-----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, WemAZ50AJzYsCarIOr3FWo/pi8LPYS/Vrf/WV8wDBKzrjV9Q796ON2R3L3k7Do0g Sb05uyvoXwsYtaQ0L5EMng== <SEC-DOCUMENT>0001047469-98-008489.txt : 19980304 <SEC-HEADER>0001047469-98-008489.hdr.sgml : 19980304 ACCESSION NUMBER: 0001047469-98-008489 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 42 FILED AS OF DATE: 19980303 EFFECTIVENESS DATE: 19980303 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIMENSIONAL INVESTMENT GROUP INC/ CENTRAL INDEX KEY: 0000861929 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 033-33980 FILM NUMBER: 98556863 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-06067 FILM NUMBER: 98556864 BUSINESS ADDRESS: STREET 1: 1299 OCEAN AVE STREET 2: 11TH FLOOR CITY: SANTA MONICA STATE: CA ZIP: 90401 BUSINESS PHONE: 2133958005 FORMER COMPANY: FORMER CONFORMED NAME: DFA US LARGE CAP INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DFA US LARGE CAP PORTFOLIO INC DATE OF NAME CHANGE: 19920331 </SEC-HEADER> <DOCUMENT> <TYPE>485BPOS <SEQUENCE>1 <DESCRIPTION>485BPOS <TEXT> <PAGE> SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X ----- Pre-Effective Amendment No. ----- ----- Post-Effective Amendment No. 19 File No. 33-33980 X ----- REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X ----- Amendment No. 20 File No. 811-6067 X ----- DIMENSIONAL INVESTMENT GROUP INC. ------------------------------------------------------ (Exact Name of Registrant as Specified in Charter) 1299 Ocean Avenue, 11th Floor, Santa Monica CA 90401 ---------------------------------------------- ---------- (Address of Principal Executive Office) (Zip Code) Registrant's Telephone Number, including Area Code (310) 395-8005 -------------- Irene R. Diamant, 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401 --------------------------------------------------- (Name and Address of Agent for Service) Copies of communications to Stephen W. Kline, Esquire, Stradley, Ronon, Stevens & Young, LLP, Great Valley Corporate Center, 30 Valley Stream Parkway, Malvern, PA 19355, (610) 640-5801. It is proposed that this filing will become effective (check appropriate box): /X/ Immediately upon filing pursuant to paragraph (b) / / On (date) pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1) / / On (date) pursuant to paragraph (a)(2) of Rule 485 / / 75 days after filing pursuant to paragraph (a)(2). The Trustees and principal officers of The DFA Investment Trust Company also have executed this registration statement. <PAGE> FORM N-1A CROSS REFERENCE SHEET (as required by Rule 404) FORM N-1A PART A ITEM NO. PROSPECTUS LOCATION - ------------------------- ------------------- Item 1. Cover Page........................... Cover Page Item 2. Synopsis............................. Highlights Item 3. Condensed Financial Information...... Condensed Financial Information Item 4. General Description of Registrant.... Cover Page; Highlights; The Portfolio; Investment Objective and Policies; Securities Loans; Risk Factors; General Information Item 5. Management of the Fund............... Highlights; Management of the Portfolios Item 6. Capital Stock and Other Securities... Highlights; Dividends, Capital Gains Distributions and Taxes; General Information Item 7. Purchase of Securities Being Offered.............................. Highlights; Purchase of Shares; Valuation of Shares; Distribution; Exchange of Shares Item 8. Redemption or Repurchase............. Highlights; Redemption of Shares Item 9. Pending Legal Proceedings............ Not Applicable -2- <PAGE> FORM N-1A PART B ITEM NO. LOCATION IN STATEMENT OF - ------------------------- ADDITIONAL INFORMATION ------------------------ Item 10. Cover Page........................... Cover Page Item 11. Table of Contents.................... Table of Contents Item 12. General Information and History...... Other Information Item 13. Investment Objectives and Policies... Investment Objective and Policies; Investment Limitations Item 14. Management of the Fund............... Management of the Portfolios; Directors and Officers Item 15. Control Persons and Principal Holders of Securities................ Principal Holders of Securities Item 16. Investment Advisory and Other Services............................. Management of the Portfolios Item 17. Brokerage Allocation and Other Practices............................ Brokerage Transactions Item 18. Capital Stock and Other Securities... Other Information Item 19. Purchase, Redemption and Pricing of Securities Being Offered.......... Purchase of Shares; Redemption of Shares Item 20. Tax Status........................... Federal Tax Treatment of Futures Contracts Item 21. Underwriters......................... Not Applicable Item 22. Calculation of Performance Data...... Calculation of Performance Data Item 23. Financial Statements................. Financial Statements -3- <PAGE> FORM N-1A PART C ITEM NO. LOCATION IN PART C - ------------------------- ------------------ Item 24. Financial Statements and Exhibits.... Financial Statements and Exhibits Item 25. Persons Controlled by or Under Common Control with Registrant....... Persons Controlled by or Under Common Control with Registrant Item 26. Number of Holders of Securities...... Number of Holders of Securities Item 27. Indemnification...................... Indemnification Item 28. Business and Other Connections of Investment Advisor................... Business and Other Connections of Investment Advisor Item 29. Principal Underwriters............... Principal Underwriters Item 30. Location of Accounts and Records..... Location of Accounts and Records Item 31. Management Services.................. Management Services Item 32. Undertakings......................... Undertakings -4- <PAGE> PROSPECTUS MARCH 3, 1998 THE DFA 6-10 INSTITUTIONAL PORTFOLIO _________________ This prospectus describes THE DFA 6-10 INSTITUTIONAL PORTFOLIO (the "Portfolio"), a series of shares issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, (310) 395-8005. The Portfolio is an open-end, management investment company whose shares are offered, without a sales charge, to institutional investors, retirement plans and clients of registered investment advisers. The Fund issues thirteen series of shares, each of which represents a separate class of the Fund's common stock, having its own investment objective and policies. The minimum initial purchase requirement for the Portfolio is $5,000,000. THE INVESTMENT OBJECTIVE OF THE PORTFOLIO IS TO ACHIEVE LONG-TERM CAPITAL APPRECIATION. THE PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF THE U.S. 6-10 SMALL COMPANY SERIES (THE "SERIES") OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"). THE SERIES IS AN OPEN-END, MANAGEMENT INVESTMENT COMPANY THAT HAS THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS AS THE PORTFOLIO. THE INVESTMENT EXPERIENCE OF THE PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE INVESTMENT EXPERIENCE OF THE SERIES. INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "THE PORTFOLIO." This prospectus sets forth information about the Portfolio that prospective investors should know before investing and should be read carefully and retained for future reference. A statement of additional information about the Portfolio, dated March 3, 1998, as amended from time to time, which is incorporated herein by reference, has been filed with the Securities and Exchange Commission and is available upon request, without charge, by writing or calling the Fund at the above address or telephone number. _________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. <PAGE> TABLE OF CONTENTS <TABLE> PAGE <S> <C> HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 3 THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . . 6 Portfolio Characteristics and Policies. . . . . . . . . . . . . . . . . . 6 Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . 7 SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Small Company Securities. . . . . . . . . . . . . . . . . . . . . . . . . 8 Portfolio Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 8 MANAGEMENT OF THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . . 8 Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . 9 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . . . 9 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 In Kind Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 VALUATION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 </TABLE> <PAGE> HIGHLIGHTS PAGE INVESTMENT OBJECTIVE 6 The investment objective of the Portfolio is to achieve long-term capital appreciation. The investment objective of the Portfolio is a fundamental policy and may not be changed without the affirmative vote of a majority of its outstanding securities. The Portfolio seeks to achieve its investment objective by investing all of its investable assets in the Series, which in turn invests in the stocks of small companies traded in the U.S. securities markets. The size of a company will be measured by its relative market capitalization. The Series will be structured by generally basing the amount of each security purchased on the issuer's relative market capitalization applied on a basis of descending values, with a view to achieving a reasonable reflection of the relative market capitalizations of its portfolio companies. (See "Portfolio Characteristics and Policies.") PAGE RISK FACTORS 8 The Portfolio is authorized to invest in repurchase agreements. This policy and the policy of the Portfolio to invest in the shares of the Series involve certain risks. (See "RISK FACTORS.") PAGE MANAGEMENT AND ADMINISTRATIVE SERVICES 8 Dimensional Fund Advisors Inc. (the "Advisor" or "DFA") provides the Portfolio with administrative services and also serves as investment advisor to the Series. (See "MANAGEMENT OF THE PORTFOLIO.") PAGE DIVIDEND POLICY 9 The Portfolio distributes substantially all of its net investment income and any net realized capital gains in November and December of each year. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") PAGE PURCHASE, VALUATION AND REDEMPTION OF SHARES 11 The shares of the Portfolio are offered at net asset value, which is calculated as of the close of the New York Stock Exchange (the "NYSE") on each day that the NYSE is open for business. The minimum initial purchase requirement for the Portfolio's shares is $5,000,000. There is no minimum purchase requirement for subsequent purchases. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. The redemption price of a share of the Portfolio is equal to its net asset value. (See "PURCHASE OF SHARES," "VALUATION OF SHARES" and "REDEMPTION OF SHARES.") <PAGE> SHAREHOLDER TRANSACTION EXPENSES None* The expenses in the expense table below are based on those incurred by the Portfolio and the Series for the fiscal year ended November 30, 1997. ANNUAL FUND OPERATING EXPENSES** (AS A PERCENTAGE OF AVERAGE NET ASSETS) <TABLE> <S> <C> <C> Management Fee 0.03% Administration Fee (after fee waiver) 0.00% Other Expenses (after assumption of expenses) 0.17% Total Operating Expenses (after fee waiver and assumption of expenses) 0.20%*** </TABLE> * Shares of the Portfolio that are purchased through omnibus accounts maintained by securities firms may be subject to a service fee or commission on such purchases. ** The "Management Fee" is payable by the Series, and the "Administration Fee" is payable by the Portfolio. The amount set forth in "Other Expenses" REPRESENTS THE AGGREGATE AMOUNT THAT IS PAYABLE BY BOTH THE SERIES AND THE PORTFOLIO. *** BEGINNING NOVEMBER 30, 1993, THE ADVISOR AGREED TO LIMIT THE TOTAL EXPENSES OF THE PORTFOLIO TO NOT MORE THAN 0.20% OF THE AVERAGE NET ASSETS OF THE PORTFOLIO ON AN ANNUALIZED BASIS. PURSUANT TO THIS AGREEMENT, THE ADVISOR FIRST WILL WAIVE ITS FEE UNDER THE ADMINISTRATION AGREEMENT WITH RESPECT TO THE PORTFOLIO AND, IF NECESSARY, WILL ALSO REIMBURSE THE PORTFOLIO TO THE EXTENT NECESSARY TO KEEP THE CUMULATIVE ANNUAL EXPENSES OF THE PORTFOLIO TO NOT MORE THAN 0.20% OF THE AVERAGE NET ASSETS OF THE PORTFOLIO ON AN ANNUALIZED BASIS. ABSENT THE ADVISOR'S FEE WAIVER AND ASSUMPTION OF EXPENSES, THE ANNUALIZED RATIO OF TOTAL OPERATING EXPENSES TO AVERAGE NET ASSETS FOR THE PORTFOLIO AND SERIES FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1997 WOULD HAVE BEEN 0.40%. FOR PURPOSES OF THIS WAIVER AND ASSUMPTION OF EXPENSES, THE ANNUAL EXPENSES ARE THOSE EXPENSES INCURRED IN ANY PERIOD CONSISTING OF TWELVE CONSECUTIVE MONTHS. THE ADVISOR RETAINS THE RIGHT IN ITS SOLE DISCRETION TO MODIFY OR ELIMINATE THE WAIVER OF A PORTION OF ITS FEES IN THE FUTURE. IF THE ADVISOR MODIFIES OR ELIMINATES THE FEE WAIVER, SUCH CHANGE WILL BE SET FORTH IN THE PROSPECTUS. EXAMPLE You would pay the following transaction and annual operating expenses on a $1,000 investment in the Portfolio, assuming a 5% annual return over each of the following time periods and redemption at the end of each time period: <TABLE> <S> <C> <C> <C> 1 Year 3 Years 5 Years 10 Years ------ ------- ------- --------- $2 $6 $11 $26 </TABLE> The purpose of the above fee table and Example is to assist investors in understanding the various costs and expenses that an investor in the Portfolio will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 <PAGE> The table summarizes the aggregate estimated annual operating expenses of both the Portfolio and the Series. (See "MANAGEMENT OF THE PORTFOLIO.") The Board of Directors of the Fund has considered whether such expenses will be more or less than they would be if the Portfolio were to invest directly in the securities held by the Series. The aggregate amount of expenses for the Portfolio and Series may be greater than it would be if the Portfolio were to invest directly in the securities held by the Series. However, the total expense ratio for the Portfolio and the Series is expected to be less over time than such ratio would be if the Portfolio were to invest directly in the underlying securities. This is because this arrangement enables institutional investors, including the Portfolio, to pool their assets, which may be expected to result in economies by spreading certain fixed costs over a larger asset base. Each shareholder in the Series, including the Portfolio, will pay its proportionate share of the expenses of the Series. CONDENSED FINANCIAL INFORMATION The following financial highlights are part of the financial statements of the Portfolio. The information for each of the past fiscal years has been audited by independent accountants. The financial statements, related notes and the report of the independent accountants covering such financial information and financial highlights for the Fund's most recent fiscal year ended November 30, 1997, are incorporated by reference into the statement of additional information from the Fund's annual report to shareholders for the year ended November 30, 1997. Further information about the Portfolio's performance is contained in the Fund's annual report to shareholders of the Portfolio for the year ended November 30, 1997. A copy of the annual report may be obtained from the Fund upon request at no charge. 3 <PAGE> FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> Year YEAR Year Year MAY 4 Ended ENDED Ended Ended TO Nov. 30, NOV. 30, Nov. 30, Nov. 30, NOV. 30, 1997 1996 1995 1994 1993 -------- -------- -------- -------- -------- <S> <C> <C> <C> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . $14.60 $12.79 $10.29 $10.61 $10.00 Income from Investment Operations - --------------------------------- Net Investment Income . . . . . . . . . . . . . . . . . 0.08 0.13 0.13 0.13 0.10 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . . . . . . . . . . . . . . . . 2.46 2.22 2.84 (0.08) 0.68 Total from Investment Operations . . . . . . . . . . 2.54 2.35 2.97 0.05 0.78 Less Distributions - ------------------ Net Investment Income . . . . . . . . . . . . . . . . . (0.13) (0.02) (0.13) (0.21) (0.02) Net Realized Gains . . . . . . . . . . . . . . . . . . (5.11) (0.52) (0.34) (0.16) (0.15) Total Distributions . . . . . . . . . . . . . . . . . (5.24) (0.54) (0.47) (0.37) (0.17) Net Asset Value, End of Period . . . . . . . . . . . . . $11.90 $14.60 $12.79 $10.29 $10.61 Total Return . . . . . . . . . . . . . . . . . . . . . . 26.52% 19.04% 29.08% 0.53% 7.78%# Net Assets, End of Period (thousands) . . . . . . . . . . $15,968 $10,990 $21,192 $15,070 $1,801 Ratio of Expenses to Average Net Assets (1) . . . . . . . 0.20%(a) 0.20%(a) 0.20%(a) 0.20%(a) 0.20%*(a) Ratio of Net Investment Income to Average Net Assets . . 0.77%(a) 0.47%(a) 1.12%(a) 1.93%(a) 1.90%*(a) Portfolio Turnover Rate . . . . . . . . . . . . . . . . . N/A N/A N/A N/A N/A Average Commission Rate . . . . . . . . . . . . . . . . . N/A N/A N/A N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . 30.04% 32.38% 21.16% 27.65% 32.88%*(b) Average Commission Rate of Master Fund Series (2) . . . . $0.0583 $0.0586 N/A N/A N/A </TABLE> ________________ *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (a) Had certain waivers and assumptions of expenses not been in effect, the ratios of expenses to average net assets for the periods ended November 30, 1997 through 1993 would have been 0.40%, 0.38%, 0.56%, 0.82%, and 2.29%, respectively, and the ratios of net investment income to average net assets for the periods ended November 30, 1997 through 1993 would have been 0.57%, 0.28%, 0.77%, 1.31% and (0.19)%, respectively. (2) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal years beginning after September 1, 1995. (b) Master Fund Series Turnover calculated for the period February 3 to November 30, 1993. 4 <PAGE> THE PORTFOLIO The Portfolio, unlike many other investment companies which directly acquire and manage their own portfolio of securities, seeks to achieve its investment objective by investing all of its investable assets in the Series, an open-end, management investment company registered under the Investment Company Act of 1940 ("1940 Act") having the same investment objective as the Portfolio. The investment objective of the Portfolio may not be changed without the affirmative vote of a majority of its outstanding securities and the investment objective of the Series may not be changed without the affirmative vote of a majority of the outstanding securities of that Series. Shareholders of the Portfolio will receive written notice thirty days prior to any change in the investment objective of the Series. This prospectus describes the investment objective, policies and restrictions of the Portfolio and the Series. (See "INVESTMENT OBJECTIVE AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE PORTFOLIO" for a description of the management and other expenses associated with the Portfolio's investment in the Trust. Other institutional investors, including other mutual funds, may invest in the Series, and the expenses of such other investors and, correspondingly, their returns may differ from those of the Portfolio. Please contact the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005, for information about the availability of investing in the Series other than through the Portfolio. The shares of the Series will be offered to institutional investors for the purpose of increasing the funds available for investment, to reduce expenses as a percentage of total assets and to achieve other economies that might be available at higher asset levels. For example, the Series might be able to place larger block trades at more advantageous prices and to participate in securities transactions of larger denominations, thereby reducing the relative amount of certain transaction costs in relation to the total size of the transaction. Investment in the Series by other institutional investors offers potential benefits to the Series and, through its investment in the Series, also to the Portfolio. However, economies and expense reductions might not be achieved and additional investment opportunities, such as increased diversification, might not be available if other institutions do not invest in the Series. Also, if an institutional investor were to redeem its interest in the Series, the remaining investors in the Series could experience higher pro rata operating expenses, thereby producing lower returns, and the Series' security holdings may become less diverse, resulting in increased risk. Institutional investors that have a greater pro rata ownership interest in the Series than the Portfolio could have effective voting control over the operation of the Series. Further, if the Series changes its investment objective in a manner which is inconsistent with the investment objective of the Portfolio and the shareholders of the Portfolio fail to approve a similar change in the investment objective of the Portfolio, the Portfolio would be forced to withdraw its investment in the Series and either seek to invest its assets in another registered investment company with the same investment objective as the Portfolio, which might not be possible, or retain an investment advisor to manage the Portfolio's assets in accordance with its own investment objective, possibly at increased cost. A withdrawal by the Portfolio of its investment in the Series could result in a distribution in kind of portfolio securities (as opposed to a cash distribution) to the Portfolio. Should such a distribution occur, the Portfolio could incur brokerage fees or other transaction costs in converting such securities to cash in order to pay redemptions. In addition, a distribution in kind to the Portfolio could result in a less diversified portfolio of investments and could affect adversely the liquidity of the Portfolio. Moreover, a distribution in kind by the Series may constitute a taxable exchange for federal income tax purposes resulting in gain or loss to the Portfolio. Any net capital gains so realized will be distributed to the Portfolio's shareholders as described in "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" below. Finally, the Portfolio's investment in the shares of a registered investment company such as the Series is relatively new and results in certain operational and other complexities. However, management believes that the benefits to be gained by shareholders outweigh the additional complexities and that the risks attendant to such investment are not inherently different from the risks of direct investment in securities of the type in which the Series invests. 5 <PAGE> INVESTMENT OBJECTIVE AND POLICIES The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio provides investors with access to a securities portfolio consisting of small U.S. companies. Company size will be determined for purposes of the Series solely on the basis of a company's market capitalization. "Market capitalization" will be calculated by multiplying the price of a company's stock by the number of its shares of common stock. The Portfolio, indirectly through ownership of the Series, will be structured to reflect reasonably the relative market capitalizations of the Series' portfolio companies. The Advisor believes that over the long term the investment performance of small companies in the U.S. is superior to that of large companies. Institutional investors which, for a variety of reasons, may choose not to make substantial, or any, direct investment in companies whose securities will be held by the Series, may participate indirectly in the investment performance of these companies through ownership of the Portfolio's stock. PORTFOLIO CHARACTERISTICS AND POLICIES The Portfolio is a diversified investment company that pursues its investment objective by investing all of its assets in the Series, which has the same investment objective and policies as the Portfolio. The Series is a diversified investment company that invests in a broad and diverse group of small U.S. companies having readily marketable securities. Any reference in this prospectus to a "small U.S. company" means a company whose securities are traded in the U.S. securities markets and whose market capitalization is not larger than the largest of those in the smaller one half (deciles 6 through 10) of companies listed on the NYSE. The Series will purchase common stocks of companies whose shares are listed on the NYSE, the American Stock Exchange (the "AMEX") and traded in the over-the-counter market ("OTC"). The Series may invest in securities of foreign issuers which are traded in the U.S. securities markets, but such investments may not exceed 5% of the gross assets of the Series. It is the intention of the Series to acquire a portion of the common stock of each eligible NYSE, AMEX and OTC company on a market capitalization weighted basis. (See "Portfolio Structure.") In the future, the Series may purchase common stocks of small U.S. companies which are listed on other U.S. securities exchanges. In addition, the Series is authorized to invest in private placements of interest-bearing debentures that are convertible into common stock ("privately placed convertible debentures"). Such investments are considered illiquid and the value thereof together with the value of all other illiquid investments may not exceed 15% of the value of the Series' total assets at the time of purchase. PORTFOLIO STRUCTURE The investment portfolio of the Series is structured by generally basing the amount of each security purchased on the issuer's relative market capitalization with a view to creating in the Series a reasonable reflection of the relative market capitalizations of its portfolio companies. The decision to include or exclude the shares of an issuer will be made on the basis of such issuer's relative market capitalization determined by reference to other companies located in the United States. Even though a company's stock may meet the market capitalization criterion, it may not be purchased by the Series if (i) in the Advisor's judgment, the issuer is in extreme financial difficulty, (ii) the issuer is involved in a merger or consolidation or is the subject of an acquisition or (iii) a significant portion of the issuer's securities are closely held. Further, securities of real estate investment trusts will not be acquired (except as a part of a merger, consolidation or acquisition of assets). In addition, the Advisor may exclude the stock of a company that otherwise meets the market capitalization criterion if the Advisor determines in its best judgment that other conditions exist that make the purchase of such stock for the Series inappropriate. Deviation from strict market capitalization weighting will also occur in the Series because the Series intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by the Series may be reduced from time to time from the level which strict adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the Series' assets may be invested in interest-bearing obligations, such as money-market instruments, for this purpose, thereby causing further 6 <PAGE> deviation from strict market capitalization weighting. Such investments would be made on a temporary basis pending investment in equity securities pursuant to the Series' investment objective. The Series may make block purchases of eligible securities at opportune prices even though such purchases exceed the number of shares which, at the time of purchase, strict adherence to the policy of market capitalization weighting would otherwise require. In addition, the Series may acquire securities eligible for purchase or otherwise represented in its portfolio at the time of the exchange in exchange for the issuance of its shares. (See "In Kind Purchases.") While such transactions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the Series. Changes in composition and relative ranking (in terms of market capitalization) of the stocks which are eligible for purchase by the Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On a not less than semi-annual basis, the Advisor will determine the market capitalization of the largest small company in which the Series may invest. Common stocks whose market capitalizations are not greater than such company will be purchased for the Series. Additional investments generally will not be made in securities which have appreciated in value sufficiently to be excluded from the Advisor's then current market capitalization limit for eligible portfolio securities. This may result in further deviation from strict market capitalization weighting and such deviation could be substantial if a significant amount of the Series' holdings increase in value sufficiently to be excluded from the limit for eligible securities, but not by a sufficient amount to warrant their sale. (See "Portfolio Transactions.") A further deviation from market capitalization may occur if the Series invests a portion of its assets in privately placed convertible debentures. (See "Portfolio Characteristics and Policies.") It is management's belief that the stocks of small companies offer, over a long term, a prudent opportunity for capital appreciation, but, at the same time, selecting a limited number of such issues for inclusion in the Series involves greater risk than including a large number of them. The Series intends to invest at least 80% of its assets in equity securities of U.S. small companies. Generally, the Series does not seek current income as an investment objective and investments will not be based upon an issuer's dividend payment policy or record. However, many of the companies whose securities will be included in the Series do pay dividends. It is anticipated, therefore, that the Series will receive dividend income. PORTFOLIO TRANSACTIONS On a periodic basis, the Advisor will review the Series' holdings and determine which, at the time of such review, are no longer considered small U.S. companies. Securities which have depreciated in value since their acquisition will not be sold by the Series solely because prospects for the issuer are not considered attractive or due to an expected or realized decline in securities prices in general. Securities may be disposed of, however, at any time when, in the Advisor's judgment, circumstances, such as (but not limited to) tender offers, mergers and similar transactions, or bids made for block purchases at opportune prices, warrant their sale. Generally, securities will not be sold to realize short-term profits, but, when circumstances warrant, they may be sold without regard to the length of time held. Generally, securities will be purchased with the expectation that they will be held for longer than one year and will be held until such time as they are no longer considered an appropriate holding in light of the policy of maintaining portfolios of companies with small market capitalizations. The annual portfolio turnover rates of the Series for the fiscal years ended November 30, 1996 and 1997, respectively, were 32.38% and 30.04%. SECURITIES LOANS The Series is authorized to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While the Series may earn additional income from lending securities, such activity is incidental to the Series' investment objective. The value of securities loaned may not exceed 331/3% 7 <PAGE> of the value of the Series' total assets. In connection with such loans, the Series will receive collateral consisting of cash or U.S. Government securities, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. In addition, the Series will be able to terminate the loan at any time and will receive reasonable interest on the loan, as well as amounts equal to any dividends, interest or other distributions on the loaned securities. In the event of the bankruptcy of the borrower, the Series could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. The Portfolio is also authorized to lend its portfolio securities. However, as long as it holds only shares of the Series, it will not do so. RISK FACTORS SMALL COMPANY SECURITIES Typically, securities of small companies are less liquid than securities of large companies. Recognizing this factor, the Series will endeavor to effect securities transactions in a manner to avoid causing significant price fluctuations in the market for these securities. BORROWING The Series has reserved the right to borrow amounts not exceeding 33% of its net assets for the purposes of making redemption payments. When advantageous opportunities to do so exist, the Series may also purchase securities when borrowings exceed 5% of the value of its net assets. Such purchases can be considered "leveraging" and, in such circumstances, the net value of the Series may increase or decrease at a greater rate than would be the case if the Series had not leveraged. The interest payable on the amount borrowed would increase the Series' expenses and, if the appreciation and income produced by the investments purchased when the Series has borrowed are less than the cost of borrowing, the investment performance of the Series will be reduced as a result of leveraging. PORTFOLIO STRATEGIES The method employed by the Advisor to manage the Series will differ from the process employed by many other investment advisors in that the Advisor will rely on fundamental analysis of the investment merits of securities to a limited extent to eliminate potential acquisitions rather than rely on this technique to select securities. Further, because securities generally will be held long-term and will not be eliminated based on short-term price fluctuations, the Advisor generally will not act upon general market movements or short-term price fluctuations of securities to as great an extent as many other investment advisors. REPURCHASE AGREEMENTS In addition, the Series may invest in repurchase agreements. In the event of a bankruptcy of the other party to a repurchase agreement, the Trust could experience delay in recovering the securities underlying such agreement. Management believes that the risk can be controlled through stringent security selection criteria and careful monitoring procedures. MANAGEMENT OF THE PORTFOLIO The Advisor serves as investment advisor to the Series and, as such, is responsible for the management of its assets. Investment decisions for the Series are made by the Investment Committee of the Advisor, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of the Advisor who are elected annually. The Advisor provides the Series with a trading department and selects brokers and dealers to effect securities transactions. 8 <PAGE> Securities transactions are placed with a view to obtaining the best price and execution of such transactions and, subject to this goal, may be placed with brokers which have assisted in the sale of the Portfolio's shares. The Advisor is authorized to pay a higher commission to a broker, dealer or exchange member than another such organization might charge if it determines, in good faith, that the commission paid is reasonable in relation to the research or brokerage services provided by such organization. For the fiscal year ended November 30, 1997, the Advisor received a fee for its advisory services to the Series equal to 0.03% of the average net assets of the Series and the total expenses of the Portfolio were 0.20% of its average net assets. Absent the Advisor's waiver of its fee under the Administration Agreement with respect to the Portfolio (see "Administrative Services") and its assumption of portfolio expenses to the extent necessary to keep the cumulative annual expenses of the Portfolio to not more than 0.20% of the average net assets of the Portfolio on an annual basis, the ratio of expenses to average net assets for the fiscal year ended November 30, 1997 would have been 0.40%. The Portfolio and Series each bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage fees, commissions and transfer taxes in connection with the acquisition and disposition of portfolio securities, taxes, insurance premiums, costs incidental to meetings of its shareholders and directors or trustees, the cost of filing its registration statements under federal securities laws and the cost of any filings required under state securities laws, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to the Portfolio or the Series are so allocated and expenses which are not allocable to the Portfolio and the Series are borne by the Portfolio and Series on the basis of their relative net assets. The Advisor was organized in May, 1981, and is engaged in the business of providing investment management services to institutional investors. Assets under management total approximately $26 billion. David G. Booth and Rex A. Sinquefield (directors and officers of both the Fund and the Advisor , trustees and officers of the Trust and shareholders of the Advisor) may be deemed controlling persons of the Advisor. The Board of Directors is responsible for establishing Portfolio policies and for overseeing the management of the Portfolio. Each of the Directors and officers of the Fund is also a Trustee and officer of the Trust. The Directors of the Fund, including all of the disinterested Directors, have adopted written procedures to monitor potential conflicts of interest that might develop between the Portfolio and the Series. The Portfolio's statement of additional information furnishes information about the Directors and officers of the Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional information.) ADMINISTRATIVE SERVICES The Fund has entered into an administration agreement with the Advisor on behalf of the Portfolio. Pursuant to the administration agreement, the Advisor will perform various services, including: supervision of the services provided by the Portfolio's custodian and dividend disbursing agent and others who provide services to the Fund for the benefit of the Portfolio; assisting the Fund in complying with the provisions of federal, state, local and foreign securities, tax and other laws applicable to the Portfolio; providing shareholders with information about the Portfolio and their investments as they or the Fund may request; assisting the Portfolio in conducting meetings of shareholders of record; furnishing information as the Board of Directors may require regarding the Series; and any other administrative services for the benefit of the Portfolio as the Board of Directors may reasonably request. The Advisor also provides the Fund with office space and personnel. For its administrative services, the Portfolio pays the Advisor a monthly fee equal to one-twelfth of .07% of the average net assets of the Portfolio. The Advisor has agreed to waive its fee under the administration agreement with respect to the Portfolio to the extent necessary to keep the cumulative annual expenses of the Portfolio to not more than 0.20% of the average net assets of the Portfolio on an annualized basis. 9 <PAGE> DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES The Portfolio intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for federal income taxes to the extent that its net investment income and net realized capital gains are distributed. The Portfolio's policy is to distribute substantially all net investment income together with any net realized capital gains in November and December of each year. The Series also intends to qualify as a regulated investment company under the Code. Special tax rules may apply in determining the income and gains that the Series earns on its investments. Also, foreign governments may impose taxes on the income and gains from the Series' investments in foreign securities. These rules may, in turn, affect the amount of distributions that the Portfolio pays to shareholders. Shareholders of the Portfolio will automatically receive all income dividends and any capital gains distributions in additional shares of the Portfolio at net asset value (as of the business date following the dividend record date), unless upon written notice to PFPC Inc., the Portfolio's transfer agent, the shareholder selects one of the following options: Income Option - to receive income dividends in cash and capital gains distributions in additional shares at net asset value. Capital Gains Option - to receive capital gains distributions in cash and income dividends in additional shares at net asset value. Cash Option - to receive both income dividends and capital gains distributions in cash. The Portfolio receives income in the form of income dividends paid by the Series. This income, less the expenses incurred in operations, is the Portfolio's net investment income from which income dividends are distributed as described above. The Portfolio also may receive capital gains distributions from the Series and may realize capital gains upon the redemption of the shares of the Series. Any net realized capital gains of the Portfolio will be distributed as described above. Whether paid in cash or additional shares and regardless of the length of time the Portfolio's shares have been owned by shareholders who are subject to federal income taxes, distributions from long-term capital gains are taxable as such. Dividends from net investment income or net short-term capital gains will be taxable as ordinary income, whether received in cash or in additional shares. Dividends from net investment income will generally qualify in part for the corporate dividends received deduction, but the portion of dividends so qualified depends on the aggregate qualifying dividend income received by the Series from domestic (U.S.) sources. For those investors subject to tax, if purchases of shares of the Portfolio are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution. Shareholders are notified annually by the Fund as to the federal tax status of dividends and distributions paid by the Portfolio. 10 <PAGE> Dividends which are declared in November or December to shareholders of record in such a month but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes as if paid by the Portfolio and received by the shareholder on December 31 of the calendar year in which they are declared. The sale of shares of the Portfolio is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares of the Portfolio for shares of another portfolio of the Fund. Any loss incurred on sale or exchange of the Portfolio's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. In addition to federal taxes, shareholders may be subject to state and local taxes on distributions from the Portfolio and on gains arising on redemption or exchange of Portfolio shares. The Portfolio is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on the account registration form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding. The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Portfolio. PURCHASE OF SHARES Investors may purchase shares of the Portfolio by first contacting the Advisor at (310) 395-8005 to notify the Advisor of the proposed investment and then completing an Account Registration Form and mailing it to: Dimensional Investment Group Inc. The DFA 6-10 Institutional Portfolio 1299 Ocean Avenue, 11th floor Santa Monica, CA 90401 The minimum initial purchase requirement for the Portfolio's shares is $5,000,000. Once the minimum purchase requirement is satisfied, further investments in the Portfolio are not subject to any minimum purchase requirement. The Fund reserves the right to reduce or waive the minimum investment requirement, to reject any initial or additional investment and to suspend the offering of shares of the Portfolio. Investors having an account with a bank that is a member or a correspondent of a member of the Federal Reserve System may purchase shares by first calling the Advisor at (310) 395-8005 to notify the Advisor of the proposed investment, then requesting the bank to transmit immediately available funds (Federal Funds) by wire to the custodian, for the account of Dimensional Investment Group Inc. (The DFA 6-10 Institutional Portfolio). Additional investments also may be made through the wire procedure by first notifying the Advisor. Investors who wish to purchase shares by check should send their check to Dimensional Investment Group Inc., c/o PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC Bank, N.A. serves as custodian for the Portfolio. Shares may also be purchased and sold by individuals through securities firms which may charge a service fee or commission for such transactions. No such fee or commission is charged on shares which are purchased or 11 <PAGE> redeemed directly from the Fund. Investors who are clients of investment advisory organizations may also be subject to investment advisory fees under their own arrangements with such organizations. Purchases of shares will be made in full and fractional shares calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued. IN KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in exchange for securities which are eligible for acquisition by the Series or otherwise represented in its portfolio as described in this prospectus. Securities to be exchanged which are accepted by the Fund and shares of the Portfolio to be issued therefore will be valued as set forth under "VALUATION OF SHARES" at the time of the next determination of net asset value after such acceptance. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. The Fund will not accept securities in exchange for shares of the Portfolio unless: (1) such securities are, at the time of the exchange, eligible to be included, or otherwise represented, in the Series and current market quotations are readily available for such securities; (2) the investor represents and agrees that all securities offered to be exchanged are not subject to any restrictions upon their sale by the Series under the Securities Act of 1933 or otherwise; and (3) at the discretion of the Fund, the value of any such security (except U.S. Government securities) being exchanged together with other securities of the same issuer owned by the Series may not exceed 5% of the net assets of the Series immediately after the transaction. The Fund will accept such securities for investment and not for resale. A gain or loss for federal income tax purposes will generally be realized by investors who are subject to federal taxation upon the exchange depending upon the cost of the securities exchanged. Investors interested in such exchanges should contact the Advisor. VALUATION OF SHARES The net asset values per share of the Portfolio and the Series are calculated as of the close of the NYSE by dividing the total market value of their respective investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Portfolio and the Series, respectively. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. Securities held by the Series which are listed on a securities exchange and for which market quotations are available are valued at the last quoted sale price of the day or, if there is no such reported sale, the Series values such securities at the mean between the most recent quoted bid and asked prices. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the mean between the most recent quoted bid and asked prices. The value of other assets and securities for which no quotations are readily available (including restricted securities) are determined in good faith at fair value in accordance with procedures adopted by the Board of Trustees of the Trust. Provided that the transfer agent has received the investor's Account Registration Form in good order and the custodian has received the investor's payment, shares of the Portfolio will be priced at the net asset value calculated next after receipt of the investor's funds by the custodian. "Good order" with respect to the purchase of shares means that (1) a fully completed and properly signed Account Registration Form and any additional supporting legal documentation required by the Advisor has been received in legible form and (2) the Advisor has been notified of the purchase by telephone and, if the Advisor so requests, also in writing, no later than the close of regular trading on the NYSE (ordinarily 1:00 p.m. PST) on the day of the purchase. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. The Fund reserves the right to redeem shares 12 <PAGE> owned by any purchaser whose order is canceled in order to recover any resulting loss to the Fund and may prohibit or restrict the manner in which such purchaser may place further orders. Management believes that any dilutive effect of the cost of investing the proceeds of the sale of the shares of the Portfolio is minimal and, therefore, the shares of the Portfolio are currently sold at net asset value, without the imposition of a fee that would be used to reimburse the Portfolio for such cost ("reimbursement fee"). Reimbursement fees may be charged prospectively from time to time based upon the future experience of the Portfolio and the Series. Any such charges will be described in the prospectus. DISTRIBUTION The Fund acts as distributor of the Portfolio's shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of DFA, pursuant to which DFA Securities Inc. is responsible for supervising the sale of the Portfolio's shares. No compensation is paid by the Fund to DFA Securities Inc. under this agreement. EXCHANGE OF SHARES Investors may exchange shares of the Portfolio for those of another portfolio in the Fund or a portfolio of DFA Investment Dimensions Group Inc., an open-end, management investment company ("DFAIDG"), by first contacting the Advisor at (310) 395-8005 to notify the Advisor of the proposed exchange and then completing an Exchange Form and mailing it to: Dimensional Investment Group Inc. Attn: Client Operations 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 The minimum amount for an exchange into a portfolio of DFAIDG is $100,000. Exchanges are accepted only into those portfolios of DFAIDG that are eligible for the exchange privilege of DFAIDG. Investors may contact the Advisor at the above-listed phone number for a list of those portfolios of DFAIDG that accept exchanges. The exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the markets. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of the Portfolio or otherwise adversely affect the Fund or DFAIDG, any proposed exchange will be subject to the approval of the Advisor. Such approval will depend on: (i) the size of the proposed exchange; (ii) the prior number of exchanges by that shareholder; (iii) the nature of the underlying securities and the cash position of the Portfolio and of the portfolio of DFAIDG involved in the proposed exchange; (iv) the transaction costs involved in processing the exchange; and (v) the total number of redemptions by exchange already made out of the Portfolio. The redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the Advisor has received an Exchange Form in good order, plus any applicable reimbursement fee on purchases by exchange. "Good order" means a completed Exchange Form specifying the dollar amount to be exchanged, signed by all registered owners of the shares; and if the Fund does not have on file the authorized signatures for the account, a guarantee of the signature of each registered owner by an "eligible guarantor institution." Such institutions generally include national or state banks, savings associations, savings and loan associations, trust companies, savings banks, credit unions and members of a recognized stock exchange. Exchanges will be accepted only if the registrations of the two accounts are identical, stock certificates 13 <PAGE> have not been issued and the Fund may issue the shares of the portfolio being acquired in compliance with the securities laws of the investor's state of residence. There is no fee imposed on an exchange. However, the Fund reserves the right to impose an administrative fee in order to cover the costs incurred in processing an exchange. Any such fee will be disclosed in the prospectus. An exchange is treated as a redemption and a purchase. Therefore, an investor could realize a taxable gain or a loss on the transaction. The Fund reserves the right to revise or terminate the exchange privilege, waive the minimum amount requirement, limit the amount of or reject any exchange, as deemed necessary, at any time. REDEMPTION OF SHARES Investors who desire to redeem shares of the Portfolio must first contact the Advisor at the telephone number shown under "PURCHASE OF SHARES." The Portfolio will redeem shares at the net asset value of such shares next determined, either: (1) where stock certificates have not been issued, after receipt of a written request for redemption in good order by the Portfolio's transfer agent or (2) if stock certificates have been issued, after receipt of the stock certificates in good order at the office of the transfer agent. "Good order" means that the request to redeem shares must include all necessary documentation, to be received in writing by the Advisor no later than the close of regular trading on the NYSE (ordinarily 1:00 p.m. PST), including: the stock certificate(s), if issued; a letter of instruction or a stock assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners (or authorized representatives thereof) of the shares; if the Fund does not have on file the authorized signatures for the account, a guarantee of the signature of each registered owner by an eligible guarantor institution; and any other required supporting legal documents. Shareholders redeeming shares for which certificates have not been issued, who have authorized redemption payment by wire on an authorization form filed with the Fund, may request that redemption proceeds be paid in federal funds wired to the bank they have designated on the authorization form. If the proceeds are wired to the shareholder's account at a bank which is not a member of the Federal Reserve System, there could be a delay in crediting the funds to the shareholder's bank account. The Fund reserves the right at any time to suspend or terminate the redemption by wire procedure after notification to shareholders. No charge is made by the Fund for redemptions. The redemption of all shares in an account will result in the account being closed. A new Account Registration Form will be required for further investments. (See "PURCHASE OF SHARES.") Although the redemption payments will ordinarily be made within seven days after receipt, payment to investors redeeming shares which were purchased by check will not be made until the Fund can verify that the payments for the purchase have been, or will be, collected, which may take up to fifteen days or more. Investors may avoid this delay by submitting a certified check along with the purchase order. The Fund reserves the right to redeem a shareholder's account if the value of the shares in the account is $500 or less, whether because of redemptions, a decline in the Portfolio's net asset value per share or any other reason. Before the Fund involuntarily redeems shares from such an account and sends the proceeds to the stockholder, the Fund will give written notice of the redemption to the stockholder at least sixty days in advance of the redemption date. The stockholder will then have sixty days from the date of the notice to make an additional investment in the Portfolio in order to bring the value of the shares in the account to more than $500 and avoid such involuntary redemption. The redemption price to be paid to a stockholder for shares redeemed by the Fund under this right will be the aggregate net asset value of the shares in the account at the close of business on the redemption date. When in the best interests of the Portfolio, the Portfolio may make a redemption payment, in whole or in part, by a distribution of portfolio securities that the Portfolio receives from the Series in lieu of cash in accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage charges and other transaction costs selling securities that were received in payment of redemptions. 14 <PAGE> GENERAL INFORMATION The Portfolio and the Series may disseminate reports of their investment performance from time to time. Investment performance is calculated on a total return basis, that is by including all net investment income and any realized and unrealized net capital gains or losses during the period for which investment performance is reported. If dividends or capital gains distributions have been paid during the relevant period the calculation of investment performance will include such dividends and capital gains distributions as though reinvested in shares of the Portfolio. Standard quotations of total return are computed in accordance with SEC Guidelines and are presented whenever any non-standard quotations are disseminated. Non-standardized total return quotations may differ from the SEC Guideline computations by covering different time periods. In all cases, disclosures are made when performance quotations differ from the SEC Guidelines. Performance data is based on historical earnings and is not intended to indicate future performance. Rates of return expressed on an annual basis will usually not equal the sum of returns expressed for consecutive interim periods due to the compounding of the interim yields. The Fund's annual report to shareholders of the Portfolio for the fiscal year ended November 30, 1997, contains additional performance information. A copy of the annual report is available upon request and without charge. The Fund was incorporated under Maryland law on March 19, 1990. The shares of the Portfolio, when issued and paid for in accordance with the Portfolio's prospectus, will be fully paid and non-assessable shares, with equal, non-cumulative voting rights and no preferences as to conversion, exchange, dividends, redemption or any other feature. With respect to matters which require shareholder approval, shareholders are entitled to vote only with respect to matters which affect the interest of the class of shares (Portfolio) which they hold, except as otherwise required by applicable law. If liquidation of the Fund should occur, shareholders would be entitled to receive on a per class basis the assets of the particular class whose shares they own, as well as a proportionate share of Fund assets not attributable to any particular class. Ordinarily, the Fund does not intend to hold annual meetings of shareholders, except as required by the 1940 Act or other applicable law. The Fund's bylaws provide that special meetings of shareholders shall be called at the written request of at least 10% of the votes entitled to be cast at such meeting. Such meeting may be called to consider any matter, including the removal of one or more directors. Shareholders will receive shareholder communications with respect to such matters as required by the 1940 Act, including semi-annual and annual financial statements of the Fund, the latter being audited. The DFA Investment Trust Company was organized as a Delaware business trust on October 27, 1992. The Trust offers shares of its Series only to institutional investors in private offerings. The Fund may withdraw the investment of the Portfolio in the Series at any time, if the Board of Directors of the Fund determines that it 15 <PAGE> is in the best interests of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of the Fund would consider what action might be taken, including the investment of all of the assets of the Portfolio in another pooled investment entity having the same investment objective as the Portfolio or the hiring of an investment advisor to manage the Portfolio's assets in accordance with the investment policies described above. Whenever the Portfolio, as an investor in the Series, is asked to vote on a shareholder proposal, the Fund will solicit voting instructions from the Portfolio's shareholders with respect to the proposal. The Directors of the Fund will then vote the Portfolio's shares in the Series in accordance with the voting instructions received from the Portfolio's shareholders. The Directors of the Fund will vote shares of the Portfolio for which they receive no voting instructions in accordance with their best judgment. As of January 30, 1998, the following person(s) owned more than 25% of the voting securities of the Portfolio: <TABLE> <S> <C> NIGAS Savings Investment and Thrift Plans 69.07% Pensions and Investments Department P.O. Box 190 Aurora, IL 60507 Utah Retirement Systems 27.91% 540 E. 200 South Salt Lake City, UT 84102 </TABLE> Shareholder inquiries may be made by writing or calling the Fund at the address or telephone number appearing on the cover of this prospectus. Only those individuals whose signatures are on file for the account in question may receive specific account information or make changes in the account registration. 16 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 INVESTMENT ADVISOR DIMENSIONAL FUND ADVISORS INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 CUSTODIAN PNC BANK, N.A. 200 Stevens Drive, Airport Business Center Lester, PA 19113 ACCOUNTING SERVICES, DIVIDEND DISBURSING AND TRANSFER AGENT PFPC INC. 400 Bellevue Parkway Wilmington, DE 19809 LEGAL COUNSEL STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 INDEPENDENT ACCOUNTANTS COOPERS & LYBRAND L.L.P 2400 Eleven Penn Center 19th and Market Streets Philadelphia, PA 19103 <PAGE> THE DFA 6-10 INSTITUTIONAL PORTFOLIO DIMENSIONAL INVESTMENT GROUP INC. 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401 TELEPHONE: (310) 395-8005 STATEMENT OF ADDITIONAL INFORMATION MARCH 3, 1998 This statement of additional information is not a prospectus but should be read in conjunction with the prospectus of The DFA 6-10 Institutional Portfolio (the "Portfolio") of Dimensional Investment Group Inc. (the "Fund"), dated March 3, 1998, as amended from time to time, which can be obtained from the Fund by writing to the above address or by calling the above telephone number. TABLE OF CONTENTS <TABLE> PAGE <S> <C> INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 2 BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 7 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 7 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . 9 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 </TABLE> <PAGE> INVESTMENT OBJECTIVE AND POLICIES The following information supplements the information set forth in the prospectus under the caption "INVESTMENT OBJECTIVE AND POLICIES" and applies to the U.S. 6-10 Series (the "Series") of The DFA Investment Trust Company (the "Trust"). Because the structure of the Series is based on the relative market capitalizations of eligible holdings, it is possible that the Series might include at least 5% of the outstanding voting securities of one or more issuers. In such circumstances, the Fund and the issuer would be deemed "affiliated persons" under the Investment Company Act of 1940 (the "1940 Act") and certain requirements of the 1940 Act regulating dealings between affiliates might become applicable. However, based on the present capitalizations of the groups of companies eligible for inclusion in the Series and the anticipated amount of the Series' assets intended to be invested in such securities, management does not anticipate that the Series will include as much as 5% of the voting securities of any issuer. BROKERAGE TRANSACTIONS During the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid total brokerage commissions of $361,784, $473,887 and $855,652, respectively. The substantial increases or decreases in the amount of brokerage commissions paid by the Series from year to year resulted from increases or decreases in the amount of securities that were bought and sold by the Series. Portfolio transactions of the Series will be placed with a view to receiving the best price and execution. In addition, the Advisor will seek to acquire and dispose of securities in a manner which would cause as little fluctuation in the market prices of stocks being purchased or sold as possible in light of the size of the transactions being effected. Brokers will be selected with these goals in view. The Advisor monitors the performance of brokers which effect transactions for the Series to determine the effect that their trading has on the market prices of the securities in which it invests. The Advisor also checks the rate of commission being paid by the Series to its brokers to ascertain that they are competitive with those charged by other brokers for similar services. Transactions also may be placed with brokers who provide the Advisor with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. The Investment Management Agreement of the Series permits the Advisor knowingly to pay commissions on these transactions which are greater than another broker might charge if the Advisor, in good faith, determines that the commissions paid are reasonable in relation to the research or brokerage services provided by the broker or dealer when viewed in terms of either a particular transaction or the Advisor's overall responsibilities to the Series. During fiscal year 1997, the Series paid commissions for securities transactions to brokers which provided market price monitoring services, market studies and research services to the Series of $486,637 with respect to securities transactions valued at $153,272,761. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Series. The OTC companies eligible for purchase by the Series are thinly traded securities. Therefore, the Advisor believes it needs maximum flexibility to effect OTC trades on a best execution basis. To that end, the Advisor places buy and sell orders with market makers, third market brokers, Instinet and with dealers on an agency basis when the Advisor determines that the securities may not be available from other sources at a more favorable price. Third market brokers enable the Advisor to trade with other institutional holders directly on a net basis. This allows the Advisor sometimes to trade larger blocks than would be possible by going through a single market maker. 2 <PAGE> Instinet is an electronic information and communication network whose subscribers include most market makers as well as many institutions. Instinet charges a commission for each trade executed on its system. On any given trade, the Series, by trading through Instinet, would pay a spread to a dealer on the other side of the trade plus a commission to Instinet. However, placing a buy (or sell) order on Instinet communicates to many (potentially all) market makers and institutions at once. This can create a more complete picture of the market and thus increase the likelihood that the Series can effect transactions at the best available prices. The Portfolio will not incur any brokerage or other costs in connection with its purchase or redemption of shares of the Series, except if the Portfolio receives securities or currencies from the Series to satisfy the Portfolio's redemption request. INVESTMENT LIMITATIONS The Portfolio has adopted certain limitations which may not be changed without the approval of the holders of a majority of the outstanding voting securities of the Portfolio. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be effected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of the Portfolio. The Series' investment limitations are the same as those of the Portfolio. The Portfolio will not: (1) invest in commodities or real estate, including limited partnership interests therein, although it may purchase and sell securities of companies which deal in real estate and securities which are secured by interests in real estate; (2) make loans of cash, except through the acquisition of repurchase agreements and obligations customarily purchased by institutional investors; (3) as to 75% of the total assets of the Portfolio, invest in the securities of any issuer (except obligations of the U.S. Government and its agencies and instrumentalities) if, as a result, more than 5% of the Portfolio's total assets, at market, would be invested in the securities of such issuer; (4) purchase or retain securities of an issuer, if those officers and directors of the Fund or the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; (5) borrow, except from banks and as a temporary measure for extraordinary or emergency purposes and then, in no event, in excess of 33% of its net assets, or pledge more than 33% of such assets to secure such loans; (6) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in (5) above; (7) invest more than 15% of the value of the Portfolio's total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; (8) engage in the business of underwriting securities issued by others; (9) invest for the purpose of exercising control over management of any company; 3 <PAGE> (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; (11) invest more than 5% of its total assets in securities of companies which have (with predecessors) a record of less than three years' continuous operation; (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; (13) write or acquire options or interests in oil, gas or other mineral exploration, leases or development programs; (14) purchase warrants, except that the Portfolio may acquire warrants as a result of corporate actions involving its holding of other equity securities; (15) purchase securities on margin or sell short; (16) acquire more than 10% of the voting securities of any issuer; or (17) issue senior securities (as such term is defined in Section 18(f) of the 1940 Act), except to the extent permitted by the 1940 Act. The investment limitations described in (3), (4), (7), (9), (10), (11), (12) and (16) above do not prohibit the Portfolio from investing all or substantially all of its assets in the shares of another registered open-end investment company, such as the Series. Although (2) above prohibits cash loans, the Portfolio is authorized to lend portfolio securities. Inasmuch as the Portfolio will only hold shares of the Series, the Portfolio does not intend to lend those shares. For purposes of (7) above, although the Portfolio is authorized to invest up to 15% of its total assets in illiquid securities, it does not intend to do so. Pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act"), the Series may purchase certain unregistered (i.e. restricted) securities upon a determination that a liquid institutional market exists for the securities. If it is decided that a liquid market does exist, the securities will not be subject to the Series' limitations on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Trustees of the Trust has delegated the day-to-day function of making liquidity determinations to the Advisor. For Rule 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Trustees and the Advisor will continue to monitor the liquidity of Rule 144A securities. Although not a fundamental policy subject to shareholder approval, the Portfolio indirectly through its investment in the Series, does not intend to purchase interests in any real estate investment trust. Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from 4 <PAGE> its total assets those assets which represent collateral received by the Series for its securities lending transactions. Unless otherwise indicated, all limitations applicable to the Portfolio's and Series' investments apply only at the time that a transaction is undertaken. Any subsequent change in a rating assigned by any rating service to a security or change in the percentage of the Portfolio's or Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in the Portfolio's or Series' total assets will not require the Portfolio or Series to dispose of an investment until the Advisor determines that it is practicable to sell or close out the investment without undue market or tax consequences. DIRECTORS AND OFFICERS The names, addresses and dates of birth of the directors and officers of the Fund and a brief statement of their present positions and principal occupations during the past five years is set forth below. DIRECTORS David G. Booth, Director*, (12/2/46), President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director, of the following companies: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc. (registered investment company). Trustee, President and Chairman-Chief Executive Officer of The DFA Investment Trust Company (registered investment company). Chairman and Director, Dimensional Fund Advisors Ltd. George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company and First Prairie Funds (registered investment companies). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Public Director, Chicago Mercantile Exchange. Myron S. Scholes, (7/1/42), Director, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. 5 <PAGE> Rex A. Sinquefield, (9/7/44), Director*, Chairman-Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd. *Interested Director of the Fund. OFFICERS Each of the officers listed below hold the same office (except as otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc. Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA. Truman Clark, (4/8/41), Vice President, Santa Monica, CA. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. Maureen Connors, (11/17/36), Vice President and Assistant Secretary, Santa Monica, CA. Robert Deere, (10/8/57), Vice President, Santa Monica, CA. Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Richard Eustice, (8/5/65), Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA. Kamyab Hashemi-Nejad, 1/22/61, Vice President, Controller and Assistant Treasurer, Santa Monica, CA. Stephen P. Manus, 12/26/50, Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. Karen McGinley, 3/10/66, Vice President, Santa Monica, CA. Catherine L. Newell, 5/7/64, Vice President and Assistant Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989 to 1996. David Plecha, (10/26/61), Vice President, Santa Monica, CA. George Sands, (2/8/56), Vice President, Santa Monica, CA. Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Jeanne C. Sinquefield, Ph.D., (12/2/46), Executive Vice President, Santa Monica, CA. 6 <PAGE> Scott Thornton, (3/1/63), Vice President, Santa Monica, CA. Weston Wellington, (3/1/51), Vice President, Santa Monica, CA. Director of Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994. Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife. Directors and officers as a group own less than 1% of the Portfolio's outstanding stock. Set forth below is a table listing, for each director entitled to receive compensation, the compensation received from the Fund during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year. <TABLE> <CAPTION> Total Compensation from Aggregate Fund Compensation and Fund Complex Director from Fund -------- ------------ ----------------------- <S> <C> <C> George M. Constantinides $5,000 $30,000 John P. Gould $5,000 $30,000 Roger G. Ibbotson $5,000 $30,000 Merton H. Miller $5,000 $30,000 Myron S. Scholes $5,000 $30,000 </TABLE> * 1 moved from here; text not shown ADMINISTRATIVE SERVICES PFPC Inc. ("PFPC") serves as the accounting services, dividend disbursing and transfer agent for the Portfolio and the Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include day-to-day keeping and maintenance of certain records, calculation of the offering price of the shares, preparation of reports, liaison with its custodian, and transfer and dividend disbursing agency services. For its services, the Portfolio pays PFPC a monthly fee of $1,000. OTHER INFORMATION For the services it provides as investment advisor to the Series, the Advisor is paid a monthly fee calculated as a percentage of average net assets of the Series. For the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid advisory fees of $57,000, $81,000 and $102,000, respectively. The Series has more than one investor; this dollar amount represents the total dollar amount of advisory fees paid by the Series to the Advisor. The Fund was known as DFA U.S. Large Cap Inc. from February, 1992, until the Fund amended its Articles of Incorporation in April, 1993, to change to its present name. Prior to a February, 1992, amendment to the Fund's Articles of Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. PNC Bank, N.A. serves as a custodian for the Portfolio and the Series. The custodian maintains a separate account or accounts for the Portfolio and the Series; receives, holds and releases portfolio securities 7 <PAGE> on account of the Portfolio and the Series; makes receipts and disbursements of money on behalf of the Portfolio and the Series; and collects and receives income and other payments and distributions on account of the Portfolio's and Series' portfolio securities. Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the Fund's financial statements. PRINCIPAL HOLDERS OF SECURITIES As of January 30, 1998, the following person(s) beneficially owned 5% or more of the outstanding stock of the Portfolio, as set forth below: <TABLE> <S> <C> NI-Gas Savings Investment & Thrift Plans 69.07% Northern Illinois Gas P.O. Box 190 Aurora, IL 60507 Utah Retirement System 27.91% 540 E. 200 South Salt Lake City, UT 84102 </TABLE> PURCHASE OF SHARES The following information supplements the information set forth in the prospectus under the caption "PURCHASE OF SHARES." The Fund will accept purchase and redemption orders on each day that the New York Stock Exchange (the "NYSE") is open for business, regardless of whether the Federal Reserve System is closed. However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Fund will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days as the NYSE, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Fund is closed. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Fund or the Portfolio. Securities accepted in exchange for shares of the Portfolio will be acquired for investment purposes and will be considered for sale under the same circumstances as other securities in the Portfolio. REDEMPTION OF SHARES The following information supplements the information set forth in the prospectus under the caption "REDEMPTION OF SHARES." The Fund may suspend redemption privileges or postpone the date of payment: (1) during any period when the NYSE is closed, or trading on the NYSE is restricted as determined by the Securities and Exchange Commission (the "Commission"), (2) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities 8 <PAGE> owned by it, or fairly to determine the value of its assets, and (3) for such other periods as the Commission may permit. Shareholders may transfer shares of the Portfolio to another person by making a written request therefore to the Advisor who will transmit the request to the Fund's Transfer Agent. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of request, the stock certificate or any stock power must be guaranteed in the same manner as described in the prospectus under "REDEMPTION OF SHARES." As with redemptions, the written request must be received in good order before any transfer can be made. CALCULATION OF PERFORMANCE DATA Following are quotations of the annualized percentage total returns of the Portfolio for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable) using the standardized method of calculation required by the Commission. <TABLE> <CAPTION> <S> <C> <C> ONE YEAR FIVE YEARS TEN YEARS -------- ---------- --------- 26.42% 17.62% n/a (55 months) </TABLE> For purposes of calculating the performance of the Portfolio, the performance of the Series will be utilized for the period prior to when the Portfolio commenced operations, and, if applicable, restated to reflect the Portfolio's fees and expenses. As the following formula indicates, the Portfolio and Series each determines its average annual total return by finding the average annual compounded rates of return over the stated time period that would equate a hypothetical initial purchase order of $1,000 to its redeemable value (including capital appreciation/depreciation and dividends and distributions paid and reinvested less any fees charged to a shareholder account) at the end of the stated time period. The calculation assumes that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The calculation also assumes the account was completely redeemed at the end of each period and the deduction of all applicable charges and fees. According to the Commission's formula: P(1 + T)n = ERV where: 9 <PAGE> P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one-, five- and ten-year periods at the end of the one-, five- and ten-year periods (or fractional portion thereof). In addition to the standardized method of calculating performance required by the Commission, the Portfolio and Series may disseminate other performance data and may advertise total return performance calculated on a monthly basis. The Portfolio may compare its investment performance to appropriate market and mutual fund indices and investments for which reliable performance data is available. Such indices are generally unmanaged and are prepared by entities and organizations which track the performance of investment companies or investment advisors. Unmanaged indices often do not reflect deductions for administrative and management costs and expenses. The performance of the Portfolio may also be compared in publications to averages, performance rankings, or other information prepared by recognized mutual fund statistical services. Any performance information, whether related to the Portfolio or to the Advisor, should be considered in light of the Portfolio's investment objectives and policies, characteristics and the quality of the portfolio and market conditions during the time period indicated and should not be considered to be representative of what may be achieved in the future. FINANCIAL STATEMENTS The audited financial statements and financial highlights of the Portfolio for the Fund's fiscal year ended November 30, 1997, as set forth in the Fund's annual report to shareholders of the Portfolio, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited financial statements of the Series for the Trust's fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. A shareholder may obtain a copy of the reports upon request and without charge, by contacting the Fund at the address or telephone number appearing on the cover of this statement of additional information. 10 <PAGE> PROSPECTUS MARCH 3, 1998 DFA ONE-YEAR FIXED INCOME PORTFOLIO II _________________ This prospectus describes DFA ONE-YEAR FIXED INCOME PORTFOLIO II (the "Portfolio"), a series of shares issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, (310) 395-8005. The Portfolio is an open-end, management investment company whose shares are offered, without a sales charge, to 401(k) defined contribution plans and clients, customers or members of certain institutions. The Fund issues thirteen series of shares, each of which represents a separate class of the Fund's common stock, having its own investment objective and policies. The Fund has not established a minimum initial purchase requirement for the Portfolio. THE INVESTMENT OBJECTIVE OF THE PORTFOLIO IS TO ACHIEVE STABLE REAL VALUE OF CAPITAL WITH A MINIMUM OF RISK BY INVESTING IN HIGH QUALITY OBLIGATIONS. THE PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF THE DFA ONE-YEAR FIXED INCOME SERIES (THE "SERIES") OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"). THE SERIES IS AN OPEN-END, MANAGEMENT INVESTMENT COMPANY THAT HAS THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS AS THE PORTFOLIO. THE INVESTMENT EXPERIENCE OF THE PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE INVESTMENT EXPERIENCE OF THE SERIES. INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "THE PORTFOLIO." This prospectus sets forth information about the Portfolio that prospective investors should know before investing and should be read carefully and retained for future reference. A statement of additional information about the Portfolio, dated March 3, 1998, as amended from time to time, which is incorporated herein by reference, has been filed with the Securities and Exchange Commission and is available upon request, without charge, by writing or calling the Fund at the above address or telephone number. _________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 1 <PAGE> TABLE OF CONTENTS PAGE HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 3 THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 6 Description of Investments. . . . . . . . . . . . . . . . . . . . . . . 6 Investments in the Banking Industry . . . . . . . . . . . . . . . . . . 7 Portfolio Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . 7 SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Foreign Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Banking Industry Concentrations . . . . . . . . . . . . . . . . . . . . 8 Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 8 MANAGEMENT OF THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . 8 Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . 9 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . .10 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 VALUATION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 2 <PAGE> HIGHLIGHTS PAGE INVESTMENT OBJECTIVE 6 The investment objective of the Portfolio is to achieve stable real value of capital with a minimum of risk. The Portfolio invests all of its assets in the Series. Generally, the Series will acquire high quality obligations which mature within one year from the date of settlement; however, when greater returns are available substantial investments may be made in securities maturing within two years from the date of settlement as well. In addition, the Series intends to concentrate investments in the banking industry under certain circumstances. The investment objective of the Portfolio is a fundamental policy and may not be changed without the affirmative vote of a majority of its outstanding securities. (See "INVESTMENT OBJECTIVE AND POLICIES.") PAGE RISK FACTORS 8 The Series is authorized to invest in dollar-denominated obligations of U.S. subsidiaries and branches of foreign banks and dollar-denominated obligations of foreign issuers traded in the U.S. and also is authorized to concentrate investments in the banking industry in certain circumstances. The Portfolio is authorized to invest in repurchase agreements. All of the above-described policies involve certain risks. The policy of the Portfolio to invest in the shares of the Series also involves certain risks. (See "RISK FACTORS.") PAGE MANAGEMENT AND ADMINISTRATIVE SERVICES 8 Dimensional Fund Advisors Inc. (the "Advisor") serves as investment advisor to the Series. The Advisor provides the Portfolio with certain administrative services. The Fund contracts with Shareholder Services Agents to provide certain recordkeeping and other services for the benefit of the Portfolio's shareholders. (See "MANAGEMENT OF THE PORTFOLIO.") PAGE DIVIDEND POLICY 10 The Portfolio distributes dividends from its net investment income monthly and makes any distributions from realized net capital gains on an annual basis. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") PAGE PURCHASE, VALUATION AND REDEMPTION OF SHARES 11 The shares of the Portfolio are sold at net asset value. The redemption price of a share of the Portfolio is equal to the net asset value of the share. The value of the shares issued by the Portfolio will fluctuate in relation to the investment experience of the Series. Unlike money market funds, the shares of the Portfolio will tend to reflect fluctuations in interest rates because the Series does not seek to stabilize the price of its shares by use of the "amortized cost" method of securities valuation. (See "PURCHASE OF SHARES," "VALUATION OF SHARES" and "REDEMPTION OF SHARES.") 1 <PAGE> SHAREHOLDER TRANSACTION EXPENSES None* The expenses in the following table are based on those incurred by the Portfolio for the fiscal year ended November 30, 1997. ANNUAL FUND OPERATING EXPENSES** (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management Fee 0.05% Administration Fee (after voluntary fee waivers) 0.00% Other Expenses (after assumption of expenses) 0.70% Total Operating Expenses (after fee waivers and assumption of expenses) 0.75%*** * Shares of the Portfolio that are purchased through omnibus accounts maintained by securities firms may be subject to a service fee or commission on such purchases. ** The "Management Fee" is payable by the Series and the "Administration Fee" is payable by the Portfolio. The amount set forth in "Other Expenses" represents the aggregate amount that is payable by both the Series and the Portfolio. "Other Expenses" include a fee paid to the Shareholder Services Agent of each employer plan or institution at the annual rate of .25% of the average daily value of all shares of the Portfolio that are held in an account maintained by such Shareholder Services Agent, paid on a monthly basis. (See "Administrative Services.") *** Effective December 1, 1995, the Advisor agreed to waive its fee under the Administration Agreement with respect to the Portfolio, and to the extent that such waiver is insufficient, to assume the expenses of the Portfolio, to the extent necessary to keep the cumulative annual expenses of the Portfolio to not more than .75% of the average net assets of the Portfolio on an annualized basis. Absent the Advisor's waiver of the administration fees and assumption of expenses, the ratio of total operating expenses to average net assets for the Portfolio and Series for the fiscal year ended November 30, 1997, would have been 1.14%. For purposes of this waiver and assumption of expenses, the annual expenses are those expenses incurred in any period consisting of twelve consecutive months. The Advisor retains the right in its sole discretion to modify or eliminate the waiver of a portion of its fees and the assumption of expenses of the Portfolio in the future. If the Advisor modifies or eliminates the fee waiver or assumption of expenses, such change will be set forth in the prospectus. EXAMPLE You would pay the following transaction and annual operating expenses on a $1,000 investment in each Portfolio, assuming a 5% annual return over each of the following time periods and redemption at the end of each time period: <TABLE> <CAPTION> 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- <S> <C> <C> <C> $8 $24 $42 $93 </TABLE> The purpose of the above fee table and Example is to assist investors in understanding the various costs and expenses that an investor in the Portfolio will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 <PAGE> The table summarizes the aggregate estimated annual operating expenses of both the Portfolio and the Series. (See "MANAGEMENT OF THE PORTFOLIO" for a description of Portfolio and Series expenses.) The Board of Directors of the Fund has considered whether such expenses will be more or less than they would be if the Portfolio were to invest directly in the securities held by the Series. The aggregate amount of expenses for the Portfolio and the Series may be greater than it would be if the Portfolio were to invest directly in the securities held by the Series. However, the total expense ratio for the Portfolio and the Series is expected to be less over time than such ratio would have been if the Portfolio were to invest directly in the underlying securities. This is because this arrangement enables institutional investors, including the Portfolio, to pool their assets, which may be expected to result in economies by spreading certain fixed costs over a larger asset base. Each shareholder in the Series, including the Portfolio, will pay its proportionate share of the expenses of the Series. CONDENSED FINANCIAL INFORMATION The following financial highlights are part of the financial statements of the Portfolio. The information for each of the past fiscal years has been audited by independent accountants. The financial statements, related notes and the report of the independent accountants covering such financial information and financial highlights for the Fund's most recent fiscal year ended November 30, 1997, are incorporated by reference into the Fund's statement of additional information from the Fund's annual report to shareholders for the year ended November 30, 1997. Further information about the Portfolio's performance is contained in the Fund's annual report to shareholders of the Portfolio for the year ended November 30, 1997. A copy of the annual report may be obtained from the Fund upon request at no charge. 3 <PAGE> FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> Year Year Feb. 9 Ended Ended To Nov. 30, Nov. 30, Nov. 30, 1997 1996 1995 -------- -------- -------- <S> <C> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . . . . . . . . . . $10.18 $10.16 $10.00 INCOME FROM INVESTMENT OPERATIONS Net Investment Income. . . . . . . . . . . . . . . . . . . . . . . . . . . 0.53 0.46 0.24 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . . . (0.01) 0.02 0.16 ------ ------ ------ Total from Investment Operations . . . . . . . . . . . . . . . . . . . . . 0.52 0.48 0.40 ------ ------ ------ LESS DISTRIBUTIONS Net Investment Income. . . . . . . . . . . . . . . . . . . . . . . . . . . (0.54) (0.46) (0.24) ------ ------ ------ Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . . . . . $10.16 $10.18 $10.16 ------ ------ ------ ------ ------ ------ Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.23% 4.86% 4.09%# Net Assets, End of Period (thousands) . . . . . . . . . . . . . . . . . . . . $9,342 $4,732 $569 Ratio of Expenses to Average Net Assets (1) . . . . . . . . . . . . . . . . . 0.75%(a) 0.75%(a) 2.50%*(a) Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . . . 5.10%(a) 4.66%(a) 2.80%*(a) Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . . . . . . . . . . . 82.84% 95.84% 81.31%(b) </TABLE> ________________ (Adjusted to reflect a 900% stock dividend as of January 2, 1996.) *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (a) Had certain waivers and assumptions of expenses not been in effect, the ratios of expenses to average net assets for the periods ended November 30, 1997, 1996 and 1995 would have been 1.14%, 2.80% and 17.81%, respectively and the ratios of net investment income to average net assets for the periods ended November 30, 1997, 1996 and 1995 would have been 4.71%, 2.61% and (12.60%), respectively. (b) Master Fund Series turnover calculated for the year ended November 30, 1995. 4 <PAGE> THE PORTFOLIO The Portfolio, unlike many other investment companies which directly acquire and manage their own portfolio of securities, seeks to achieve its investment objective by investing all of its investable assets in the Series, an open-end, management investment company registered under the Investment Company Act of 1940, having the same investment objective as the Portfolio. The investment objective of the Portfolio may not be changed without the affirmative vote of a majority of its outstanding securities and the investment objective of the Series may not be changed without the affirmative vote of a majority of its outstanding securities. Shareholders of the Portfolio will receive written notice thirty days prior to any change in the investment objective of the Series. This prospectus describes the investment objective, policies and restrictions of the Portfolio and the Series. (See "INVESTMENT OBJECTIVE AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE PORTFOLIO" for a description of the management and other expenses associated with the Portfolio's investment in the Series. Other institutional investors, including other mutual funds, may invest in the Series, and the expenses of such other investors and, correspondingly, their returns may differ from those of the Portfolio. Please contact the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for information about the availability of investing in the Series other than through the Portfolio. The shares of the Series will be offered to institutional investors for the purpose of increasing the funds available for investment, to reduce expenses as a percentage of total assets and to achieve other economies that might be available at higher asset levels. For example, the Series might be able to place larger block trades at more advantageous prices and to participate in securities transactions of larger denominations, thereby reducing the relative amount of certain transaction costs in relation to the total size of the transaction. While investment in the Series by other institutional investors offers potential benefits to the Series and, through its investment in the Series, also to the Portfolio, economies and expense reductions might not be achieved and additional investment opportunities, such as increased diversification, might not be available if other institutions do not invest in the Series. Also, if an institutional investor were to redeem its interest in the Series, the remaining investors in the Series could experience higher pro rata operating expenses, thereby producing lower returns, and the Series' security holdings may become less diverse, resulting in increased risk. Institutional investors that have a greater pro rata ownership interest in the Series than the Portfolio could have effective voting control over the operation of the Series. Further, if the Series changes its investment objective in a manner which is inconsistent with the investment objective of the Portfolio and the shareholders of the Portfolio fail to approve a similar change in the investment objective of the Portfolio, the Portfolio would be forced to withdraw its investment in the Series and either seek to invest its assets in another registered investment company with the same investment objective as the Portfolio, which might not be possible, or retain an investment advisor to manage the Portfolio's assets in accordance with its own investment objective, possibly at increased cost. A withdrawal by the Portfolio of its investment in the Series could result in a distribution in kind of portfolio securities (as opposed to a cash distribution) to the Portfolio. Should such a distribution occur, the Portfolio could incur brokerage fees or other transaction costs in converting such securities to cash in order to pay redemptions. In addition, a distribution in kind to the Portfolio could result in a less diversified portfolio of investments and could affect adversely the liquidity of the Portfolio. Moreover, a distribution in kind by the Series may constitute a taxable exchange for federal income tax purposes resulting in gain or loss to the Portfolio. Any net capital gains so realized will be distributed to the Portfolio's shareholders as described in "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" below. Finally, the Portfolio's investment in the shares of a registered investment company such as the Series is new and results in certain operational and other complexities. However, management believes that the benefits to be gained by shareholders outweigh the additional complexities and that the risks attendant to such investment are not inherently different from the risks of direct investment in securities of the type in which the Series invests. 5 <PAGE> INVESTMENT OBJECTIVE AND POLICIES The investment objective of the Portfolio is to achieve a stable real value (i.e. a return in excess of the rate of inflation) of invested capital with a minimum of risk. This objective will be pursued by investing the assets of the Portfolio in the Series, which has the same investment objective and policies as the Portfolio. The Series will invest in U.S. government obligations, U.S. government agency obligations, dollar-denominated obligations of foreign issuers issued in the U.S., bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate obligations, commercial paper, repurchase agreements and obligations of supranational organizations. Generally, the Series will acquire obligations which mature within one year from the date of settlement, but substantial investments may be made in obligations maturing within two years from the date of settlement when greater returns are available. It is the Series' policy that the weighted average length of maturity of investments will not exceed one year. The Series principally invests in certificates of deposit, commercial paper, bankers' acceptances, notes and bonds. The Series will invest more than 25% of its total assets in obligations of U.S. and/or foreign banks and bank holding companies when the yield to maturity on these instruments exceeds the yield to maturity on all other eligible portfolio investments of similar quality for a period of five consecutive days when the New York Stock Exchange (the "NYSE") is open for trading. (See "Investments in the Banking Industry.") DESCRIPTION OF INVESTMENTS The following is a description of the categories of the investments which may be acquired by the Series. 1. U.S. GOVERNMENT OBLIGATIONS - Debt securities issued by the U.S. Treasury which are direct obligations of the U.S. government, including bills, notes and bonds. 2. U.S. GOVERNMENT AGENCY OBLIGATIONS - Issued or guaranteed by U.S. government-sponsored instrumentalities and federal agencies, including the Federal National Mortgage Association, Federal Home Loan Bank and the Federal Housing Administration. 3. CORPORATE DEBT OBLIGATIONS - Non-convertible corporate debt securities (e.g., bonds and debentures) which are issued by companies whose commercial paper is rated Prime-1 by Moody's Investors Services, Inc. ("Moody's") or A-1 by Standard & Poor's Rating Group, a Division of The McGraw-Hill Companies ("S&P") and dollar-denominated obligations of foreign issuers issued in the U.S. If the issuer's commercial paper is unrated, then the debt security would have to be rated at least AA by S&P or Aa2 by Moody's. If there is neither a commercial paper rating nor a rating of the debt security, then the Advisor must determine that the debt security is of comparable quality to equivalent issues of the same issuer rated at least AA or Aa2. 4. BANK OBLIGATIONS - Obligations of U.S. banks and savings and loan associations and dollar-denominated obligations of U.S. subsidiaries and branches of foreign banks, such as certificates of deposit (including marketable variable rate certificates of deposit) and bankers' acceptances. Bank certificates of deposit will only be acquired from banks having assets in excess of $1,000,000,000. 5. COMMERCIAL PAPER - Rated, at the time of purchase, A-1 or better by S&P or Prime-1 by Moody's, or, if not rated, issued by a corporation having an outstanding unsecured debt issue rated Aaa by Moody's or AAA by S&P, and having a maximum maturity of nine months. 6. REPURCHASE AGREEMENTS - Instruments through which the Series purchases securities ("underlying securities") from a bank, or a registered U.S. government securities dealer, with an agreement by the seller to repurchase the security at an agreed price, plus interest at a specified rate. The underlying securities will be limited to U.S. government and agency obligations described in (1) and (2) above. The Series will not enter into a repurchase agreement with a duration of more than seven days if, as a result, more than 10% of the value of the Series' total assets would be so invested. The Series will also only invest in repurchase agreements with a bank if the bank has at least $1,000,000,000 in assets and is approved by the Investment Committee of the Advisor. The Advisor will monitor the market value of the securities plus any accrued interest thereon so that they will at least equal the repurchase price. 6 <PAGE> 7. SUPRANATIONAL ORGANIZATION OBLIGATIONS - Debt securities of supranational organizations such as the European Coal and Steel Community, the European Economic Community and the World Bank, which are chartered to promote economic development. The categories of investments that may be acquired by the Series may include both fixed and floating rate securities. Floating rate securities bear interest at rates that vary with prevailing market rates. Interest rate adjustments are made periodically (e.g., every six months), usually based on a money market index such as the London Interbank Offered Rate (LIBOR) or the Treasury bill rate. INVESTMENTS IN THE BANKING INDUSTRY The Series will invest more than 25% of its total assets in obligations of U.S. and/or foreign banks and bank holding companies when the yield to maturity on these investments exceeds the yield to maturity on all other eligible portfolio investments for a period of five consecutive days when the NYSE is open for trading. For the purpose of this policy, which is a fundamental policy of the Series and can only be changed by a vote of shareholders of the Series, banks and bank holding companies are considered to constitute a single industry, the banking industry. The Portfolio has the same fundamental policy, which can only be changed by a vote of the Portfolio's shareholders, except that the Portfolio's policy does not apply to the extent that all or substantially all of its net assets are invested in the Series. When investment in such obligations exceeds 25% of the total net assets of the Series, the Series will be considered to be concentrating its investments in the banking industry. As of the date of this prospectus, the Series is concentrating its investment in this industry. The types of bank and bank holding company obligations in which the Series may invest include: dollar-denominated certificates of deposit, bankers' acceptances, commercial paper and other debt obligations issued in the United States and which mature within two years of the date of settlement, provided such obligations meet the Series' established credit rating criteria as stated under "Description of Investments." In addition, the Series is authorized to invest more than 25% of its total assets in Treasury bonds, bills and notes and obligations of federal agencies and instrumentalities. PORTFOLIO STRATEGY The Series will be managed with a view to capturing credit risk premiums and term or maturity premiums. As used herein, the term "credit risk premium" means the anticipated incremental return on investment for holding obligations considered to have greater credit risk than direct obligations of the U.S. Treasury and "maturity risk premium" means the anticipated incremental return on investment for holding securities having maturities of longer than one month compared to securities having a maturity of one month. The Advisor believes that credit risk premiums are available largely through investment in high grade commercial paper, certificates of deposit and corporate obligations. The holding period for assets of the Series will be chosen with a view to maximizing anticipated monthly returns, net of trading costs. The Series is expected to have a high portfolio turnover rate due to the relatively short maturities of the securities to be acquired. The rate of portfolio turnover will depend upon market and other conditions; it will not be a limiting factor when management believes that portfolio changes are appropriate. It is anticipated that the annual turnover rate of the Series could be 0% to 200%. The annual portfolio turnover rates of the Series for the fiscal years ended November 30, 1996 and 1997, respectively, were 95.84% and 82.84%. While the Series acquires securities in principal transactions and, therefore, does not pay brokerage commissions, the spread between the bid and asked prices of a security may be considered to be a "cost" of trading. Such costs ordinarily increase with trading activity. However, as stated above, securities ordinarily will be sold when, in the Advisor's judgment, the monthly return of the Series will be increased as a result of portfolio transactions after taking in to account the cost of trading. It is anticipated that securities will be acquired in the secondary markets for short term instruments. SECURITIES LOANS The Series is authorized to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While the Series may earn additional income from lending securities, such activity 7 <PAGE> is incidental to the investment objective of the Series. The value of securities loaned may not exceed 331/3% of the value of the Series' total assets. In connection with such loans, the Series will receive collateral consisting of cash or U.S. Government securities, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. In addition, the Series will be able to terminate the loan at any time and will receive reasonable interest on the loan, as well as amounts equal to any dividends, interest or other distributions on the loaned securities. In the event of the bankruptcy of the borrower, the Series could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. The Portfolio is also authorized to lend its portfolio securities. However, as long as it holds only shares of the Series, it will not do so. RISK FACTORS FOREIGN SECURITIES The Series invests in foreign issuers. Such investments involve risks that are not associated with investments in U.S. public companies. Such risks may include legal, political and or diplomatic actions of foreign governments, such as imposition of withholding taxes on interest and dividend income payable on the securities held, possible seizure or nationalization of foreign deposits, establishment of exchange controls or the adoption of other foreign governmental restrictions which might adversely affect the value of the assets held by the Series. Further, foreign issuers are not generally subject to uniform accounting, auditing and financial reporting standards comparable to those of U.S. public companies and there may be less publicly available information about such companies than comparable U.S. companies. The Series may invest in obligations of supranational organizations. The value of the obligations of these organizations may be adversely affected if one or more of their supporting governments discontinue their support. BANKING INDUSTRY CONCENTRATIONS Concentrating in obligations of the banking industry may involve additional risk by foregoing the safety of investing in a variety of industries. Changes in the market's perception of riskiness of banks relative to non-banks could cause more fluctuations in the net asset value of the Series (and, thus, the Portfolio) than might occur in less concentrated portfolios. REPURCHASE AGREEMENTS In addition, the Series may invest in repurchase agreements. In the event of the bankruptcy of the other party to a repurchase agreement, the Trust could experience delay in recovering the securities underlying such agreement. Management believes that this risk can be controlled through stringent security selection criteria and careful monitoring procedures. MANAGEMENT OF THE PORTFOLIO The Advisor serves as investment advisor to the Series. As such, the Advisor is responsible for the management of its assets. Investment decisions for the Series are made by the Investment Committee of the Advisor, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of the Advisor who are elected annually. The Advisor provides the Series with a trading department and selects brokers and dealers to effect securities transactions. Portfolio securities are placed with a view to obtaining best price and execution and, subject to this goal, may be placed with brokers which have assisted in the sale of the Portfolio's shares. For the fiscal year ended November 30, 1997, the Advisor received a fee for its advisory services to the Series equal to 0.05% of the average net assets of the Series and the total expenses of the Portfolio were 0.75% of its average net assets. Effective December 1, 1995, the Advisor agreed to waive its fee under the Administration Agreement with respect to the Portfolio, and to the extent that such waiver is insufficient, to reimburse the Portfolio, to the extent necessary to keep the cumulative annual expenses of the Portfolio to not more than 0.75% of the average net assets of the Portfolio on an annualized basis. Absent the Advisor's waiver of the administration fees and assumption of expenses, the ratio of expenses to average net assets for the Portfolio for the fiscal year ended November 8 <PAGE> 30, 1997, would have been 1.14%. For purposes of this waiver and assumption of expenses, the annual expenses are those expenses incurred in any period consisting of twelve consecutive months. The Advisor retains the right in its sole discretion to modify or eliminate the waiver of a portion of its fees and the assumption of expenses of the Portfolio in the future. If the Advisor modifies or eliminates the fee waiver or assumption of expenses, such change will be set forth in the prospectus. The Portfolio and the Series each bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage commissions and transfer taxes in connection with the acquisition and disposition of portfolio securities, taxes, insurance premiums, costs incidental to meetings of its shareholders and directors or trustees, the cost of filing its registration statements under federal securities laws and the cost of any filings required under state securities laws, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to the Portfolio or the Series are so allocated and expenses which are not allocable to the Portfolio and the Series are borne by the Portfolio and the Series on the basis of their relative net assets. The Advisor was organized in May, 1981, and is engaged in the business of providing investment management services to institutional investors. Assets under management total approximately $26 billion. David G. Booth and Rex A. Sinquefield (directors and officers of both the Fund and the Advisor, trustees and officers of the Trust, and shareholders of the Advisor) may be deemed controlling persons of the Advisor. The Board of Directors is responsible for establishing Portfolio policies and for overseeing the management of the Portfolio. Each of the Directors and officers of the Fund is also a Trustee and officer of the Trust. The Directors of the Fund, including all of the disinterested Directors, have adopted written procedures to monitor potential conflicts of interest that might develop between the Portfolio and the Series. The Portfolio's statement of additional information furnishes information about the Directors and officers of the Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional information.) ADMINISTRATIVE SERVICES The Fund has entered into an administration agreement with the Advisor on behalf of the Portfolio. Pursuant to the administration agreement, the Advisor will perform various services, including: supervision of the services provided by the Portfolio's custodian and dividend disbursing agent and others who provide services to the Fund for the benefit of the Portfolio; assisting the Fund to comply with the provisions of federal, state, local and foreign securities, tax and other laws applicable to the Portfolio; providing shareholders of record with information about the Portfolio and their investments as they or the Fund may request; assisting the Fund to conduct meetings of shareholders of record; furnishing information as the Board of Directors may require regarding the Series; and any other administrative services for the benefit of the Portfolio as the Board of Directors may reasonably request. The Advisor also provides the Fund with office space and personnel. For its administrative services, the Portfolio pays the Advisor a monthly fee equal to one-twelfth of .10% of the average net assets of the Portfolio. The Advisor has agreed to waive its fee under the administration agreement with respect to the Portfolio to the extent necessary to keep the cumulative annual expenses of the Portfolio to not more than .75% of the average net assets on an annualized basis. The Fund intends to enter into shareholder service agreements with certain Shareholder Service Agents on behalf of the Portfolio. The Shareholder Service Agents ordinarily will include (i) with respect to participants in a 401(k) plan that invests in the Portfolio, the person designated to service the employer's plan and (ii) institutions whose clients, customers or members invest in the Portfolio. These services to be provided under the shareholder service agreements may include any of the following: individual recordkeeping for 401(k) plan participants and clients, customers or members of institutions (collectively referred to herein as "Participants"); sending statements to Participants reflecting account activities such as purchases, redemptions and dividend payments; responding to Participant inquiries regarding their accounts; tax reporting with respect to dividends, distributions and redemptions; receiving, aggregating and processing Participant orders; and providing the Portfolio with information necessary for the Fund to comply with the state securities laws. The fee paid by the Portfolio to the Shareholder Services Agent of each employer plan or institution is an annual rate of .25% of the 9 <PAGE> aggregate daily value of all shares held in an account maintained by such Shareholder Services Agent, paid on a monthly basis. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES The Portfolio intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for federal income taxes to the extent that its net investment income and net realized capital gains are distributed. Net investment income, which is accrued daily, will be distributed monthly (except for January) by the Portfolio. Any net realized capital gains of the Portfolio will be distributed annually after the close of the fiscal year. The Series also intends to qualify each year as a regulated investment company under the Code. Special tax rules may apply in determining the income and gains that the Series earns on its investments. Also, foreign governments may impose taxes on the income and gains from the Series' investments in foreign securities. These rules may, in turn, affect the amount of distributions that the Portfolio pays to its shareholders. Shareholders of the Portfolio will automatically receive all income dividends and any capital gains distributions in additional shares of the Portfolio at net asset value (as of the business date following the dividend record date). The Portfolio receives income in the form of income dividends paid by the Series. This income, less the expenses incurred in operations, is the Portfolio's net investment income from which income dividends are distributed as described above. The Portfolio also may receive capital gains distributions from the Series and may realize capital gains upon the redemption of the shares of the Series. Any net realized capital gains of the Portfolio will be distributed as described above. Dividends and distributions paid to a 401(k) plan accumulate free of federal income tax. Since virtually all the net investment income from the Portfolio is expected to arise from earned interest, it is not expected that any of the Portfolio's distributions will be eligible for the dividends received deduction for corporations. Whether paid in cash or additional shares and regardless of the length of time the Portfolio's shares have been owned by shareholders who are subject to federal income taxes, distributions from long-term capital gains are taxable as such. Dividends from net investment income or net short-term capital gains will be taxable as ordinary income. Shareholders are notified annually by the Fund as to the federal tax status of dividends and distributions paid by the Portfolio. Dividends which are declared in November or December to shareholders of record in such a month but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes as if paid by the Portfolio and received by the shareholder on December 31 of the calendar year in which they are declared. The sale of shares of the Portfolio is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares of the Portfolio for shares of another portfolio of the Fund. Any loss incurred on sale or exchange of the Portfolio's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. In addition to federal taxes, shareholders may be subject to state or local taxes on distributions received from the Portfolio and gains arising on redemption or exchange of Portfolio shares. It is anticipated that no portion of the Portfolio's distributions will qualify for exemption from state personal income taxes as dividends paid from interest earned on direct obligations of the U.S. Government. The Portfolio is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding 10 <PAGE> requirement by certifying on the account registration form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding. The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Portfolio. PURCHASE OF SHARES Shares of the Portfolio are sold only (i) to fund deferred compensation plans which are exempt from taxation under section 401(k) of the Code and (ii) to clients, customers or members of certain institutions. Provided that shares of the Portfolio are available under an employer's plan or through an institution, shares may be purchased by following the procedures adopted by the respective employer or institution and approved by the Fund's management for making investments. Shares are available through the Shareholder Services Agent designated under the employer's plan or by the institution. Investors who want to consider investing in the Portfolio should contact their employer or institution for details. Institutions which purchase shares of the Portfolio for the accounts of their customers may impose separate charges on those customers for account services. The Fund does not impose a minimum purchase requirement, but investors who wish to purchase shares of the Portfolio should determine whether their employer's plan or institution imposes a minimum transaction requirement. VALUATION OF SHARES The net asset value per share of the Series is calculated as of the close of the NYSE by dividing the total market value of its investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Series. The value of the shares of the Series will tend to fluctuate with interest rates because, unlike money market funds, the Series does not seek to stabilize the value of its shares by use of the "amortized cost" method of asset valuation. Net asset value includes interest on fixed income securities which is accrued daily. Securities held by the Series which are listed on a securities exchange and for which market quotations are available are valued at the last quoted sale price of the day. Unlisted securities for which market quotations are readily available are valued at the mean between the most recent quoted bid and asked prices. Securities which are traded OTC and on a stock exchange will be valued according to the broadest and most representative market; it is expected that for bonds and other fixed-income securities this ordinarily will be the OTC market. Securities held by the Series may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the current market value of such securities. The value of other assets and securities for which no quotations are readily available (including restricted securities) are determined in good faith at fair value in accordance with procedures adopted by the Board of Trustees of the Trust. The net asset value of the Portfolio is calculated as of the close of the NYSE by dividing the total market value of its investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Portfolio. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. Provided that the Shareholder Services Agent has received the investor's investment instructions in good order and the Custodian has received the investor's payment, shares of the Portfolio will be priced at the net asset value calculated next after receipt of the order by PFPC Inc., the transfer agent of the Fund. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. The Fund reserves the right to redeem shares owned by any purchaser whose order is canceled to recover any resulting loss to the Fund and may prohibit or restrict in the manner in which such purchaser may place further orders. DISTRIBUTION The Fund acts as distributor of the Portfolio's shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of DFA, pursuant to which DFA Securities Inc. is responsible for supervising the sale of the Portfolio's shares. No compensation is paid by the Fund to DFA Securities Inc. under this agreement. 11 <PAGE> EXCHANGE OF SHARES Provided such transactions are permitted under an employer's 401(k) plan, investors may exchange shares of the Portfolio for shares in a portfolio of DFA Investment Dimensions Group Inc., an open-end, management investment company by completing the necessary documentation as required by the services agent designated under the employer's plan and the Advisor. Please contact the service agent of your plan for further information. The minimum amount for an exchange is $100,000. The exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the markets. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of any Portfolio or otherwise adversely affect the Fund, the exchange privilege may be terminated, and any proposed exchange will be subject to the approval of the Advisor. Such approval will depend on: (i) the size of the proposed exchange; (ii) the prior number of exchanges by that shareholder; (iii) the nature of the underlying securities and the cash position of the Portfolio involved in the proposed exchange; (iv) the transaction costs involved in processing the exchange; and (v) the total number of redemptions by exchange already made out of the Portfolio. The redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the services agent has received appropriate instructions in the form required by such services agent and provided that such service agent has provided proper documentation to the Advisor. Exchanges may be subject to a reimbursement fee. There is no fee imposed on an exchange. However, the Fund reserves the right to impose an administrative fee in order to cover the costs incurred in processing an exchange. Any such fee will be disclosed in the prospectus. An exchange is treated as a redemption and a purchase. Therefore, an investor could realize a taxable gain or loss on the transaction. No gain or loss will be recognized by investors through a 401(k) plan. The Fund reserves the right to revise or terminate the exchange privilege, limit the amount of or reject any exchange, or waive the minimum amount requirement as deemed necessary, at any time. REDEMPTION OF SHARES Investors who desire to redeem shares of the Portfolio must furnish a redemption request to the respective Shareholder Services Agent in the form required by such Shareholder Services Agent. The Portfolio will redeem shares at the net asset value of such shares next determined after receipt of a request for redemption in good order. Although the redemption payments will ordinarily be made within seven days after receipt, payment to investors redeeming shares which were purchased by check will not be made until the Fund can verify that the payments for the purchase have been, or will be, collected, which may take up to fifteen days or more. Investors may avoid this delay by submitting a certified check along with the purchase order. The Fund reserves the right to redeem a shareholder's account if the value of the shares in the account is $500 or less, whether because of redemptions, a decline in the Portfolio's net asset value per share or any other reason. Before the Fund involuntarily redeems shares from such an account and sends the proceeds to the stockholder, the Fund will give written notice of the redemption to the stockholder at least sixty days in advance of the redemption date. The stockholder will then have sixty days from the date of the notice to make an additional investment in the Portfolio in order to bring the value of the shares in the account to more than $500 and avoid such involuntary redemption. The redemption price to be paid to a stockholder for shares redeemed by the Fund under this right will be the aggregate net asset value of the shares in the account at the close of business on the redemption date. 12 <PAGE> When in the best interests of the Portfolio, the Portfolio may make a redemption payment, in whole or in part, by a distribution of portfolio securities that the Portfolio receives from the Series in lieu of cash in accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage charges and other transaction costs selling securities that were received in payment of redemptions. GENERAL INFORMATION The Portfolio and the Series may disseminate reports of their investment performance from time to time. Investment performance is calculated on a total return basis; that is by including all net investment income and any realized and unrealized net capital gains or losses during the period for which investment performance is reported. If dividends or capital gains distributions have been paid during the relevant period the calculation of investment performance will include such dividends and capital gains distributions as though reinvested in shares of the Portfolio. Standard quotations of total return are computed in accordance with SEC Guidelines and are presented whenever any non-standard quotations are disseminated to provide comparability to other investment companies. Non-standardized total return quotations may differ from the SEC Guidelines computations by covering different time periods. In all cases, disclosures are made when performance quotations differ from the SEC Guidelines. Performance data is based on historical earnings and is not intended to indicate future performance. Rates of return expressed on an annual basis will usually not equal the sum of returns expressed for consecutive interim periods due to the compounding of the interim yields. The Fund's annual report to shareholders of the Portfolio for the fiscal year ended November 30, 1997, contains additional performance information. A copy of the annual report is available upon request and without charge. The Fund was incorporated under Maryland law on March 19, 1990. The shares of the Portfolio, when issued and paid for in accordance with the Portfolio's prospectus, will be fully paid and non-assessable shares, with equal, non-cumulative voting rights and no preferences as to conversion, exchange, dividends, redemption or any other feature. With respect to matters which require shareholder approval, shareholders are entitled to vote only with respect to matters which affect the interest of the class of shares (Portfolio) which they hold, except as otherwise required by applicable law. If liquidation of the Fund should occur, shareholders would be entitled to receive on a per class basis the assets of the particular Portfolio whose shares they own, as well as a proportionate share of Fund assets not attributable to any particular Portfolio. Ordinarily, the Fund does not intend to hold annual meetings of shareholders, except as required by the Investment Company Act of 1940 (the "1940 Act") or other applicable law. The Fund's by-laws provide that special meetings of shareholders shall be called at the written request of at least 10% of the votes entitled to be cast at such meeting. Such meeting may be called to consider any matter, including the removal of one or more directors. Shareholders will receive shareholder communications with respect to such matters as required by the 1940 Act, including semi-annual and annual financial statements of the Fund, the latter being audited. The DFA Investment Trust Company was organized as a Delaware business trust on October 27, 1992. The Trust offers shares of its Series only to institutional investors in private offerings. The Fund may withdraw the investment of the Portfolio in the Series at any time, if the Board of Directors of the Fund determines that it is in the best interests of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of the Fund would consider what action might be taken, including the investment of all of the assets of the Portfolio in another pooled investment entity having the same investment objective as the Portfolio or the hiring of an investment advisor to manage the Portfolio's assets in accordance with the investment policies described above. Whenever the Portfolio, as an investor in the Series, is asked to vote on a shareholder proposal, the Fund will solicit voting instructions from the Portfolio's shareholders with respect to the proposal. The Directors of the Fund will then vote the Portfolio's shares in the Series in accordance with the voting instructions received from the Portfolio's shareholders. The Directors of the Fund will vote shares of the Portfolio for which they receive no voting instructions in accordance with their best judgment. As of January 30, 1998, the following person owned more than 25% of the voting securities of the Portfolio: 13 <PAGE> <TABLE> <S> <C> Home Depot Future Builder and Stock 65.48% Ownership Plan Wachovia Bank of North Carolina as Trustee* 301 N. Main Street Winston Salem, NC 27150 *Owner of record only. </TABLE> Shareholder inquiries may be made by writing or calling the Shareholder Services Agent at the address or telephone number set forth in the employer's plan documents or in documents provided by the institution. 14 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 INVESTMENT ADVISOR DIMENSIONAL FUND ADVISORS INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 CUSTODIAN PNC BANK, N.A. 200 Stevens Drive, Airport Business Center Lester, PA 19113 ACCOUNTING SERVICES, DIVIDEND DISBURSING AND TRANSFER AGENT PFPC INC. 400 Bellevue Parkway Wilmington, DE 19809 LEGAL COUNSEL STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 INDEPENDENT ACCOUNTANTS COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center 19th and Market Streets Philadelphia, PA 19103 <PAGE> DFA ONE-YEAR FIXED INCOME PORTFOLIO II DIMENSIONAL INVESTMENT GROUP INC. 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401 TELEPHONE: (310) 395-8005 STATEMENT OF ADDITIONAL INFORMATION MARCH 3, 1998 This statement of additional information is not a prospectus but should be read in conjunction with the prospectus of DFA One-Year Fixed Income Portfolio II (the "Portfolio") of Dimensional Investment Group Inc. (the "Fund"), dated March 3, 1998, as amended from time to time, which can be obtained by writing or calling the Shareholder Services Agent for your employer's plan. TABLE OF CONTENTS PAGE BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2 INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . 6 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . 8 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . 8 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 <PAGE> BROKERAGE TRANSACTIONS The DFA One-Year Fixed Income Series (the "Series") of The DFA Investment Trust Company (the "Trust") acquires and sells securities on a net basis with dealers which are major market makers in such securities. The Investment Committee of the Advisor selects dealers on the basis of their size, market making and credit analysis ability. When executing portfolio transactions, the Advisor seeks to obtain the most favorable price and execution for the securities being traded among the dealers with whom the Series effects transactions. Transactions also may be placed with brokers who provide the Advisor with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Series. The Portfolio will not incur any brokerage or other costs in connection with its purchase or redemption of shares of the Series, except if the Portfolio receives securities from the Series to satisfy the Portfolio's redemption request. INVESTMENT LIMITATIONS The Portfolio has adopted certain limitations which may not be changed without the approval of the holders of a majority of the outstanding voting securities of the Portfolio. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be effected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of such Portfolio. The investment limitations of the Series are the same as those of the Portfolio. The Portfolio will not: (1) invest in commodities or real estate, including limited partnership interests therein, although it may purchase and sell securities of companies which deal in real estate and securities which are secured by interests in real estate; (2) make loans of cash, except through the acquisition of repurchase agreements and obligations customarily purchased by institutional investors; (3) as to 75% of its total assets, invest in the securities of any issuer (except obligations of the U.S. Government and its agencies and instrumentalities) if, as a result , more than 5% of the Portfolio's total assets, at market, would be invested in the securities of such issuer; (4) purchase or retain securities of an issuer, if those officers and directors of the Fund or the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; (5) borrow, except from banks and as a temporary measure for extraordinary or emergency purposes and then, in no event, in excess of 5% of its net assets; (6) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value; 2 <PAGE> (7) invest more than 10% of the value of the Portfolio's total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; (8) engage in the business of underwriting securities issued by others; (9) invest for the purpose of exercising control over management of any company; (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; (11) invest more than 5% of its total assets in securities of companies which have (with predecessors) a record of less than three years' continuous operation; (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; except the Portfolio shall invest more than 25% of its total assets in obligations of banks and bank holding companies in the circumstances described in the prospectus under "Investments in the Banking Industry" and as otherwise described under "Portfolio Strategy;" (13) write or acquire options or interests in oil, gas or other mineral exploration, leases or development programs; (14) purchase warrants; (15) purchase securities on margin or sell short; (16) acquire more than 10% of the voting securities of any issuer; or (17) issue senior securities (as such term is defined in Section 18(f) of the 1940 Act), except to the extent permitted under the 1940 Act. The investment limitations described in (3), (4), (7), (9), (10), (11), (12) and (16) above do not prohibit the Portfolio from investing all or substantially all of its assets in the shares of another registered open-end investment company, such as the Series. Although (2) above prohibits cash loans, the Portfolio is authorized to lend portfolio securities. Inasmuch as the Portfolio will only hold shares of the Series, the Portfolio does not intend to lend those shares. For purposes of (7) above, the Portfolio (indirectly through the Series) may invest in commercial paper that is exempt from the registration requirements of the Securities Act of 1933 (the "1933 Act") subject to the requirements regarding credit ratings stated in the prospectus under "Description of Investments." Further, pursuant to Rule 144A under the 1933 Act, the Series may purchase certain unregistered (i.e. restricted) securities upon a determination that a liquid institutional market exists for the securities. If it is decided that a liquid market does exist, the securities will not be subject to the 10% limitation on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Trustees of the Trust has delegated the day-to-day function of making liquidity determinations to the Advisor. For 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Trustees and the Advisor will continue to monitor the liquidity of Rule 144A securities. 3 <PAGE> Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from its total assets those assets which represent collateral received by the Series for its securities lending transactions. Unless otherwise indicated, all limitations applicable to the Portfolio's and Series' investments apply only at the time that a transaction is undertaken. Any subsequent change in a rating assigned by any rating service to a security or change in the percentage of the Portfolio's or Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in the Portfolio's or Series' total assets will not require the Portfolio or Series to dispose of an investment until the Advisor determines that is practicable to sell or closeout the investment without undue market or tax consequences. In the event that ratings services assign different ratings to the same security, the Advisor will determine which rating it believes best reflects the security's quality and risk at that time, which may be the higher of the several assigned ratings. DIRECTORS AND OFFICERS The names, addresses and dates of birth of the directors and officers of the Fund and a brief statement of their present positions and principal occupations during the past five years is set forth below. DIRECTORS David G. Booth,* 12/2/46, Director, President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director, of the following companies: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc. (registered investment company). Trustee, President and Chairman-Chief Executive Officer of The DFA Investment Trust Company (registered investment company). Chairman and Director, Dimensional Fund Advisors Ltd. George M. Constantinides, 9/22/47, Director, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. John P. Gould, 1/19/39, Director, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company and First Prairie Funds (registered investment companies). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). Roger G. Ibbotson, 5/27/43, Director, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, 5/16/23, Director, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Public Director, Chicago Mercantile Exchange. 4 <PAGE> Myron S. Scholes, 7/1/42, Director, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. Rex A. Sinquefield,* 9/7/44, Director, Chairman-Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd. *Interested Director of the Fund. OFFICERS Each of the officers listed below hold the same office (except as otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc. Arthur Barlow, 11/7/55, Vice President, Santa Monica, CA. Truman Clark, 4/8/41, Vice President, Santa Monica, CA. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. Maureen Connors, 11/17/36, Vice President and Assistant Secretary, Santa Monica, CA. Robert Deere, 10/8/57, Vice President, Santa Monica, CA. Irene R. Diamant, 7/16/50, Vice President and Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Richard Eustice, 8/5/65, Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., 1/21/61, Vice President, Santa Monica, CA. Kamyab Hashemi-Nejad, 1/22/61, Vice President, Controller and Assistant Treasurer, Santa Monica, CA. Stephen P. Manus, 12/26/50, Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. Karen McGinley, 3/10/66, Vice President, Santa Monica, CA. Catherine L. Newell, 5/7/64, Vice President and Assistant Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989 to 1996. David Plecha, 10/26/61, Vice President, Santa Monica, CA. 5 <PAGE> George Sands, 2/8/56, Vice President, Santa Monica, CA. Michael T. Scardina, 10/12/55, Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Jeanne C. Sinquefield, Ph.D., 12/2/46, Executive Vice President, Santa Monica, CA. Scott Thornton, 3/1/63, Vice President, Santa Monica, CA. Weston Wellington, 3/1/51, Vice President, Santa Monica, CA. Director of Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994. Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife. Directors and officers as a group own less than 1% of the Portfolio's outstanding stock. Set forth below is a table listing, for each director entitled to receive compensation, the compensation received from the Fund during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year. <TABLE> <CAPTION> Aggregate Total Compensation from Compensation Fund Director from Fund and Fund Complex - -------- ------------ ----------------------- <S> <C> <C> George M. Constantinides $5,000 $30,000 John P. Gould $5,000 $30,000 Roger G. Ibbotson $5,000 $30,000 Merton H. Miller $5,000 $30,000 Myron S. Scholes $5,000 $30,000 </TABLE> ADMINISTRATIVE SERVICES PFPC, Inc. ("PFPC") serves as the accounting services, dividend disbursing and transfer agent for the Portfolio and the Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include day-to-day keeping and maintenance of certain records, calculation of the net asset value of the shares, preparation of reports, liaison with the Portfolio's and the Series' custodian, and transfer and dividend disbursing agency services. For its services, the Portfolio pays PFPC a monthly fee of $1,000. 6 <PAGE> OTHER INFORMATION For the services it provides as investment advisor to the Series, the Advisor is paid a monthly fee calculated as a percentage of average net assets of the Series. For the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid advisory fees of $310,000, $386,000 and $392,000, respectively. The Series has more than one investor; this dollar amount represents the total dollar amount of advisory fees paid by the Series to the Advisor. The Fund was known as DFA U.S. Large Cap Inc. from February, 1992, until the Fund amended its Articles of Incorporation in April, 1993, to change to its present name. Prior to a February, 1992, amendment to the Fund's Articles of Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. PNC Bank, N.A. serves as a custodian for the Portfolio and the Series. The custodian maintains a separate account or accounts for the Portfolio and the Series; receives, holds and releases portfolio securities on account of the Portfolio and the Series; makes receipts and disbursements of money on behalf of the Portfolio and the Series; and collects and receives income and other payments and distributions on account of the Portfolio's and Series' portfolio securities. Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the Fund's financial statements. PURCHASE OF SHARES The following information supplements the information set forth in the prospectus under the caption "PURCHASE OF SHARES." The Fund will accept purchase and redemption orders on each day that the New York Stock Exchange ("NYSE") is open for business, regardless of whether the Federal Reserve System is closed. However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Fund will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days that the NYSE is closed, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Fund is closed. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Fund or the Portfolio. REDEMPTION OF SHARES The following information supplements the information set forth in the prospectus under the caption "REDEMPTION OF SHARES." The Fund may suspend redemption privileges or postpone the date of payment: (1) during any period when the NYSE is closed, or trading on the NYSE is restricted as determined by the Securities and Exchange Commission (the "Commission"), (2) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it, or fairly to determine the value of its assets, and (3) for such other periods as the Commission may permit. 7 <PAGE> PRINCIPAL HOLDERS OF SECURITIES As of January 30, 1998, the following persons beneficially owned 5% or more of the outstanding stock of the Portfolio, as set forth below: <TABLE> <S> <C> Home Depot Future Builder and Stock Ownership Plan 65.48% Wachovia Bank of North Carolina as Trustee* 301 N. Main Street Winston Salem, NC 27150 Starbucks Coffee 13.52% Wachovia Bank of North Carolina as Custodian* 301 N. Main Street Winston Salem, NC 27150 Sisters of Charity 13.22% Northern Trust as Trustee* Attn: Mutual Funds P.O. Box 92956 Chicago, IL 60675 Hewitt IRA Portfolio 7.78% Wachovia Bank of North Carolina as Custodian* Attn: Mutual Funds 301 N. Main Street Winston Salem, NC 27150 </TABLE> ____________________ *Owner of record only. CALCULATION OF PERFORMANCE DATA Following are quotations of the annualized percentage total return for the Portfolio for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable), using the standardized method of calculation required by the Commission. <TABLE> <CAPTION> ONE YEAR FIVE YEARS TEN YEARS -------- ---------- --------- <S> <C> <C> 5.13% =55 months n/a </TABLE> 8 <PAGE> For purposes of calculating the performance of the Portfolio, the performance of the Series will be utilized for the period prior to when the Portfolio commenced operations and, if applicable, restated to reflect the Portfolio's fees and expenses. As the following formula indicates, the Portfolio and Series each determines its average annual total return by finding the average annual compounded rates of return over the stated time period that would equate a hypothetical initial purchase order of $1,000 to its redeemable value (including capital appreciation/depreciation and dividends and distributions paid and reinvested less any fees charged to a shareholder account) at the end of the stated time period. The calculation assumes that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The calculation also assumes the account was completely redeemed at the end of each period and the deduction of all applicable charges and fees. According to the Commission formula: P(1 + T)(n) = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one-, five- and ten-year periods at the end of the one-, five-and ten-year periods (or fractional portion thereof). In addition to the standardized method of calculating performance required by the Commission, the Portfolio and Series may disseminate other performance data and may advertise total return performance calculated on a monthly basis. The Portfolio may compare its investment performance to appropriate market and mutual fund indices and investments for which reliable performance data is available. Such indices are generally unmanaged and are prepared by entities and organizations which track the performance of investment companies or investment advisors. Unmanaged indices often do not reflect deductions for administrative and management costs and expenses. The performance of the Portfolio also may be compared in publications to averages, performance rankings, or other information prepared by recognized mutual fund statistical services. Any performance information, whether related to the Portfolio or to the Advisor, should be considered in light of the Portfolio's investment objectives and policies, characteristics and the quality of the portfolio and market conditions during the time period indicated and should not be considered to be representative of what may be achieved in the future. FINANCIAL STATEMENTS The audited financial statements and financial highlights of the Portfolio for the Fund's fiscal year ended November 30, 1997, as set forth in the Fund's annual report to shareholders of the Portfolio, 9 <PAGE> and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited financial statements of the Series for the Trust's fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. A shareholder may obtain a copy of the reports upon request and without charge, by contacting the Fund at the address or telephone number appearing on the cover of this statement of additional information. 10 <PAGE> PROSPECTUS MARCH 3, 1998 THE DFA INTERNATIONAL VALUE PORTFOLIO ------------------ This prospectus describes THE DFA INTERNATIONAL VALUE PORTFOLIO (the "Portfolio"), a series of shares issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, (310) 395-8005. The Portfolio is an open-end, management investment company whose shares are offered, without a sales charge, to institutional investors, retirement plans and clients of registered investment advisers. The Fund issues thirteen series of shares, each of which represents a separate class of the Fund's common stock, having its own investment objective and policies. The Fund has not established an initial minimum purchase requirement for the Portfolio. THE INVESTMENT OBJECTIVE OF THE PORTFOLIO IS TO ACHIEVE LONG-TERM CAPITAL APPRECIATION. THE PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF THE DFA INTERNATIONAL VALUE SERIES (THE "SERIES") OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"). THE SERIES IS AN OPEN-END, MANAGEMENT INVESTMENT COMPANY THAT HAS THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS AS THE PORTFOLIO. THE INVESTMENT EXPERIENCE OF THE PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE INVESTMENT EXPERIENCE OF THE SERIES. INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "THE PORTFOLIO." This prospectus sets forth information about the Portfolio that prospective investors should know before investing and should be read carefully and retained for future reference. A statement of additional information about the Portfolio, dated March 3, 1998, as may be amended from time to time, which is incorporated herein by reference, has been filed with the Securities and Exchange Commission and is available upon request, without charge, by writing or calling the Fund at the above address or telephone number. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. <PAGE> TABLE OF CONTENTS PAGE HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 3 THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 6 Portfolio Characteristics and Policies. . . . . . . . . . . . . . . . . 6 Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . 7 SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Foreign Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Foreign Currencies and Related Transactions . . . . . . . . . . . . . . 8 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Portfolio Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . 9 Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 9 Futures Contracts and Options on Futures. . . . . . . . . . . . . . . . 9 MANAGEMENT OF THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . 9 Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . 10 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . . 10 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 In Kind Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 VALUATION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 <PAGE> HIGHLIGHTS PAGE INVESTMENT OBJECTIVE 5 The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio will invest all of its assets in the Series, which in turn will invest in the stocks of large non-U.S. companies that are value stocks, primarily because they have a high book value in relation to their market value. The investment objective of the Portfolio is a fundamental policy and may not be changed without the affirmative vote of a majority of its outstanding securities. (See "INVESTMENT OBJECTIVE AND POLICIES.") PAGE RISK FACTORS 7 The Portfolio (indirectly through its investment in the Series) invests in foreign securities and may invest in futures contracts and options thereon. The Portfolio is also authorized to invest in repurchase agreements. Those policies and the policy of the Portfolio to invest in the shares of the Series involve certain risks. (See "RISK FACTORS.") PAGE MANAGEMENT AND ADMINISTRATIVE SERVICES 8 Dimensional Fund Advisors Inc. (the "Advisor" or "DFA") provides the Portfolio with administrative services and also serves as investment advisor to the Series. (See "MANAGEMENT OF THE PORTFOLIO.") PAGE DIVIDEND POLICY 9 The Portfolio distributes dividends from its net investment income quarterly and any realized net capital gains annually after the end of its fiscal year. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") PAGE PURCHASE, VALUATION AND REDEMPTION OF SHARES 11 The shares of the Portfolio are offered at net asset value, which is calculated as of the close of the New York Stock Exchange (the "NYSE") on each day that the NYSE is open for business. The Fund has not established an initial minimum purchase requirement for the Portfolio, and there is no minimum purchase requirement for subsequent purchases. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. The redemption price of a share of the Portfolio is equal to its net asset value. (See "PURCHASE OF SHARES," "VALUATION OF SHARES" and "REDEMPTION OF SHARES.") 1 <PAGE> SHAREHOLDER TRANSACTION EXPENSES None* The expenses in the expense table below are based on those incurred by the Portfolio and the Series for the fiscal year ended November 30, 1997. ANNUAL FUND OPERATING EXPENSES** (AS A PERCENTAGE OF AVERAGE NET ASSETS) <TABLE> <S> <C> Management Fee 0.20% Administration Fee 0.20% Other Expenses 0.16% Total Operating Expenses 0.56% </TABLE> *Shares of the Portfolio that are purchased through omnibus accounts maintained by securities firms may be subject to a service fee or commission on such purchases. **The "Management Fee" is payable by the Series and the "Administration Fee" is payable by the Portfolio. The amount set forth in "Other Expenses" represents the aggregate amount that is payable by both the Series and the Portfolio. EXAMPLE You would pay the following transaction and annual operating expenses on a $1,000 investment in the Portfolio, assuming a 5% annual return over each of the following time periods and redemption at the end of each time period: <TABLE> <CAPTION> 1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- <S> <C> <C> <C> $6 $18 $31 $70 </TABLE> The purpose of the above fee table and Example is to assist investors in understanding the various costs and expenses that an investor in the Portfolio will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. The table summarizes the aggregate estimated annual operating expenses of both the Portfolio and the Series. (See "MANAGEMENT OF THE PORTFOLIO.") The Board of Directors of the Fund has considered whether such expenses will be more or less than they would be if the Portfolio were to invest directly in the securities held by the Series. The aggregate amount of expenses for the Portfolio and the Series may be greater than it would be if the Portfolio were to invest directly in the securities held by the Series. However, the total expense ratio for the Portfolio and the Series is expected to be less over time than such ratio would be if the Portfolio were to invest directly in the underlying securities. This is because this arrangement enables institutional investors, including the Portfolio, to pool their assets, which may be expected to result in economies by spreading certain fixed costs over a larger asset base. Each shareholder in the Series, including the Portfolio, will pay its proportionate share of the expenses of the Series. 2 <PAGE> CONDENSED FINANCIAL INFORMATION The following financial highlights are part of the financial statements of the Portfolio. The information for each of the past fiscal years has been audited by independent accountants. The financial statements, related notes and the report of the independent accountants covering such financial information and financial highlights for the Fund's most recent fiscal year ended November 30, 1997, are incorporated by reference into the Portfolio's statement of additional information from the Fund's annual report to shareholders for the year ended November 30. 1997. Further information about the Portfolio's performance is contained in the Fund's annual report to shareholders of the Portfolio for the year ended November 30, 1997. A copy of the annual report may be obtained from the Fund upon request at no charge. 3 <PAGE> FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> YEAR YEAR YEAR FEB. 16 ENDED ENDED ENDED TO NOV. 30, NOV. 30, NOV. 30, NOV. 30, 1997 1996 1995 1994 -------- -------- -------- -------- <S> <C> <C> <C> <C> Net Asset Value, Beginning of Period. . . . . $ 11.90 $ 10.55 $ 10.06 $ 10.00 -------- -------- -------- -------- Income from Investment Operations Net Investment Income. . . . . . . . . . . 0.19 0.21 0.19 0.13 -------- -------- -------- -------- Net Gains (Losses) on Securities (Realized and Unrealized). . . . . . . . (0.65) 1.31 0.51 0.06 -------- -------- -------- -------- Total from Investment Operations . . . . (0.46) 1.52 0.70 0.19 Less Distributions Net Investment Income. . . . . . . . . . . (0.21) (0.17) (0.19) (0.13) Net Realized Gains . . . . . . . . . . . . (0.29) -- (0.02) -- -------- -------- -------- -------- Total Distributions. . . . . . . . . . . (0.50) (0.17) (0.21) (0.13) -------- -------- -------- -------- Net Asset Value, End of Period . . . . . . . $ 10.94 $ 11.90 $ 10.55 $ 10.06 -------- -------- -------- -------- Total Return . . . . . . . . . . . . . . . . (4.04)% 14.54% 6.95% 1.85%# Net Assets, End of Period (thousands) . . . . $370,117 $316,708 $245,243 $227,795 Ratio of Expenses to Average Net Assets (1). . . . . . . . . . . . . . . . . . 0.56% 0.56%(a) 0.65%(a) 0.65%*(a) Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . . . . 1.72% 2.22%(a) 1.79%(a) 1.80%*(a) Portfolio Turnover Rate. . . . . . . . . . . . N/A N/A N/A N/A Average Commission Rate. . . . . . . . . . . . N/A N/A N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . . . . . . . . . . . . 22.55% 12.23% 9.75% 1.90%* Average Commission Rate of Master Fund Series (2). . . . . . . . . . . . . . . . $ 0.0068 $ 0.0112 N/A N/A </TABLE> - ------------------ *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (a) Had certain waivers and reimbursements not been in effect, the ratios of expenses to average net assets for the periods ended November 30, 1996, 1995 and 1994 would have been 0.57%, 0.72% and 0.72%, respectively and the ratios of net investment income to average net assets for the periods ended November 30, 1996, 1995 and 1994 would have been 2.21%, 1.71% and 1.75, respectively. (2) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal years beginning after September 1, 1995. 4 <PAGE> THE PORTFOLIO The Portfolio, unlike many other investment companies which directly acquire and manage their own portfolio of securities, seeks to achieve its investment objective by investing all of its investable assets in the Series, an open-end, management investment company registered under the Investment Company Act of 1940 (the "1940 Act") having the same investment objective as the Portfolio. The investment objective of the Portfolio may not be changed without the affirmative vote of a majority of its outstanding securities and the investment objective of the Series may not be changed without the affirmative vote of a majority of its outstanding securities. Shareholders of the Portfolio will receive written notice thirty days prior to any change in the investment objective of the Series. This prospectus describes the investment objective, policies and restrictions of the Portfolio and the Series. (See "INVESTMENT OBJECTIVE AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE PORTFOLIO" for a description of the management and other expenses associated with the Portfolio's investment in the Series. Other institutional investors, including other mutual funds, may invest in the Series, and the expenses of such other investors and, correspondingly, their returns may differ from those of the Portfolio. Please contact the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for information about the availability of investing in the Series other than through the Portfolio. The shares of the Series will be offered to institutional investors for the purpose of increasing the funds available for investment, to reduce expenses as a percentage of total assets and to achieve other economies that might be available at higher asset levels. For example, the Series might be able to place larger block trades at more advantageous prices and to participate in securities transactions of larger denominations, thereby reducing the relative amount of certain transaction costs in relation to the total size of the transaction. Investment in the Series by other institutional investors offers potential benefits to the Series and, through its investment in the Series, also to the Portfolio. However, such economies and expense reductions might not be achieved and additional investment opportunities, such as increased diversification, might not be available if other institutions do not invest in the Series. Also, if an institutional investor were to redeem its interest in the Series, the remaining investors in the Series could experience higher pro rata operating expenses, thereby producing lower returns, and the Series' security holdings may become less diverse, resulting in increased risk. Institutional investors that have a greater pro rata ownership interest in the Series than the Portfolio could have effective voting control over the operation of the Series. Further, if the Series changes its investment objective in a manner which is inconsistent with the investment objective of the Portfolio and the shareholders of the Portfolio fail to approve a similar change in the investment objective of the Portfolio, the Portfolio would be forced to withdraw its investment in the Series and either seek to invest its assets in another registered investment company with the same investment objective as the Portfolio, which might not be possible, or retain an investment advisor to manage the Portfolio's assets in accordance with its own investment objective, possibly at increased cost. A withdrawal by the Portfolio of its investment in the Series could result in a distribution in kind of portfolio securities (as opposed to a cash distribution) to the Portfolio. Should such a distribution occur, the Portfolio could incur brokerage fees or other transaction costs in converting such securities to cash in order to pay redemptions. In addition, a distribution in kind to the Portfolio could result in a less diversified portfolio of investments and could affect adversely the liquidity of the Portfolio. Moreover, a distribution in kind by the Series may constitute a taxable exchange for federal income tax purposes resulting in gain or loss to the Portfolio. Any net capital gains so realized will be distributed to the Portfolio's shareholders as described in "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" below. Finally, the Portfolio's investment in the shares of a registered investment company such as the Series is relatively new and results in certain operational and other complexities. However, management believes that the benefits to be gained by shareholders outweigh the additional complexities and that the risks attendant to such investment are not inherently different from the risks of direct investment in securities of the type in which the Series invests. 5 <PAGE> INVESTMENT OBJECTIVE AND POLICIES PORTFOLIO CHARACTERISTICS AND POLICIES The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio pursues its objective by investing all of its assets in the Series, which has the same investment objective and policies as the Portfolio. The Series operates as a diversified investment company and seeks to achieve its objective by investing in the stocks of large non-U.S. companies which the Advisor believes to be value stocks at the time of purchase. Securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value (a "book to market ratio"). Generally, the shares of a company in any given country will be considered to have a high book to market ratio if the ratio equals or exceeds the ratios of any of the 30% of companies in that country with the highest positive book to market ratios whose shares are listed on a major exchange, and, as described below, will be considered eligible for investment. In measuring value, the Advisor may consider additional factors such as cash flow, economic conditions and developments in the issuer's industry. The Series intends to invest in the stocks of large companies in countries with developed markets. As of the date of this prospectus, the Series may invest in the stocks of large companies in Australia, Belgium, Denmark, France, Germany, Hong Kong, Italy, Japan, Malaysia, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland and the United Kingdom. As the Series' asset growth permits, it may invest in the stocks of large companies in other developed markets, including Austria, Finland and Ireland. (See "RISK FACTORS.") PORTFOLIO STRUCTURE Under normal market conditions, at least 65% of the Series' assets will be invested in companies organized or having a majority of their assets in or deriving a majority of their operating income in at least three non-U.S. countries and no more than 40% of the Series' assets will be invested in such companies in any one country. The Series reserves the right to invest in futures contracts and options on futures contracts to commit funds awaiting investment or to maintain liquidity. To the extent that the Series invests in futures contracts for other than bona fide hedging purposes, the Series will not purchase futures contracts if as a result more than 5% of its total assets would then consist of initial margin deposits on such contracts. Such investments entail certain risks. (See "RISK FACTORS.") The Series also may invest up to 5% of its assets in convertible debentures issued by large non-U.S. companies. As of the date of this prospectus, the Series intends to invest in companies having at least $800 million of market capitalization and the Series will be approximately market capitalization weighted. The Advisor may reset such floor from time to time to reflect changing market conditions. In determining market capitalization weights, the Advisor, using its best judgment, will seek to eliminate the effect of cross holdings on the individual country weights. As a result, the weighting of certain countries in the Series may vary from their weighting in international indices such as those published by The Financial Times, Morgan Stanley Capital International or Salomon/Russell. The Advisor, however, will not attempt to account for cross holding within the same country. The Advisor may exclude the stock of a company that otherwise meets the applicable criteria if the Advisor determines in its best judgment that other conditions exist that make the purchase of such stock for the Series inappropriate. Deviation from market capitalization weighting also will occur because the Series intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by the Series may be reduced from time to time from the level which adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the Series' assets may be invested in interest-bearing obligations, such as money-market instruments, for this purpose, thereby causing further deviation from market capitalization weighting. Such investments would be made on a temporary basis pending investment in 6 <PAGE> equity securities pursuant to the Series investment objective. A further deviation from market capitalization weighting may occur if the Series invests a portion of its assets in convertible debentures. The Series may make block purchases of eligible securities at opportune prices even though such purchases exceed the number of shares which, at the time of purchase, adherence to the policy of market capitalization weighting would otherwise require. In addition, the Series may acquire securities eligible for purchase or otherwise represented in its portfolio at the time of the exchange in exchange for the issuance of its shares. (See "In Kind Purchases.") While such transactions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the Series. Changes in the composition and relative ranking (in terms of market capitalization and book to market ratio) of the stocks which are eligible for purchase by the Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On a periodic basis, the Advisor will prepare a list of eligible large companies with high book to market ratios whose stock are eligible for investment; such list will be revised not less than semi-annually. Only common stocks whose market capitalizations are not less than the minimum on such list will be purchased by the Series. Additional investments will not be made in securities which have depreciated in value to such an extent that they are not then considered by the Advisor to be large companies. This may result in further deviation from market capitalization weighting and such deviation could be substantial, if a significant amount of the Series' holdings decrease in value sufficiently to be excluded from the then current market capitalization requirement for eligible securities, but not by a sufficient amount to warrant their sale. It is management's belief that the value stocks of large companies offer, over a long term, a prudent opportunity for capital appreciation, but, at the same time, selecting a limited number of such issues for inclusion in the Series involves greater risk than including a large number of them. The Advisor does not anticipate that a significant number of securities which meet the market capitalization criteria will be selectively excluded from the Series. The Series does not seek current income as an investment objective and investments will not be based upon an issuer's dividend payment policy or record. However, many of the companies whose securities will be included in the Series do pay dividends. It is anticipated, therefore, that the Series will receive dividend income. PORTFOLIO TRANSACTIONS Securities which have depreciated in value since their acquisition will not be sold by the Series solely because prospects for the issuer are not considered attractive or due to an expected or realized decline in securities prices in general. Securities may be disposed of, however, at any time when, in the Advisor's judgment, circumstances warrant their sale, such as tender offers, mergers and similar transactions, or bids made for block purchases at opportune prices. Generally, securities will not be sold to realize short-term profits, but, when circumstances warrant, they may be sold without regard to the length of time held. Generally, securities will be purchased with the expectation that they will be held for longer than one year and will be held until such time as they are no longer considered an appropriate holding in light of the policy of maintaining a portfolio of companies with large market capitalizations and high book to market ratios. The annual portfolio turnover rates of the Series for the fiscal years ended November 30, 1996 and 1997, respectively, were 12.23% and 22.55%. SECURITIES LOANS The Series is authorized to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While the Series may earn additional income from lending securities, such activity is incidental to the Series' investment objective. The value of securities loaned may not exceed 331/3% of the value of the Series' total assets. In connection with such loans, the Series will receive collateral consisting 7 <PAGE> of cash or U.S. Government securities, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. In addition, the Series will be able to terminate the loan at any time and will receive reasonable interest on the loan, as well as amounts equal to any dividends, interest or other distributions on the loaned securities. In the event of the bankruptcy of the borrower, the Series could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. The Portfolio is also authorized to lend its portfolio securities. However, as long as it holds only shares of the Series, it will not do so. RISK FACTORS FOREIGN SECURITIES The Series invests in foreign issuers. Such investments involve risks that are not associated with investments in U.S. public companies. Such risks may include legal, political and or diplomatic actions of foreign governments, such as imposition of withholding taxes on interest and dividend income payable on the securities held, possible seizure or nationalization of foreign deposits, establishment of exchange controls or the adoption of other foreign governmental restrictions which might adversely affect the value of the assets held by the Series. Further, foreign issuers are not generally subject to uniform accounting, auditing and financial reporting standards comparable to those of U.S. public companies and there may be less publicly available information about such companies than comparable U.S. companies. The economies of many countries in which the Series invests are not as diverse or resilient as the U.S. economy, and have significantly less financial resources. Some countries are more heavily dependent on international trade and may be affected to a greater extent by protectionist measures of their governments, or dependent upon a relatively limited number of commodities and, thus, sensitive to changes in world prices for these commodities. In many foreign countries, stock markets are more variable than U.S. markets for two reasons. Contemporaneous declines in both (i) foreign securities prices in local currencies and (ii) the value of local currencies in relation to the U.S. dollar can have a significant negative impact on the net asset value of the Series and the Portfolio. The net asset value of the Series is denominated in U.S. dollars, and, therefore, declines in market price of both the foreign securities held by the Series and the foreign currency in which those securities are denominated will be reflected in the net asset value of the Series' and the Portfolio's shares. FOREIGN CURRENCIES AND RELATED TRANSACTIONS Investments of the Series will be denominated in foreign currencies. Changes in the relative values of foreign currencies and the U.S. dollar, therefore, will affect the value of investments of the Series. The Series may purchase foreign currency futures contracts and options in order to hedge against changes in the level of foreign currency exchange rates. Such contracts involve an agreement to purchase or sell a specific currency at a future date at a price set in the contract and enable the Series to protect against losses resulting from adverse changes in the relationship between the U.S. dollar and foreign currencies occurring between the trade and settlement dates of Series securities transactions, but they also tend to limit the potential gains that might result from a positive change in such currency relationships. Gains and losses on investments in futures and options thereon depend on interest rates and other economic forces. BORROWING The Series has reserved the right to borrow amounts not exceeding 33% of its net assets for the purposes of making redemption payments. When advantageous opportunities to do so exist, the Series may also purchase securities when borrowings exceed 5% of the value of its net assets. Such purchases can be considered to be 8 <PAGE> "leveraging" and, in such circumstances, the net asset value of the Series may increase or decrease at a greater rate than would be the case if the Series had not leveraged. The interest payable on the amount borrowed would increase the Series' expenses and, if the appreciation and income produced by the investments purchased when the Series has borrowed are less than the cost of borrowing, the investment performance of the Series will be reduced as a result of leveraging. PORTFOLIO STRATEGIES The method employed by the Advisor to manage the Series will differ from the process employed by many other investment advisors in that the Advisor will rely on fundamental analysis of the investment merits of securities to a limited extent to eliminate potential acquisitions rather than rely on this technique to select securities. Further, because securities generally will be held long-term and will not be eliminated based on short-term price fluctuations, the Advisor generally will not act upon general market movements or short-term price fluctuations of securities to as great an extent as many other investment advisors. REPURCHASE AGREEMENTS In addition, the Series may invest in repurchase agreements. In the event of a bankruptcy of the other party to a repurchase agreement, the Trust could experience delay in recovering the securities underlying such agreement. Management believes that the risks associated with repurchase agreements can be controlled through stringent security selection criteria and careful monitoring procedures. FUTURES CONTRACTS AND OPTIONS ON FUTURES The Series also may invest in futures contracts and options on futures. To the extent that the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, the Series will not enter into such transactions if, immediately thereafter, the sum of the amount of initial margin deposits and options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that, in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. These investments entail the risk that an imperfect correlation may exist between changes in the market value of the stocks owned by the Series and the prices of such futures contracts and options, and, at times, the market for such contracts and options might lack liquidity, thereby inhibiting the Series' ability to close a position in such investments. Gains or losses on investments in options and futures depend on the direction of securities prices, interest rates and other economic factors and the loss from investing in futures contracts is potentially unlimited. The Series' investment in futures and options are subject to special tax rules that may affect the amount, timing and character of the income earned by the Series and the Portfolio's distributions to its shareholders. (These special rules are discussed in the statement of additional information.) MANAGEMENT OF THE PORTFOLIO The Advisor serves as investment advisor to the Series and, as such, is responsible for the management of its assets. Investment decisions for the Series are made by the Investment Committee of the Advisor, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of the Advisor who are elected annually. The Advisor provides the Series with a trading department and selects brokers and dealers to effect securities transactions. Portfolio securities transactions are placed with a view to obtaining the best price and execution of such transactions. The Advisor is authorized to pay a higher commission to a broker, dealer or exchange member than another such organization might charge if it determines, in good faith, that the commission paid is reasonable in relation to the research or brokerage services provided by such organization. 9 <PAGE> For the fiscal year ended November 30, 1997, the Advisor received a fee for its advisory services to the Series equal to 0.20% of the average net assets of the Series and the total expenses of the Portfolio were 0.56% of its average net assets. The Portfolio and the Series each bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage fees, commissions and transfer taxes in connection with the acquisition and disposition of portfolio securities, taxes, insurance premiums, costs incidental to meetings of its shareholders and directors or trustees, the cost of filing its registration statements under federal securities and the cost of any filings required under state securities laws, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to the Portfolio or the Series are so allocated and expenses which are not allocable to the Portfolio and the Series are borne by the Portfolio and the Series on the basis of their relative net assets. The Advisor was organized in May, 1981, and is engaged in the business of providing investment management services to institutional investors. Assets under management total approximately $26 billion. David G. Booth and Rex A. Sinquefield (directors and officers of both the Fund and the Advisor, trustees and officers of the Trust, and shareholders of the Advisor) may be deemed controlling persons of the Advisor. The Advisor has entered into a Consulting Services Agreement with Dimensional Fund Advisors Ltd. ("DFAL") and DFA Australia Limited ("DFA Australia"), respectively. Pursuant to the terms of each Consulting Services Agreement, DFAL and DFA Australia provide certain trading and administrative services to the Advisor with respect to the Series. The Advisor owns 100% of the outstanding shares of DFAL and beneficially owns 100% of DFA Australia. The Board of Directors is responsible for establishing Portfolio policies and for overseeing the management of the Portfolio. Each of the Directors and officers of the Fund is also a Trustee and officer of the Trust. The Directors of the Fund, including all of the disinterested Directors, have adopted written procedures to monitor potential conflicts of interest that might develop between the Portfolio and the Series. The Portfolio's statement of additional information furnishes information about the Directors and officers of the Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional information.) ADMINISTRATIVE SERVICES The Fund has entered into an administration agreement with the Advisor, on behalf of the Portfolio. Pursuant to the administration agreement, the Advisor will perform various services, including: supervision of the services provided by the Portfolio's custodian and transfer and dividend disbursing agent and others who provide services to the Fund for the benefit of the Portfolio; assisting the Fund in complying with the provisions of federal, state, local and foreign securities, tax and other laws applicable to the Portfolio; providing shareholders with information about the Portfolio and their investments as they or the Fund may request; assisting the Fund in conducting meetings of shareholders; furnishing information as the Board of Directors may require regarding the Series; and any other administrative services for the benefit of the Portfolio as the Board of Directors may reasonably request. The Advisor also provides the Fund 10 <PAGE> with office space. For its administrative services, the Portfolio pays the Advisor a monthly fee equal to one-twelfth of .20% of the average net assets of the Portfolio. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES The Portfolio intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for federal income taxes to the extent that its net investment income and net realized capital gains are distributed. The Portfolio's policy is to distribute substantially all net investment income quarterly and any realized net capital gains annually after November 30, the close of the Fund's fiscal year. The Series also intends to qualify as a regulated investment company under the Code. Special tax rules may apply in determining the income and gains that the Series earns on its investments. These rules may, in turn, affect the amount of distributions that the Portfolio pays to its shareholders. Shareholders of the Portfolio will automatically receive all income dividends and any capital gains distributions in additional shares of the Portfolio whose shares they hold at net asset value (as of the business date following the dividend record date). The Portfolio receives income in the form of income dividends paid by the Series. This income, less the expenses incurred in operations, is the Portfolio's net investment income from which income dividends are distributed as described above. The Portfolio also may receive capital gains distributions from the Series and may realize capital gains upon the redemption of the shares of the Series. Any net realized capital gains of the Portfolio will be distributed as described above. Whether paid in cash or additional shares and regardless of the length of time the Portfolio's shares have been owned by shareholders who are subject to federal income taxes, distributions from long-term capital gains are taxable as such. Dividends from net investment income or net short-term capital gains will be taxable as ordinary income, whether received in cash or in additional shares. It is anticipated that either none or only a small portion of the distributions made by the Portfolio will qualify for the corporate dividends received deduction because of the Series' investment in foreign equity securities. For those investors subject to tax, if purchases of shares of the Portfolio are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution. Shareholders are notified annually by the Fund as to the federal tax status of dividends and distributions paid by the Portfolio. Dividends which are declared in November or December to shareholders of record in such a month but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes as if paid by the Portfolio and received by the shareholder on December 31 of the calendar year in which they are declared. 11 <PAGE> The sale of shares of the Portfolio is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares of the Portfolio for shares of another Portfolio of the Fund. Any loss incurred on sale or exchange of the Portfolio's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. The Series may be subject to foreign withholding taxes on income from certain of its foreign securities. These taxes will, in turn, reduce the amount of distributions the Portfolio pays to its shareholders. If the Series purchases shares in certain foreign entities, called "passive foreign investment companies," the Series may be subject to U.S. federal income tax and a related interest charge on a portion of any "excess distribution" or gain from the disposition of such shares even if such income is distributed as a taxable dividend by the Series to the Portfolio. In addition to federal taxes, shareholders may be subject to state and local taxes on distributions from the Portfolio to its shareholders and on gains arising on redemption or exchange of the Portfolio's shares. The Portfolio is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on the account registration form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding. The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Portfolio. PURCHASE OF SHARES Investors may purchase shares of the Portfolio by first contacting the Advisor at (310) 395-8005 to notify the Advisor of the proposed investment and then completing an Account Registration Form and mailing it to: Dimensional Investment Group Inc. DFA International Value Portfolio 1299 Ocean Avenue, 11th floor Santa Monica, CA 90401 The Fund has not established an initial minimum purchase requirement for the Portfolio. The Fund reserves the right to reject any initial or additional investment and to suspend the offering of shares of the Portfolio. Investors having an account with a bank that is a member or a correspondent of a member of the Federal Reserve System may purchase shares by first calling the Advisor at (310) 395-8005 to notify the Advisor of the proposed investment, then requesting the bank to transmit immediately available funds (Federal Funds) by wire to the Custodian, for the account of Dimensional Investment Group Inc. (DFA International Value Portfolio). Additional investments also may be made through the wire procedure by first notifying the Advisor. Investors who wish to purchase shares by check should send their check to Dimensional Investment Group Inc., c/o PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC Bank, N.A. serves as custodian for the Portfolio. Shares may also be purchased and sold by individuals through securities firms which may charge a service fee or commission for such transactions. No such fee or commission is charged on shares which are purchased or redeemed directly from the Fund. Investors who are clients of investment advisory organizations may also be subject to investment advisory fees under their own arrangements with such organizations. 12 <PAGE> Purchases of shares will be made in full and fractional shares calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued. IN KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in exchange for securities which are eligible for acquisition by the Series or otherwise represented in the portfolio of the Series as described in this prospectus or in exchange for local currencies in which such securities of the Series are denominated. Securities and local currencies to be exchanged which are accepted by the Fund and Fund shares to be issued therefore will be valued as set forth under "VALUATION OF SHARES" at the time of the next determination of net asset value after such acceptance. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Investors who desire to purchase shares of the Portfolio with local currencies should first contact the Advisor for wire instructions. The Fund will not accept securities in exchange for shares of the Portfolio unless: (1) such securities are, at the time of the exchange, eligible to be included, or otherwise represented, in the Series and current market quotations are readily available for such securities; (2) the investor represents and agrees that all securities offered to be exchanged are not subject to any restrictions upon their sale by the Series under the Securities Act of 1933 or under the laws of the country in which the principal market for such securities exists or otherwise; and (3) at the discretion of the Fund, the value of any such security (except U.S. Government securities) being exchanged together with other securities of the same issuer owned by the Series may not exceed 5% of the net assets of the Series immediately after the transaction. The Fund will accept such securities for investment and not for resale. A gain or loss for federal income tax purposes will be realized by investors who are subject to federal taxation upon the exchange depending upon the cost of the securities exchanged. Investors interested in such exchanges should contact the Advisor. VALUATION OF SHARES The net asset values per share of the Portfolio and the Series are calculated as of the close of the NYSE by dividing the total market value of their respective investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Portfolio and the Series, respectively. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. Securities held by the Series which are listed on a securities exchange and for which market quotations are available are valued at the last quoted sale price of the day or, if there is no such reported sale, the Series values such securities at the mean between the most recent quoted bid and asked prices. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the mean between the most recent quoted bid and asked prices. The value of other assets and securities for which no quotations are readily available (including restricted securities) are determined in good faith at fair value in accordance with procedures adopted by the Board of Trustees of the Trust. Generally, trading in foreign securities markets is completed each day at various times prior to the close of the NYSE. The values of foreign securities held by the Series are determined as of such times for the purpose of computing the net asset value of the Series. If events which materially affect the value of the investments of the Series occur subsequent to the close of the securities market on which such securities are primarily traded, the investments affected thereby will be valued at "fair value" as described above. The net asset value per share of the Series is expressed in U.S. dollars by translating the net assets of the Series using the bid price for the dollar as quoted by generally recognized reliable sources. 13 <PAGE> Provided that PFPC Inc., the transfer agent, has received the investor's Account Registration Form in good order and the Portfolio's custodian has received the investor's payment, shares of the Portfolio will be priced at the net asset value calculated next after receipt of the investor's funds by the Portfolio's custodian. "Good order" with respect to the purchase of shares means that (1) a fully completed and properly signed Account Registration Form and any additional supporting legal documentation required by the Advisor has been received in legible form and (2) the Advisor has been notified of the purchase by telephone and, if the Advisor so requests, also in writing, no later than the close of regular trading on the NYSE (ordinarily 1:00 p.m. PST) on the day of the purchase. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. The Fund reserves the right to redeem shares owned by any purchaser whose order is canceled in order to recover any resulting loss to the Fund and may prohibit or restrict in the manner in which such purchaser may place further orders. Management believes that any dilutive effect of the cost of investing the proceeds of the sale of the shares of the Portfolio is minimal and, therefore, the shares of the Portfolio are currently sold at net asset value, without imposition of a fee that would be used to reimburse the Portfolio for such cost ("reimbursement fee"). Reimbursement fees may be charged prospectively from time to time based upon the future experience of the Portfolio and the Series. Any such charges will be described in the prospectus. DISTRIBUTION The Fund acts as distributor of the Portfolio's shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of DFA, pursuant to which DFA Securities Inc. is responsible for supervising the sale of the Portfolio's shares. No compensation is paid by the Fund to DFA Securities Inc. under this agreement. EXCHANGE OF SHARES Investors may exchange shares of the Portfolio for those of another portfolio in the Fund or a portfolio of DFA Investment Dimensions Group Inc., an open-end, management investment company ("DFAIDG"), by first contacting the Advisor at (310) 395-8005 to notify the Advisor of the proposed exchange and then completing an Exchange Form and mailing it to: Dimensional Investment Group Inc. Attn: Client Operations 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 The minimum amount for an exchange into a portfolio of DFAIDG is $100,000. Exchanges are accepted only into those portfolios of DFAIDG that are eligible for the exchange privilege of DFAIDG. Investors may contact the Advisor at the above-listed phone number for a list of those portfolios of DFAIDG that accept exchanges. The exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the markets. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of the Portfolio or otherwise adversely affect the Fund or DFAIDG, any proposed exchange will be subject to the approval of the Advisor. Such approval will depend on: (i) the size of the proposed exchange; (ii) the prior number of exchanges by that shareholder; (iii) the nature of the underlying securities and the cash position of the Portfolio and of the portfolio of DFAIDG involved in the proposed exchange; (iv) the transaction costs involved in processing the exchange; and (v) the total number of redemptions by exchange already made out of the Portfolio. 14 <PAGE> The redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the Advisor has received an Exchange Form in good order, plus any applicable reimbursement fee on purchases by exchange. "Good order" means a completed Exchange Form specifying the dollar amount to be exchanged, signed by all registered owners of the shares; and if the Fund does not have on file the authorized signatures for the account, a guarantee of the signature of each registered owner by an "eligible guarantor institution." Such institutions generally include national or state banks, savings associations, savings and loan associations, trust companies, savings banks, credit unions and members of a recognized stock exchange. Exchanges will be accepted only if the registrations of the two accounts are identical, stock certificates have not been issued and the Fund may issue the shares of the portfolio being acquired in compliance with the securities laws of the investor's state of residence. There is no fee imposed on an exchange. However, the Fund reserves the right to impose an administrative fee in order to cover the costs incurred in processing an exchange. Any such fee will be disclosed in the prospectus. An exchange is treated as a redemption and a purchase. Therefore, an investor could realize a taxable gain or a loss on the transaction. The Fund reserves the right to revise or terminate the exchange privilege, waive the minimum amount requirement, limit the amount of or reject any exchange, as deemed necessary, at any time. REDEMPTION OF SHARES Investors who desire to redeem shares of the Portfolio must first contact the Advisor at the telephone number shown under "PURCHASE OF SHARES." The Portfolio will redeem shares at the net asset value of such shares next determined, either: (1) where stock certificates have not been issued, after receipt of a written request for redemption in good order by PFPC Inc., the transfer agent or (2) if stock certificates have been issued, after receipt of the stock certificates in good order at the office of the transfer agent. "Good order" means that the request to redeem shares must include all necessary documentation to be received in writing by the Advisor no later than the close of regular trading on the NYSE (ordinarily 1:00 p.m. PST), including: the stock certificate(s), if issued; a letter of instruction or a stock assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners (or authorized representatives thereof) of the shares; if the Fund does not have on file the authorized signatures for the account, a guarantee of the signature of each registered owner by an eligible guarantor institution; and any other required supporting legal documents. Shareholders redeeming shares for which certificates have not been issued, who have authorized redemption payment by wire on an authorization form filed with the Fund, may request that redemption proceeds be paid in federal funds wired to the bank they have designated on the authorization form. If the proceeds are wired to the shareholder's account at a bank which is not a member of the Federal Reserve System, there could be a delay in crediting the funds to the shareholder's bank account. The Fund reserves the right at any time to suspend or terminate the redemption by wire procedure after notification to shareholders. No charge is made by the Fund for redemptions. The redemption of all shares in an account will result in the account being closed. A new Account Registration Form will be required for further investments. (See "PURCHASE OF SHARES.") Although the redemption payments will ordinarily be made within seven days after receipt, payment to investors redeeming shares which were purchased by check will not be made until the Fund can verify that the payments for the purchase have been, or will be, collected, which may take up to fifteen days or more. Investors may avoid this delay by submitting a certified check along with the purchase order. The Fund reserves the right to redeem a shareholder's account if the value of the shares in the account is $500 or less, whether because of redemptions, a decline in the Portfolio's net asset value per share or any other reason. Before the Fund involuntarily redeems shares from such an account and sends the proceeds to the stockholder, the Fund will give written notice of the redemption to the stockholder at least sixty days in advance of the redemption date. The stockholder will then have sixty days from the date of the notice to make an additional investment in the Portfolio in order to bring the value of the shares in the account to more than $500 and avoid such involuntary 15 <PAGE> redemption. The redemption price to be paid to a stockholder for shares redeemed by the Fund under this right will be the aggregate net asset value of the shares in the account at the close of business on the redemption date. When in the best interests of the Portfolio, the Portfolio may make a redemption payment, in whole or in part, by a distribution of portfolio securities that the Portfolio receives from the Series in lieu of cash in accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage charges and other transaction costs selling securities that were received in payment of redemptions. The Series reserves the right to redeem its shares in the currencies in which its investments are denominated. Investors may incur charges in converting such currencies to dollars and the value of the currencies may be affected by currency exchange fluctuations. GENERAL INFORMATION The Portfolio and the Series may disseminate reports of their investment performance from time to time. Investment performance is calculated on a total return basis; that is by including all net investment income and any realized and unrealized net capital gains or losses during the period for which investment performance is reported. If dividends or capital gains distributions have been paid during the relevant period the calculation of investment performance will include such dividends and capital gains distributions as though reinvested in shares of the Portfolio. Standard quotations of total return are computed in accordance with SEC Guidelines and are presented whenever any non-standard quotations are disseminated. Non-standardized total return quotations may differ from the SEC Guideline computations by covering different time periods. In all cases, disclosures are made when performance quotations differ from the SEC Guidelines. Performance data is based on historical earnings and is not intended to indicate future performance. Rates of return expressed on an annual basis will usually not equal the sum of returns expressed for consecutive interim periods due to the compounding of the interim yields. The Fund's annual report to shareholders of the Portfolio for the fiscal year ended November 30, 1997, contains additional performance information. A copy of the annual report is available upon request and without charge. The Fund was incorporated under Maryland law on March 19, 1990. The shares of the Portfolio, when issued and paid for in accordance with the Portfolio's prospectus, will be fully paid and non-assessable shares, with equal, non-cumulative voting rights and no preferences as to conversion, exchange, dividends, redemptions or any other feature. With respect to matters which require shareholder approval, shareholders are entitled to vote only with respect to matters which affect the interest of the class of shares (Portfolio) which they hold, except as otherwise required by applicable law. If liquidation of the Fund should occur, shareholders would be entitled to receive on a per class basis the assets of the particular class whose shares they own, as well as a proportionate share of Fund assets not attributable to any particular class. Ordinarily, the Fund does not intend to hold annual meetings of shareholders, except as required by the 1940 Act or other applicable law. The Fund's bylaws provide that special meetings of shareholders shall be called at the written request of at least 10% of the votes entitled to be cast at such meeting. Such meeting may be called to consider any matter, including the removal of one or more directors. Shareholders will receive shareholder communications with respect to such matters as required by the 1940 Act, including semi-annual and annual financial statements of the Fund, the latter being audited. The DFA Investment Trust Company was organized as a Delaware business trust on October 27, 1992. The Trust offers shares of its Series only to institutional investors in private offerings. The Fund may withdraw the investment of the Portfolio in the Series at any time, if the Board of Directors of the Fund determines that it is in the best interests of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of the Fund would consider what action might be taken, including the investment of all of the assets of the Portfolio in another pooled investment entity having the same investment objective as the Portfolio or the hiring of an investment advisor to manage the Portfolio's assets in accordance with the investment policies described above. Whenever the Portfolio, as an investor in the Series, is asked to vote on a shareholder proposal, the Fund will solicit voting instructions from the Portfolio's shareholders with respect to the proposal. The Directors of the Fund will then vote the Portfolio's shares in the Series in accordance with the voting instructions received from the 16 <PAGE> Portfolio's shareholders. The Directors of the Fund will vote shares of the Portfolio for which they receive no voting instructions in accordance with their best judgment. As of January 30, 1998, the following person owned more than 25% of the voting securities of the Portfolio: <TABLE> <S> <C> Charles Schwab & Co.-REIN* 63.96% 101 Montgomery Street San Francisco, CA 94104 </TABLE> *Owner of record only Shareholder inquiries may be made by writing or calling the Fund at the address or telephone number appearing on the cover of this prospectus. Only those individuals whose signatures are on file for the account in question may receive specific account information or make changes in the account registration. 17 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 INVESTMENT ADVISOR DIMENSIONAL FUND ADVISORS INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 CUSTODIAN PNC BANK, N.A. 200 Stevens Drive, Airport Business Center Lester, PA 19113 ACCOUNTING SERVICES, DIVIDEND DISBURSING AND TRANSFER AGENT PFPC INC. 400 Bellevue Parkway Wilmington, DE 19809 LEGAL COUNSEL STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 INDEPENDENT ACCOUNTANTS COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center 19th and Market Streets Philadelphia, PA 19103 <PAGE> THE DFA INTERNATIONAL VALUE PORTFOLIO DIMENSIONAL INVESTMENT GROUP INC. 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401 TELEPHONE: (310) 395-8005 STATEMENT OF ADDITIONAL INFORMATION MARCH 3, 1998 This statement of additional information is not a prospectus but should be read in conjunction with the prospectus of The DFA International Value Portfolio (the "Portfolio") of Dimensional Investment Group Inc. (the "Fund"), dated March 3, 1998, as amended from time to time, which can be obtained from the Fund by writing to the above address or by calling the above telephone number. TABLE OF CONTENTS <TABLE> <CAPTION> PAGE <S> <C> INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 2 BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FUTURES CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 FEDERAL TAX TREATMENT OF FUTURES CONTRACTS . . . . . . . . . . . . . . . . . 6 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 9 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . 10 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 </TABLE> <PAGE> INVESTMENT OBJECTIVE AND POLICIES The following information supplements the information set forth in the prospectus under the caption "INVESTMENT OBJECTIVE AND POLICIES" and applies to the DFA International Value Series (the "Series") of The DFA Investment Trust Company (the "Trust"). Because the structure of the Series is based on the relative market capitalizations of eligible holdings, it is possible that the Series might include at least 5% of the outstanding voting securities of one or more issuers. In such circumstances, the Fund and the issuer would be deemed "affiliated persons" under the Investment Company Act of 1940 (the "1940 Act") and certain requirements of the 1940 Act regulating dealings between affiliates might become applicable. However, based on the present capitalizations of the groups of companies eligible for inclusion in the Series and the anticipated amount of the Series' assets intended to be invested in such securities, management does not anticipate that the Series will include as much as 5% of the voting securities of any issuer. The Series may invest up to 5% of its assets in convertible debentures issued by non-U.S. companies. Convertible debentures include corporate bonds and notes that may be converted into or exchanged for common stock. These securities are generally convertible either at a stated price or a stated rate (that is, for a specific number of shares of common stock or other security). As with other fixed income securities, the price of a convertible debenture to some extent varies inversely with interest rates. While providing a fixed-income stream (generally higher in yield than the income derived from a common stock but lower than that afforded by a non-convertible debenture), a convertible debenture also affords the investor an opportunity, through its conversion feature, to participate in the capital appreciation of the common stock into which it is convertible. As the market price of the underlying common stock declines, convertible debentures tend to trade increasingly on a yield basis and so may not experience market value declines to the same extent as the underlying common stock. When the market price of the underlying common stock increases, the price of a convertible debenture tends to rise as a reflection of the value of the underlying common stock. To obtain such a higher yield, the Series may be required to pay for a convertible debenture an amount in excess of the value of the underlying common stock. Common stock acquired by the Series upon conversion of a convertible debenture will generally be held for so long as the Advisor anticipates such stock will provide the Series with opportunities which are consistent with the Series' investment objective and policies. BROKERAGE TRANSACTIONS During the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid total commissions of $542,306, $1,251,242 and $1,133,787, respectively. The substantial increases or decreases in the amount of brokerage commissions paid by the Series from year to year resulted from increases or decreases in the amount of securities that were bought and sold by the Series. Portfolio transactions of the Series will be placed with a view to receiving the best price and execution. In addition, the Advisor will seek to acquire and dispose of securities in a manner which would cause as little fluctuation in the market prices of stocks being purchased or sold as possible in light of the size of the transactions being effected. Brokers will be selected with these goals in view. The Advisor monitors the performance of brokers which effect transactions for the Series to determine the effect that their trading has on the market prices of the securities in which it invests. The Advisor also checks the rate of commission being paid by the Series to its brokers to ascertain that they are competitive with those charged by other brokers for similar services. Transactions also may be placed with brokers who provide the Advisor with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. The Investment Management Agreement of the Series permits the Advisor knowingly to pay commissions on these transactions which are greater than another broker might charge if the Advisor, in good faith, determines that the commissions paid are reasonable in relation to the research or brokerage 2 <PAGE> services provided by the broker or dealer when viewed in terms of either a particular transaction or the Advisor's overall responsibilities to assets under its management. The Advisor places buy and sell orders on Instinet when the Advisor determines that the securities may not be available from other sources at a more favorable price. Instinet is an electronic information and communication network whose subscribers include most market makers as well as many institutions. Instinet charges a commission for each trade executed on its system. On any given trade, the Series, by trading through Instinet, would pay a spread to a dealer on the other side of the trade plus a commission to Instinet. However, placing a buy (or sell) order on Instinet communicates to many (potentially all) market makers and institutions at once. This can create a more complete picture of the market and thus increase the likelihood that the Series can effect transactions at the best available prices. During fiscal year 1997, the Series paid commissions for securities transactions to brokers which provided market price monitoring services, market studies and research services to the Series of $13,922 with respect to securities transactions valued at $4,623,558. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Series. The Portfolio will not incur any brokerage or other costs in connection with its purchase or redemption of shares of the Series, except if the Portfolio receives securities or currencies from the Series to satisfy the Portfolio's redemption request. INVESTMENT LIMITATIONS The Portfolio has adopted certain limitations which may not be changed without the approval of the holders of a majority of the outstanding voting securities of the Portfolio. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be effected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of the Portfolio. The investment limitations of the Series are the same as those of the Portfolio. The Portfolio will not: (1) invest in commodities or real estate, including limited partnership interests therein, although it may purchase and sell securities of companies which deal in real estate and securities which are secured by interests in real estate and may purchase or sell financial futures contracts and options thereon; (2) make loans of cash, except through the acquisition of repurchase agreements and obligations customarily purchased by institutional investors; (3) as to 75% of its total assets, invest in the securities of any issuer (except obligations of the U.S. Government and its agencies and instrumentalities) if, as a result , more than 5% of the Portfolio's total assets, at market, would be invested in the securities of such issuer; (4) purchase or retain securities of an issuer, if those officers and directors of the Fund or the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; (5) borrow, except from banks and as a temporary measure for extraordinary emergency purposes and then, in no event, in excess of 33% of its net assets, or pledge more than 33% of such assets to secure such loans; 3 <PAGE> (6) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in (5) above; (7) invest more than 15% of the value of the Portfolio's total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; (8) engage in the business of underwriting securities issued by others; (9) invest for the purpose of exercising control over management of any company; (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; (11) invest more than 5% of its total assets in securities of companies which have (with predecessors) a record of less than three years' continuous operation; (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; (13) write or acquire options or interests in oil, gas or other mineral exploration, leases or development programs, except as described in (1) above; (14) purchase warrants, except that the Portfolio may acquire warrants as a result of corporate actions involving its holding of other equity securities; (15) purchase securities on margin or sell short; (16) acquire more than 10% of the voting securities of any issuer; or (17) issue senior securities (as such term is defined in Section 18(f) of the 1940 Act), except to the extent permitted by the 1940 Act. The investment limitations described in (3), (4), (7), (9), (10), (11), (12) and (16) above do not prohibit the Portfolio from investing all or substantially all of its assets in the shares of another registered open-end investment company, such as the Series. The investment limitations described in (1) and (15) above do not prohibit the Portfolio from making margin deposits in connection with the purchase or sale of financial futures contracts and options thereon to the extent permitted under applicable regulations. Although (2) above prohibits cash loans, the Portfolio is authorized to lend portfolio securities. Inasmuch as the Portfolio will only hold shares of the Series, the Portfolio does not intend to lend those shares. Pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act"), the Series may purchase certain unregistered (i.e. restricted) securities upon a determination that a liquid institutional market exists for the securities. If it is decided that a liquid market does exist, the securities will not be subject to the Series' limitations on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Trustees of the Trust has delegated the day-to-day function of making liquidity determinations to the Advisor. For Rule 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Trustees and the Advisor will continue to monitor the liquidity of Rule 144A securities. 4 <PAGE> The Series may acquire and sell forward foreign currency exchange contracts in order to hedge against changes in the level of future currency rates. Such contracts involve an obligation to purchase or sell a specific currency at a future date at a price set in the contract. While the Series has retained authority to buy and sell financial futures contracts and options thereon, it has no present intention to do so. Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from its total assets those assets which represent collateral received by the Series for its securities lending transactions. Unless otherwise indicated, all limitations applicable to the Portfolios' and Series' investments apply only at the time that a transaction is undertaken. Any subsequent change in the percentage of a Portfolio's or Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in a Portfolio's or Series' total assets will not require a Portfolio or Series to dispose of an investment until the Advisor determines that it is practicable to sell or close out the position without undue market or tax consequences. FUTURES CONTRACTS The Series may enter into futures contracts and options on futures contracts for the purpose of remaining fully invested and to maintain liquidity to pay redemptions. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of defined securities at a specified future time and at a specified price. Futures contracts which are standardized as to maturity date and underlying financial instrument are traded on national futures exchanges. The Series will be required to make a margin deposit in cash or government securities with a broker or custodian to initiate and maintain positions in futures contracts. Minimal initial margin requirements are established by the futures exchange and brokers may establish margin requirements which are higher than the exchange requirements. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes, to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, reduction in the contract value may reduce the required margin resulting in a repayment of excess margin to the Series. Variation margin payments are made to and from the futures broker for as long as the contract remains open. The Series expects to earn income on its margin deposits. To the extent that the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, the Series will not enter into such transaction if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. Pursuant to published positions of the Securities and Exchange Commission (the "Commission"), the Series may be required to maintain segregated accounts consisting of liquid assets such as cash, U.S. government securities, or other high grade debt obligations (or, as permitted under applicable regulation, enter into offsetting positions) in connection with its futures contract transactions in order to cover its obligations with respect to such contracts. Positions in futures contracts may be closed out only on an exchange which provides a secondary market. However, there can be no assurance that a liquid secondary market will exist for any particular futures contract at any specific time. Therefore, it might not be possible to close a futures position and, in the event of adverse price movements, the Series would continue to be required to continue to make variation margin deposits. In such circumstances, if the Series has insufficient cash, it might have to sell portfolio securities 5 <PAGE> to meet daily margin requirements at a time when it might be disadvantageous to do so. Management intends to minimize the possibility that it will be unable to close out a futures contract by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. FEDERAL TAX TREATMENT OF FUTURES CONTRACTS Except for transactions the Series has identified as hedging transactions, the Series is required for federal income tax purposes to recognize as income for each taxable year its net unrealized gains and losses on certain futures contracts as of the end of the year as well as those actually realized during the year. In most cases, any gain or loss recognized with respect to a futures contract is considered to be 60% long-term gain or loss and 40% short-term capital gain or loss, without regard to the holding period of the contract. Furthermore, sales of futures contracts which are intended to hedge against a change in the value of securities held by the Series may affect the holding period of such securities and, consequently, the nature of the gain or loss on such securities upon disposition. In order for the Series to continue to qualify for federal income tax treatment as a regulated investment company, at least 90% of its gross income for a taxable year must be derived from qualifying income; i.e., dividends, interest, income derived from loans of securities, gains from the sale of securities and other income derived with respect to the Series' business of investing in securities. It is anticipated that any net gain realized from closing futures contracts will be considered gain from the sale of securities and, therefore, constitute qualifying income for purposes of the 90% requirement. The Series will distribute to shareholders annually any net capital gains which have been recognized for federal income tax purposes (including unrealized gains at the end of the Series' fiscal year) on futures transactions. Such distributions will be combined with distributions of capital gains realized on the Series' other investments. DIRECTORS AND OFFICERS The names, addresses and dates of birth of the directors and officers of the Fund and a brief statement of their present positions and principal occupations during the past five years is set forth below. DIRECTORS David G. Booth, Director*, (12/2/46), President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director, of the following companies: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc. (registered investment company). Trustee, President and Chairman-Chief Executive Officer of The DFA Investment Trust Company (registered investment company). Chairman and Director, Dimensional Fund Advisors Ltd. George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. 6 <PAGE> John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company and First Prairie Funds (registered investment companies). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Public Director, Chicago Mercantile Exchange. Myron S. Scholes, (7/1/42), Director, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. Rex A. Sinquefield, (9/7/44), Director*, Chairman-Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd. *Interested Director of the Fund. OFFICERS Each of the officers listed below hold the same office (except as otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc. Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA. Truman Clark, (4/8/41), Vice President, Santa Monica, CA. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. Maureen Connors, (11/17/36), Vice President and Assistant Secretary, Santa Monica, CA. Robert Deere, (10/8/57), Vice President, Santa Monica, CA. Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Richard Eustice, (8/5/65), Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA. 7 <PAGE> Kamyab Hashemi-Nejad, (1/22/61), Vice President, Controller and Assistant Treasurer, Santa Monica, CA. Stephen P. Manus, (12/26/50), Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. Karen McGinley, (3/10/66), Vice President, Santa Monica, CA. Catherine L. Newell, (5/7/64), Vice President and Assistant Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989 to 1996. David Plecha, (10/26/61), Vice President, Santa Monica, CA. George Sands, (2/8/56), Vice President, Santa Monica, CA. Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Jeanne C. Sinquefield, Ph.D., (12/2/46), Executive Vice President, Santa Monica, CA. Scott Thornton, (3/1/63), Vice President, Santa Monica, CA. Weston Wellington, (3/1/51), Vice President, Santa Monica, CA. Director of Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994. Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife. Directors and officers as a group own less than 1% of the Portfolio's outstanding stock. Set forth below is a table listing, for each director entitled to receive compensation, the compensation received from the Fund during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year. <TABLE> <CAPTION> Aggregate Total Compensation from Compensation Fund Director from Fund and Fund Complex -------- ------------ ----------------------- <S> <C> <C> George M. Constantinides $5,000 $30,000 John P. Gould $5,000 $30,000 Roger G. Ibbotson $5,000 $30,000 Merton H. Miller $5,000 $30,000 Myron S. Scholes $5,000 $30,000 </TABLE> 8 <PAGE> ADMINISTRATIVE SERVICES PFPC Inc. ("PFPC") serves as the accounting services, dividend disbursing and transfer agent for the Portfolio and the Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include day-to-day keeping and maintenance of certain records, calculation of the offering price of the shares, preparation of reports, liaison with its custodian, and transfer and dividend disbursing agency services. For its services, the Portfolio pays PFPC a monthly fee of $1,000. OTHER INFORMATION For the services it provides as investment advisor to the Series, the Advisor is paid a monthly fee calculated as a percentage of average net assets of the Series. For the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid advisory fees of $937,000, $2,124,000 and $2,997,000, respectively. The Series has more than one investor; this dollar amount represents the total dollar amount of advisory fees paid by the Series to the Advisor. The Fund was known as DFA U.S. Large Cap Inc. from February, 1992, until the Fund amended its Articles of Incorporation in April, 1993, to change to its present name. Prior to a February, 1992, amendment to the Fund's Articles of Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. PNC Bank, N.A. serves as the custodian for the Portfolio. Citibank, N.A. ("Citibank"), 111 Wall Street, New York, New York 10005, will succeed Boston Safe Deposit and Trust Company ("Boston Safe"), Princess House, 1 Suffolk Lane, London, EC4R OAN England, as the global custodian for the Series. It is expected that the conversion from Boston Safe to Citibank will be accomplished by May 1, 1998. The custodians maintain a separate account or accounts for the Portfolio and Series; receive, hold and release portfolio securities on account of the Portfolio and Series; make receipts and disbursements of money on behalf of the Portfolio and the Series; and collect and receive income and other payment and distributions on account of the Portfolio's and Series' portfolio securities. Coopers & Lybrand L.L.P, the Fund's independent accountants, audits the Fund's financial statements on an annual basis. PRINCIPAL HOLDERS OF SECURITIES As of January 30, 1998, the following persons beneficially owned 5% or more of the outstanding stock of the Portfolio, as set forth below: <TABLE> <S> <C> Charles Schwab & Co.-REIN* 63.96% 101 Montgomery Street San Francisco, CA 94104 Peoples Energy Corporate Retirement 9.92% and Benefit Plans Committee 130 E. Randolph Drive Chicago, IL 60601 Donaldson, Lufkin & Jenrette Securities Corp.* 6.55% Pershing Division P.O. Box 2052 Jersey City, NJ 07303 FTC & Co.* 5.13% P.O. Box 173736 Denver, CO 80217 *Owner of record only </TABLE> 9 <PAGE> PURCHASE OF SHARES The following information supplements the information set forth in the prospectus under the caption "PURCHASE OF SHARES." The Fund will accept purchase and redemption orders on each day that the New York Stock Exchange ("NYSE") is open for business, regardless of whether the Federal Reserve System is closed. However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Fund will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days as the NYSE, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Fund is closed. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Fund or the Portfolio. Securities accepted in exchange for shares of the Portfolio will be acquired for investment purposes and will be considered for sale under the same circumstances as other securities in the Portfolio. REDEMPTION OF SHARES The following information supplements the information set forth in the prospectus under the caption "REDEMPTION OF SHARES." The Fund may suspend redemption privileges or postpone the date of payment: (1) during any period when the NYSE is closed, or trading on the NYSE is restricted as determined by the Commission, (2) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it, or fairly to determine the value of its assets, and (3) for such other periods as the Commission may permit. Shareholders may transfer shares of the Portfolio to another person by making a written request therefore to the Advisor who will transmit the request to the Fund's Transfer Agent. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of 10 <PAGE> request, the stock certificate or any stock power must be guaranteed in the same manner as described in the prospectus under "REDEMPTION OF SHARES." As with redemptions, the written request must be received in good order before any transfer can be made. CALCULATION OF PERFORMANCE DATA Following are quotations of the annualized percentage total returns of the Portfolio for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable) using the standardized method of calculation required by the Commission. <TABLE> <CAPTION> One Year Five Years Ten Years -------- ---------- --------- <S> <C> <C> -4.12% (45 months) 4.64% n/a </TABLE> For purposes of calculating the performance of the Portfolio, the performance of the Series will be utilized for the period prior to when the Portfolio commenced operations, and, if applicable, restated to reflect the Portfolio's fees and expenses. As the following formula indicates, the Portfolio and Series each determines its average annual total return by finding the average annual compounded rates of return over the stated time period that would equate a hypothetical initial purchase order of $1,000 to its redeemable value (including capital appreciation/depreciation and dividends and distributions paid and reinvested less any fees charged to a shareholder account) at the end of the stated time period. The calculation assumes that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The calculation also assumes the account was completely redeemed at the end of each period and the deduction of all applicable charges and fees. According to the Commission's formula: P(1 + T)(n) = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one-, five- and ten-year periods at the end of the one-, five- and ten-year periods (or fractional portion thereof). In addition to the standardized method of calculating performance required by the Commission, the Portfolio and Series may disseminate other performance data 11 <PAGE> and may advertise total return performance calculated on a monthly basis. The Portfolio may compare its investment performance to appropriate market and mutual fund indices and investments for which reliable performance data is available. Such indices are generally unmanaged and are prepared by entities and organizations which track the performance of investment companies or investment advisors. Unmanaged indices often do not reflect deductions for administrative and management costs and expenses. The performance of the Portfolio may also be compared in publications to averages, performance rankings, or other information prepared by recognized mutual fund statistical services. Any performance information, whether related to the Portfolio or to the Advisor, should be considered in light of the Portfolio's investment objectives and policies, characteristics and the quality of the portfolio and market conditions during the time period indicated and should not be considered to be representative of what may be achieved in the future. FINANCIAL STATEMENTS The audited financial statements and financial highlights of the Portfolio for the Fund's fiscal year ended November 30, 1997, as set forth in the Fund's annual report to shareholders of the Portfolio, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited financial statements of the Series for the Trust's fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. A shareholder may obtain a copy of the reports upon request and without charge, by contacting the Fund at the address or telephone number appearing on the cover of this statement of additional information. 12 <PAGE> PROSPECTUS MARCH 3, 1998 DFA INTERNATIONAL VALUE PORTFOLIO II ------------------- This prospectus describes DFA INTERNATIONAL VALUE PORTFOLIO II (the "Portfolio"), a series of shares issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, (310) 395-8005. The Portfolio is an open-end, management investment company whose shares are offered, without a sales charge, to 401(k) defined contribution plans and clients, customers or members of certain institutions. The Fund issues thirteen series of shares, each of which represents a separate class of the Fund's common stock, having its own investment objective and policies. The Fund has not established a minimum initial purchase requirement for the Portfolio. THE INVESTMENT OBJECTIVE OF THE PORTFOLIO IS TO ACHIEVE LONG-TERM CAPITAL APPRECIATION. THE PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF THE DFA INTERNATIONAL VALUE SERIES (THE "SERIES") OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"). THE SERIES IS AN OPEN-END, MANAGEMENT INVESTMENT COMPANY THAT HAS THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS AS THE PORTFOLIO. THE INVESTMENT EXPERIENCE OF THE PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE INVESTMENT EXPERIENCE OF THE SERIES. INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "THE PORTFOLIO." This prospectus sets forth information about the Portfolio that prospective investors should know before investing and should be read carefully and retained for future reference. A statement of additional information about the Portfolio, dated March 3, 1998, as amended from time to time, which is incorporated herein by reference, has been filed with the Securities and Exchange Commission and is available upon request, without charge, by writing or calling the Fund at the above address or telephone number. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. <PAGE> TABLE OF CONTENTS PAGE HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . 3 THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . 6 Portfolio Characteristics and Policies. . . . . . . . . . . . . . . . 6 Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . . . 6 Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . 7 SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Foreign Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 8 Foreign Currencies and Related Transactions . . . . . . . . . . . . . 8 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Portfolio Strategies. . . . . . . . . . . . . . . . . . . . . . . . . 8 Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . 9 Futures Contracts and Options on Futures. . . . . . . . . . . . . . . 9 MANAGEMENT OF THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . 9 Administrative Services . . . . . . . . . . . . . . . . . . . . . . . 10 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 VALUATION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 <PAGE> HIGHLIGHTS PAGE INVESTMENT OBJECTIVE 6 The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio will invest all of its assets in the Series, which in turn will invest in the stocks of large non-U.S. companies that are value stocks, primarily because they have a high book value in relation to their market value. The investment objective of the Portfolio is a fundamental policy and may not be changed without the affirmative vote of a majority of its outstanding securities. (See "INVESTMENT OBJECTIVE AND POLICIES.") PAGE RISK FACTORS 8 The Portfolio (indirectly through its investment in the Series) invests in foreign securities and may invest in financial futures contracts and options thereon. The Portfolio is also authorized to invest in repurchase agreements. Those policies and the policy of the Portfolio to invest in the shares of the Series involve certain risks. (See "RISK FACTORS.") PAGE MANAGEMENT AND ADMINISTRATIVE SERVICES 9 Dimensional Fund Advisors Inc. (the "Advisor" or "DFA") provides the Portfolio with administrative services and also serves as investment advisor to the Series. The Fund contracts with Shareholder Services Agents to provide certain recordkeeping and other services for the benefit of the Portfolio's shareholders. (See "MANAGEMENT OF THE PORTFOLIO.") PAGE DIVIDEND POLICY 10 After the end of the Portfolio's fiscal year in November, the Portfolio distributes dividends from its net investment income and any realized net capital gains annually in December. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") PAGE PURCHASE, VALUATION AND REDEMPTION OF SHARES 11 The shares of the Portfolio are offered at net asset value, which is calculated as of the close of the New York Stock Exchange (the "NYSE") on each day that the NYSE is open for business. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. The redemption price of a share of the Portfolio is equal to its net asset value. (See "PURCHASE OF SHARES," "VALUATION OF SHARES" and "REDEMPTION OF SHARES.") 1 <PAGE> SHAREHOLDER TRANSACTION EXPENSES None* The expenses in the expense table below are based on those incurred by the Portfolio and the Series for the fiscal year ended November 30, 1997, restated to reflect current fees, waivers and arrangements to assume expenses. ANNUAL FUND OPERATING EXPENSES** (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management Fee 0.20% Administration Fee 0.01% Other Expenses 0.42% Total Operating Expenses 0.63%*** *Shares of the Portfolio that are purchased through omnibus accounts maintained by securities firms may be subject to a service fee or commission on such purchases. **The "Management Fee" is payable by the Series and the "Administration Fee" is payable by the Portfolio. The amount set forth in "Other Expenses" represents the aggregate amount that is payable by both the Series and the Portfolio. "Other Expenses" include a fee paid to the Shareholder Services Agent of each employer plan or institution at the annual rate of .10% of the aggregate daily value of all shares of the Portfolio that are held in an account maintained by such Shareholder Services Agent, paid on a monthly basis. (See "Administrative Services.") ***Beginning on July 1, 1996, the Advisor agreed to waive its administration fee with respect to the Portfolio and, to the extent that such waiver is insufficient, to assume expenses of the Portfolio to the extent necessary to keep the cumulative annual expenses to not more than .75% of the average net assets of the Portfolio on an annualized basis. For purposes of this waiver and assumption, the annualized expenses are those expenses incurred in any period commencing on or after July 1, 1996, consisting of twelve consecutive months. The Advisor was not required to waive any fees for the fiscal year ended November 30, 1997. The Advisor retains the right in its sole discretion to modify or eliminate the waivers of a portion of its fees or its assumption of expenses of the Portfolio in the future. If the Advisor modifies or eliminates the fee waivers or assumption, such change will be set forth in the prospectus. EXAMPLE You would pay the following transaction and annual operating expenses on a $1,000 investment in each Portfolio, assuming a 5% annual return over each of the following time periods and redemption at the end of each time period: 1 Year 3 Years 5 Years 10 Years $6 $20 $35 $79 The purpose of the above fee table and Example is to assist investors in understanding the various costs and expenses that an investor in the Portfolio will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 <PAGE> The table summarizes the aggregate estimated annual operating expenses of both the Portfolio and the Series. (See "MANAGEMENT OF THE PORTFOLIO.") The Board of Directors of the Fund has considered whether such expenses will be more or less than they would be if the Portfolio were to invest directly in the securities held by the Series. The aggregate amount of expenses for the Portfolio and the Series may be greater than it would be if the Portfolio were to invest directly in securities held by the Series. However, the total expense ratio for the Portfolio and the Series is expected to be less over time than such ratio would have been if the Portfolio were to invest directly in the underlying securities. This is because this arrangement enables institutional investors, including the Portfolio, to pool their assets, which may be expected to result in economies by spreading certain fixed costs over a larger asset base. Each shareholder in the Series, including the Portfolio, will pay its proportionate share of the expenses of the Series. CONDENSED FINANCIAL INFORMATION The following financial highlights are part of the financial statements of the Portfolio. The information for each of the past fiscal years has been audited by independent accountants. The financial statements, related notes and the report of the independent accountants covering such financial information and financial highlights for the Fund's most recent fiscal year ended November 30, 1997, are incorporated by reference into the Portfolio's statement of additional information from the Fund's annual report to shareholders for the year ended November 30, 1997. Further information about the Portfolio's performance is contained in the Fund's annual report to shareholders of the Portfolio for the year ended November 30, 1997. A copy of the annual report may be obtained from the Fund upon request at no charge. 3 <PAGE> FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> Year Year Year Aug. 3 Ended Ended Ended to Nov. 30, Nov. 30, Nov. 30, Nov. 30, 1997 1996 1995 1994 -------- -------- -------- ------- <S> <C> <C> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . . . . . . . . $ 11.36 $ 9.95 $ 9.48 $ 10.00 -------- -------- -------- ------- Income from Investment Operations Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . 0.17 0.14 0.13 0.06 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . (0.63) 1.28 0.49 (0.52) -------- -------- -------- ------- Total from Investment Operations . . . . . . . . . . . . . . . . . . (0.46) 1.42 0.62 (0.46) -------- -------- -------- ------- Less Distributions Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . (0.15) (0.01) (0.13) (0.06) Net Realized Gains . . . . . . . . . . . . . . . . . . . . . . . . . . (0.10) -- (0.02) -- -------- -------- -------- ------- Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . (0.25) (0.01) (0.15) (0.06) -------- -------- -------- ------- Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . . . . $ 10.65 $ 11.36 $ 9.95 $ 9.48 -------- -------- -------- ------- -------- -------- -------- ------- Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.15)% 14.28% 6.52% (4.73)%# Net Assets, End of Period (thousands) . . . . . . . . . . . . . . . . . . $ 37,610 $ 30,018 $ 14,323 $ 7,643 Ratio of Expenses to Average Net Assets (1) . . . . . . . . . . . . . . . 0.63% 0.86%(a) 0.96%(a) 0.96%*(a) Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . 1.63% 1.67%(a) 1.63%(a) 2.56%*(a) Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A N/A Average Commission Rate . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . . . . . . . . . 22.55% 12.23% 9.75% 1.90%*(b) -------- -------- -------- ------- Average Commission Rate of Master Fund Series (2) . . . . . . . . . . . . $ 0.0068 $ 0.0112 N/A N/A -------- -------- -------- ------- -------- -------- -------- ------- </TABLE> - ------------------- *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro rata share of its Master Fund Series. (a) Had certain waivers and reimbursements not been in effect, the ratios of expenses to average net assets for the periods ended November 30, 1997, 1996, 1995 and 1994, would have been 0.58%, 0.96%, 1.48% and 12.07%, respectively, and the ratios of net investment income to average net assets, for the periods ended November 30, 1997, 1996, 1995 and 1994, would have been 1.68%, 1.57%, 1.11% and 1.46%, respectively. (2) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal years beginning after September 1, 1995. (b) Master Fund Series Turnover calculated for the period February 16 to November 30, 1994. 4 <PAGE> THE PORTFOLIO The Portfolio, unlike many other investment companies which directly acquire and manage their own portfolio of securities, seeks to achieve its investment objective by investing all of its investable assets in the Series, an open-end, management investment company registered under the Investment Company Act of 1940 (the "1940 Act"), having the same investment objective as the Portfolio. The investment objective of the Portfolio may not be changed without the affirmative vote of a majority of its outstanding shares and the investment objective of the Series may not be changed without the affirmative vote of a majority of its outstanding shares. Shareholders of the Portfolio will receive written notice thirty days prior to any change in the investment objective of the Series. This prospectus describes the investment objective, policies and restrictions of the Portfolio and the Series. (See "INVESTMENT OBJECTIVE AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE PORTFOLIO" for a description of the management and other expenses associated with the Portfolio's investment in the Series. Other institutional investors, including other mutual funds, may invest in the Series, and the expenses of such other investors and, correspondingly, their returns may differ from those of the Portfolio. Please contact the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for information about the availability of investing in the Series other than through the Portfolio. The shares of the Series will be offered to institutional investors for the purpose of increasing the funds available for investment, to reduce expenses as a percentage of total assets and to achieve other economies that might be available at higher asset levels. For example, the Series might be able to place larger block trades at more advantageous prices and to participate in securities transactions of larger denominations, thereby reducing the relative amount of certain transaction costs in relation to the total size of the transaction. Investment in the Series by other institutional investors offers potential benefits to the Series and, through its investment in the Series, also to the Portfolio. However, such economies and expense reductions might not be achieved and additional investment opportunities, such as increased diversification, might not be available if other institutions do not invest in the Series. Also, if an institutional investor were to redeem its interest in the Series, the remaining investors in the Series could experience higher pro rata operating expenses, thereby producing lower returns, and the Series' security holdings may become less diverse, resulting in increased risk. Institutional investors that have a greater pro rata ownership interest in the Series than the Portfolio could have effective voting control over the operation of the Series. Further, if the Series changes its investment objective in a manner which is inconsistent with the investment objective of the Portfolio and the shareholders of the Portfolio fail to approve a similar change in the investment objective of the Portfolio, the Portfolio would be forced to withdraw its investment in the Series and either seek to invest its assets in another registered investment company with the same investment objective as the Portfolio, which might not be possible, or retain an investment advisor to manage the Portfolio's assets in accordance with its own investment objective, possibly at increased cost. A withdrawal by the Portfolio of its investment in the Series could result in a distribution in kind of portfolio securities (as opposed to a cash distribution) to the Portfolio. Should such a distribution occur, the Portfolio could incur brokerage fees or other transaction costs in converting such securities to cash in order to pay redemptions. In addition, a distribution in kind to the Portfolio could result in a less diversified portfolio of investments and could affect adversely the liquidity of the Portfolio. Moreover, a distribution in kind by the Series may constitute a taxable exchange for federal income tax purposes resulting in gain or loss to the Portfolio. Any net capital gains so realized will be distributed to the Portfolio's shareholders as described in "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" below. Finally, the Portfolio's investment in the shares of a registered investment company such as the Series is relatively new and results in certain operational and other complexities. However, management believes that the benefits to be gained by shareholders outweigh the additional complexities and that the risks attendant to such investment are not inherently different from the risks of direct investment in securities of the type in which the Series invests. 5 <PAGE> INVESTMENT OBJECTIVE AND POLICIES PORTFOLIO CHARACTERISTICS AND POLICIES The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio pursues its objective by investing all of its assets in the Series, which has the same investment objective and policies as the Portfolio. The Series operates as a diversified investment company and seeks to achieve its objective by investing in the stocks of large non-U.S. companies which the Advisor believes to be value stocks at the time of the purchase. Securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value (a "book to market ratio"). Generally, the shares of a company in any given country will be considered to have a high book to market ratio if the ratio equals or exceeds the ratios of any of the 30% of companies in that country with the highest positive book to market ratios whose shares are listed on a major exchange, and, as described below, will be considered eligible for investment. In measuring value, the Advisor may consider additional factors such as cash flow, economic conditions and developments in the issuer's industry. The Series intends to invest in the stocks of large companies in countries with developed markets. As of the date of this prospectus, the Series may invest in the stocks of large companies in Australia, Belgium, Denmark, France, Germany, Hong Kong, Italy, Japan, Malaysia, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland and the United Kingdom. As the Series' asset growth permits, it may invest in the stocks of large companies in other developed markets, including Austria, Finland and Ireland. (See "RISK FACTORS.") PORTFOLIO STRUCTURE Under normal market conditions, at least 65% of the Series' assets will be invested in companies organized or having a majority of their assets in or deriving a majority of their operating income in at least three non-U.S. countries and no more than 40% of the Series' assets will be invested in such companies in any one country. The Series reserves the right to invest in futures contracts and options on futures contracts to commit funds awaiting investment or to maintain liquidity. To the extent that the Series invests in future contracts for other than bona fide hedging purposes, the Series will not purchase futures contracts if as a result more than 5% of its total assets would then consist of initial margin deposits on such contracts. Such investments entail certain risks. (See "RISK FACTORS.") The Series also may invest up to 5% of its assets in convertible debentures issued by large non-U.S. companies. As of the date of this prospectus, the Series intends to invest in companies having at least $800 million of market capitalization and the Series will be approximately market capitalization weighted. The Advisor may reset such floor from time to time to reflect changing market conditions. In determining market capitalization weights, the Advisor, using its best judgment, will seek to eliminate the effect of cross holdings on the individual country weights. As a result, the weighting of certain countries in the Series may vary from their weighting in international indices such as those published by The Financial Times, Morgan Stanley Capital International or Salomon/Russell. The Advisor, however, will not attempt to account for cross holding within the same country. The Advisor may exclude the stock of a company that otherwise meets the applicable criteria if the Advisor determines, in its best judgment, that other conditions exist that make the purchase of such stock for the Series inappropriate. Deviation from market capitalization weighting also will occur because the Series intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by the Series may be reduced from time to time from the level which adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the Series' assets may be invested in interest-bearing obligations, such as money-market instruments, for this purpose, thereby causing further deviation from market capitalization weighting. Such investments would be made on a temporary basis pending investment in equity securities pursuant to the Series investment objective. A further 6 <PAGE> deviation from market capitalization weighting may occur if the Series invests a portion of its assets in convertible debentures. The Series may make block purchases of eligible securities at opportune prices even though such purchases exceed the number of shares which, at the time of purchase, adherence to the policy of market capitalization weighing would otherwise require. While such purchases might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the Series. Changes in the composition and relative ranking (in terms of market capitalization and book to market ratio) of the stocks which are eligible for purchase by the Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On not less than a semi-annual basis, the Advisor will prepare a current list of eligible large companies with high book to market ratios whose stock are eligible for investment. Only common stocks whose market capitalizations are not less than the minimum on such list will be purchased by the Series. Additional investments will not be made in securities which have depreciated in value to such an extent that they are not then considered by the Advisor to be large companies. This may result in further deviation from market capitalization weighing and such deviation could be substantial if a significant amount of the Series' holdings decrease in value sufficiently to be excluded from the then current market capitalization requirement for eligible securities, but not by a sufficient amount to warrant their sale. It is management's belief that the value stocks of large companies offer, over a long term, a prudent opportunity for capital appreciation but, at the same time, selecting a limited number of such issues for inclusion in the Series involves greater risk than including a large number of them. The Advisor does not anticipate that a significant number of securities which meet the market capitalization criteria will be selectively excluded from the Series. The Series does not seek current income as an investment objective and investments will not be based upon an issuer's dividend payment policy or record. However, many of the companies whose securities will be included in the Series do pay dividends. It is anticipated, therefore, that the Series will receive dividend income. PORTFOLIO TRANSACTIONS Securities which have depreciated in value since their acquisition will not be sold by the Series solely because prospects for the issuer are not considered attractive or due to an expected or realized decline in securities prices in general. Securities may be disposed of, however, at any time when, in the Advisor's judgment, circumstances warrant their sale, such as tender offers, mergers and similar transactions, or bids made for block purchases at opportune prices. Generally, securities will not be sold to realize short-term profits, but, when circumstances warrant, they may be sold without regard to the length of time held. Generally, securities will be purchased with the expectation that they will be held for longer than one year and will be held until such time as they are no longer considered an appropriate holding in light of the policy of maintaining a portfolio of companies with large market capitalizations and high book to market ratios. The annual portfolio turnover rates of the Series for the fiscal years ended November 30, 1996 and 1997, respectively, were 12.23% and 22.55%. SECURITIES LOANS The Series is authorized to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While the Series may earn additional income from lending securities, such activity is incidental to the Series' investment objective. The value of securities loaned may not exceed 331/3% of the value of the Series' total assets. In connection with such loans, the Series will receive collateral consisting of cash or U.S. Government securities, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. In addition, the Series will be able to terminate the loan at any 7 <PAGE> time and will receive reasonable interest on the loan, as well as amounts equal to any dividends, interest or other distributions on the loaned securities. In the event of the bankruptcy of the borrower, the Series could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. The Portfolio is also authorized to lend its portfolio securities. However, as long as it holds only shares of the Series, it will not do so. RISK FACTORS FOREIGN SECURITIES The Series invests in foreign issuers. Such investments involve risks that are not associated with investments in U.S. public companies. Such risks may include legal, political and or diplomatic actions of foreign governments, such as imposition of withholding taxes on interest and dividend income payable on the securities held, possible seizure or nationalization of foreign deposits, establishment of exchange controls or the adoption of other foreign governmental restrictions which might adversely affect the value of the assets held by the Series. Further, foreign issuers are not generally subject to uniform accounting, auditing and financial reporting standards comparable to those of U.S. public companies and there may be less publicly available information about such companies than comparable U.S. companies. The economies of many countries in which the Series invests are not as diverse or resilient as the U.S. economy, and have significantly less financial resources. Some countries are more heavily dependent on international trade and may be affected to a greater extent by protectionist measures of their governments, or dependent upon a relatively limited number of commodities and, thus, sensitive to changes in world prices for these commodities. In many foreign countries, stock markets are more variable than U.S. markets for two reasons. Contemporaneous declines in both (i) foreign securities prices in local currencies and (ii) the value of local currencies in relation to the U.S. dollar can have a significant negative impact on the net asset value of the Series and the Portfolio. The net asset value of the Series is denominated in U.S. dollars, and, therefore, declines in market price of both the foreign securities held by the Series and the foreign currency in which those securities are denominated will be reflected in the net asset value of the Series' and the Portfolio's shares. FOREIGN CURRENCIES AND RELATED TRANSACTIONS Investments of the Series will be denominated in foreign currencies. Changes in the relative values of foreign currencies and the U.S. dollar, therefore, will affect the value of investments of the Series. The Series may purchase foreign currency futures contracts and options in order to hedge against changes in the level of foreign currency exchange rates. Such contracts involve an agreement to purchase or sell a specific currency at a future date at a price set in the contract and enable the Series to protect against losses resulting from adverse changes in the relationship between the U.S. dollar and foreign currencies occurring between the trade and settlement dates of Series securities transactions, but they also tend to limit the potential gains that might result from a positive change in such currency relationships. Gains and losses on futures contracts and options thereon depend on interest rates and other economic forces. BORROWING The Series has reserved the right to borrow amounts not exceeding 33% of its net assets for the purposes of making redemption payments. When advantageous opportunities to do so exist, the Series may also purchase securities when borrowings exceed 5% of the value of its net assets. Such purchases can be considered to be "leveraging" and, in such circumstances, the net asset value of the Series may increase or decrease at a greater rate than would be the case if the Series had not leveraged. The interest payable on the amount borrowed would increase 8 <PAGE> the Series' expenses and, if the appreciation and income produced by the investments purchased when the Series has borrowed are less than the cost of borrowing, the investment performance of the Series will be reduced as a result of leveraging. PORTFOLIO STRATEGIES The method employed by the Advisor to manage the Series differs from the process employed by many other investment advisors in that the Advisor will rely on fundamental analysis of the investment merits of securities to a limited extent to eliminate potential acquisitions rather than rely on this technique to select securities. Further, because securities generally will be held long-term and will not be eliminated based on short-term price fluctuations, the Advisor generally will not act upon general market movements or short-term price fluctuations of securities to as great an extent as many other investment advisors. REPURCHASE AGREEMENTS In addition, the Series may invest in repurchase agreements. In the event of a bankruptcy of the other party to a repurchase agreement, the Trust could experience delay in recovering the securities underlying such agreement. Management believes that the risks associated with repurchase agreements can be controlled through stringent security selection criteria and careful monitoring procedures. FUTURES CONTRACTS AND OPTIONS ON FUTURES The Series also may invest in futures contracts and options on futures. To the extent that the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, the Series will not enter into such transactions if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that, in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. These investments entail the risk that an imperfect correlation may exist between changes in the market value of the stocks owned by the Series and the prices of such futures contracts and options, and, at times, the market for such contracts and options might lack liquidity, thereby inhibiting a Series' ability to close a position in such investments. Gains or losses on investments in options and futures depend on the direction of securities prices, interest rates and other economic factors, and the loss from investing in futures contracts is potentially unlimited. The Series' investment in futures and options are subject to special tax rules that may affect the amount, timing and character of the income earned by the Series and the Portfolio's distributions to its shareholders. (These special rules are discussed in the statement of additional information.) MANAGEMENT OF THE PORTFOLIO The Advisor serves as investment advisor to the Series and, as such, is responsible for the management of its assets. Investment decisions for the Series are made by the Investment Committee of the Advisor, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of the Advisor who are elected annually. The Advisor provides the Series with a trading department and selects brokers and dealers to effect securities transactions. Securities transactions are placed with a view to obtaining the best price and execution of such transactions. The Advisor is authorized to pay a higher commission to a broker, dealer or exchange member than another such organization might charge if it determines, in good faith, that the commission paid is reasonable in relation to the research or brokerage services provided by such organization. 9 <PAGE> For the fiscal year ended November 30, 1997, the Advisor received a fee for its advisory services to the Series equal to 0.20% of the average net assets of the Series and the total expenses of the Portfolio were 0.63% of its average net assets. The Advisor was not required to waive any fees for the fiscal year ended November 30, 1997. The Portfolio and the Series each bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage commissions and transfer taxes in connection with the acquisition and disposition of portfolio securities, taxes, insurance premiums, costs incidental to meetings of its shareholders and directors or trustees, the cost of filing its registration statements under federal securities laws and the cost of any filings required under state securities laws, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to the Portfolio or the Series are so allocated and expenses which are not allocable to the Portfolio and the Series are borne by the Portfolio or Series on the basis of their relative net assets. The Advisor was organized in May, 1981, and is engaged in the business of providing investment management services to institutional investors. Assets under management total approximately $26 billion. David G. Booth and Rex A. Sinquefield (directors and officers of both the Fund and the Advisor, trustees and officers of the Trust, and shareholders of the Advisor) may be deemed controlling persons of the Advisor. The Advisor has entered into a Consulting Services Agreement with Dimensional Fund Advisors Ltd. ("DFAL") and DFA Australia Limited ("DFA Australia"), respectively. Pursuant to the terms of each Consulting Services Agreement, DFAL and DFA Australia provide certain trading and administrative services to the Advisor with respect to the Series. The Advisor owns 100% of the outstanding shares of DFAL and beneficially owns 100% of DFA Australia. The Board of Directors is responsible for establishing Portfolio policies and for overseeing the management of the Portfolio. Each of the Directors and officers of the Fund is also a Trustee and officer of the Trust. The Directors of the Fund, including all the disinterested Directors, have adopted written procedures to monitor potential conflicts of interest that might develop between the Portfolio and the Series. The Portfolio's statement of additional information furnishes information about the Directors and officers of the Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional information.) ADMINISTRATIVE SERVICES The Fund has entered into an administration agreement with the Advisor on behalf of the Portfolio. Pursuant to the administration agreement, the Advisor will perform various services, including: supervision of the services provided by the Portfolio's custodian and dividend disbursing agent and others who provide services to the Fund for the benefit of the Portfolio; assisting the Fund to comply with the provisions of federal, state, local and foreign securities, tax and other laws applicable to the Portfolio; providing shareholders with information about the Portfolio and their investments as they or the Fund may request; assisting the Fund to conduct meetings of shareholders of record; furnishing information as the Board of Directors may require regarding the Series; and any other administrative services for the benefit of the Portfolio as the Board of Directors may reasonably request. The Advisor also provides the Fund with office space and personnel. The annual fee paid monthly by the Portfolio to the Advisor for administrative services is .01% of the average monthly net assets of the Portfolio. The Advisor has 10 <PAGE> agreed to waive its fee under the administration agreement for the Portfolio and, to the extent that such waiver is insufficient, to assume expenses of the Portfolio to the extent necessary to keep its cumulative annual expenses to not more than .75% of the average net assets of the Portfolio on an annualized basis. The Advisor retains the right in its sole discretion to modify or eliminate the waiver of a portion of its fees and assumption of expenses in the future. The Fund intends to enter into shareholder service agreements with certain Shareholder Service Agents on behalf of the Portfolio. The Shareholder Service Agents ordinarily will include (i) with respect to participants in a 401(k) plan that invests in the Portfolio, the person designated to service the employer's plan and (ii) institutions whose clients, customers or members invest in the Portfolio. The service to be provided under the shareholder service agreements may include any of the following: shareholder recordkeeping; sending statements to shareholders reflecting account activities such as purchases, redemptions and dividend payments; responding to shareholder inquiries regarding their accounts; tax reporting with respect to dividends, distributions and redemptions; receiving, aggregating and processing shareholder orders; and providing the Portfolio with information necessary for the Fund to comply with the state securities laws. The fee paid by the Portfolio to the Shareholder Services Agent of each employer plan or institution is an annual rate of .10% of the aggregate daily value of all shares held in an account maintained by such Shareholder Services Agent, paid on a monthly basis. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES The Portfolio intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for federal income taxes to the extent that its net investment income and net realized capital gains are distributed. The Portfolio's policy is to distribute substantially all net investment income and any realized net capital gains annually in December after the close of the Fund's fiscal year on November 30. The Series also intends to qualify as a regulated investment company under the Code. Special tax rules may apply in determining the income and gains that the Series earns on its investments. These rules may, in turn, affect the amount of distributions that the Portfolio pays to its shareholders. Shareholders of the Portfolio will automatically receive all income dividends and any capital gains distributions in additional shares of the Portfolio at net asset value (as of the business date following the dividend record date). The Portfolio receives income in the form of income dividends paid by the Series. This income, less the expenses incurred in operations, is the Portfolio's net investment income from which income dividends are distributed as described above. The Portfolio also may receive capital gains distributions from the Series and may realize capital gains upon the redemption of the shares of the Series. Any net realized capital gains of the Portfolio will be distributed as described above. Dividends and distributions paid to a 401(k) plan accumulate free of federal income tax. Whether paid in cash or additional shares and regardless of the length of time the Portfolio's shares have been owned by shareholders who are subject to federal income taxes, distributions from long-term capital gains are taxable as such. Dividends from net investment income or net short-term capital gains will be taxable as ordinary income, whether received in cash or in additional shares. It is anticipated that either none or only a small portion of the distributions made by the Portfolio will qualify for the corporate dividends received deduction because of the Series' investment in foreign equity securities. For those investors subject to tax, if purchases of shares of the Portfolio are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution. 11 <PAGE> Shareholders are notified annually by the Fund as to the federal tax status of dividends and distributions paid by the Portfolio. Dividends which are declared in December to shareholders of record but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes as if paid by the Portfolio and received by the shareholder on December 31 of the calendar year in which they are declared. The sale of shares of the Portfolio is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares of the Portfolio for shares of another portfolio of the Fund. Any loss incurred on sale or exchange of the Portfolio's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. The Series may be subject to foreign withholding taxes on income from certain of its foreign securities. These taxes will, in turn, reduce the amount of distributions the Portfolio pays to its shareholders. If the Series purchases shares in certain foreign entities, called "passive foreign investment companies," the Series may be subject to U.S. federal income tax and a related interest charge on a portion of any "excess distribution" or gain from the disposition of such shares even if such income is distributed as a taxable dividend by the Series to the Portfolio. In addition to federal taxes, shareholders may be subject to state and local taxes on distributions from the Portfolio to its shareholders and on gains arising on redemption or exchange of the Portfolio's shares. The Portfolio is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on the account registration form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding. The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Portfolio. PURCHASE OF SHARES Shares of the Portfolio are sold only (i) to fund deferred compensation plans which are exempt from taxation under section 401(k) of the Code and (ii) to clients, customers or members of certain institutions. Provided that shares of the Portfolio are available under an employer's plan or through an institution, shares may be purchased by following the procedures adopted by the respective employer or institution and approved by the Fund's management for making investments. Shares are available through the Shareholder Services Agent designated under the employer's plan or by the institution. Investors who want to consider investing in the Portfolio should contact their employer or institution for details. Institutions which purchase shares of the Portfolio for the accounts of their customers may impose separate charges on those customers for account services. The Fund does not impose a minimum purchase requirement, but investors who wish to purchase shares of the Portfolio should determine whether their employer's plan or institution imposes a minimum transaction requirement. VALUATION OF SHARES The net asset values per share of the Portfolio and the Series are calculated as of the close of the NYSE by dividing the total market value of their respective investments and other assets, less any liabilities, by the total 12 <PAGE> outstanding shares of the stock of the Portfolio and the Series, respectively. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. Securities held by the Series which are listed on a securities exchange and for which market quotations are available are valued at the last quoted sale price of the day or, if there is no such reported sale, the Series values such securities at the mean between the most recent quoted bid and asked prices. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the mean between the most recent quoted bid and asked prices. The value of other assets and securities for which no quotations are readily available (including restricted securities) are determined in good faith at fair value in accordance with procedures adopted by the Board of Trustees of the Trust. Generally, trading in foreign securities markets is completed each day at various times prior to the close of the NYSE. The values of foreign securities held by the Series are determined as of such times for the purpose of computing the net asset value of the Series. If events which materially affect the value of the investments of the Series occur subsequent to the close of the securities market on which such securities are primarily traded, the investments affected thereby will be valued at "fair value" as described above. The net asset value per share of the Series is expressed in U.S. dollars by translating the net assets of the Series using the bid price for the dollar as quoted by generally recognized reliable sources. Provided that the Shareholder Services Agent has received the investor's investment instructions in good order and the Portfolio's custodian has received the investor's payment, shares of the Portfolio will be priced at the net asset value calculated next after receipt of the order by PFPC Inc., the transfer agent for the Portfolio. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. The Fund reserves the right to redeem shares owned by any purchaser whose order is canceled in order to recover any resulting loss to the Fund and may prohibit or restrict the manner in which such purchaser may place further orders. Management believes that any dilutive effective of the cost of investing the proceeds of the sale of the shares of the Portfolio is minimal and, therefore, the shares of the Portfolio are currently sold at net asset value, without imposition of a fee that would be used to reimburse the Portfolio for such cost ("reimbursement fee"). Reimbursement fees may be charged prospectively from time to time based upon the future experience of the Portfolio and the Series which would be used to defray the costs of investing in securities (such as brokerage commissions, taxes and other transaction costs). Any such charges will be described in the prospectus. DISTRIBUTION The Fund acts as distributor of the Portfolio's shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of DFA, pursuant to which DFA Securities Inc. is responsible for supervising the sale of the Portfolio's shares. No compensation is paid by the Fund to DFA Securities Inc. under this agreement. EXCHANGE OF SHARES Provided such transactions are permitted under the employer's 401(k) plan or by the institution, investors may exchange shares of the Portfolio for those of the U.S. 6-10 Value Portfolio II or the U.S. Large Cap Value Portfolio II by first completing the necessary documentation as required by the Shareholder Services Agent designated under the employer's plan or by the institution. The exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the markets. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of any of the portfolios or otherwise adversely affect the Fund, the exchange privilege may be 13 <PAGE> terminated. Exchanges will be accepted only if the Fund may issue the shares of the portfolio being acquired in compliance with the securities laws of the investor's state of residence. The redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the Shareholder Services Agent has received appropriate instructions in the form required by such Shareholder Services Agent. There is no fee imposed on an exchange. However, the Fund reserves the right to impose an administrative fee in order to cover the costs incurred in processing an exchange. Any such fee will be disclosed in the prospectus. An exchange is treated as a redemption and a purchase. Therefore, an investor could realize a taxable gain or loss on the transaction. The Fund reserves the right to revise or terminate the exchange privilege or limit the amount of or reject any exchange, as deemed necessary, at any time. REDEMPTION OF SHARES Investors who desire to redeem shares of the Portfolio must furnish a redemption request to the respective Shareholder Services Agent in the form required by such Shareholder Services Agent. The Portfolio will redeem shares at the net asset value of such shares next determined after receipt of a request for redemption in good order. Although the redemption payments will ordinarily be made within seven days after receipt, payment to investors redeeming shares which were purchased by check will not be made until the Fund can verify that the payments for the purchase have been, or will be, collected, which may take up to fifteen days or more. Investors may avoid this delay by submitting a certified check along with the purchase order. The Fund reserves the right to redeem a shareholder's account if the value of the shares in the account is $500 or less, whether because of redemptions, a decline in the Portfolio's net asset value per share or any other reason. Before the Fund involuntarily redeems shares from such an account and sends the proceeds to the stockholder, the Fund will give written notice of the redemption to the stockholder at least sixty days in advance of the redemption date. The stockholder will then have sixty days from the date of the notice to make an additional investment in the Portfolio in order to bring the value of the shares in the account to more than $500 and avoid such involuntary redemption. The redemption price to be paid to a stockholder for shares redeemed by the Fund under this right will be the aggregate net asset value of the shares in the account at the close of business on the redemption date. When in the best interests of the Portfolio, the Portfolio may make a redemption payment, in whole or in part, by a distribution of portfolio securities that the Portfolio receives from the Series in lieu of cash in accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage charges and other transaction costs selling securities that were received in payment of redemptions. The Series reserves the right to redeem its shares in the currencies in which its investments are denominated. Investors may incur charges in converting such currencies to dollars and the value of the currencies may be affected by currency exchange fluctuations. GENERAL INFORMATION The Portfolio and the Series may disseminate reports of their investment performance from time to time. Investment performance is calculated on a total return basis; that is by including all net investment income and any realized and unrealized net capital gains or losses during the period for which investment performance is reported. If dividends or capital gains distributions have been paid during the relevant period, the calculation of investment performance will include such dividends and capital gains distributions as though reinvested in shares of the Portfolio. Standard quotations of total return are computed in accordance with SEC Guidelines and are presented whenever any non-standard quotations are disseminated. Non-standardized total return quotations may 14 <PAGE> differ from the SEC Guideline computations by covering different time periods. In all cases, disclosures are made when performance quotations differ from the SEC Guidelines. Performance data is based on historical earnings and is not intended to indicate future performance. Rates of return expressed on an annual basis will usually not equal the sum of returns expressed for consecutive interim periods due to the compounding of the interim yields. The Fund's annual report to shareholders of the Portfolio for the fiscal year ended November 30, 1997, contains additional performance information. A copy of the annual report is available upon request and without charge. The Fund was incorporated under Maryland law on March 19, 1990. The shares of the Portfolio, when issued and paid for in accordance with the Portfolio's prospectus, will be fully paid and non-assessable shares, with equal, non-cumulative voting rights and no preferences as to conversion, exchange, dividends, redemptions or any other feature. With respect to matters which require shareholder approval, shareholders are entitled to vote only with respect to matters which affect the interest of the class of shares (Portfolio) which they hold, except as otherwise required by applicable law. If liquidation of the Fund should occur, shareholders would be entitled to receive on a per class basis the assets of the particular Portfolio whose shares they own, as well as a proportionate share of Fund assets not attributable to any particular Portfolio. Ordinarily, the Fund does not intend to hold annual meetings of shareholders, except as required by the 1940 Act or other applicable law. The Fund's bylaws provide that special meetings of shareholders shall be called at the written request of at least 10% of the votes entitled to be cast at such meeting. Such meeting may be called to consider any matter, including the removal of one or more directors. Shareholders will receive shareholder communications with respect to such matters as required by the 1940 Act, including semi-annual and annual financial statements of the Fund, the latter being audited. The DFA Investment Trust Company was organized as a Delaware business trust on October 27, 1992. The Trust offers shares of its Series only to institutional investors in private offerings. The Fund may withdraw the investment of the Portfolio in the Series at any time, if the Board of Directors of the Fund determines that it is in the best interests of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of the Fund would consider what action might be taken, including the investment of all of the assets of the Portfolio in another pooled investment entity having the same investment objective as the Portfolio or the hiring of an investment advisor to manage the Portfolio's assets in accordance with the investment policies described above. Whenever the Portfolio, as an investor in the Series, is asked to vote on a shareholder proposal, the Fund will solicit voting instructions from the Portfolio's shareholders with respect to the proposal. The Directors of the Fund will then vote the Portfolio's shares in the Series in accordance with the voting instructions received from the Portfolio's shareholders. The Directors of the Fund will vote shares of the Portfolio for which they receive no voting instructions in accordance with their best judgment. As of January 30, 1998, the following person owned more than 25% of the voting securities of the Portfolio: BellSouth Corporation 100% Bankers Trust Company as Trustee* 34 Exchange Place Jersey City, NJ 07302 * Owner of record only Shareholder inquiries may be made by writing or calling the Shareholder Services Agent at the address or telephone number set forth in the employer's plan documents or in documents provided by the institution. 15 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 Investment Advisor DIMENSIONAL FUND ADVISORS INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 Custodian PNC BANK, N.A. 200 Stevens Drive Airport Business Center Lester, PA 19113 Accounting Services, Dividend Disbursing and Transfer Agent PFPC INC. 400 Bellevue Parkway Wilmington, DE 19809 Legal Counsel STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 Independent Accountants COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center 19th and Market Streets Philadelphia, PA 19103 16 <PAGE> DFA INTERNATIONAL VALUE PORTFOLIO II DIMENSIONAL INVESTMENT GROUP INC. 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401 TELEPHONE: (310) 395-8005 STATEMENT OF ADDITIONAL INFORMATION MARCH 3, 1998 This statement of additional information is not a prospectus but should be read in conjunction with the prospectus of DFA International Value Portfolio II (the "Portfolio") of Dimensional Investment Group Inc. (the "Fund"), dated March 3, 1998, as amended from time to time, which can be obtained by writing or calling the Shareholder Services Agent for your employer's plan. TABLE OF CONTENTS PAGE INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 2 BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FUTURES CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 FEDERAL TAX TREATMENT OF FUTURES CONTRACTS . . . . . . . . . . . . . . . . . 6 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 9 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . 10 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 <PAGE> INVESTMENT OBJECTIVE AND POLICIES The following information supplements the information set forth in the prospectus under the caption "INVESTMENT OBJECTIVE AND POLICIES" and applies to the DFA International Value Series (the "Series") of The DFA Investment Trust Company (the "Trust"). Because the structure of the Series is based on the relative market capitalizations of eligible holdings, it is possible that the Series might include at least 5% of the outstanding voting securities of one or more issuers. In such circumstances, the Fund and the issuer would be deemed "affiliated persons" under the Investment Company Act of 1940 (the "1940 Act") and certain requirements of the 1940 Act regulating dealings between affiliates might become applicable. However, based on the present capitalizations of the groups of companies eligible for inclusion in the Series and the anticipated amount of the Series' assets intended to be invested in such securities, management does not anticipate that the Series will include as much as 5% of the voting securities of any issuer. The Series may invest up to 5% of its assets in convertible debentures issued by non-U.S. companies. Convertible debentures include corporate bonds and notes that may be converted into or exchanged for common stock. These securities are generally convertible either at a stated price or a stated rate (that is, for a specific number of shares of common stock or other security). As with other fixed income securities, the price of a convertible debenture to some extent varies inversely with interest rates. While providing a fixed-income stream (generally higher in yield than the income derived from a common stock but lower than that afforded by a non-convertible debenture), a convertible debenture also affords the investor an opportunity, through its conversion feature, to participate in the capital appreciation of the common stock into which it is convertible. As the market price of the underlying common stock declines, convertible debentures tend to trade increasingly on a yield basis and so may not experience market value declines to the same extent as the underlying common stock. When the market price of the underlying common stock increases, the price of a convertible debenture tends to rise as a reflection of the value of the underlying common stock. To obtain such a higher yield, the Series may be required to pay for a convertible debenture an amount in excess of the value of the underlying common stock. Common stock acquired by the Series upon conversion of a convertible debenture will generally be held for so long as the Advisor anticipates such stock will provide the Series with opportunities which are consistent with the Series' investment objective and policies. BROKERAGE TRANSACTIONS During the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid brokerage commissions of $542,306, $1,251,242 and $1,133,787, respectively. The substantial increases or decreases in the amount of brokerage commissions paid by the Series from year to year resulted from increases or decreases in the amount of securities that were bought and sold by the Series. Portfolio transactions of the Series will be placed with a view to receiving the best price and execution. In addition, the Advisor will seek to acquire and dispose of securities in a manner which would cause as little fluctuation in the market prices of stocks being purchased or sold as possible in light of the size of the transactions being effected. Brokers will be selected with these goals in view. The Advisor monitors the performance of brokers which effect transactions for the Series to determine the effect that their trading has on the market prices of the securities in which it invests. The Advisor also checks the rate of commission being paid by the Series to its brokers to ascertain that they are competitive with those charged by other brokers for similar services. Transactions also may be placed with brokers who provide the Advisor with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. The Investment Management Agreement of the Series permits the Advisor knowingly to 2 <PAGE> pay commissions on these transactions which are greater than another broker might charge if the Advisor, in good faith, determines that the commissions paid are reasonable in relation to the research or brokerage services provided by the broker or dealer when viewed in terms of either a particular transaction or the Advisor's overall responsibilities to assets under its management. The Advisor places buy and sell orders on Instinet when the Advisor determines that the securities may not be available from other sources at a more favorable price. Instinet is an electronic information and communication network whose subscribers include most market makers as well as many institutions. Instinet charges a commission for each trade executed on its system. On any given trade, the Series, by trading through Instinet, would pay a spread to a dealer on the other side of the trade plus a commission to Instinet. However, placing a buy (or sell) order on Instinet communicates to many (potentially all) market makers and institutions at once. This can create a more complete picture of the market and thus increase the likelihood that the Series can effect transactions at the best available prices. During fiscal year 1997, the Series paid commissions for securities transactions to brokers which provided market price monitoring services, market studies and research services to the Series of $13,922 with respect to securities transactions valued at $4,623,558. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Series. The Portfolio will not incur any brokerage or other costs in connection with its purchase or redemption of shares of the Series, except if the Portfolio receives securities or currencies from the Series to satisfy the Portfolio's redemption request. INVESTMENT LIMITATIONS The Portfolio has adopted certain limitations which may not be changed without the approval of the holders of a majority of the outstanding voting securities of the Portfolio. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be effected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of such Portfolio. The investment limitations of the Series are the same as those of the Portfolio. The Portfolio will not: (1) invest in commodities or real estate, including limited partnership interests therein, although it may purchase and sell securities of companies which deal in real estate and securities which are secured by interests in real estate and may purchase or sell financial futures contracts and options thereon; (2) make loans of cash, except through the acquisition of repurchase agreements and obligations customarily purchased by institutional investors; (3) as to 75% of its total assets, invest in the securities of any issuer (except obligations of the U.S. Government and its agencies and instrumentalities) if, as a result of more than 5% of the Portfolio's total assets, at market, would be invested in the securities of such issuer; (4) purchase or retain securities of an issuer, if those officers and directors of the Fund or the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; 3 <PAGE> (5) borrow, except from banks and as a temporary measure for extraordinary or emergency purposes and, then, in no event in excess of 33% of its net assets, or pledge more than 33% of such assets to secure such loans; (6) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in (5) above; (7) invest more than 15% of the value of the Portfolio's total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; (8) engage in the business of underwriting securities issued by others; (9) invest for the purpose of exercising control over management of any company; (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; (11) invest more than 5% of its total assets in securities of companies which have (with predecessors) a record of less than three years' continuous operation; (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; (13) write or acquire options or interests in oil, gas or other mineral exploration, leases or development programs, except as described in (1) above; (14) purchase warrants, except that the Portfolio may acquire warrants as a result of corporate actions involving its holding of equity securities; (15) purchase securities on margin or sell short; (16) acquire more than 10% of the voting securities of any issuer; or (17) issue senior securities (as such term is defined in Section 18(f) of the 1940 Act), except to the extent permitted by the 1940 Act. The investment limitations described in (3), (7), (9), (10), (11), (12) and (16) above do not prohibit the Portfolio from investing all or substantially all of its assets in the shares of another registered open-end investment company, such as the Series. The investment limitations described in (1) and (15) above do not prohibit the Portfolio from making margin deposits in connection with the purchase or sale of financial futures contracts and options thereon to the extent permitted under applicable regulations. Although (2) above prohibits cash loans, the Portfolio is authorized to lend portfolio securities. Inasmuch as the Portfolio will only hold shares of the Series, the Portfolio does not intend to lend those shares. 4 <PAGE> Pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act"), the Series may purchase certain unregistered (i.e. restricted) securities upon a determination that a liquid institutional market exists for the securities. If it is decided that a liquid market does exist, the securities will not be subject to the Series' limitations on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Trustees of the Trust has delegated the day-to-day function of making liquidity determinations to the Advisor. For Rule 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Trustees and the Advisor will continue to monitor the liquidity of Rule 144A securities. The Series may acquire and sell forward foreign currency exchange contracts in order to hedge against changes in the level of future currency rates. Such contracts involve an obligation to purchase or sell a specific currency at a future date at a price set in the contract. While the Series has retained authority to buy and sell financial futures contracts and options thereon, it has no present intention to do so. Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from its total assets those assets which represent collateral received by the Series for its securities lending transactions. Unless otherwise indicated, all limitations applicable to the Portfolios' and Series' investments apply only at the time that a transaction is undertaken. Any subsequent change in the percentage of a Portfolio's or Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in a Portfolio's or Series' total assets will not require a Portfolio or Series to dispose of an investment until the Advisor determines that it is practicable to sell or close out the position without undue market or tax consequences. FUTURES CONTRACTS The Series may enter into futures contracts and options on futures contracts for the purpose of remaining fully invested and to maintain liquidity to pay redemptions. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of defined securities at a specified future time and at a specified price. Futures contracts which are standardized as to maturity date and underlying financial instrument are traded on national futures exchanges. The Series will be required to make a margin deposit in cash or government securities with a broker or custodian to initiate and maintain positions in futures contracts. Minimal initial margin requirements are established by the futures exchange and brokers may establish margin requirements which are higher than the exchange requirements. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes, to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, reduction in the contract value may reduce the required margin resulting in a repayment of excess margin to the Series. Variation margin payments are made to and from the futures broker for as long as the contract remains open. The Series expects to earn income on its margin deposits. To the extent that the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, the Series will not enter into such transaction if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. Pursuant to published positions of the Securities and Exchange Commission (the "Commission"), the Series may be required to maintain segregated accounts consisting of liquid assets such as cash, U.S. government securities, or other high grade debt obligations (or, 5 <PAGE> as permitted under applicable regulation, enter into offsetting positions) in connection with its futures contract transactions in order to cover its obligations with respect to such contracts. Positions in futures contracts may be closed out only on an exchange which provides a secondary market. However, there can be no assurance that a liquid secondary market will exist for any particular futures contract at any specific time. Therefore, it might not be possible to close a futures position and, in the event of adverse price movements, the Series would continue to be required to continue to make variation margin deposits. In such circumstances, if the Series has insufficient cash, it might have to sell portfolio securities to meet daily margin requirements at a time when it might be disadvantageous to do so. Management intends to minimize the possibility that it will be unable to close out a futures contract by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. FEDERAL TAX TREATMENT OF FUTURES CONTRACTS Except for transactions the Series has identified as hedging transactions, the Series is required for federal income tax purposes to recognize as income for each taxable year its net unrealized gains and losses on certain futures contracts as of the end of the year as well as those actually realized during the year. In most cases, any gain or loss recognized with respect to a futures contract is considered to be 60% long-term gain or loss and 40% short-term capital gain or loss, without regard to the holding period of the contract. Furthermore, sales of futures contracts which are intended to hedge against a change in the value of securities held by the Series may affect the holding period of such securities and, consequently, the nature of the gain or loss on such securities upon disposition. In order for the Series to continue to qualify for federal income tax treatment as a regulated investment company, at least 90% of its gross income for a taxable year must be derived from qualifying income; i.e., dividends, interest, income derived from loans of securities, gains from the sale of securities and other income derived with respect to the Series' business of investing in securities. It is anticipated that any net gain realized from closing futures contracts will be considered gain from the sale of securities and, therefore, constitute qualifying income for purposes of the 90% requirement. The Series will distribute to shareholders annually any net capital gains which have been recognized for federal income tax purposes (including unrealized gains at the end of the Series' fiscal year) on futures transactions. Such distributions will be combined with distributions of capital gains realized on the Series' other investments. DIRECTORS AND OFFICERS The names, addresses and dates of birth of the directors and officers of the Fund and a brief statement of their present positions and principal occupations during the past five years is set forth below. DIRECTORS David G. Booth, (12/2/46), Director*, President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director, of the following companies: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc. 6 <PAGE> (registered investment company). Trustee, President and Chairman-Chief Executive Officer of The DFA Investment Trust Company (registered investment company). Chairman and Director, Dimensional Fund Advisors Ltd. George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company and First Prairie Funds (registered investment companies). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Public Director, Chicago Mercantile Exchange. Myron S. Scholes, (7/1/42), Director, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. Rex A. Sinquefield, (9/7/44), Director*, Chairman-Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd. *Interested Director of the Fund. OFFICERS Each of the officers listed below hold the same office (except as otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc. Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA. Truman Clark, (4/8/41), Vice President, Santa Monica, CA. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. 7 <PAGE> Maureen Connors, (11/17/36), Vice President and Assistant Secretary, Santa Monica, CA. Robert Deere, (10/8/57), Vice President, Santa Monica, CA. Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Richard Eustice, (8/5/65), Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA. Kamyab Hashemi-Nejad, 1/22/61, Vice President, Controller and Assistant Treasurer, Santa Monica, CA. Stephen P. Manus, 12/26/50, Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. Karen McGinley, 3/10/66, Vice President, Santa Monica, CA. Catherine L. Newell, 5/7/64, Vice President and Assistant Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989 to 1996. David Plecha, (10/26/61), Vice President, Santa Monica, CA. 41, Vice President, Santa Monica, CA. George Sands, (2/8/56), Vice President, Santa Monica, CA. Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Jeanne C. Sinquefield, Ph.D., (10/12/55), Executive Vice President, Santa Monica, CA. Scott Thornton, (3/1/63), Vice President, Santa Monica, CA. Weston Wellington, (3/1/51), Vice President, Santa Monica, CA. Director of Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994. Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife. Directors and officers as a group own less than 1% of the Portfolio's outstanding stock. Set forth below is a table listing, for each director entitled to receive compensation, the compensation received from the Fund during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year. 8 <PAGE> <TABLE> <CAPTION> Aggregate Total Compensation from Compensation Fund Director from Fund and Fund Complex - -------- ------------ ----------------------- <S> <C> <C> George M. Constantinides $ 5,000 $ 30,000 John P. Gould $ 5,000 $ 30,000 Roger G. Ibbotson $ 5,000 $ 30,000 Merton H. Miller $ 5,000 $ 30,000 Myron S. Scholes $ 5,000 $ 30,000 </TABLE> ADMINISTRATIVE SERVICES PFPC Inc. ("PFPC") serves as the accounting services, dividend disbursing and transfer agent for the Portfolio and the Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include day-to-day keeping and maintenance of certain records, calculation of the offering price of the shares, preparation of reports, liaison with its custodian, and transfer and dividend disbursing agency services. For its services, the Portfolio pays PFPC a monthly fee of $1,000. OTHER INFORMATION For the services it provides as investment advisor to the Series, the Advisor is paid a monthly fee calculated as a percentage of average net assets of the Series. For the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid advisory fees of $937,000, $2,124,000 and $2,997,000, respectively. The Series has more than one investor; this dollar amount represents the total dollar amount of advisory fees paid by the Series to the Advisor. The Fund was known as DFA U.S. Large Cap Inc. from February, 1992, until the Fund amended its Articles of Incorporation in April, 1993, to change to its present name. Prior to a February, 1992, amendment to the Fund's Articles of Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. PNC Bank, N.A. serves as the custodian for the Portfolio. Citibank, N.A. ("Citibank"), 111 Wall Street, New York, New York 10005, will succeed Boston Safe Deposit and Trust Company ("Boston Safe"), Princess House, 1 Suffolk Lane, London EC4R OAN, England, as the global custodian for the Series. It is expected that the conversion from Boston Safe to Citibank will be accomplished by May 1, 1998. The custodians maintain a separate account or accounts for the Portfolio and Series; receive, hold and release portfolio securities on account of the Portfolio and Series; make receipts and disbursements of money on behalf of the Portfolio and Series; and collect and receive income and other payments and distributions on account of the Portfolio's and Series' portfolio securities. Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the Fund's financial statements on an annual basis. 9 <PAGE> PRINCIPAL HOLDERS OF SECURITIES As of January 30, 1998, the following person beneficially owned 5% or more of the outstanding stock of the Portfolio, as set forth below: BellSouth Corporation 100% Bankers Trust Company as Trustee* 34 Exchange Place Jersey City, NJ 07302 *Owner of record only PURCHASE OF SHARES The following information supplements the information set forth in the prospectus under the caption "PURCHASE OF SHARES." The Fund will accept purchase and redemption orders on each day that the New York Stock Exchange ("NYSE") is open for business, regardless of whether the Federal Reserve System is closed. However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Fund will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days that the NYSE is closed, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Fund is closed. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Fund or the Portfolio. Securities accepted in exchange for shares of the Portfolio will be acquired for investment purposes and will be considered for sale under the same circumstances as other securities in the Portfolio. REDEMPTION OF SHARES The following information supplements the information set forth in the prospectus under the caption "REDEMPTION OF SHARES." The Fund may suspend redemption privileges or postpone the date of payment: (1) during any period when the NYSE is closed, or trading on the NYSE is restricted as determined by the Commission (2) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it, or fairly to determine the value of its assets, and (3) for such other periods as the Commission may permit. 10 <PAGE> CALCULATION OF PERFORMANCE DATA Following are quotations of the annualized percentage total returns for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable) using the standardized method of calculation required by the Commission. One Year Five Years Ten Years -------- ---------- --------- -4.15% (39 mos.) n/a 3.31% For purposes of calculating the performance of the Portfolio, the performance of its corresponding Series will be utilized for the period prior to when the Portfolio commenced operations and, if applicable, restated to reflect the Portfolio's fees and expenses. As the following formula indicates, the Portfolio and Series each determines its average annual total return by finding the average annual compounded rates of return over the stated time period that would equate a hypothetical initial purchase order of $1,000 to its redeemable value (including capital appreciation/depreciation and dividends and distributions paid and reinvested less any fees charged to a shareholder account) at the end of the stated time period. The calculation assumes that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The calculation also assumes the account was completely redeemed at the end of each period and the deduction of all applicable charges and fees. According to the Commission's formula: P(1 + T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one-, five- and ten-year periods at the end of the one-, five- and ten-year periods (or fractional portion thereof). In addition to the standardized method of calculating performance required by the Commission, the Portfolio and Series may disseminate other performance data 11 <PAGE> and may advertise total return performance calculated on a monthly basis. The Portfolio may compare its investment performance to appropriate market and mutual fund indices and investments for which reliable performance data is available. Such indices are generally unmanaged and are prepared by entities and organizations which track the performance of investment companies or investment advisors. Unmanaged indices often do not reflect deductions for administrative and management costs and expenses. The performance of the Portfolio may also be compared in publications to averages, performance rankings, or other information prepared by recognized mutual fund statistical services. Any performance information, whether related to the Portfolio or to the Advisor, should be considered in light of the Portfolio's investment objectives and policies, characteristics and the quality of the portfolio and market conditions during the time period indicated and should not be considered to be representative of what may be achieved in the future. FINANCIAL STATEMENTS The audited financial statements and financial highlights of the Portfolio for the Fund's fiscal year ended November 30, 1997, as set forth in the Fund's annual report to shareholders of the Portfolio, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited financial statements of the Series for the Trust's fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. A shareholder may obtain a copy of the reports upon request and without charge, by contacting the Fund at the address or telephone number appearing on the cover of the statement of additional information. 12 <PAGE> PROSPECTUS MARCH 3, 1998 DFA INTERNATIONAL VALUE PORTFOLIO III U.S. LARGE CAP VALUE PORTFOLIO III -------------- This prospectus describes DFA INTERNATIONAL VALUE PORTFOLIO III and U.S. LARGE CAP VALUE PORTFOLIO III (collectively the "Portfolios"), each a series of shares issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, (310) 395-8005. Each Portfolio is an open-end, management investment company whose shares are offered, without a sales charge, to 401(k) defined contribution plans and clients of registered financial advisers. The Fund issues thirteen series of shares, each of which represents a separate class of the Fund's common stock, having its own investment objective and policies and two of which are set forth in this prospectus. The investment objective of each Portfolio is to achieve long-term capital appreciation. EACH PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF A CORRESPONDING SERIES OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"), AN OPEN-END, MANAGEMENT INVESTMENT COMPANY THAT ISSUES SERIES (INDIVIDUALLY AND COLLECTIVELY, THE "SERIES") HAVING THE SAME INVESTMENT OBJECTIVES, POLICIES AND LIMITATIONS AS THE PORTFOLIOS. THE INVESTMENT EXPERIENCE OF EACH PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE INVESTMENT EXPERIENCE OF ITS CORRESPONDING SERIES. INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "THE PORTFOLIOS." This prospectus sets forth information about the Portfolios that prospective investors should know before investing and should be read carefully and retained for future reference. A statement of additional information about the Portfolios, dated March 3, 1998, as amended from time to time, which is incorporated herein by reference, has been filed with the Securities and Exchange Commission and is available upon request, without charge, by writing or calling the Fund at the above address or telephone number. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. <PAGE> TABLE OF CONTENTS <TABLE> <CAPTION> PAGE <S> <C> HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 4 THE PORTFOLIOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 DFA INTERNATIONAL VALUE PORTFOLIO III - INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 8 Portfolio Characteristics and Policies. . . . . . . . . . . . . . . . . 8 Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . 9 U.S. LARGE CAP VALUE PORTFOLIO III - INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 10 Portfolio Characteristics and Policies. . . . . . . . . . . . . . . . . 10 Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . 11 SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Foreign Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Foreign Currencies and Related Transactions . . . . . . . . . . . . . . 12 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Portfolio Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . 13 Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 13 Futures Contracts and Options on Futures. . . . . . . . . . . . . . . . 13 MANAGEMENT OF THE PORTFOLIOS . . . . . . . . . . . . . . . . . . . . . . . . 13 Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . 14 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . . 15 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 In Kind Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 VALUATION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 </TABLE> <PAGE> HIGHLIGHTS PAGE THE PORTFOLIOS 7 Each Portfolio, in effect, represents a separate mutual fund with its own investment objective and policies. The investment objective of each Portfolio is a fundamental policy and may not be changed without the affirmative vote of a majority of its outstanding securities. Clients of financial advisors may choose to invest in one or both of the Portfolios. Proceeds from the sale of shares of a Portfolio will be invested in accordance with that Portfolio's investment objective and policies. PAGE INVESTMENT OBJECTIVE - DFA INTERNATIONAL VALUE PORTFOLIO III 8 The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio will invest all of its assets in the DFA International Value Series of the Trust (the "International Value Series"), which in turn will invest in the stocks of large non-U.S. companies that are value stocks, primarily because they have a high book value in relation to their market value. (See "DFA INTERNATIONAL VALUE PORTFOLIO III - INVESTMENT OBJECTIVE AND POLICIES.") PAGE INVESTMENT OBJECTIVE - U.S. LARGE CAP VALUE PORTFOLIO III 10 The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio will invest all of its assets in the U.S. Large Cap Value Series of the Trust (the "Large Cap Value Series"), which in turn will invest in the common stocks of U.S. companies that are value stocks, primarily because they have a high book value in relation to their market value. The Large Cap Value Series will purchase common stocks of companies whose market capitalizations equal or exceed that of a company having the median market capitalization of companies whose shares are listed on the New York Stock Exchange (the "NYSE"). (See "U.S. LARGE CAP VALUE PORTFOLIO III - INVESTMENT OBJECTIVE AND POLICIES.") PAGE RISK FACTORS 12 The DFA International Value Portfolio III (indirectly through its investment in the International Value Series) invests in foreign securities. The International Value Series and the Large Cap Value Series, in which the corresponding Portfolios invest, may invest in futures contracts and options thereon. Each Portfolio is authorized to invest in repurchase agreements. Those policies and the policy of the Portfolios to invest in the shares of corresponding Series of the Trust involve certain risks. (See "RISK FACTORS.") PAGE MANAGEMENT AND ADMINISTRATIVE SERVICES 14 Dimensional Fund Advisors Inc. (the "Advisor" or "DFA") provides each Portfolio with administrative services and also serves as investment advisor to each Series. (See "MANAGEMENT OF THE PORTFOLIOS.") 1 <PAGE> PAGE DIVIDEND POLICY 15 Each Portfolio distributes dividends from its net investment income in November and December of each year and will distribute any realized net capital gains annually after the end of the Fund's fiscal year in November. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") PAGE PURCHASE, VALUATION AND REDEMPTION OF SHARES 16 The shares of the Portfolios are offered at net asset value, which is calculated as of the close of the NYSE on each day that the NYSE is open for business. The value of a Portfolio's shares will fluctuate in relation to the investment experience of its corresponding Series. The redemption price of a share of each Portfolio is equal to its net asset value. (See "PURCHASE OF SHARES," "VALUATION OF SHARES" and "REDEMPTION OF SHARES.") 2 <PAGE> SHAREHOLDER TRANSACTION EXPENSES None* The expenses in the following tables are based on those incurred by the Portfolios and their corresponding Series for the fiscal year ended November 30, 1997. ANNUAL FUND OPERATING EXPENSES** (AS A PERCENTAGE OF AVERAGE NET ASSETS) <TABLE> <S> <C> DFA INTERNATIONAL VALUE PORTFOLIO III Management Fee 0.20% Administration Fee 0.01% Other Expenses 0.17% Total Operating Expenses 0.38% U.S. LARGE CAP VALUE PORTFOLIO III Management Fee 0.10% Administration Fee 0.01% Other Expenses 0.12% Total Operating Expenses 0.23% </TABLE> *Shares of the Portfolios that are purchased through omnibus accounts maintained by securities firms may be subject to a service fee or commission on such purchases. **The "Management Fee" is payable by the Series and the "Administration Fee" is payable by the Portfolio. The amount set forth in "Other Expenses" represents the aggregate amount that is payable by both the Series and the Portfolio. EXAMPLE You would pay the following transaction and annual operating expenses on a $1,000 investment in each Portfolio, assuming a 5% annual return over each of the following time periods and redemption at the end of each time period: <TABLE> <CAPTION> 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- <S> <C> <C> <C> <C> DFA International Value Portfolio III $4 $12 $21 $48 U.S. Large Cap Value Portfolio III $2 $7 $13 $29 </TABLE> The purpose of the above fee table and Example is to assist investors in understanding the various costs and expenses that an investor in the Portfolios will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 3 <PAGE> The table summarizes the aggregate estimated annual operating expenses of both the Portfolios and the corresponding Series. (See "MANAGEMENT OF THE PORTFOLIOS" for a description of Portfolio and Series expenses.) The Board of Directors of the Fund has considered whether such expenses will be more or less than they would be if each Portfolio were to invest directly in the securities held by its corresponding Series. The aggregate amount of expenses for a Portfolio and the corresponding Series may be greater than it would be if the Portfolio were to invest directly in the securities held by the corresponding Series. However, the total expense ratios for the Portfolios and their corresponding Series are expected to be less over time than such ratios would be if the Portfolios were to invest directly in the underlying securities. This is because this arrangement enables institutional investors, including the Portfolios, to pool their assets, which may be expected to result in economies by spreading certain fixed costs over a larger asset base. Each shareholder in a Series, including the corresponding Portfolio, will pay its proportionate share of the expenses of the Series. CONDENSED FINANCIAL INFORMATION The following financial highlights are part of the financial statements of each Portfolio. The information for each of the past fiscal years has been audited by independent accountants. The financial statements, related notes, and the report of the independent accountants covering such financial information and financial highlights for the Fund's most recent fiscal year ended November 30, 1997, are incorporated by reference into the Portfolios' statement of additional information from the Fund's annual report to shareholders for the year ended November 30, 1997. Further information about the Portfolios' performance is contained in the Fund's annual report to shareholders of the Portfolios for the year ended November 30, 1997. A copy of the annual report may be obtained from the Fund upon request at no charge. 4 <PAGE> DFA INTERNATIONAL VALUE PORTFOLIO III FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> Year Year Feb. 3, Ended Ended to Nov. 30, Nov. 30, Nov. 30, 1997 1996 1995 -------- -------- -------- <S> <C> <C> <C> Net Asset Value, Beginning of Period . . . . . $ 12.39 $ 10.81 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income . . . . . . . . . . . . 0.21 0.21 0.17 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . . . . . . . . . (0.69) 1.38 0.84 -------- -------- -------- Total from Investment Operations . . . . . . (0.48) 1.59 1.01 -------- -------- -------- LESS DISTRIBUTIONS Net Investment Income . . . . . . . . . . . . (0.22) (0.01) (0.17) Net Realized Gains . . . . . . . . . . . . . (0.12) --- (0.03) -------- -------- -------- Total Distributions . . . . . . . . . . . . . (0.34) (0.01) (0.20) -------- -------- -------- Net Asset Value, End of Period . . . . . . . . $ 11.57 $ 12.39 $ 10.81 Total Return . . . . . . . . . . . . . . . . . (3.91)% 14.76% 10.04%# Net Assets, End of Period (thousands) . . . . . $282,818 $242,371 $146,952 Ratio of Expenses to Average Net Assets (1) . . 0.38% 0.45% 0.51%* Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . . . . . . . . . . 1.88% 2.03% 2.29%* Portfolio Turnover Rate . . . . . . . . . . . . N/A N/A N/A Average Commission Rate . . . . . . . . . . . . N/A N/A N/A Portfolio Turnover Rate of Master Fund Series . 22.55% 12.23% 9.75%(a) Average Commission Rate of Master Fund Series (2). . . . . . . . . . . . . . . . . . $0.0068 $0.0112 N/A </TABLE> *Annualized #Non-Annualized (1) Represents the respective combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (2) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal years beginning after September 1, 1995. (a) Master Fund Series Turnover calculated for the year ended November 30, 1995. 5 <PAGE> U.S. LARGE CAP VALUE PORTFOLIO III FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> YEAR YEAR FEB. 3, ENDED ENDED TO NOV. 30, NOV. 30, NOV. 30, 1996 1996 1995 -------- -------- -------- <S> <C> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . . . . . . . . . $ 15.76 $ 12.92 $ 10.00 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . 0.32 0.28 0.23 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . . 3.52 2.60 3.09 -------- -------- -------- Total from Investment Operations . . . . . . . . . . . . . . . . . . . . 3.84 2.88 3.32 -------- -------- -------- LESS DISTRIBUTIONS Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . (0.29) (0.04) (0.23) Net Realized Gains . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.29) --- (0.17) -------- -------- -------- Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.58) (0.04) (0.40) -------- -------- -------- Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . . . . . $ 19.02 $ 15.76 $ 12.92 Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.23% 22.34% 33.27%# Net Assets, End of Period (thousands) . . . . . . . . . . . . . . . . . . . $471,038 $379,974 $135,043 Ratio of Expenses to Average Net Assets (1) . . . . . . . . . . . . . . . . 0.23% 0.26% 0.31%* Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . . 1.79% 2.29% 2.82%* Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A Average Commission Rate . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . . . . . . . . . . 17.71% 20.12% 29.41%(a) Average Commission Rate of Master Fund Series (2) . . . . . . . . . . . . . $ 0.0494 $ 0.0499 N/A </TABLE> *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (2) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal years beginning after September 1, 1995. (a) Master Fund Series Turnover calculated for the year ended November 30, 1995. 6 <PAGE> THE PORTFOLIOS Each of the Portfolios, unlike many other investment companies which directly acquire and manage their own portfolio of securities, seeks to achieve its investment objective by investing all of its investable assets in a corresponding Series of the Trust, an open-end, management investment company, registered under the Investment Company Act of 1940 ("1940 Act"), that issues Series having the same investment objective as each of the Portfolios. The investment objective of a Portfolio may not be changed without the affirmative vote of a majority of its outstanding securities and the investment objective of a Series may not be changed without the affirmative vote of a majority of its outstanding securities. Shareholders of a Portfolio will receive written notice thirty days prior to any change in the investment objective of its corresponding Series. This prospectus describes the investment objective, policies and restrictions of each Portfolio and its corresponding Series. (See "DFA INTERNATIONAL VALUE PORTFOLIO III - INVESTMENT OBJECTIVE AND POLICIES" and "U.S. LARGE CAP VALUE PORTFOLIO III - INVESTMENT OBJECTIVE AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE PORTFOLIOS" for a description of the management and other expenses associated with the Portfolios' investment in the Trust. Other institutional investors, including other mutual funds, may invest in each Series, and the expenses of such other investors and, correspondingly, their returns may differ from those of the Portfolios. Please contact the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for information about the availability of investing in the Series other than through the Portfolios. The shares of the Series will be offered to institutional investors for the purpose of increasing the funds available for investment, to reduce expenses as a percentage of total assets and to achieve other economies that might be available at higher asset levels. For example, a Series might be able to place larger block trades at more advantageous prices and to participate in securities transactions of larger denominations, thereby reducing the relative amount of certain transaction costs in relation to the total size of the transaction. Investment in a Series by other institutional investors offers potential benefits to the Series and, through their investment in the Series, also to the Portfolios. However such economies and expense reductions might not be achieved and additional investment opportunities, such as increased diversification, might not be available if other institutions do not invest in the Series. Also, if an institutional investor were to redeem its interest in a Series, the remaining investors in that Series could experience higher pro rata operating expenses, thereby producing lower returns, and the Series' security holdings may become less diverse, resulting in increased risk. Institutional investors that have a greater pro rata ownership interest in a Series than the corresponding Portfolio could have effective voting control over the operation of the Series. Further, if a Series changes its investment objective in a manner which is inconsistent with the investment objective of a corresponding Portfolio and the shareholders of the Portfolio fail to approve a similar change in the investment objective of the Portfolio, the Portfolio would be forced to withdraw its investment in the Series and either seek to invest its assets in another registered investment company with the same investment objective as the Portfolio, which might not be possible, or retain an investment advisor to manage the Portfolio's assets in accordance with its own investment objective, possibly at increased cost. A withdrawal by a Portfolio of its investment in the corresponding Series could result in a distribution in kind of portfolio securities (as opposed to a cash distribution) to the Portfolio. Should such a distribution occur, the Portfolio could incur brokerage fees or other transaction costs in converting such securities to cash in order to pay redemptions. In addition, a distribution in kind to the Portfolio could result in a less diversified portfolio of investments and could affect adversely the liquidity of the Portfolio. Moreover, a distribution in kind by the Series corresponding to the Portfolio may constitute a taxable exchange for federal income tax purposes resulting in gain or loss to such Portfolio. Any net capital gains so realized will be distributed to such Portfolio's shareholders as described in "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" below. 7 <PAGE> Finally, the Portfolios' investment in the shares of a registered investment company such as the Trust is relatively new and results in certain operational and other complexities. However, management believes that the benefits to be gained by shareholders outweigh the additional complexities and that the risks attendant to such investment are not inherently different from the risks of direct investment in securities of the type in which the Series invest. DFA INTERNATIONAL VALUE PORTFOLIO III - INVESTMENT OBJECTIVE AND POLICIES PORTFOLIO CHARACTERISTICS AND POLICIES The investment objective of the DFA International Value Portfolio III is to achieve long-term capital appreciation. The Portfolio pursues its objective by investing all of its assets in the International Value Series, which has the same investment objective and policies as the Portfolio. The International Value Series operates as a diversified investment company and seeks to achieve its objective by investing in the stocks of large non-U.S. companies which the Advisor believes to be value stocks at the time of purchase. Securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value (a "book to market ratio"). Generally, the shares of a company in any given country will be considered to have a high book to market ratio if the ratio equals or exceeds the ratios of any of the 30% of companies in that country with the highest positive book to market ratios whose shares are listed on a major exchange, and, as described below, will be considered eligible for investment. In measuring value, the Advisor may consider additional factors such as cash flow, economic conditions and developments in the issuer's industry. The International Value Series intends to invest in the stocks of large companies in countries with developed markets. As of the date of this prospectus, the International Value Series may invest in the stocks of large companies in Australia, Belgium, Denmark, France, Germany, Hong Kong, Italy, Japan, Malaysia, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland and the United Kingdom. As the International Value Series' asset growth permits, it may invest in the stocks of large companies in other developed markets, including Austria, Finland and Ireland. (See "RISK FACTORS.") PORTFOLIO STRUCTURE Under normal market conditions, at least 65% of the International Value Series' assets will be invested in companies organized or having a majority of their assets in or deriving a majority of their operating income in at least three non-U.S. countries and no more than 40% of the Series' assets will be invested in such companies in any one country. The International Value Series reserves the right to invest in futures contracts and options on futures contracts to commit funds awaiting investment or to maintain liquidity. To the extent that the International Value Series invests in futures contracts for other than bona fide hedging purposes, it will not purchase futures contracts if, as a result, more than 5% of its total assets would then consist of initial margin deposits on such contracts. Such investments entail certain risks. (See "RISK FACTORS.") The International Value Series also may invest up to 5% of its assets in convertible debentures issued by large non-U.S. companies. As of the date of this prospectus, the International Value Series intends to invest in companies having at least $800 million of market capitalization and the Series will be approximately market capitalization weighted. The Advisor may reset such floor from time to time to reflect changing market conditions. In determining market capitalization weights, the Advisor, using its best judgment, will seek to eliminate the effect of cross holdings on the individual country weights. As a result, the weighting of certain countries in the International Value Series may vary from their weighting in international indices, such as those published by The Financial Times, Morgan Stanley Capital International or Salomon/Russell. The Advisor, however, will not attempt to account for cross holding within the same country. The Advisor may exclude the stock of a company that otherwise meets the applicable criteria if the Advisor determines, in its best judgment, that other conditions exist that make the purchase of such stock for the International Value Series inappropriate. 8 <PAGE> Deviation from market capitalization weighting also will occur because the International Value Series intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by the International Value Series may be reduced from time to time from the level which adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the International Value Series' assets may be invested in interest-bearing obligations, such as money-market instruments, for this purpose, thereby causing further deviation from market capitalization weighting. Such investments would be made on a temporary basis pending investment in equity securities pursuant to the International Value Series' investment objective. A further deviation from market capitalization weighting may occur if the International Value Series invests a portion of its assets in convertible debentures. The International Value Series may make block purchases of eligible securities at opportune prices even though such purchases exceed the number of shares which, at the time of purchase, adherence to the policy of market capitalization weighting would otherwise require. In addition, the Series may acquire securities eligible for purchase or otherwise represented in its portfolio at the time of the exchange in exchange for the issuance of its shares. (See "In Kind Purchases.") While such transactions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the International Value Series. Changes in the composition and relative ranking (in terms of market capitalization and book to market ratio) of the stocks which are eligible for purchase by the International Value Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On not less than a semi-annual basis, the Advisor will prepare a current list of eligible large companies with high book to market ratios whose stock are eligible for investment. Only common stocks whose market capitalizations are not less than the minimum on such list will be purchased by the International Value Series. Additional investments will not be made in securities which have depreciated in value to such an extent that they are not then considered by the Advisor to be large companies. This may result in further deviation from market capitalization weighting and such deviation could be substantial if a significant amount of the International Value Series' holdings decrease in value sufficiently to be excluded from the then current market capitalization requirement for eligible securities, but not by a sufficient amount to warrant their sale. It is management's belief that the value stocks of large companies offer, over a long term, a prudent opportunity for capital appreciation but, at the same time, selecting a limited number of such issues for inclusion in the International Value Series involves greater risk than including a large number of them. The Advisor does not anticipate that a significant number of securities which meet the market capitalization criteria will be selectively excluded from the International Value Series. The International Value Series does not seek current income as an investment objective and investments will not be based upon an issuer's dividend payment policy or record. However, many of the companies whose securities will be included in the International Value Series do pay dividends. It is anticipated, therefore, that the International Value Series will receive dividend income. PORTFOLIO TRANSACTIONS Securities which have depreciated in value since their acquisition will not be sold by the International Value Series solely because prospects for the issuer are not considered attractive or due to an expected or realized decline in securities prices in general. Securities may be disposed of, however, at any time when, in the Advisor's judgment, circumstances warrant their sale, such as tender offers, mergers and similar transactions, or bids made for block purchases at opportune prices. Generally, securities will not be sold to realize short-term profits, but, when circumstances warrant, they may be sold without regard to the length of time held. Generally, securities will be purchased with the expectation that they will be held for longer than one year and will be held until such time as they are no longer considered an appropriate holding in light of the policy of maintaining a portfolio of companies with large market capitalizations and high book to market ratios. The annual portfolio turnover rates of the 9 <PAGE> International Value Series for the fiscal years ended November 30, 1996 and 1997 were 12.23% and 22.55%, respectively. U.S. LARGE CAP VALUE PORTFOLIO III - INVESTMENT OBJECTIVE AND POLICIES PORTFOLIO CHARACTERISTICS AND POLICIES The investment objective of the U.S. Large Cap Value Portfolio III is to achieve long-term capital appreciation. The Portfolio pursues its objective by investing all of its assets in the Large Cap Value Series, which has the same investment objective and policies as the Portfolio. The Large Cap Value Series seeks to achieve its objective by investing in the common stocks of large U.S. companies with shares that have a high book to market ratio. A company's shares will be considered to have a high book to market ratio if the ratio equals or exceeds the ratios of any of the 30% of companies with the highest positive book to market ratios whose shares are listed on the NYSE and, except as described below, will be considered eligible for investment. A company will be considered "large" if its market capitalization (i.e., the market price of its common stock multiplied by the number of outstanding shares) equals or exceeds that of the company having the median market capitalization of companies whose shares are listed on the NYSE. In addition, the Large Cap Value Series is authorized to invest in private placements of interest-bearing debentures that are convertible into common stock ("privately placed convertible debentures"). Such investments are considered illiquid and the value thereof together with the value of all other illiquid investments may not exceed 15% of the value of the Large Cap Value Series' total assets at the time of purchase. PORTFOLIO STRUCTURE The Large Cap Value Series will operate as a diversified investment company. Further, the Large Cap Value Series will not invest more than 25% of its total assets in securities of companies in a single industry. Ordinarily, at least 80% of the assets of the Large Cap Value Series will be invested in a broad and diverse group of readily marketable common stocks of large U.S. companies with high book to market ratios, as described above. The Large Cap Value Series may invest a portion of its assets, ordinarily not more than 20%, in high quality, highly liquid fixed income securities, such as money market instruments, and short-term repurchase agreements. The Large Cap Value Series may invest in futures contracts and options on futures contracts. To the extent that the Large Cap Value Series invests in futures contracts for other than bona fide hedging purposes, it will not purchase futures contracts if more than 5% of the Series' total assets are then invested as initial margin deposits on such contracts or options. The Large Cap Value Series will purchase securities that are listed on the principal U.S. national securities exchanges and traded over-the-counter. The Large Cap Value Series will be structured on a market capitalization basis, generally by basing the amount of each security purchased on the issuer's relative market capitalization, with a view to creating in the Large Cap Value Series a reasonable reflection of the relative market capitalizations of its portfolio companies. However, the Advisor may exclude the securities of a company that otherwise meets the applicable criteria described above if the Advisor determines, in its best judgment, that other conditions exist that make the inclusion of such security inappropriate. Deviation from strict market capitalization weighting will also occur because the Large Cap Value Series intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by the Large Cap Value Series may be reduced, from time to time, from the level which adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the Large Cap Value Series' assets may be invested in interest-bearing obligations, as described above, for this purpose, thereby causing further deviation from market capitalization weighting. Such investments would be made on a temporary basis pending investment in equity securities pursuant to the Large Cap Value Series' investment objective. The Large Cap Value Series may make block purchases of eligible securities at opportune prices even 10 <PAGE> though such purchases exceed the number of shares which, at the time of purchase, strict adherence to the policy of market capitalization weighting would otherwise require. In addition, the Series may acquire securities eligible for purchase or otherwise represented in its portfolio at the time of the exchange in exchange for the issuance of its shares. (See "In Kind Purchases.") While such transactions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the Large Cap Value Series. Changes in the composition and relative ranking (in terms of market capitalization and book to market ratio) of the stocks which are eligible for purchase by the Large Cap Value Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On not less than a semi-annual basis, the Advisor will prepare a current list of large U.S. companies with high book to market ratios whose stock is eligible for investment. Only common stocks whose market capitalizations are not less than the maximum on such list will be purchased by the Large Cap Value Series. Additional investments will not be made in securities which have depreciated in value to such an extent that they are not then considered by the Advisor to be large companies. This may result in further deviation from market capitalization weighting and such deviation could be substantial if a significant amount of the Large Cap Value Series' holdings decrease in value sufficiently to be excluded from the then current market capitalization requirement for eligible securities, but not by a sufficient amount to warrant their sale. It is management's belief that the stocks of large U.S. companies with high book to market ratios offer, over a long term, a prudent opportunity for capital appreciation but, at the same time, selecting a limited number of such issues for inclusion in the Large Cap Value Series involves greater risk than including a large number of them. The Advisor does not anticipate that a significant number of securities which meet the market capitalization criteria will be selectively excluded from the Large Cap Value Series. The Large Cap Value Series does not seek current income as an investment objective and investments will not be based upon an issuer's dividend payment policy or record. However, many of the companies whose securities will be included in the Large Cap Value Series do pay dividends. It is anticipated, therefore, that the Large Cap Value Series will receive dividend income. PORTFOLIO TRANSACTIONS The Large Cap Value Series does not intend to purchase or sell securities based on the prospects for the economy, the securities markets or the individual issuers whose shares are eligible for purchase. As described under "Portfolio Structure," investments will be made in virtually all eligible securities on a market capitalization weighted basis. Generally, securities will be purchased with the expectation that they will be held for longer than one year. The Large Cap Value Series may sell portfolio securities when the issuer's market capitalization falls substantially below that of the issuer with the minimum market capitalization which is then eligible for purchase by the Large Cap Value Series. However, securities may be sold at any time when, in the Advisor's judgment, circumstances warrant their sale. The annual portfolio turnover rates of the Large Cap Value Series for the fiscal years ended November 30, 1996 and 1997 were 20.12% and 17.71%, respectively. In addition, the Large Cap Value Series may sell portfolio securities when their book to market ratio falls substantially below that of the security with the lowest such ratio that is then eligible for purchase by the Series. 11 <PAGE> SECURITIES LOANS The Series are authorized to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While a Series may earn additional income from lending securities, such activity is incidental to a Series' investment objective. The value of securities loaned may not exceed 331/3% of the value of a Series' total assets. In connection with such loans, a Series will receive collateral consisting of cash or U.S. Government securities, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. In addition, the Series will be able to terminate the loan at any time and will receive reasonable interest on the loan, as well as amounts equal to any dividends, interest or other distributions on the loaned securities. In the event of the bankruptcy of the borrower, the Series could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. Each Portfolio is also authorized to lend its portfolio securities. However, as long as it holds only shares of its corresponding Series, it will not do so. RISK FACTORS FOREIGN SECURITIES The International Value Series invests in foreign issuers. Such investments involve risks that are not associated with investments in U.S. public companies. Such risks may include legal, political and or diplomatic actions of foreign governments, such as imposition of withholding taxes on interest and dividend income payable on the securities held, possible seizure or nationalization of foreign deposits, establishment of exchange controls or the adoption of other foreign governmental restrictions which might adversely affect the value of the assets held by the International Value Series. Further, foreign issuers are not generally subject to uniform accounting, auditing and financial reporting standards comparable to those of U.S. public companies and there may be less publicly available information about such companies than comparable U.S. companies. The economies of many countries in which the International Value Series invests are not as diverse or resilient as the U.S. economy, and have significantly less financial resources. Some countries are more heavily dependent on international trade and may be affected to a greater extent by protectionist measures of their governments, or dependent upon a relatively limited number of commodities and, thus, sensitive to changes in world prices for these commodities. In many foreign countries, stock markets are more variable than U.S. markets for two reasons. Contemporaneous declines in both (i) foreign securities prices in local currencies and (ii) the value of local currencies in relation to the U.S. dollar can have a significant negative impact on the net asset value of the International Value Series and the DFA International Value Portfolio III. The net asset value of the International Value Series is denominated in U.S. dollars, and, therefore, declines in market price of both the foreign securities held by the International Value Series and the foreign currency in which those securities are denominated will be reflected in the net asset value of the International Value Series' and the DFA International Value Portfolio III's shares. FOREIGN CURRENCIES AND RELATED TRANSACTIONS Investments of the International Value Series will be denominated in foreign currencies. Changes in the relative values of foreign currencies and the U.S. dollar, therefore, will affect the value of investments of that Series. The International Value Series may purchase foreign currency futures contracts and options in order to hedge against changes in the level of foreign currency exchange rates. Such contracts involve an agreement to purchase or sell a specific currency at a future date at a price set in the contract and enable the International Value Series to protect against losses resulting from adverse changes in the relationship between the U.S. dollar and foreign currencies occurring between the trade and settlement dates of Series securities transactions, but they also 12 <PAGE> tend to limit the potential gains that might result from a positive change in such currency relationships. Gains and losses on futures contracts and options thereon depend on interest rates and other economic forces. BORROWING The International Value Series and the Large Cap Value Series each has reserved the right to borrow amounts not exceeding 33% of its net assets for the purposes of making redemption payments. When advantageous opportunities to do so exist, a Series may also purchase securities when borrowings exceed 5% of the value of its net assets. Such purchases can be considered to be "leveraging" and, in such circumstances, the net asset value of the Series may increase or decrease at a greater rate than would be the case if the Series had not leveraged. The interest payable on the amount borrowed would increase the Series' expenses and, if the appreciation and income produced by the investments purchased when the Series has borrowed are less than the cost of borrowing, the investment performance of the Series will be reduced as a result of leveraging. PORTFOLIO STRATEGIES The method employed by the Advisor to manage the International Value Series and the Large Cap Value Series differs from the process employed by many other investment advisors in that the Advisor will rely on fundamental analysis of the investment merits of securities to a limited extent to eliminate potential acquisitions rather than rely on this technique to select securities. Further, because securities generally will be held long-term and will not be eliminated based on short-term price fluctuations, the Advisor generally will not act upon general market movements or short-term price fluctuations of securities to as great an extent as many other investment advisors. REPURCHASE AGREEMENTS In addition, each Series may invest in repurchase agreements. In the event of bankruptcy of the other party to a repurchase agreement, the Trust could experience delay in recovering the securities underlying such agreement. Management believes that this risk can be controlled through stringent security selection criteria and careful monitoring procedures. FUTURES CONTRACTS AND OPTIONS ON FUTURES Each Series also may invest in futures contracts and options on futures. To the extent that a Series invests in futures contracts and options thereon for other than bona fide hedging purposes, it will not enter into such transactions if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that, in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. These investments entail the risk that an imperfect correlation may exist between changes in the market value of the stocks owned by the Series and the prices of such futures contracts and options, and, at times, the market for such contracts and options might lack liquidity, thereby inhibiting a Series' ability to close a position in such investments. Gains or losses on investments in options and futures depend on the direction of securities prices, interest rates and other economic factors, and the loss from investing in futures contracts is potentially unlimited. A Series' investment in futures and options are subject to special tax rules that may affect the amount, timing and character of the income earned by such Series and the corresponding Portfolio's distributions to its shareholders. (These special rules are discussed in the statement of additional information.) 13 <PAGE> MANAGEMENT OF THE PORTFOLIOS The Advisor serves as investment advisor to each Series and, as such, is responsible for the management of their respective assets. Investment decisions for the Series are made by the Investment Committee of the Advisor, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of the Advisor who are elected annually. The Advisor provides each Series with a trading department and selects brokers and dealers to effect securities transactions. Securities transactions are placed with a view to obtaining the best price and execution of such transactions. The Advisor is authorized to pay a higher commission to a broker, dealer or exchange member than another such organization might charge if it determines, in good faith, that the commission paid is reasonable in relation to the research or brokerage services provided by such organization. For the fiscal year ended November 30, 1997, (i) the Advisor received a fee for its advisory services to the Series equal to the following percentage of the average net assets of each Series and (ii) the total expenses of each Portfolio were the following percentages of its average net assets: Management Fee Total Expenses DFA International Value Portfolio III 0.20% 0.38% U.S. Large Cap Value Portfolio III 0.10% 0.23% Each Portfolio and Series bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage commissions and transfer taxes in connection with the acquisition and disposition of portfolio securities, taxes, insurance premiums, costs incidental to meetings of its shareholders and directors or trustees, the cost of filing its registration statements under federal securities laws and the cost of any filings required under state securities laws, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to a particular Portfolio or Series are so allocated and expenses which are not allocable to a particular Portfolio and its corresponding Series are borne by such Portfolio and Series on the basis of their relative net assets. The Advisor was organized in May, 1981, and is engaged in the business of providing investment management services to institutional investors. Assets under management total approximately $26 billion. David G. Booth and Rex A. Sinquefield (directors and officers of both the Fund and the Advisor, trustees and officers of the Trust, and shareholders of the Advisor) may be deemed controlling persons of the Advisor. The Advisor has entered into a Consulting Services Agreement with Dimensional Fund Advisors Ltd. ("DFAL") and DFA Australia Limited ("DFA Australia"), respectively. Pursuant to the terms of each Consulting Services Agreement, DFAL and DFA Australia provide certain trading and administrative services 14 <PAGE> to the Advisor with respect to the International Value Series of the Trust. The Advisor owns 100% of the outstanding shares of DFAL and beneficially owns 100% of DFA Australia. The Board of Directors is responsible for establishing Portfolio policies and for overseeing the management of the Portfolios. Each of the Directors and officers of the Fund is also a Trustee and officer of the Trust. The Directors of the Fund, including all of the disinterested Directors, have adopted written procedures to monitor potential conflicts of interest that might develop between the Portfolios and the Series. The statement of additional information relating to the Portfolios furnishes information about the Directors and officers of the Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional information.) ADMINISTRATIVE SERVICES The Fund has entered into an administration agreement with the Advisor on behalf of each Portfolio. Pursuant to the administration agreement, the Advisor will perform various services, including: supervision of the services provided by the Portfolio's custodian and dividend disbursing agent and others who provide services to the Fund for the benefit of the Portfolio; assisting the Fund to comply with the provisions of federal, state, local and foreign securities, tax and other laws applicable to the Portfolio; providing shareholders of record with information about the Portfolio and their investments as they or the Fund may request; assisting the Fund to conduct meetings of shareholders; furnishing information as the Board of Directors may require regarding the Series; and any other administrative services for the benefit of the Portfolio as the Board of Directors may reasonably request. The Advisor also provides the Fund with office space and personnel. For its administrative services, the Portfolios each pay the Advisor a monthly fee equal to one-twelfth of .01% of their respective average net assets. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES Each Portfolio intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for federal income taxes to the extent that its net investment income and net realized capital gains are distributed. The policy of each Portfolio is to distribute substantially all of its net investment income in November and December of each year. Both Portfolios will distribute any realized net capital gains annually after the end of the Fund's fiscal year. Each Series intends to qualify as a regulated investment company under the Code. Special tax rules may apply in determining the income and gains that each Series earns on its investments. These rules may affect the amount of distributions that a Portfolio pays to its shareholders. Shareholders of the Portfolios will automatically receive all income dividends and any capital gains distributions in additional shares of the Portfolio whose shares they hold at net asset value (as of the business date following the dividend record date). Shareholders of the U.S. Large Cap Value Portfolio III, who do not own their shares under a 401(k) plan, may select one of the following options upon written notice to PFPC Inc., the transfer agent for each Portfolio: Income Option - to receive income dividends in cash and capital gains distributions in additional shares at net asset value. Capital Gains Option - to receive capital gains distributions in cash and income dividends in additional shares at net asset value. Cash Option - to receive both income dividends and capital gains distributions in cash. Each Portfolio receives income in the form of income dividends paid by the corresponding Series. This income, less the expenses incurred in operations, is a Portfolio's net investment income from which income dividends are distributed as described above. A Portfolio also may receive capital gains distributions from the 15 <PAGE> corresponding Series and may realize capital gains upon the redemption of the shares of the Series. Any net realized capital gains of a Portfolio will be distributed as described above. Dividends and distributions paid to a 401(k) plan accumulate free of federal income taxes. Whether paid in cash or additional shares and regardless of the length of time a Portfolio's shares have been owned by shareholders who are subject to federal income taxes, distributions from long-term capital gains are taxable as such. Dividends from net investment income or net short-term capital gains will be taxable as ordinary income, whether received in cash or in additional shares. Dividends from net investment income of U.S. Large Cap Value Portfolio will generally qualify in part for the corporate dividends received deduction, but the portion of dividends so qualified depends on the aggregate qualifying dividend income received by the corresponding Series from domestic (U.S.) sources. It is anticipated that either none or only a small portion of the distributions made by the DFA International Value Portfolio III will qualify for the corporate dividends received deduction because of the corresponding Series' investment in foreign equity securities. For those investors subject to tax, if purchases of shares of the Portfolios are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution. Dividends from net investment income or net short-term capital gains will be taxable as ordinary income. Shareholders are notified annually by the Fund as to the federal tax status of dividends and distributions paid by the Portfolios. Dividends which are declared in November or December to shareholders of record in such month but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes as if paid by a Portfolio and received by the shareholder on December 31 of the calendar year in which they are declared. The sale of shares of a Portfolio is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares of a Portfolio for shares of another portfolio of the Fund. Any loss incurred on sale or exchange of a Portfolio's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. The International Value Series may be subject to foreign withholding taxes on income and gains from certain of its foreign securities. These taxes will, in turn, reduce the amount of distributions the International Value Portfolio III pays to its shareholders. If International Value Series purchases shares in certain foreign entities, called "passive foreign investment companies," the Series may be subject to U.S. federal income tax and a related interest charge on a portion of any "excess distribution" or gain from the disposition of such shares even if such income is distributed as a taxable dividend by the Series to International Value Portfolio III. In addition to federal taxes, shareholders may be subject to state and local taxes on distributions from a Portfolio to its shareholders and on gains arising on redemption or exchange of a Portfolio's shares. The Portfolios are required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on the account registration form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding. The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Portfolios. 16 <PAGE> PURCHASE OF SHARES Shares of the Portfolios are sold only (i) to fund deferred compensation plans which are exempt from taxation under section 401(k) of the Code and (ii) to clients of financial advisers. Provided that shares of the Portfolios are available under an employer's 401(k) plan, shares may be purchased by following the procedures adopted by the respective employer and approved by Fund management for making investments. Shares are available through the service agent designated under the employer's plan. Investors who are considering an investment in the Portfolios should contact their employer for details. The Fund does not impose a minimum purchase requirement, but investors should determine whether their employer's plan imposes a minimum transaction requirement. Investors who are clients of financial advisers should contact their financial adviser with respect to a proposed investment and then follow the procedures adopted by the financial adviser for making purchases. Shares that are purchased or sold through omnibus accounts maintained by securities firms may be subject to a service fee or commission for such transactions. Clients of financial advisers may also be subject to investment advisory fees under their own arrangements with their financial advisers. Purchases of shares will be made in full and fractional shares calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued. IN KIND PURCHASES If accepted by the Fund, shares of a Portfolio may be purchased in exchange for securities which are eligible for acquisition by its corresponding Series or otherwise represented in the portfolios of the Series as described in this prospectus or in exchange for local currencies in which such securities of the International Value Series are denominated. Securities and local currencies to be exchanged which are accepted by the Fund and Fund shares to be issued therefore will be valued as set forth under "VALUATION OF SHARES" at the time of the next determination of net asset value after such acceptance. All dividends, interests, subscription, or other rights pertaining to such securities shall become the property of the Portfolio whose shares are being acquired and must be delivered to the Fund by the investor upon receipt from the issuer. Investors who desire to purchase shares of the DFA International Value Portfolio III with local currencies should first contact the Advisor for wire instructions. The Fund will not accept securities in exchange for shares of a Portfolio unless: (1) such securities are, at the time of the exchange, eligible to be included, or otherwise represented, in the Series corresponding to the Portfolio whose shares are to be issued and current market quotations are readily available for such securities; (2) the investor represents and agrees that all securities offered to be exchanged are not subject to any restrictions upon their sale by the Portfolio under the Securities Act of 1933 or under the laws of the country in which the principal market for such securities exists or otherwise; and (3) at the discretion of the Fund, the value of any such security (except U.S. Government securities) being exchanged together with other securities of the same issuer owned by the corresponding Series may not exceed 5% of the net assets of the Series immediately after the transaction. The Fund will accept such securities for investment and not for resale. A gain or loss for federal income tax purposes will generally be realized by investors who are subject to federal taxation upon the exchange depending upon the cost of the securities or local currency exchanged. Investors interested in such exchanges should contact the Advisor. VALUATION OF SHARES The net asset value per share of each Series is calculated as of the close of the NYSE by dividing the total market value of its investments and other assets, less any liabilities, by the total outstanding shares of the stock of 17 <PAGE> the Series. Securities held by a Series which are listed on a securities exchange and for which market quotations are available are valued at the last quoted sale price of the day or, if there is no such reported sale, the Series values such securities at the mean between the most recent quoted bid and asked prices. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the mean between the most recent quoted bid and asked prices. The value of other assets and securities for which no quotations are readily available (including restricted securities) are determined in good faith at fair value in accordance with procedures adopted by the Board of Trustees of the Trust. Generally, trading in foreign securities markets is completed each day at various times prior to the close of the NYSE. The values of foreign securities held by the International Value Series are determined as of such times for the purpose of computing the net asset value of the Series. If events which materially affect the value of the investments of the International Value Series occur subsequent to the close of the securities market on which such securities are primarily traded, the investments affected thereby will be valued at "fair value" as described above. The net asset value per share of the International Value Series is expressed in U.S. dollars by translating the net assets of the Series using the bid price for the dollar as quoted by generally recognized reliable sources. The net asset value of each Portfolio is calculated as of the close of the NYSE by dividing the total market value of its investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Portfolio. The value of each Portfolio's shares will fluctuate in relation to the investment experience of the corresponding Series. Provided that a financial adviser or service agent designated under a 401(k) plan has received the investor's investment instructions in good order and a Portfolio's custodian has received the investor's payment, shares of the Portfolio selected will be priced at the net asset value calculated next after receipt of the order by PFPC Inc., the transfer agent for the Portfolios. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. The Fund reserves the right to redeem shares owned by any purchaser whose order is canceled to recover any resulting loss to the Fund and may prohibit or restrict the manner in which such purchaser may place further orders. Management believes that any dilutive effect of the cost of investing the proceeds of the sale of the shares of the Portfolios is minimal and, therefore, the shares of the Portfolios are currently sold at net asset value, without imposition of a fee that would be used to reimburse a Portfolio for such cost ("reimbursement fee"). Reimbursement fees may be charged prospectively from time to time based upon the future experience of the Portfolios and their corresponding Series. Any such charges will be described in the prospectus. DISTRIBUTION The Fund acts as distributor of the Portfolios' shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of DFA, pursuant to which DFA Securities Inc. is responsible for supervising the sale of the Portfolios' shares. No compensation is paid by the Fund to DFA Securities Inc. under this agreement. EXCHANGE OF SHARES An investor who is a client of a financial adviser may exchange shares of one Portfolio for those of another Portfolio described in this prospectus or a portfolio of DFA Investment Dimensions Group Inc., an open-end, management investment company ("DFAIDG"), by first contacting its financial adviser and completing the documentation required by the financial adviser. Exchanges are accepted only into those portfolios of DFAIDG that are eligible for the exchange privilege of DFAIDG. In addition, exchanges are not accepted into or from the DFA International Value Portfolio III. Investors should contact their financial advisor for a list of those portfolios of DFAIDG that accept exchanges. 18 <PAGE> In the case of an investor who has invested through an employer's 401(k) plan, investors may exchange shares of other Fund portfolios that are offered through the plan by completing the necessary documentation as required by the service agent designated under the employer's plan and the Advisor. Please contact the service agent of your plan for further information. The minimum amount for an exchange is $100,000. The exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the markets. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of the Portfolios or otherwise adversely affect the Fund or DFAIDG , the exchange privilege may be terminated and any proposed exchange will be subject to the approval of the Advisor. Such approval will depend on: (i) the size of the proposed exchange; (ii) the prior number of exchanges by that shareholder; (iii) the nature of the underlying securities and the cash position of the Portfolio and of the portfolio of DFAIDG involved in the proposed exchange; (iv) the transaction costs involved in processing the exchange; and (v) the total number of redemptions by exchange already made out of the Portfolio. With respect to shares held by clients of financial advisers, the redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the Advisor has received an Exchange Form in good order, plus any applicable reimbursement fee on purchases by exchange. "Good order" means a completed Exchange Form specifying the dollar amount to be exchanged, signed by all registered owners of the shares; and if the Fund does not have on file the authorized signatures for the account, a guarantee of the signature of each registered owner by a commercial bank, trust company or member of a recognized stock exchange. Exchanges will be accepted only if the registrations of the two accounts are identical, stock certificates have not been issued and the Fund may issue the shares of the portfolio being acquired in compliance with the securities laws of the investor's state of residence. With respect to shares held under a 401(k) plan, the redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the plan's service agent has received appropriate instructions in the form required by such service agent plus any applicable reimbursement fee on purchases by exchange, and provided that such service agent has provided proper documentation to the Advisor. There is no fee imposed on an exchange. However, the Fund reserves the right to impose an administrative fee in order to cover the costs incurred in processing an exchange. Any such fee will be disclosed in the prospectus. An exchange is treated as a redemption and a purchase. Therefore, an investor could realize a taxable gain or loss on the transaction. The Fund reserves the right to revise or terminate the exchange privilege, limit the amount of or reject any exchange, or waive the minimum amount requirement as deemed necessary, at any time. REDEMPTION OF SHARES An investor who desires to redeem shares of a Portfolio must furnish a redemption request to its financial adviser or to the service agent designated under a 401(k) plan in the form required by such financial adviser or service agent. The Portfolio will redeem shares at the net asset value of such shares next determined after receipt of a request for redemption in good order by PFPC Inc. Although the redemption payments will ordinarily be made within seven days after receipt, payment to investors redeeming shares which were purchased by check will not be made until the Fund can verify that the payments for the purchase have been, or will be, collected, which may take up to fifteen days or more. Investors may avoid this delay by submitting a certified check along with the purchase order. With respect to each Portfolio, the Fund reserves the right to redeem a shareholder's account if the value of the shares in a specific account is $500 or less, whether because of redemptions, a decline in the Portfolio's net asset value per share or any other reason. Before the Fund involuntarily redeems shares 19 <PAGE> from such an account and sends the proceeds to the stockholder, the Fund will give written notice of the redemption to the stockholder at least sixty days in advance of the redemption date. The stockholder will then have sixty days from the date of the notice to make an additional investment in the Fund in order to bring the value of the shares in the account for a specific Portfolio to more than $500 and avoid such involuntary redemption. The redemption price to be paid to a stockholder for shares redeemed by the Fund under this right will be the aggregate net asset value of the shares in the account at the close of business on the redemption date. When in the best interest of a Portfolio, the Portfolio may make a redemption payment, in whole or in part, by a distribution of portfolio securities that the Portfolio receives from the Series in lieu of cash in accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage charges and other transaction costs selling securities that were received in payment of redemptions. The International Value Series reserves the right to redeem its shares in the currencies in which its investments are denominated. Investors may incur charges in converting such currencies to dollars and the value of currencies may be affected by currency exchange fluctuations. GENERAL INFORMATION The Portfolios and the Series may disseminate reports of their investment performance from time to time. Investment performance is calculated on a total return basis; that is by including all net investment income and any realized and unrealized net capital gains or losses during the period for which investment performance is reported. If dividends or capital gains distributions have been paid during the relevant period, the calculation of investment performance will include such dividends and capital gains distributions as though reinvested in shares of the Portfolio. Standard quotations of total return are computed in accordance with SEC Guidelines and are presented whenever any non-standard quotations are disseminated. Non-standardized total return quotations may differ from the SEC Guideline computations by covering different time periods. In all cases, disclosures are made when performance quotations differ from the SEC Guidelines. Performance data is based on historical earnings and is not intended to indicate future performance. Rates of return expressed on an annual basis will usually not equal the sum of returns expressed for consecutive interim periods due to the compounding of the interim yields. The Fund's annual report to shareholders of the Portfolios for the fiscal year ended November 30, 1997, contains additional performance information. A copy of the annual report is available upon request and without charge. The Fund was incorporated under Maryland law on March 19, 1990. The shares of each Portfolio, when issued and paid for in accordance with this prospectus, will be fully paid and non-assessable shares, with equal, non-cumulative voting rights and no preferences as to conversion, exchange, dividends, redemption or any other feature. With respect to matters which require shareholder approval, shareholders are entitled to vote only with respect to matters which affect the interest of the class of shares (Portfolio) which they hold, except as otherwise required by applicable law. If liquidation of the Fund should occur, shareholders would be entitled to receive on a per class basis the assets of the particular Portfolio whose shares they own, as well as a proportionate share of Fund assets not attributable to any particular Portfolio. Ordinarily, the Fund does not intend to hold annual meetings of shareholders, except as required by the 1940 Act or other applicable law. The Fund's by-laws provide that special meetings of shareholders shall be called at the written request of at least 10% of the votes entitled to be cast at such meeting. Such meeting may be called to consider any matter, including the removal of one or more directors. Shareholders will receive shareholder communications with respect to such matters as required by the 1940 Act, including semi-annual and annual financial statements of the Fund, the latter being audited. The DFA Investment Trust Company was organized as a Delaware business trust on October 27, 1992. The Trust offers shares of its Series only to institutional investors in private offerings. The Fund may withdraw the investment of a Portfolio in a Series at any time, if the Board of Directors of the Fund determines that it is in the best interests of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of the Fund would consider what action might be taken, including the investment of all of the assets of the Portfolio in another pooled 20 <PAGE> investment entity having the same investment objective as the Portfolio or the hiring of an investment advisor to manage the Portfolio's assets in accordance with the investment policies described above. Whenever a Portfolio, as an investor in its corresponding Series, is asked to vote on a shareholder proposal, the Fund will solicit voting instructions from the Portfolio's shareholders with respect to the proposal. The Directors of the Fund will then vote the Portfolio's shares in the Series in accordance with the voting instructions received from the Portfolio's shareholders. The Directors of the Fund will vote shares of the Portfolio for which they receive no voting instructions in accordance with their best judgment. As of January 30, 1998, the following person(s) owned more than 25% of the voting securities of the following Portfolios: DFA INTERNATIONAL VALUE PORTFOLIO III <TABLE> <S> <C> Charles Schwab & Co. Inc.-ALL REIN* 100% 101 Montgomery Street San Francisco, CA 94104 </TABLE> U.S. LARGE CAP VALUE PORTFOLIO III <TABLE> <CAPTION> <S> <C> Charles Schwab & Co. Inc.-CAP REIN* 53.95% 101 Montgomery Street San Francisco, CA 94104 Charles Schwab & Co. Inc.-ALL REIN* 45.99% 101 Montgomery Street San Francisco, CA 94104 </TABLE> *Owner of record only Shareholder inquiries may be made by writing or calling the Fund at the address or telephone number appearing on the cover of this prospectus. 21 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 INVESTMENT ADVISOR DIMENSIONAL FUND ADVISORS INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 CUSTODIAN PNC BANK, N.A. 200 Stevens Drive, Airport Business Center Lester, PA 19113 ACCOUNTING SERVICES, DIVIDEND DISBURSING AND TRANSFER AGENT PFPC INC. 400 Bellevue Parkway Wilmington, DE 19809 LEGAL COUNSEL STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 INDEPENDENT ACCOUNTANTS COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center 19th and Market Streets Philadelphia, PA 19103 <PAGE> DFA INTERNATIONAL VALUE PORTFOLIO III U.S. LARGE CAP VALUE PORTFOLIO III DIMENSIONAL INVESTMENT GROUP INC. 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401 TELEPHONE: (310) 395-8005 STATEMENT OF ADDITIONAL INFORMATION MARCH 3, 1998 This statement of additional information is not a prospectus but should be read in conjunction with the prospectus of DFA International Value Portfolio III and U.S. Large Cap Value Portfolio III (individually, a "Portfolio" and collectively, the "Portfolios") of Dimensional Investment Group Inc. (the "Fund"), dated March 3, 1998, as amended from time to time, which can be obtained from the Fund by writing to the Fund at the above address or by calling the above telephone number. TABLE OF CONTENTS <TABLE> <CAPTION> PAGE <S> <C> INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 2 BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 FUTURES CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 FEDERAL TAX TREATMENT OF FUTURES CONTRACTS . . . . . . . . . . . . . . . . . 6 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 9 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . 11 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 </TABLE> <PAGE> INVESTMENT OBJECTIVE AND POLICIES The following information supplements the information set forth in the prospectus under the captions "DFA INTERNATIONAL VALUE PORTFOLIO III-INVESTMENT OBJECTIVE AND POLICIES" and "U.S. LARGE CAP VALUE PORTFOLIO III-INVESTMENT OBJECTIVE AND POLICIES" and applies to the DFA International Value Series (the "International Value Series") and the DFA U.S. Large Cap Value Series (the "Large Cap Value Series" and, together with the International Value Series, the "Series") of The DFA Investment Trust Company (the "Trust"). Because the structure of the International Value Series and the Large Cap Value Series is based on the relative market capitalizations of eligible holdings, it is possible that the Series might include at least 5% of the outstanding voting securities of one or more issuers. In such circumstances, the Fund and the issuer would be deemed "affiliated persons" under the Investment Company Act of 1940 (the "1940 Act") and certain requirements of the 1940 Act regulating dealings between affiliates might become applicable. However, based on the present capitalizations of the groups of companies eligible for inclusion in the Series and the anticipated amount of the Series' assets intended to be invested in such securities, management does not anticipate that a Series will include as much as 5% of the voting securities of any issuer. The International Value Series may invest up to 5% of its assets in convertible debentures issued by non-U.S. companies. Convertible debentures include corporate bonds and notes that may be converted into or exchanged for common stock. These securities are generally convertible either at a stated price or a stated rate (that is, for a specific number of shares of common stock or other security). As with other fixed income securities, the price of a convertible debenture to some extent varies inversely with interest rates. While providing a fixed-income stream (generally higher in yield than the income derived from a common stock but lower than that afforded by a non-convertible debenture), a convertible debenture also affords the investor an opportunity, through its conversion feature, to participate in the capital appreciation of the common stock into which it is convertible. As the market price of the underlying common stock declines, convertible debentures tend to trade increasingly on a yield basis and so may not experience market value declines to the same extent as the underlying common stock. When the market price of the underlying common stock increases, the price of a convertible debenture tends to rise as a reflection of the value of the underlying common stock. To obtain such a higher yield, the International Value Series may be required to pay for a convertible debenture an amount in excess of the value of the underlying common stock. Common stock acquired by the International Value Series upon conversion of a convertible debenture will generally be held for so long as the Advisor anticipates such stock will provide the International Value Series with opportunities which are consistent with its investment objective and policies. BROKERAGE TRANSACTIONS The following table depicts brokerage commissions paid by the Portfolios' corresponding Series. BROKERAGE COMMISSIONS FISCAL YEARS ENDED NOVEMBER 30, 1997, 1996 AND 1995 <TABLE> <CAPTION> 1997 1996 1995 ---- ---- ---- <S> <C> <C> <C> International Value Series $1,133,787 $1,251,242 $542,306 Large Cap Value Series 929,005 934,452 410,503 </TABLE> 2 <PAGE> The substantial increases or decreases in the amount of brokerage commissions paid by the International Value Series from year to year resulted from increases or decreases in the amount of securities that were bought and sold by the International Value Series. Portfolio transactions of each Series will be placed with a view to receiving the best price and execution. In addition, the Advisor will seek to acquire and dispose of securities in a manner which would cause as little fluctuation in the market prices of stocks being purchased or sold as possible in light of the size of the transactions being effected. Brokers will be selected with these goals in view. The Advisor monitors the performance of brokers which effect transactions for the Series to determine the effect that their trading has on the market prices of the securities in which they invest. The Advisor also checks the rate of commission being paid by the Series to their brokers to ascertain that they are competitive with those charged by other brokers for similar services. Transactions also may be placed with brokers who provide the Advisor with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. The Investment Management Agreement of each Series permits the Advisor knowingly to pay commissions on these transactions which are greater than another broker might charge if the Advisor, in good faith, determines that the commissions paid are reasonable in relation to the research or brokerage services provided by the broker or dealer when viewed in terms of either a particular transaction or the Advisor's overall responsibilities to assets under its management. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Series. During fiscal year 1997, the Series paid commissions for securities transactions to brokers which provided market price monitoring services, market studies and research services to the Series as follows: <TABLE> <CAPTION> VALUE OF BROKERAGE SECURITIES TRANSACTIONS COMMISSIONS ----------------------- ----------- <S> <C> <C> International Value Series $ 4,623,558 $ 13,922 Large Cap Value Series 78,961,638 122,527 Total </TABLE> The over-the-counter market ("OTC") companies eligible for purchase by the Large Cap Value Series are thinly traded securities. Therefore, the Advisor believes it needs maximum flexibility to effect OTC trades on a best execution basis. To that end, the Advisor places buy and sell orders with market makers, third market brokers, Instinet and with dealers on an agency basis when the Advisor determines that the securities may not be available from other sources at a more favorable price. Third market brokers enable the Advisor to trade with other institutional holders directly on a net basis. This allows the Advisor sometimes to trade larger blocks than would be possible by going through a single market maker. The Advisor places buy and sell orders on Instinet when the Advisor determines that the securities may not be available from other sources at a more favorable price. Instinet is an electronic information and communication network whose subscribers include most market makers as well as many institutions. Instinet charges a commission for each trade executed on its system. On any given trade a Series, by trading through Instinet, would pay a spread to a dealer on the other side of the trade plus a commission to Instinet. However, placing a buy (or sell) order on Instinet communicates to many (potentially all) market makers and institutions 3 <PAGE> at once. This can create a more complete picture of the market and thus increase the likelihood that the Series can effect transactions at the best available prices. Neither Portfolio will incur any brokerage or other costs in connection with its purchase or redemption of shares of its corresponding Series, except if a Portfolio receives securities or currencies from the corresponding Series to satisfy the Portfolio's redemption request. INVESTMENT LIMITATIONS Each of the Portfolios has adopted certain limitations which may not be changed without the approval of the holders of a majority of the outstanding voting securities of the Portfolio. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be effected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of such Portfolio. The investment limitation of each Series is the same as the corresponding Portfolio. The Portfolios will not: (1) invest in commodities or real estate, including limited partnership interests therein, although they may purchase and sell securities of companies which deal in real estate and securities which are secured by interests in real estate and may purchase or sell financial futures contracts and options thereon; (2) make loans of cash, except through the acquisition of repurchase agreements and obligations customarily purchased by institutional investors; (3) as to 75% of the total assets of a Portfolio, invest in the securities of any issuer (except obligations of the U.S. Government and its agencies and instrumentalities) if, as a result of more than 5% of the Portfolio's total assets, at market, would be invested in the securities of such issuer; (4) purchase or retain securities of an issuer, if those officers and directors of the Fund or the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; (5) borrow, except from banks as a temporary measure for extraordinary or emergency purposes and, then, in no event, in excess of 33% of a Portfolio's net assets, or pledge more than 33% of such assets to secure such loans; (6) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in (5) above; (7) invest more than 15% of the value of the Portfolio's total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; (8) engage in the business of underwriting securities issued by others; (9) invest for the purpose of exercising control over management of any company; (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; (11) invest more than 5% of its total assets in securities of companies which have (with predecessors) a record of less than three years' continuous operation; 4 <PAGE> (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; (13) write or acquire options (except as described in (1) above) or interests in oil, gas or other mineral exploration, leases or development programs; (14) purchase warrants, except that the Portfolios may acquire warrants as a result of corporate actions involving their holdings of equity securities; (15) purchase securities on margin or sell short; (16) acquire more than 10% of the voting securities of any issuer, provided that this limitation applies only to 75% of the assets of the U.S. Large Cap Value Portfolio III; or (17) issue senior securities (as such term is defined in Section 18(f) of the 1940 Act), except to the extent permitted by the 1940 Act. The investment limitations described in (3), (7), (9), (10), (11), (12) and (16) above do not prohibit each Portfolio from investing all or substantially all of its assets in the shares of another registered open-end investment company, such as the Series. The investment limitations described in (1) and (15) above do not prohibit each Portfolio from making margin deposits in connection with the purchase or sale of financial futures contracts and options thereon to the extent permitted under applicable regulations. Although (2) above prohibits cash loans, the Portfolios are authorized to lend portfolio securities. Inasmuch as the Portfolios will only hold shares of a corresponding Series, the Portfolios do not intend to lend those shares. Pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act"), the Series may purchase certain unregistered (i.e. restricted) securities upon a determination that a liquid institutional market exists for the securities. If it is decided that a liquid market does exist, the securities will not be subject to the 15% limitation on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Trustees of the Trust has delegated the day-to-day function of making liquidity determinations to the Advisor. For Rule 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Trustees and the Advisor will continue to monitor the liquidity of Rule 144A securities. The International Value Series may acquire and sell forward foreign currency exchange contracts in order to hedge against changes in the level of future currency rates. Such contracts involve an obligation to purchase or sell a specific currency at a future date at a price set in the contract. While the Series have retained authority to buy and sell financial futures contracts and options thereon, they have no present intention to do so. Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from 5 <PAGE> its total assets those assets which represent collateral received by the Series for its securities lending transactions. Unless otherwise indicated, all limitations applicable to the Portfolios' and Series' investments apply only at the time that a transaction is undertaken. Any subsequent change in the percentage of a Portfolio's or Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in a Portfolio's or Series' total assets will not require a Portfolio or Series to dispose of an investment until the Advisor determines that it is practicable to sell or close out the investment without undue market or tax consequences. FUTURES CONTRACTS The International Value Series and the Large Cap Value Series each may enter into futures contracts and options on futures contracts for the purpose of remaining fully invested and to maintain liquidity to pay redemptions. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of defined securities at a specified future time and at a specified price. Futures contracts which are standardized as to maturity date and underlying financial instrument are traded on national futures exchanges. A Series will be required to make a margin deposit in cash or government securities with a broker or custodian to initiate and maintain positions in futures contracts. Minimal initial margin requirements are established by the futures exchange and brokers may establish margin requirements which are higher than the exchange requirements. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes, to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, reduction in the contract value may reduce the required margin resulting in a repayment of excess margin to a Series. Variation margin payments are made to and from the futures broker for as long as the contract remains open. The Series expect to earn income on their margin deposits. To the extent that a Series invests in futures contracts and options thereon for other than bona fide hedging purposes, no Series will enter into such transaction if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that in the case of an option that is in-the-money at the time of purchase the in-the-money amount may be excluded in calculating the 5%. Pursuant to published positions of the Securities and Exchange Commission (the "Commission"), the Series may be required to maintain segregated accounts consisting of liquid assets such as cash, U.S. government securities, or other high grade debt obligations (or, as permitted under applicable regulation, enter into offsetting positions) in connection with its futures contract transactions in order to cover its obligations with respect to such contracts. Positions in futures contracts may be closed out only on an exchange which provides a secondary market. However, there can be no assurance that a liquid secondary market will exist for any particular futures contract at any specific time. Therefore, it might not be possible to close a futures position and, in the event of adverse price movements, a Series would continue to be required to continue to make variation margin deposits. In such circumstances, if a Series has insufficient cash, it might have to sell portfolio securities to meet daily margin requirements at a time when it might be disadvantageous to do so. Management intends to minimize the possibility that it will be unable to close out a futures contract by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. FEDERAL TAX TREATMENT OF FUTURES CONTRACTS Except for transactions a Series has identified as hedging transactions, the Series is required for federal income tax purposes to recognize as income for each taxable year its net unrealized gains and losses on certain futures contracts as of the end of the year as well as those actually realized during the year. In most cases, 6 <PAGE> any gain or loss recognized with respect to a futures contract is considered to be 60% long-term gain or loss and 40% short-term capital gain or loss, without regard to the holding period of the contract. Furthermore, sales of futures contracts which are intended to hedge against a change in the value of securities held by a Series may affect the holding period of such securities and, consequently, the nature of the gain or loss on such securities upon disposition. In order for a Series to continue to qualify for federal income tax treatment as a regulated investment company, at least 90% of its gross income for a taxable year must be derived from qualifying income; i.e., dividends, interest, income derived from loans of securities, gains from the sale of securities and other income derived with respect to the Series' business of investing in securities. It is anticipated that any net gain realized from closing futures contracts will be considered gain from the sale of securities and, therefore, constitute qualifying income for purposes of the 90% requirement. The Series will distribute to shareholders annually any net capital gains which have been recognized for federal income tax purposes (including unrealized gains at the end of the Series' fiscal year) on futures transactions. Such distributions will be combined with distributions of capital gains realized on the Series' other investments. DIRECTORS AND OFFICERS The names, addresses and dates of birth of the directors and officers of the Fund and a brief statement of their present positions and principal occupations during the past five years is set forth below. DIRECTORS David G. Booth, Director*, (12/2/46), President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director, of the following companies: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc. (registered investment company). Trustee, President and Chairman-Chief Executive Officer of The DFA Investment Trust Company (registered investment company). Chairman and Director, Dimensional Fund Advisors Ltd. George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company and First Prairie Funds (registered investment companies). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) 7 <PAGE> and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Public Director, Chicago Mercantile Exchange. Myron S. Scholes, (7/1/42), Director, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. Rex A. Sinquefield, (9/7/44), Director*, Chairman-Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd. *Interested Director of the Fund. OFFICERS Each of the officers listed below hold the same office (except as otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc. Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA. Truman Clark, (4/18/41), Vice President, Santa Monica, CA. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. Maureen Connors, (11/17/36), Vice President and Assistant Secretary, Santa Monica, CA. Robert Deere, (10/8/57), Vice President, Santa Monica, CA. Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities other than Dimensional Fund Advisers Ltd.), Santa Monica, CA. Richard Eustice, (8/5/65), Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA. Kamyab Hashemi-Nejad, (1/22/61), Vice President, Controller and Assistant Treasurer, Santa Monica, CA. Stephen P. Manus, (12/26/50), Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. 8 <PAGE> Karen McGinley, (3/10/66), Vice President, Santa Monica, CA. Catherine L. Newell, (5/7/64), Vice President and Assistant Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989 to 1996. David Plecha, (10/26/61), Vice President, Santa Monica, CA. George Sands, (2/8/56), Vice President, Santa Monica, CA. Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Jeanne C. Sinquefield, Ph.D., (12/2/46), Executive Vice President, Santa Monica, CA. Scott Thornton, (3/1/63), Vice President, Santa Monica, CA. Weston Wellington, (3/1/51), Vice President, Santa Monica, CA. Director of Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994. Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife. Directors and officers as a group own less than 1% of each Portfolio's outstanding stock. Set forth below is a table listing, for each director entitled to receive compensation, the compensation received from the Fund during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year. Aggregate Total Compensation from Compensation Fund Director from Fund and Fund Complex - -------- ------------ ----------------------- George M. Constantinides $5,000 $30,000 John P. Gould $5,000 $30,000 Roger G. Ibbotson $5,000 $30,000 Merton H. Miller $5,000 $30,000 Myron S. Scholes $5,000 $30,000 9 <PAGE> ADMINISTRATIVE SERVICES PFPC Inc. ("PFPC") serves as the accounting services, dividend disbursing and transfer agent for the Portfolios and the Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include day-to-day keeping and maintenance of certain records, calculation of the net asset value of the shares, preparation of reports, liaison with the Portfolios' and the Series' custodians, and transfer and dividend disbursing agency services. For its services, each Portfolio pays PFPC a monthly fee of $1,000. OTHER INFORMATION For the services it provides as investment advisor to each Series, the Advisor is paid a monthly fee calculated as a percentage of average net assets of the Series. For the fiscal years ended November 30, 1997, 1996 and 1995, the Series paid advisory fees as set forth in the following table: 1997 1996 1995 International Value Series* $ 2,997,000 $ 2,124,000 $ 937,000 Large Cap Value Series* $ 1,255,000 $ 699,000 $ 306,000 - -------------------- * The Series has more than one investor; this dollar amount represents the total dollar amount of advisory fees paid by the Series to the Advisor. The Fund was known as DFA U.S. Large Cap Inc. from February, 1992, until the Fund amended its Articles of Incorporation in April 1993, to change to its present name. Prior to a February 1992, amendment to the Fund's Articles of Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. PNC Bank, N.A. serves as the custodian for DFA International Value Portfolio III, U.S. Large Cap Value Portfolio III and the Large Cap Value Series. Citibank, N.A. ("Citibank"), 111 Wall Street, New York, New York 10005, will succeed Boston Safe Deposit and Trust Company ("Boston Safe"), Princess House, 1 Suffolk Lane, London EC4R OAN, England, as the global custodian for the International Value Series. It is expected that the conversion from Boston Safe to Citibank will be accomplished by May 1, 1998. The custodians maintain a separate account or accounts for the Portfolios and Series; receive, hold and release portfolio securities on account of the Portfolios and Series; make receipts and disbursements of money on behalf of the Portfolios and Series; and collect and receive income and other payments and distributions on account of the Portfolios' and Series' portfolio securities. Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the Funds' financial statements on an annual basis. PURCHASE OF SHARES The following information supplements the information set forth in the prospectus under the caption "PURCHASE OF SHARES." The Fund will accept purchase and redemption orders on each day that the New York Stock Exchange ("NYSE") is open for business, regardless of whether the Federal Reserve 10 <PAGE> System is closed. However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Fund will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days as the NYSE, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Fund is closed. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of any or all Portfolios or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Fund or a Portfolio. Securities accepted in exchange for shares of a Portfolio will be acquired for investment purposes and will be considered for sale under the same circumstances as other securities in the Portfolio. REDEMPTION OF SHARES The following information supplements the information set forth in the prospectus under the caption "REDEMPTION OF SHARES." The Fund may suspend redemption privileges or postpone the date of payment: (1) during any period when the NYSE is closed, or trading on the NYSE is restricted as determined by the Commission, (2) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it, or fairly to determine the value of its assets, and (3) for such other periods as the Commission may permit. PRINCIPAL HOLDERS OF SECURITIES As of January 30, 1998, the following person(s) beneficially owned 5% or more of the outstanding stock of the Portfolios, as set forth below: DFA INTERNATIONAL VALUE PORTFOLIO III Charles Schwab & Co. Inc.-ALL REIN* 100% 101 Montgomery Street San Francisco, CA 94104 11 <PAGE> U.S. LARGE CAP VALUE PORTFOLIO III Charles Schwab & Co. Inc.-CAP REIN* 53.95% 101 Montgomery Street San Francisco, CA 94104 Charles Schwab & Co. Inc.-ALL REIN* 45.99% 101 Montgomery Street San Francisco, CA 94104 * Owner of record only. CALCULATION OF PERFORMANCE DATA Following are quotations of the annualized percentage total returns for DFA International Value Portfolio III and U.S. Large Cap Value Portfolio III for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable) using the standardized method of calculation required by the Commission. One Year Five Years Ten Years (33 mos.) DFA International Value Portfolio III -3.83% 7.67% n/a (33 mos.) U.S. Large Cap Value Portfolio III 25.29% 27.51% n/a For purposes of calculating the performance of the Portfolios, the performance of each Portfolio's corresponding Series will be utilized for the period prior to when each Portfolio commenced operations and, if applicable, restated to reflect a Portfolio's fees and expenses. As the following formula indicates, each Portfolio and Series determines its average annual total return by finding the average annual compounded rates of return over the stated time period that would equate a hypothetical initial purchase order of $1,000 to its redeemable value (including capital appreciation/depreciation and dividends and distributions paid and reinvested less any fees charged to a shareholder account) at the end of the stated time period. The calculation assumes that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The calculation also assumes the account was completely redeemed at the end of each period and the deduction of all applicable charges and fees. According to the Commission's formula: P(1 + T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years 12 <PAGE> ERV ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one-, five- and ten-year periods at the end of the one-, five- and ten-year periods (or fractional portion thereof). In addition to the standardized method of calculating performance required by the Commission, the Portfolios and Series may disseminate other performance data and may advertise total return performance calculated on a monthly basis. The Portfolios may compare their investment performance to appropriate market and mutual fund indices and investments for which reliable performance data is available. Such indices are generally unmanaged and are prepared by entities and organizations which track the performance of investment companies or investment advisors. Unmanaged indices often do not reflect deductions for administrative and management costs and expenses. The performance of the Portfolios may also be compared in publications to averages, performance rankings, or other information prepared by recognized mutual fund statistical services. Any performance information, whether related to the Portfolios or to the Advisor, should be considered in light of a Portfolio's investment objectives and policies, characteristics and the quality of the portfolio and market conditions during the time period indicated and should not be considered to be representative of what may be achieved in the future. FINANCIAL STATEMENTS The audited financial statements of each Portfolio for the Fund's fiscal year ended November 30, 1997, as set forth in the Fund's annual report to shareholders of the Portfolios, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited financial statements of the Series for the Trust's fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. A shareholder may obtain a copy of the reports upon request and without charge, by contacting the Fund at the address or telephone number appearing on the cover of this statement of additional information. 13 <PAGE> PROSPECTUS MARCH 3, 1998 U.S. LARGE CAP VALUE PORTFOLIO II _________________ This prospectus describes U.S. LARGE CAP VALUE PORTFOLIO II (the "Portfolio"), a series of shares issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, (310) 395-8005. The Portfolio is an open-end, management investment company whose shares are offered, without a sales charge, to 401(k) defined contribution plans and clients, customers or members of certain institutions. The Fund issues thirteen series of shares, each of which represents a separate class of the Fund's common stock, having its own investment objective and policies. The Fund has not established a minimum initial purchase requirement for the Portfolio. THE INVESTMENT OBJECTIVE OF THE PORTFOLIO IS TO ACHIEVE LONG-TERM CAPITAL APPRECIATION. THE PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF THE U.S. LARGE CAP VALUE SERIES (THE "SERIES") OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"). THE SERIES IS AN OPEN-END, MANAGEMENT INVESTMENT COMPANY THAT HAS THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS AS THE PORTFOLIO. THE INVESTMENT EXPERIENCE OF THE PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE INVESTMENT EXPERIENCE OF THE SERIES. INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "THE PORTFOLIO." This prospectus sets forth information about the Portfolio that prospective investors should know before investing and should be read carefully and retained for future reference. A statement of additional information about the Portfolio, dated March 3, 1998, as amended from time to time, which is incorporated herein by reference, has been filed with the Securities and Exchange Commission and is available upon request, without charge, by writing or calling the Fund at the above address or telephone number. _________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. <PAGE> <TABLE> <CAPTION> TABLE OF CONTENTS PAGE <S> <C> HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONDENSED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . 3 THE PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . 6 Portfolio Characteristics and Policies. . . . . . . . . . . . . . . . 6 Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . . . 6 Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . 7 SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Portfolio Strategies. . . . . . . . . . . . . . . . . . . . . . . . . 8 Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . 8 Futures Contracts and Options on Futures. . . . . . . . . . . . . . . 8 MANAGEMENT OF THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . 8 Administrative Services . . . . . . . . . . . . . . . . . . . . . . . 9 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . 9 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 VALUATION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 </TABLE> <PAGE> HIGHLIGHTS PAGE INVESTMENT OBJECTIVE 6 The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio will invest all of its assets in the Series, which in turn will invest in the common stocks of U.S. companies that are value stocks, primarily because they have a high book value in relation to their market value. The Series will purchase common stocks of companies whose market capitalizations equal or exceed that of a company having the median market capitalization of companies whose shares are listed on the New York Stock Exchange (the "NYSE"). The investment objective of the Portfolio is a fundamental policy and may not be changed without the affirmative vote of a majority of its outstanding securities. (See "INVESTMENT OBJECTIVE AND POLICIES.") PAGE RISK FACTORS 7 The Portfolio (indirectly through its investment in the Series) may invest in futures contracts and options thereon. Similarly, the Portfolio is also authorized to invest in repurchase agreements. Those policies and the policy of the Portfolio to invest in the shares of the Series involve certain risks. (See "RISK FACTORS.") PAGE MANAGEMENT AND ADMINISTRATIVE SERVICES 8 Dimensional Fund Advisors Inc. (the "Advisor" or "DFA") provides the Portfolio with administrative services and also serves as investment advisor to the Series. The Fund contracts with Shareholder Services Agents to provide certain recordkeeping and other services for the benefit of the Portfolio's shareholders. (See "MANAGEMENT OF THE PORTFOLIO.") PAGE DIVIDEND POLICY 9 After the end of the Portfolio's fiscal year in November, the Portfolio distributes dividends from its net investment income and any realized net capital gains annually in December. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") PAGE PURCHASE, VALUATION AND REDEMPTION OF SHARES 10 The shares of the Portfolio are offered at net asset value, which is calculated as of the close of the NYSE on each day that the NYSE is open for business. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. The redemption price of a share of the Portfolio is equal to its net asset value. (See "PURCHASE OF SHARES," "VALUATION OF SHARES" and "REDEMPTION OF SHARES.") <PAGE> SHAREHOLDER TRANSACTION EXPENSES None* The expenses in the expense table below are based on those incurred by the Portfolio and the Series for the fiscal year ended November 30, 1997. ANNUAL FUND OPERATING EXPENSES** (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management Fee 0.10% Administration Fee 0.01% Other Expenses 0.34% Total Operating Expenses 0.45%*** * Shares of the Portfolio that are purchased through omnibus accounts maintained by securities firms may be subject to a service fee or commission on such purchases. ** The "Management Fee" is payable by the Series and the "Administration Fee" is payable by the Portfolio. The amount set forth in "Other Expenses" represents the aggregate amount that is payable by both the Series and the Portfolio. "Other Expenses" include a fee paid to the Shareholder Services Agent of each employer plan or institution at the annual rate of .10% of the aggregate daily value of all shares of the Portfolio that are held in an account maintained by such Shareholder Services Agent, paid on a monthly basis. (See "Administrative Services.") *** Beginning on July 1, 1996, the Advisor agreed to waive its administration fee with respect to the Portfolio and, to the extent that such waiver is insufficient, to assume expenses of the Portfolio to the extent necessary to keep the cumulative annual expenses to not more than .75% of the average net assets of the Portfolio on an annualized basis. The Advisor did not need to waive any of its fees for the fiscal year ended November 30, 1997. For purposes of this waiver and assumption, annualized expenses are those expenses incurred in any period commencing on or after July 1, 1996, consisting of twelve consecutive months. The Advisor retains the right in its sole discretion to modify or eliminate the waiver of a portion of its fees and the assumption of expenses of the Portfolio in the future. If the Advisor modifies or eliminates the fee waiver or assumption, such change will be set forth in the prospectus. EXAMPLE You would pay the following transaction and annual operating expenses on a $1,000 investment in the Portfolio, assuming a 5% annual return over each of the following time periods and redemption at the end of each time period: <TABLE> <CAPTION> 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- <S> <C> <C> <C> $5 $14 $25 $57 </TABLE> The purpose of the above fee table and Example is to assist investors in understanding the various costs and expenses that an investor in the Portfolio will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 <PAGE> The table summarizes the aggregate estimated annual operating expenses of both the Portfolio and the Series. (See "MANAGEMENT OF THE PORTFOLIO.") The Board of Directors of the Fund has considered whether such expenses will be more or less than they would be if the Portfolio were to invest directly in the securities held by the Series. The aggregate amount of expenses for the Portfolio and the Series may be greater than it would be if the Portfolio were to invest directly in the securities held by the Series. However, the total expense ratio for the Portfolio and the Series is expected to be less over time than such ratio would be if the Portfolio were to invest directly in the underlying securities. This is because this arrangement enables institutional investors, including the Portfolio, to pool their assets, which may be expected to result in economies by spreading certain fixed costs over a larger asset base. Each shareholder in the Series, including the Portfolio, will pay its proportionate share of the expenses of the Series. CONDENSED FINANCIAL INFORMATION The following financial highlights are part of the financial statements of the Portfolio. The information for each of the past fiscal years has been audited by independent accountants. The financial statements, related notes and the report of the independent accountants covering such financial information and financial highlights for the Fund's most recent fiscal year ended November 30, 1997, are incorporated by reference into the statement of additional information from the Fund's annual report to shareholders for the year ended November 30, 1997. Further information about the Portfolio's performance is contained in the Fund's annual report to shareholders of the Portfolio for the year ended November 30, 1997. A copy of the annual report may be obtained from the Fund upon request at no charge. 3 <PAGE> FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> YEAR YEAR YEAR AUG. 3, ENDED ENDED ENDED TO NOV. 30, NOV. 30, NOV. 30, NOV. 30, 1997 1996 1995 1994 ------- ------- ------- -------- <S> <C> <C> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . . . . . . . . $ 15.43 $ 12.72 $ 9.48 $ 10.00 ------- ------- ------ ------- Income from Investment Operations Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . 0.24 0.20 0.17 0.11 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . 3.50 2.54 3.40 (0.52) ------- ------- ------ ------- Total from Investment Operations . . . . . . . . . . . . . . . . . . . 3.74 2.74 3.57 (0.41) ------- ------- ------ ------- Less Distributions Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . (0.20) (0.03) (0.17) (0.11) Net Realized Gains . . . . . . . . . . . . . . . . . . . . . . . . . . (0.25) -- (0.16) -- ------- ------- ------ ------- Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . (0.45) (0.03) (0.33) (0.11) ------- ------- ------ ------- Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . . . . $ 18.72 $15.43 $ 12.72 $ 9.48 ------- ------- ------ ------- Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.98% 21.59% 37.76% (4.14)%# Net Assets, End of Period (thousands) . . . . . . . . . . . . . . . . . . $50,369 $26,079 $ 7,110 $ 1,285 Ratio of Expenses to Average Net Assets (1) . . . . . . . . . . . . . . . 0.45% 0.82% 0.96%(a) 0.96%*(a) Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . 1.62% 1.80% 2.37%(a) 5.39%*(a) Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A N/A Average Commission Rate . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . . . . . . . . . 17.71% 20.12% 29.41% 39.33%(b) ------- ------- ------ ------- Average Commission Rate of Master Fund Series (2) . . . . . . . . . . . . $0.0494 $0.0499 N/A N/A ------- ------- ------ ------- </TABLE> ________________ *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (a) Had certain waivers and assumptions of expenses not been in effect, the ratios of expenses to average net assets for the periods ended November 30, 1995 and 1994 would have been 2.35% and 8.45%, respectively, and the ratios of net investment income to average net assets for the periods ended November 30, 1995 and 1994 would have been 0.98% and (2.10)%, respectively. (2) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal years beginning after September 1, 1995. (b) Master Fund Series Turnover calculated for the year ended November 30, 1994. 4 <PAGE> THE PORTFOLIO The Portfolio, unlike many other investment companies which directly acquire and manage their own portfolio of securities, seeks to achieve its investment objective by investing all of its investable assets in the Series, an open-end, management investment company registered under the Investment Company Act of 1940 ("1940 Act"), having the same investment objective as the Portfolio. The investment objective of the Portfolio may not be changed without the affirmative vote of a majority of its outstanding shares and the investment objective of the Series may not be changed without the affirmative vote of a majority of its outstanding shares. Shareholders of the Portfolio will receive written notice thirty days prior to any change in the investment objective of the Series. This prospectus describes the investment objective, policies and restrictions of the Portfolio and the Series. (See "INVESTMENT OBJECTIVE AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE PORTFOLIO" for a description of the management and other expenses associated with the Portfolio's investment in the Series. Other institutional investors, including other mutual funds, may invest in the Series, and the expenses of such other investors and, correspondingly, their returns may differ from those of the Portfolio. Please contact the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for information about the availability of investing in the Series other than through the Portfolio. The shares of the Series will be offered to institutional investors for the purpose of increasing the funds available for investment, to reduce expenses as a percentage of total assets and to achieve other economies that might be available at higher asset levels. For example, the Series might be able to place larger block trades at more advantageous prices and to participate in securities transactions of larger denominations, thereby reducing the relative amount of certain transaction costs in relation to the total size of the transaction. Investment in the Series by other institutional investors offers potential benefits to the Series and, through its investment in the Series, also to the Portfolio. However, such economies and expense reductions might not be achieved and additional investment opportunities, such as increased diversification, might not be available if other institutions do not invest in the Series. Also, if an institutional investor were to redeem its interest in the Series, the remaining investors in the Series could experience higher pro rata operating expenses, thereby producing lower returns, and the Series' security holdings may become less diverse, resulting in increased risk. Institutional investors that have a greater pro rata ownership interest in the Series than the Portfolio could have effective voting control over the operation of the Series. Further, if the Series changes its investment objective in a manner which is inconsistent with the investment objective of the Portfolio and the shareholders of the Portfolio fail to approve a similar change in the investment objective of the Portfolio, the Portfolio would be forced to withdraw its investment in the Series and either seek to invest its assets in another registered investment company with the same investment objective as the Portfolio, which might not be possible, or retain an investment advisor to manage the Portfolio's assets in accordance with its own investment objective, possibly at increased cost. A withdrawal by the Portfolio of its investment in the Series could result in a distribution in kind of portfolio securities (as opposed to a cash distribution) to the Portfolio. Should such a distribution occur, the Portfolio could incur brokerage fees or other transaction costs in converting such securities to cash in order to pay redemptions. In addition, a distribution in kind to the Portfolio could result in a less diversified portfolio of investments and could affect adversely the liquidity of the Portfolio. Moreover a distribution in kind by the Series may constitute a taxable exchange for federal income tax purposes resulting in gain or loss to the Portfolio. Any net capital gains so realized will be distributed to the Portfolio's shareholders as described in "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" below. Finally, the Portfolio's investment in the shares of a registered investment company such as the Series is relatively new and results in certain operational and other complexities. However, management believes that the benefits to be gained by shareholders outweigh the additional complexities and that the risks attendant to such investment are not inherently different from the risks of direct investment in securities of the type in which the Series invests. 5 <PAGE> INVESTMENT OBJECTIVE AND POLICIES PORTFOLIO CHARACTERISTICS AND POLICIES The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio pursues its objective by investing all of its assets in the Series, which has the same investment objective and policies as the Portfolio. The Series seeks to achieve its objective by investing in the common stocks of large U.S. companies which the Advisor believes to be value stocks at the time of purchase. Securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value (a "book to market ratio"). Generally, a company's shares will be considered to have a high book to market ratio if the ratio equals or exceeds the ratios of any of the 30% of companies with the highest positive book to market ratios whose shares are listed on the NYSE and, except as described below, will be considered eligible for investment. In measuring value, the Advisor may consider additional factors such as cash flow, economic conditions and developments in the issuer's industry. A company will be considered "large" if its market capitalization (i.e., the market price of its common stock multiplied by the number of outstanding shares) equals or exceeds that of the company having the median market capitalization of companies whose shares are listed on the NYSE. PORTFOLIO STRUCTURE The Series will operate as a diversified investment company. Further, the Series will not invest more than 25% of its total assets in securities of companies in a single industry. Ordinarily, at least 80% of the assets of the Series will be invested in a broad and diverse group of readily marketable common stocks of large U.S. companies with high book to market ratios, as described above. The Series may invest a portion of its assets, ordinarily not more than 20%, in high quality, highly liquid fixed income securities, such as money market instruments, and short-term repurchase agreements. The Series may invest in futures contracts and options on futures contracts. To the extent that the Series invests in futures contracts for other than bona fide hedging purposes, it will not purchase futures contracts if more than 5% of the Series' total assets are then invested as initial margin deposits on such contracts or options. The Series will purchase securities that are listed on the principal U.S. national securities exchanges and traded over-the-counter. The Series will be structured on a market capitalization basis, generally by basing the amount of each security purchased on the issuer's relative market capitalization, with a view to creating in the Series a reasonable reflection of the relative market capitalizations of its portfolio companies. However, the Advisor may exclude the securities of a company that otherwise meets the applicable criteria described above if the Advisor determines, in its best judgment, that other conditions exist that make the inclusion of such security inappropriate. Deviation from strict market capitalization weighting will also occur because the Series intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by the Series may be reduced, from time to time, from the level which adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the Series' assets may be invested in interest-bearing obligations, as described above, for this purpose, thereby causing further deviation from market capitalization weighting. Such investments would be made on a temporary basis pending investment in equity securities pursuant to the Series' investment objective. The Series may make block purchases of eligible securities at opportune prices even though such purchases exceed the number of shares which, at the time of purchase, strict adherence to the policy of market capitalization weighting would otherwise require. While such transactions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the Series. Changes in the composition and relative ranking (in terms of market capitalization and book to market ratio) of the stocks which are eligible for purchase by the Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On not less than a semi-annual basis, the Advisor will prepare a current list of large U.S. companies with high book to market ratios whose stock is eligible for investment. Only common stocks whose market capitalizations are not less than the maximum on such list will be purchased by the Series. Additional investments will not be made in securities which have depreciated in value to such an extent that they are not then considered by the Advisor to be large companies. This may result in further deviation from market capitalization weighting and such 6 <PAGE> deviation could be substantial if a significant amount of the Series' holdings decrease in value sufficiently to be excluded from the then current market capitalization requirement for eligible securities, but not by a sufficient amount to warrant their sale. It is management's belief that the value stocks of large U.S. companies offer, over a long term, a prudent opportunity for capital appreciation but, at the same time, selecting a limited number of such issues for inclusion in the Series involves greater risk than including a large number of them. The Advisor does not anticipate that a significant number of securities which meet the market capitalization criteria will be selectively excluded from the Series. The Series does not seek current income as an investment objective and investments will not be based upon an issuer's dividend payment policy or record. However, many of the companies whose securities will be included in the Series do pay dividends. It is anticipated, therefore, that the Series will receive dividend income. PORTFOLIO TRANSACTIONS The Series does not intend to purchase or sell securities based on the prospects for the economy, the securities markets or the individual issuers whose shares are eligible for purchase. As described under "Portfolio Structure," investments will be made in virtually all eligible securities on a market capitalization weighted basis. Generally, securities will be purchased with the expectation that they will be held for longer than one year. The Series may sell portfolio securities when the issuer's market capitalization falls substantially below that of the issuer with the minimum market capitalization which is then eligible for purchase by the Series. However, securities may be sold at any time when, in the Advisor's judgment, circumstances warrant their sale. The annual portfolio turnover rates of the Series for the fiscal years ended November 30, 1996 and 1997, respectively, were 20.12% and 17.71%. In addition, the Series may sell portfolio securities when their book to market ratio falls substantially below that of the security with the lowest such ratio that is then eligible for purchase by the Series. SECURITIES LOANS The Series is authorized to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While the Series may earn additional income from lending securities, such activity is incidental to the Series' investment objective. The value of securities loaned may not exceed 331/3% of the value of the Series' total assets. In connection with such loans, the Series will receive collateral consisting of cash or U.S. Government securities, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. In addition, the Series will be able to terminate the loan at any time and will receive reasonable interest on the loan, as well as amounts equal to any dividends, interest or other distributions on the loaned securities. In the event of the bankruptcy of the borrower, the Series could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. The Portfolio is also authorized to lend its portfolio securities. However, as long as it holds only shares of the Series, it will not do so. RISK FACTORS BORROWING The Series has reserved the right to borrow amounts not exceeding 33% of its net assets for the purposes of making redemption payments. When advantageous opportunities to do so exist, the Series may also purchase securities when borrowings exceed 5% of the value of its net assets. Such purchases can be considered to be "leveraging," and, in such circumstances, the net asset value of the Series may increase or decrease at a greater rate than would be the case if the Series had not leveraged. The interest payable on the amount borrowed would increase the Series' expenses and, if the appreciation 7 <PAGE> and income produced by the investments purchased when the Series has borrowed are less than the cost of borrowing, the investment performance of the Series will be reduced as a result of leveraging. PORTFOLIO STRATEGIES The method employed by the Advisor to manage the Series differs from the process employed by many other investment advisors in that the Advisor will rely on fundamental analysis of the investment merits of securities to a limited extent to eliminate potential acquisitions rather than rely on this technique to select securities. Further, because securities generally will be held long-term and will not be eliminated based on short-term price fluctuations, the Advisor generally will not act upon general market movements or short-term price fluctuations of securities to as great an extent as many other investment advisors. REPURCHASE AGREEMENTS In addition, the Series may invest in repurchase agreements. In the event of bankruptcy of the other party to a repurchase agreement, the Trust could experience delay in recovering securities underlying such agreement. Management believes that the risks associated with repurchase agreements can be controlled through stringent security selection criteria and careful monitoring procedures. FUTURES CONTRACTS AND OPTIONS ON FUTURES The Series also may invest in futures contracts and options on futures. To the extent that the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, the Series will not enter into such transactions if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that, in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. These investments entail the risk that an imperfect correlation may exist between changes in the market value of the stocks owned by the Series and the prices of such futures contracts and options, and, at times, the market for such contracts and options might lack liquidity, thereby inhibiting a Series' ability to close a position in such investments. Gains or losses on investments in options and futures depend on the direction of securities prices, interest rates and other economic factors, and the loss from investing in futures contracts is potentially unlimited. The Series' investment in futures and options are subject to special tax rules that may affect the amount, timing and character of the income earned by the Series and the Portfolio's distributions to its shareholders. (These special rules are discussed in the statement of additional information.) MANAGEMENT OF THE PORTFOLIO The Advisor serves as investment advisor to the Series and, as such, is responsible for the management of its assets. Investment decisions for the Series are made by the Investment Committee of the Advisor, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of the Advisor who are elected annually. The Advisor provides the Series with a trading department and selects brokers and dealers to effect securities transactions. Securities transactions are placed with a view to obtaining the best price and execution of such transactions. The Advisor is authorized to pay a higher commission to a broker, dealer or exchange member than another such organization might charge if it determines, in good faith, that the commission paid is reasonable in relation to the research or brokerage services provided by such organization. For the fiscal year ended November 30, 1997, the Advisor received a fee for its advisory services to the Series equal to 0.10% of the average net assets of the Series and the total expenses of the Portfolio were 0.45% of its average net assets. 8 <PAGE> The Portfolio and the Series each bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage commissions and transfer taxes in connection with the acquisition and disposition of portfolio securities, taxes, insurance premiums, costs incidental to meetings of its shareholders and directors or trustees, the cost of filing its registration statements under federal securities laws and the costs of any filings required under state securities laws, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to the Portfolio or the Series are so allocated and expenses which are not allocable to the Portfolio and the Series are borne by the Portfolio and the Series on the basis of their relative net assets. The Advisor was organized in May, 1981, and is engaged in the business of providing investment management services to institutional investors. Assets under management total approximately $26 billion. David G. Booth and Rex A. Sinquefield (directors and officers of both the Fund and the Advisor, trustees and officers of the Trust, and shareholders of the Advisor) may be deemed controlling persons of the Advisor. The Board of Directors is responsible for establishing Portfolio policies and for overseeing the management of the Portfolio. Each of the Directors and officers of the Fund is also a Trustee and officer of the Trust. The Directors of the Fund, including all of the disinterested Directors, have adopted written procedures to monitor potential conflicts of interest that might develop between the Portfolio and the Series. The Portfolio's statement of additional information furnishes information about the directors and officers of the Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional information.) ADMINISTRATIVE SERVICES The Fund has entered into an administration agreement with the Advisor on behalf of the Portfolio. Pursuant to the administration agreement, the Advisor will perform various services, including: supervision of the services provided by the Portfolio's custodian and dividend disbursing agent and others who provide services to the Fund for the benefit of the Portfolio; assisting the Fund to comply with the provisions of federal, state, local and foreign securities, tax and other laws applicable to the Portfolio; providing shareholders with information about the Portfolio and their investments as they or the Fund may request; assisting the Fund to conduct meetings of shareholders of record; furnishing information as the Board of Directors may require regarding the Series; and any other administrative services for the benefit of the Portfolio as the Board of Directors may reasonably request. The Advisor also provides the Fund with office space and personnel. The annual fee paid monthly by the Portfolio to the Advisor for administrative services is .01% of the Portfolio's average monthly net assets. The Advisor has agreed to waive its fee under the administration agreement and, to the extent that such waiver is insufficient, to assume expenses of the Portfolio to the extent necessary to keep the cumulative annual expenses to not more than .75% of the average net assets of the Portfolio on an annualized basis. The Advisor retains the right in its sole discretion to modify or eliminate the waiver of a portion of its fees and assumption of expenses in the future. The Fund intends to enter into shareholder service agreements with certain Shareholder Services Agents on behalf of the Portfolio. The Shareholder Services Agents ordinarily will include (i) with respect to participants in a 401(k) plan that invests in the Portfolio, the person designated to service the employer's plan, and (ii) institutions whose clients, customers or members invest in the Portfolio. The services to be provided under the shareholder service agreements may include any of the following: shareholder recordkeeping; sending statements to shareholders reflecting account activities such as purchases, redemptions and dividend payments; responding to shareholder inquiries regarding their accounts; tax reporting with respect to dividends, distributions and redemptions; receiving, aggregating and processing shareholder orders; and providing the Portfolio with information necessary for the Fund to comply with state securities laws. The fee paid by the Portfolio to the Shareholder Services Agent of each employer plan or institution is an annual rate of .10% of the aggregate daily value of all shares held in an account maintained by such Shareholder Services Agent, paid on a monthly basis. 9 <PAGE> DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES The Portfolio intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for federal income taxes to the extent that its net investment income and net realized capital gains are distributed. The Portfolio's policy is to distribute substantially all net investment income and any realized net capital gains annually in December after the close of the Fund's fiscal year on November 30. The Series also intends to qualify as a regulated investment company under the Code. Special tax rules may apply in determining the income and gains that the Series earns on its investments. These rules may, in turn, affect the amount of distributions that the Portfolio pays to its shareholders. Shareholders of the Portfolio will automatically receive all income dividends and any capital gains distributions in additional shares of the Portfolio at net asset value (as of the business date following the dividend record date). The Portfolio receives income in the form of income dividends paid by the Series. This income, less the expenses incurred in operations, is the Portfolio's net investment income from which income dividends are distributed as described above. The Portfolio also may receive capital gains distributions from the Series and may realize capital gains upon the redemption of the shares of the Series. Any net realized capital gains of the Portfolio will be distributed as described above. Dividends and distributions paid to a 401(k) plan accumulate free of federal income tax. Whether paid in cash or additional shares and regardless of the length of time the Portfolio's shares have been owned by shareholders who are subject to federal income taxes, distributions from long-term capital gains are taxable as such. Dividends from net investment income or net short-term capital gains will be taxable as ordinary income, whether received in cash or in additional shares. Dividends from net investment income will generally qualify in part for the corporate dividends received deduction, but the portion of dividends so qualified depends on the aggregate qualifying dividend income received by the Series from domestic (U.S.) sources. For those investors subject to tax, if purchases of shares of the Portfolio are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution. Shareholders are notified annually by the Fund as to the federal tax status of dividends and distributions paid by the Portfolio. Dividends which are declared in December to shareholders of record but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes as if paid by the Portfolio and received by the shareholder on December 31 of the calendar year in which they are declared. The sale of shares of the Portfolio is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares of the Portfolio for shares of another Portfolio of the Fund. Any loss incurred on sale or exchange of the Portfolio's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. In addition to federal taxes, shareholders may be subject to state and local taxes on distributions. Distributions of interest income and capital gains realized from certain types of U.S. Government securities may be exempt from state personal income taxes. The Portfolio is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on the account registration form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding. The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Portfolio. 10 <PAGE> PURCHASE OF SHARES Shares of the Portfolio are sold only (i) to fund deferred compensation plans which are exempt from taxation under section 401(k) of the Code and (ii) to clients, customers or members of certain institutions. Provided that shares of the Portfolio are available under an employer's plan or through an institution, shares may be purchased by following the procedures adopted by the respective employer or institution and approved by the Fund's management for making investments. Shares are available through the Shareholder Services Agent designated under the employer's plan or by the institution. Investors who want to consider investing in the Portfolio should contact their employer or institution for details. Institutions which purchase shares of the Portfolio for the accounts of their customers may impose separate charges on those customers for account services. The Fund does not impose a minimum purchase requirement, but investors who wish to purchase shares of the Portfolio should determine whether their employer's plan or institution imposes a minimum transaction requirement. VALUATION OF SHARES The net asset values per share of the Portfolio and the Series are calculated as of the close of the NYSE by dividing the total market value of their respective investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Portfolio and the Series, respectively. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. Securities held by the Series which are listed on a securities exchange and for which market quotations are available are valued at the last quoted sale price of the day or, if there is no such reported sale, such securities will be valued at the mean between the most recent quoted bid and asked prices. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the mean between the most recent quoted bid and asked prices. The value of other assets and securities for which no quotations are readily available (including restricted securities) are determined in good faith at fair value in accordance with procedures adopted by the Board of Trustees of the Trust. Provided that the Shareholder Services Agent has received the investor's investment instructions in good order and the custodian has received the investor's payment, shares of the Portfolio will be priced at the net asset value calculated next after receipt of the order by PFPC Inc., the transfer agent for the Portfolio. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. The Fund reserves the right to redeem shares owned by any purchaser whose order is canceled to recover any resulting loss to the Fund and may prohibit or restrict the manner in which such purchaser may place further orders. Management believes that any dilutive effective of the cost of investing the proceeds of the sale of the shares of the Portfolio is minimal and, therefore, the shares of the Portfolio are currently sold at net asset value, without imposition of a fee that would be used to reimburse the Portfolio for such cost (a "reimbursement fee"). However, reimbursement fees may be charged prospectively from time to time based upon the future experience of the Portfolio and the Series which would be used to defray the costs of investing in securities (such as brokerage commissions, taxes and other transaction costs). Any such charges will be described in the prospectus. DISTRIBUTION The Fund acts as distributor of the Portfolio's shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of DFA, pursuant to which DFA Securities Inc. is responsible for supervising the sale of the Portfolio's shares. No compensation is paid by the Fund to DFA Securities Inc. under this agreement. 11 <PAGE> EXCHANGE OF SHARES Provided such transactions are permitted under the employer's 401(k) plan or by the institution, investors may exchange shares of the Portfolio for those of the DFA International Value Portfolio II or the U.S. 6-10 Value Portfolio II by completing the necessary documentation as required by the Shareholder Services Agent designated under the employer's plan or by the institution. The exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the markets. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of any of the portfolios or otherwise adversely affect the Fund, the exchange privilege may be terminated. Exchanges will be accepted only if the Fund may issue the shares of the portfolio being acquired in compliance with the securities laws of the investor's state of residence. The redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the Shareholder Services Agent has received appropriate instructions in the form required by such Shareholder Services Agent. There is no fee imposed on an exchange. However, the Fund reserves the right to impose an administrative fee in order to cover the costs incurred in processing an exchange. Any such fee will be disclosed in the prospectus. An exchange is treated as a redemption and a purchase. Therefore, an investor could realize a taxable gain or loss on the transaction. The Fund reserves the right to revise or terminate the exchange privilege or limit the amount of or reject any exchange, as deemed necessary, at any time. REDEMPTION OF SHARES Investors who desire to redeem shares of the Portfolio must furnish a redemption request to the respective Shareholder Services Agent in the form required by such Shareholder Services Agent. The Portfolio will redeem shares at the net asset value of such shares next determined after receipt of a request for redemption in good order. Although the redemption payments will ordinarily be made within seven days after receipt, payment to investors redeeming shares which were purchased by check will not be made until the Fund can verify that the payments for the purchase have been, or will be, collected, which may take up to fifteen days or more. Investors may avoid this delay by submitting a certified check along with the purchase order. The Fund reserves the right to redeem a shareholder's account if the value of the shares in the account is $500 or less, whether because of redemptions, a decline in the Portfolio's net asset value per share or any other reason. Before the Fund involuntarily redeems shares from such an account and sends the proceeds to the stockholder, the Fund will give written notice of the redemption to the stockholder at least sixty days in advance of the redemption date. The stockholder will then have sixty days from the date of the notice to make an additional investment in the Portfolio in order to bring the value of the shares in the account to more than $500 and avoid such involuntary redemption. The redemption price to be paid to a stockholder for shares redeemed by the Fund under this right will be the aggregate net asset value of the shares in the account at the close of business on the redemption date. When in the best interests of the Portfolio, the Portfolio may make a redemption payment, in whole or in part, by a distribution of portfolio securities that the Portfolio receives from the Series in lieu of cash in accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage charges and other transaction costs selling securities that were received in payment of redemptions. 12 <PAGE> GENERAL INFORMATION The Portfolio and the Series may disseminate reports of their investment performance from time to time. Investment performance is calculated on a total return basis; that is by including all net investment income and any realized and unrealized net capital gains or losses during the period for which investment performance is reported. If dividends or capital gains distributions have been paid during the relevant period, the calculation of investment performance will include such dividends and capital gains distributions as though reinvested in shares of the Portfolio. Standard quotations of total return are computed in accordance with SEC Guidelines and are presented whenever any non-standard quotations are disseminated. Non-standardized total return quotations may differ from the SEC Guideline computations by covering different time periods. In all cases, disclosures are made when performance quotations differ from the SEC Guidelines. Performance data is based on historical earnings and is not intended to indicate future performance. Rates of return expressed on an annual basis will usually not equal the sum of returns expressed for consecutive interim periods due to the compounding of the interim yields. The Fund's annual report to shareholders of the Portfolio for the fiscal year ended November 30, 1997, contains additional performance information. A copy of the annual report is available upon request and without charge. The Fund was incorporated under Maryland law on March 19, 1990. The shares of the Portfolio, when issued and paid for in accordance with the Portfolio's prospectus, will be fully paid and non-assessable shares, with equal, non-cumulative voting rights and no preferences as to conversion, exchange, dividends, redemptions or any other feature. With respect to matters which require shareholder approval, shareholders are entitled to vote only with respect to matters which affect the interest of the class of shares (Portfolio) which they hold, except as otherwise required by applicable law. If liquidation of the Fund should occur, shareholders would be entitled to receive on a per class basis the assets of the particular Portfolio whose shares they own, as well as a proportionate share of Fund assets not attributable to any particular Portfolio. Ordinarily, the Fund does not intend to hold annual meetings of shareholders, except as required by the 1940 Act or other applicable law. The Fund's bylaws provide that special meetings of shareholders shall be called at the written request of at least 10% of the votes entitled to be cast at such meeting. Such meeting may be called to consider any matter, including the removal of one or more directors. Shareholders will receive shareholder communications with respect to such matters as required by the 1940 Act, including semi-annual and annual financial statements of the Fund, the latter being audited. The DFA Investment Trust Company was organized as a Delaware business trust on October 27, 1992. The Trust offers shares of its Series only to institutional investors in private offerings. The Fund may withdraw the investment of the Portfolio in the Series at any time, if the Board of Directors of the Fund determines that it is in the best interests of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of the Fund would consider what action might be taken, including the investment of all of the assets of the Portfolio in another pooled investment entity having the same investment objective as the Portfolio or the hiring of an investment advisor to manage the Portfolio's assets in accordance with the investment policies described above. Whenever the Portfolio, as an investor in the Series, is asked to vote on a shareholder proposal, the Fund will solicit voting instructions from the Portfolio's shareholders with respect to the proposal. The Directors of the Fund will then vote the Portfolio's shares in the Series in accordance with the voting instructions received from the Portfolio's shareholders. The Directors of the Fund will vote shares of the Portfolio for which they receive no voting instructions in accordance with their best judgment. As of January 30, 1998, the following person owned more than 25% of the voting securities of the Portfolio: <TABLE> <S> <C> BellSouth Corporation 100% Bankers Trust Company as Trustee* 34 Exchange Place Jersey City, NJ 07302 </TABLE> 13 <PAGE> * Owner of record only Shareholder inquiries may be made by writing or calling the Shareholder Services Agent at the address or telephone number set forth in the employer's plan documents or in documents provided by the institution. 14 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 INVESTMENT ADVISOR DIMENSIONAL FUND ADVISORS INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 CUSTODIAN PNC BANK, N.A. 200 Stevens Drive, Airport Business Center Lester, PA 19113 ACCOUNTING SERVICES, DIVIDEND DISBURSING AND TRANSFER AGENT PFPC INC. 400 Bellevue Parkway Wilmington, DE 19809 LEGAL COUNSEL STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 INDEPENDENT ACCOUNTANTS COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center 19th and Market Streets Philadelphia, PA 19103 <PAGE> U.S. LARGE CAP VALUE PORTFOLIO II DIMENSIONAL INVESTMENT GROUP INC. 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401 TELEPHONE: (310) 395-8005 STATEMENT OF ADDITIONAL INFORMATION MARCH 3, 1998 This statement of additional information is not a prospectus but should be read in conjunction with the prospectus of U.S. Large Cap Value Portfolio II (the "Portfolio") of Dimensional Investment Group Inc. (the "Fund"), dated March 3, 1998, as amended from time to time, which can be obtained by writing or calling the Shareholder Services Agent for your employer's plan. TABLE OF CONTENTS <TABLE> <CAPTION> PAGE <S> <C> INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . 2 BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2 INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FUTURES CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 FEDERAL TAX TREATMENT OF FUTURES CONTRACTS . . . . . . . . . . . . . . . . 5 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . 9 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . 10 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 </TABLE> <PAGE> INVESTMENT OBJECTIVE AND POLICIES The following information supplements the information set forth in the prospectus under the caption "INVESTMENT OBJECTIVE AND POLICIES" and applies to the U.S. Large Cap Value Series (the "Series") of The DFA Investment Trust Company (the "Trust"). Because the structure of the Series is based on the relative market capitalizations of eligible holdings, it is possible that the Series might include at least 5% of the outstanding voting securities of one or more issuers. In such circumstances, the Fund and the issuer would be deemed "affiliated persons" under the Investment Company Act of 1940 (the "1940 Act") and certain requirements of the 1940 Act regulating dealings between affiliates might become applicable. However, based on the present capitalizations of the groups of companies eligible for inclusion in the Series and the anticipated amount of the Series' assets intended to be invested in such securities, management does not anticipate that the Series will include as much as 5% of the voting securities of any issuer. BROKERAGE TRANSACTIONS During the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid brokerage commissions of $415,802, $934,452 and $929,005, respectively. The substantial increases or decreases in the amount of brokerage commissions paid by the Series from year to year resulted from increases or decreases in the amount of securities that were bought and sold by the Series. Portfolio transactions of the Series will be placed with a view to receiving the best price and execution. In addition, the Advisor will seek to acquire and dispose of securities in a manner which would cause as little fluctuation in the market prices of stocks being purchased or sold as possible in light of the size of the transactions being effected. Brokers will be selected with these goals in view. The Advisor monitors the performance of brokers which effect transactions for the Series to determine the effect that their trading has on the market prices of the securities in which it invests. The Advisor also checks the rate of commission being paid by the Series to its brokers to ascertain that they are competitive with those charged by other brokers for similar services. Transactions also may be placed with brokers who provide the Advisor with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. The Investment Management Agreement of the Series permits the Advisor knowingly to pay commissions on these transactions which are greater than another broker might charge if the Advisor, in good faith, determines that the commissions paid are reasonable in relation to the research or brokerage services provided by the broker or dealer when viewed in terms of either a particular transaction or the Advisor's overall responsibilities to assets under its management. During fiscal year 1997, the Series paid commissions for securities transactions to brokers which provided market price monitoring services, market studies and research services to the Series of $122,527 with respect to securities transactions valued at $78,961,638. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Series. The over-the-counter market ("OTC") companies eligible for purchase by the Series are thinly traded securities. Therefore, the Advisor believes it needs maximum flexibility to effect OTC trades on a best execution basis. To that end, the Advisor places buy and sell orders with market makers, third market brokers, Instinet and with dealers on an agency basis when the Advisor determines that the securities may not be available from other sources at a more favorable price. Third market brokers enable the Advisor to trade with other institutional holders directly on a net basis. This allows the Advisor sometimes to trade larger blocks than would be possible by going through a single market maker. 2 <PAGE> The Advisor places buy and sell orders on Instinet when the Advisor determines that the securities may not be available from other sources at a more favorable price. Instinet is an electronic information and communication network whose subscribers include most market makers as well as many institutions. Instinet charges a commission for each trade executed on its system. On any given trade, the Series, by trading through Instinet, would pay a spread to a dealer on the other side of the trade plus a commission to Instinet. However, placing a buy (or sell) order on Instinet communicates to many (potentially all) market makers and institutions at once. This can create a more complete picture of the market and thus increase the likelihood that the Series can effect transactions at the best available prices. The Portfolio will not incur any brokerage or other costs in connection with its purchase or redemption of shares of the Series, except if the Portfolio receives securities from the Series to satisfy the Portfolio's redemption request. INVESTMENT LIMITATIONS The Portfolio has adopted certain limitations which may not be changed without the approval of the holders of a majority of the outstanding voting securities of the Portfolio. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be effected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of such Portfolio. The investment limitations of the Series are the same as those of the Portfolio. The Portfolio will not: (1) invest in commodities or real estate, including limited partnership interests therein, although it may purchase and sell securities of companies which deal in real estate and securities which are secured by interests in real estate and may purchase or sell financial futures contracts and options thereon; (2) make loans of cash, except through the acquisition of repurchase agreements and obligations customarily purchased by institutional investors; (3) as to 75% of its total assets, invest in the securities of any issuer (except obligations of the U.S. Government and its agencies and instrumentalities) if, as a result, more than 5% of the Portfolio's total assets, at market, would be invested in the securities of such issuer; (4) purchase or retain securities of an issuer, if those officers and directors of the Fund or the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; (5) borrow, except from banks as a temporary measure for extraordinary or emergency purposes and then, in no event, in excess of 33% of its net assets , or pledge more than 33% of such assets to secure such loans; (6) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in (5) above; (7) invest more than 15% of the value of the Portfolio's total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; (8) engage in the business of underwriting securities issued by others; 3 <PAGE> (9) invest for the purpose of exercising control over management of any company. (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; (11) invest more than 5% of its total assets in securities of companies which have (with predecessors) a record of less than three years' continuous operation; (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; (13) write or acquire options or interests in oil, gas or other mineral exploration, leases or development programs, except as provided in (1) above; (14) purchase warrants, except that the Portfolio may acquire warrants as a result of corporate actions involving its holdings of equity securities; (15) purchase securities on margin or sell short; (16) acquire more than 10% of the voting securities of any issuer, provided that this limitation applies only to 75% of the assets of the Portfolio; or (17) issue senior securities (as such term is defined in Section 18(f) of the 1940 Act), except to the extent permitted by the 1940 Act. The investment limitations described in (3), (4), (7), (9), (10), (11), (12) and (16) above do not prohibit the Portfolio from investing all or substantially all of its assets in the shares of another registered open-end investment company, such as the Series. The investment limitations described in (1) and (15) above do not prohibit the Portfolio from making margin deposits in connection with the purchase or sale of financial futures contracts and options thereon to the extent permitted under applicable regulations. Although (2) above prohibits cash loans, the Portfolio is authorized to lend portfolio securities. Inasmuch as the Portfolio will only hold shares of the Series, the Portfolio does not intend to lend those shares. Pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act"), the Series may purchase certain unregistered (i.e. restricted) securities upon a determination that a liquid institutional market exists for the securities. If it is decided that a liquid market does exist, the securities will not be subject to the Series' limitations on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Trustees of the Trust has delegated the day-to-day function of making liquidity determinations to the Advisor. For Rule 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Trustees and the Advisor will continue to monitor the liquidity of Rule 144A securities. While the Series has retained authority to buy and sell financial futures contracts and options thereon, it has no present intention to do so. 4 <PAGE> Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from its total assets those assets which represent collateral received by the Series for its securities lending transactions. Unless otherwise indicated, all limitations applicable to the Portfolio's and Series' investments apply only at the time that a transaction is undertaken. Any subsequent change in the percentage of the Portfolio's or Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in the Portfolio's or Series' total assets will not require the Portfolio or Series to dispose of an investment until the Advisor determines that it is practicable to sell or close out the position without undue market or tax consequences. FUTURES CONTRACTS The Series may enter into futures contracts and options on futures contracts for the purpose of remaining fully invested and to maintain liquidity to pay redemptions. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of defined securities at a specified future time and at a specified price. Futures contracts which are standardized as to maturity date and underlying financial instrument are traded on national futures exchanges. The Series will be required to make a margin deposit in cash or government securities with a broker or custodian to initiate and maintain positions in futures contracts. Minimal initial margin requirements are established by the futures exchange, and brokers may establish margin requirements which are higher than the exchange requirements. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes, to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, reduction in the contract value may reduce the required margin resulting in a repayment of excess margin to the Series. Variation margin payments are made to and from the futures broker for as long as the contract remains open. The Series expects to earn income on its margin deposits. To the extent that the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, the Series will not enter into such transaction if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that in the case of an option that is in-the-money at the time of purchase the in-the-money amount may be excluded in calculating the 5%. Pursuant to published positions of the Securities and Exchange Commission (the "Commission"), the Series may be required to maintain segregated accounts consisting of liquid assets such as cash, U.S. government securities, or other high grade debt obligations (or, as permitted under applicable regulation, enter into offsetting positions) in connection with its futures contract transactions in order to cover its obligations with respect to such contracts. Positions in futures contracts may be closed out only on an exchange which provides a secondary market. However, there can be no assurance that a liquid secondary market will exist for any particular futures contract at any specific time. Therefore, it might not be possible to close a futures position and, in the event of adverse price movements, the Series would continue to be required to continue to make variation margin deposits. In such circumstances, if the Series has insufficient cash, it might have to sell portfolio securities to meet daily margin requirements at a time when it might be disadvantageous to do so. Management intends to minimize the possibility that it will be unable to close out a futures contract by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. 5 <PAGE> FEDERAL TAX TREATMENT OF FUTURES CONTRACTS Except for transactions the Series has identified as hedging transactions, the Series is required for federal income tax purposes to recognize as income for each taxable year its net unrealized gains and losses on certain futures contracts as of the end of the year as well as those actually realized during the year. In most cases, any gain or loss recognized with respect to a futures contract is considered to be 60% long-term gain or loss and 40% short-term capital gain or loss, without regard to the holding period of the contract. Furthermore, sales of futures contracts which are intended to hedge against a change in the value of securities held by the Series may affect the holding period of such securities and, consequently, the nature of the gain or loss on such securities upon disposition. In order for the Series to continue to qualify for federal income tax treatment as a regulated investment company, at least 90% of its gross income for a taxable year must be derived from qualifying income; i.e., dividends, interest, income derived from loans of securities, gains from the sale of securities and other income derived with respect to the Series' business of investing in securities. It is anticipated that any net gain realized from closing futures contracts will be considered gain from the sale of securities and, therefore, constitute qualifying income for purposes of the 90% requirement. The Series will distribute to shareholders annually any net capital gains which have been recognized for federal income tax purposes (including unrealized gains at the end of the Series' fiscal year) on futures transactions. Such distributions will be combined with distributions of capital gains realized on the Series' other investments. DIRECTORS AND OFFICERS The names, addresses and dates of birth of the directors and officers of the Fund and a brief statement of their present positions and principal occupations during the past five years is set forth below. DIRECTORS David G. Booth, Director*, (12/2/46), President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director, of the following companies: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc. (registered investment company). Trustee, President and Chairman-Chief Executive Officer of The DFA Investment Trust Company (registered investment company). Chairman and Director, Dimensional Fund Advisors Ltd. George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company and First Prairie Funds (registered investment companies). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). 6 <PAGE> Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Public Director, Chicago Mercantile Exchange. Myron S. Scholes, (7/1/42), Director, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. Rex A. Sinquefield, (9/7/44), Director*, Chairman-Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd. *Interested Director of the Fund. OFFICERS Each of the officers listed below hold the same office (except as otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc. Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA. Truman Clark, (4/8/41), Vice President, Santa Monica, CA. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. Maureen Connors, (11/17/36), Vice President and Assistant Secretary, Santa Monica, CA. Robert Deere, (10/8/57), Vice President, Santa Monica, CA. Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Richard Eustice, (8/5/65), Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA. Kamyab Hashemi-Nejad, 1/22/61, Vice President, Controller and Assistant Treasurer, Santa Monica, CA. 7 <PAGE> Stephen P. Manus, 12/26/50, Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. Karen McGinley, 3/10/66, Vice President, Santa Monica, CA. Catherine L. Newell, 5/7/64, Vice President and Assistant Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989 to 1996. David Plecha, (10/26/61), Vice President, Santa Monica, CA. George Sands, (2/8/56), Vice President, Santa Monica, CA. Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Jeanne C. Sinquefield, Ph.D., (12/2/46), Executive Vice President, Santa Monica, CA. Scott Thornton, (3/1/63), Vice President, Santa Monica, CA. Weston Wellington, (3/1/51), Vice President, Santa Monica, CA. Director of Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994. Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife. Directors and officers as a group own less than 1% of the Portfolio's outstanding stock. Set forth below is a table listing, for each director entitled to receive compensation, the compensation received from the Fund during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year. <TABLE> <CAPTION> Aggregate Total Compensation from Compensation Fund Director from Fund and Fund Complex - --------- ------------ ------------------------ <S> <C> <C> George M. Constantinides $5,000 $30,000 John P. Gould $5,000 $30,000 Roger G. Ibbotson $5,000 $30,000 Merton H. Miller $5,000 $30,000 Myron S. Scholes $5,000 $30,000 </TABLE> 8 <PAGE> ADMINISTRATIVE SERVICES PFPC Inc. ("PFPC") serves as the accounting services, dividend disbursing and transfer agent for the Portfolio and the Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include day-to-day keeping and maintenance of certain records, calculation of the offering price of the shares, preparation of reports, liaison with its custodian, and transfer and dividend disbursing agency services. For its services, the Portfolio pays PFPC a monthly fee of $1,000. OTHER INFORMATION For the services it provides as investment advisor to the Series, the Advisor is paid a monthly fee calculated as a percentage of average net assets of the Series. For the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid advisory fees of $306,000, $699,000 and $1,255,000, respectively. The Series has more than one investor; this dollar amount represents the total dollar amount of advisory fees paid by the Series to the Advisor. The Fund was known as DFA U.S. Large Cap Inc. from February, 1992, until the Fund amended its Articles of Incorporation in April, 1993, to change to its present name. Prior to a February, 1992, amendment to the Fund's Articles of Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. PNC Bank, N.A. serves as the custodian for the Portfolio. The custodian maintains a separate account or accounts for the Portfolio and Series; receives, holds and releases portfolio securities on account of the Portfolios and Series; makes receipts and disbursements of money on behalf of the Portfolios and Series; and collects and receives income and other payments and distributions on account of the Portfolio's and Series' portfolio securities. Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the Fund's financial statements on an annual basis. PRINCIPAL HOLDERS OF SECURITIES As of January 30, 1998, the following person beneficially owned 5% or more of the outstanding stock of the Portfolio, as set forth below: <TABLE> <CAPTION> <S> <C> BellSouth Corporation 100% Bankers Trust Company as Trustee* 34 Exchange Place Jersey City, NJ 07302 </TABLE> * Owner of record only PURCHASE OF SHARES The following information supplements the information set forth in the prospectus under the caption "PURCHASE OF SHARES." The Fund will accept purchase and redemption orders on each day that the New York Stock Exchange (the "NYSE") is open for business, regardless of whether the Federal Reserve System is closed. However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Fund 9 <PAGE> will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days that the NYSE is closed, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Fund is closed. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Fund or the Portfolio. REDEMPTION OF SHARES The following information supplements the information set forth in the prospectus under the caption "REDEMPTION OF SHARES." The Fund may suspend redemption privileges or postpone the date of payment: (1) during any period when the NYSE is closed, or trading on the NYSE is restricted as determined by the Commission, (2) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it, or fairly to determine the value of its assets, and (3) for such other periods as the Commission may permit. CALCULATION OF PERFORMANCE DATA Following are quotations of the annualized percentage total returns for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable) using the standardized method of calculation required by the Commission. <TABLE> <CAPTION> One Year Five Years Ten Years -------- ---------- --------- <S> <C> <C> 24.88% (39 mos.) n/a 23.30% </TABLE> For purposes of calculating the performance of the Portfolio, the performance of the Series will be utilized for the period prior to when the Portfolio commenced operations, and, if applicable, restated to reflect the Portfolio's fees and expenses. As the following formula indicates, the Portfolio and Series 10 <PAGE> each determines its average annual total return by finding the average annual compounded rates of return over the stated time period that would equate a hypothetical initial purchase order of $1,000 to its redeemable value (including capital appreciation/depreciation and dividends and distributions paid and reinvested less any fees charged to a shareholder account) at the end of the stated time period. The calculation assumes that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The calculation also assumes the account was completely redeemed at the end of each period and the deduction of all applicable charges and fees. According to the Commission's formula: P(1 + T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one-, five- and ten-year periods at the end of the one-, five-and ten-year periods (or fractional portion thereof). In addition to the standardized method of calculating performance required by the Commission, the Portfolio and Series may disseminate other performance data and may advertise total return performance calculated on a monthly basis. The Portfolio may compare its investment performance to appropriate market and mutual fund indices and investments for which reliable performance data is available. Such indices are generally unmanaged and are prepared by entities and organizations which track the performance of investment companies or investment advisors. Unmanaged indices often do not reflect deductions for administrative and management costs and expenses. The performance of the Portfolio may also be compared in publications to averages, performance rankings, or other information prepared by recognized mutual fund statistical services. Any performance information, whether related to the Portfolio or to the Advisor, should be considered in light of the Portfolio's investment objectives and policies, characteristics and the quality of the portfolio and market conditions during the time period indicated and should not be considered to be representative of what may be achieved in the future. FINANCIAL STATEMENTS The audited financial statements and financial highlights of the Portfolio for the Fund's fiscal year ended November 30, 1997, as set forth in the Fund's annual report to shareholders of the Portfolio, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited financial statements of the Series for the Trust's fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. 11 <PAGE> A shareholder may obtain a copy of the reports upon request and without charge, by contacting the Fund at the address or telephone number appearing on the cover of this statement of additional information. 12 <PAGE> PROSPECTUS MARCH 3, 1998 U.S. 6-10 VALUE PORTFOLIO II _________________ This prospectus describes U.S. 6-10 VALUE PORTFOLIO II (the "Portfolio"), a series of shares issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, (310) 395-8005. The Portfolio is an open-end, management investment company whose shares are offered, without a sales charge, to 401(k) defined contribution plans and clients, customers or members of certain institutions. The Fund issues thirteen series of shares, each of which represents a separate class of the Fund's common stock, having its own investment objective and policies. The Fund has not established a minimum initial purchase requirement for the Portfolio. THE INVESTMENT OBJECTIVE OF THE PORTFOLIO IS TO ACHIEVE LONG-TERM CAPITAL APPRECIATION. THE PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF THE U.S. 6-10 VALUE SERIES (THE "SERIES") OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"). THE SERIES IS AN OPEN-END, MANAGEMENT INVESTMENT COMPANY THAT HAS THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS AS THE PORTFOLIO. THE INVESTMENT EXPERIENCE OF THE PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE INVESTMENT EXPERIENCE OF THE SERIES. INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "THE PORTFOLIO." This prospectus sets forth information about the Portfolio that prospective investors should know before investing and should be read carefully and retained for future reference. A statement of additional information about the Portfolio, dated March 3, 1998, as amended from time to time, which is incorporated herein by reference, has been filed with the Securities and Exchange Commission and is available upon request, without charge, by writing or calling the Fund at the above address or telephone number. _________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. <PAGE> TABLE OF CONTENTS <TABLE> <S> <C> HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . 3 THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . 6 Portfolio Characteristics and Policies. . . . . . . . . . . . . . 6 Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . 6 Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . 7 SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Small Company Securities. . . . . . . . . . . . . . . . . . . . . 8 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Portfolio Strategies. . . . . . . . . . . . . . . . . . . . . . . 8 Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . 8 Futures Contracts and Options on Futures. . . . . . . . . . . . . 8 MANAGEMENT OF THE PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . 9 Administrative Services . . . . . . . . . . . . . . . . . . . . . 9 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . 10 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 11 VALUATION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . 11 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 12 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 12 GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . 13 </TABLE> <PAGE> HIGHLIGHTS PAGE INVESTMENT OBJECTIVE 6 The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio will invest all of its assets in the Series, which in turn will invest in the stocks of small U.S. companies that are value stocks, primarily because they have a high book value in relation to their market value. The investment objective of the Portfolio is a fundamental policy and may not be changed without the affirmative vote of a majority of its outstanding securities. (See "INVESTMENT OBJECTIVE AND POLICIES.") PAGE RISK FACTORS 7 The Portfolio (indirectly through its investment in the Series) may invest in futures contracts and options thereon. The Portfolio is also authorized to invest in repurchase agreements. These policies and the policy of the Portfolio to invest in the shares of the Series involve certain risks. (See "RISK FACTORS.") PAGE MANAGEMENT AND ADMINISTRATIVE SERVICES 8 Dimensional Fund Advisors Inc. (the "Advisor" or "DFA") provides the Portfolio with administrative services and also serves as investment advisor to the Series. The Fund contracts with Shareholder Services Agents to provide certain recordkeeping and other services for the benefit of the Portfolio's shareholders. (See "MANAGEMENT OF THE PORTFOLIO.") PAGE DIVIDEND POLICY 10 After the end of the Portfolio's fiscal year in November, the Portfolio distributes dividends from its net investment income and any realized net capital gains annually in December. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") PAGE PURCHASE, VALUATION AND REDEMPTION OF SHARES 11 The shares of the Portfolio are offered at net asset value, which is calculated as of the close of the New York Stock Exchange (the "NYSE") on each day that the NYSE is open for business. The value of the Portfolio's shares will fluctuate in relation to the investment experience of the Series. The redemption price of a share of the Portfolio is equal to its net asset value. (See "PURCHASE OF SHARES," "VALUATION OF SHARES" and "REDEMPTION OF SHARES.") 1 <PAGE> SHAREHOLDER TRANSACTION EXPENSES None* The expenses in the table below are based on those incurred by the Portfolio and the Series for the fiscal year ended November 30, 1997. ANNUAL FUND OPERATING EXPENSES** (AS A PERCENTAGE OF AVERAGE NET ASSETS) <TABLE> <S> <C> Management Fee 0.20% Administration Fee 0.01% Other Expenses 0.27% Total Operating Expenses 0.48%*** </TABLE> *Shares of the Portfolio that are purchased through omnibus accounts maintained by securities firms may be subject to a service fee or commission on such purchases. **The "Management Fee" is payable by the Series and the "Administration Fee" is payable by the Portfolio. The amount set forth in "Other Expenses" represents the aggregate amount that is payable by both the Series and the Portfolio. "Other Expenses" include a fee paid to the Shareholder Services Agent of each employer plan or institution at the annual rate of .10% of the aggregate daily value of all shares of the Portfolio that are held in an account maintained by such Shareholder Services Agent, paid on a monthly basis. (See "Administrative Services.") ***Beginning on July 1, 1996, the Advisor agreed to waive its administration fee with respect to the Portfolio and, to the extent that such waiver is insufficient, to assume expenses of the Portfolio to the extent necessary to keep the cumulative annual expenses to not more than .75% of the average net assets of the Portfolio on an annualized basis. For purposes of this waiver and assumption, the annualized expenses are those expenses incurred in any period commencing on or after July 1, 1996, consisting of twelve consecutive months. The Advisor was not required to waive any fees under this agreement for the fiscal year ended November 30, 1997. The Advisor retains the right in its sole discretion to modify or eliminate the waiver of a portion of its fees and the assumption of expenses of the Portfolio in the future. If the Advisor modifies or eliminates the fee waiver or assumption, such change will be set forth in the prospectus. EXAMPLE You would pay the following transaction and annual operating expenses on a $1,000 investment in each Portfolio, assuming a 5% annual return over each of the following time periods and redemption at the end of each time period: <TABLE> <CAPTION> 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- <S> <C> <C> <C> $5 $15 $27 $60 </TABLE> The purpose of the above fee table and Example is to assist investors in understanding the various costs and expenses that an investor in the Portfolio will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 <PAGE> The table summarizes the aggregate estimated annual operating expenses of both the Portfolio and the Series. (See "MANAGEMENT OF THE PORTFOLIO.") The Board of Directors of the Fund has considered whether such expenses will be more or less than they would be if the Portfolio were to invest directly in the securities held by the Series. The aggregate amount of expenses for the Portfolio and the Series may be greater than it would be if the Portfolio were to invest directly in the securities held by the Series. However, the total expense ratio for the Portfolio and the Series is expected to be less over time than such ratio would be if the Portfolio were to invest directly in the underlying securities. This is because this arrangement enables institutional investors, including the Portfolio, to pool their assets, which may be expected to result in economies by spreading certain fixed costs over a larger asset base. Each shareholder in the Series, including the Portfolio, will pay its proportionate share of the expenses of the Series. CONDENSED FINANCIAL INFORMATION The following financial highlights are part of the financial statements of the Portfolio. The information for each of the past fiscal years has been audited by independent accountants. The financial statements, related notes and the report of the independent accountants covering such financial information and financial highlights for the Fund's most recent fiscal year ended November 30, 1997, are incorporated by reference into the Fund's statement of additional information from the Fund's annual report for the year ended November 30, 1997. Further information about the Portfolio's performance is contained in the Fund's annual report to shareholders of the Portfolio for the year ended November 30, 1997. A copy of the annual report may be obtained from the Fund upon request at no charge. 3 <PAGE> FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> Year Year Year Aug. 3, Ended Ended Ended to Nov. 30, Nov. 30, Nov. 30, Nov. 30, -------- -------- -------- -------- 1997 1996 1995 1994 <S> <C> <C> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . . . . $ 14.67 $ 12.13 $ 9.65 $10.00 Income from Investment Operations Net Investment Income . . . . . . . . . . . . . . . . . . . . . 0.08 0.08 0.06 0.11 Net Gains (Losses) on Securities (Realized and Unrealized) . . 4.77 2.51 2.63 (0.35) -------- ------ ------- ------ Total from Investment Operations . . . . . . . . . . . . . . 4.85 2.59 2.69 (0.24) -------- ------ ------- ------ Less Distributions Net Investment Income . . . . . . . . . . . . . . . . . . . . . (0.07) (0.01) (0.06) (0.11) Net Realized Gains . . . . . . . . . . . . . . . . . . . . . . (0.25) (0.04) (0.15) -- -------- ------ ------- ------ Total Distributions . . . . . . . . . . . . . . . . . . . . . (0.32) (0.05) (0.21) (0.11) -------- ------ ------- ------ Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . $ 19.20 $ 14.67 $ 12.13 $ 9.65 Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.75% 21.39% 27.90% (2.39)%# Net Assets, End of Period (thousands). . . . . . . . . . . . . . . $125,061 $40,637 $14,290 $6,055 Ratio of Expenses to Average Net Assets (1). . . . . . . . . . . . 0.48% 0.85%(a) 0.96%(a) 0.96%*(a) Ratio of Net Investment Income to Average Net Assets . . . . . . . 0.62% 0.77%(a) 0.68%(a) 4.78%*(a) Portfolio Turnover Rate. . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A N/A Average Commission Rate. . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A N/A Portfolio Turnover Rate of Master Fund Series. . . . . . . . . . . 25.47% 14.91% 20.62% 8.22%(b) Average Commission Rate of Master Fund Series (2). . . . . . . . . $0.0645 $0.0658 N/A N/A </TABLE> ________________ *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (a) Had certain waivers and assumptions of expenses not been in effect, the ratios of expenses to average net assets for the periods ended November 30, 1997, 1996, 1995 and 1994 would have been 0.47%, 0.88%, 1.50% and 2.33%, respectively, and the ratios of net investment income to average net assets for the periods ended November 30, 1997, 1996, 1995 and 1994 would have been 0.63%, 0.74%, 0.14% and 3.41%, respectively. (2) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal years beginning after September 1, 1995. (b) Master Fund Series Turnover calculated for the year ended November 30, 1994. 4 <PAGE> THE PORTFOLIO The Portfolio, unlike many other investment companies which directly acquire and manage their own portfolio of securities, seeks to achieve its investment objective by investing all of its investable assets in the Series, an open-end, management investment company registered under the Investment Company Act of 1940 ("1940 Act"), having the same investment objective as the Portfolio. The investment objective of the Portfolio may not be changed without the affirmative vote of a majority of its outstanding shares and the investment objective of the Series may not be changed without the affirmative vote of a majority of its outstanding shares. Shareholders of the Portfolio will receive written notice thirty days prior to any change in the investment objective of the Series. This prospectus describes the investment objective, policies and restrictions of the Portfolio and the Series. (See "INVESTMENT OBJECTIVE AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE PORTFOLIO" for a description of the management and other expenses associated with the Portfolio's investment in the Series. Other institutional investors, including other mutual funds, may invest in the Series, and the expenses of such other investors and, correspondingly, their returns may differ from those of the Portfolio. Please contact the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for information about the availability of investing in the Series other than through the Portfolio. The shares of the Series will be offered to institutional investors for the purpose of increasing the funds available for investment, to reduce expenses as a percentage of total assets and to achieve other economies that might be available at higher asset levels. For example, the Series might be able to place larger block trades at more advantageous prices and to participate in securities transactions of larger denominations, thereby reducing the relative amount of certain transaction costs in relation to the total size of the transaction. Investment in the Series by other institutional investors offers potential benefits to the Series and, through its investment in the Series, also to the Portfolio. However, economies and expense reductions might not be achieved and additional investment opportunities, such as increased diversification, might not be available if other institutions do not invest in the Series. Also, if an institutional investor were to redeem its interest in the Series, the remaining investors in the Series could experience higher pro rata operating expenses, thereby producing lower returns, and the Series' security holdings may become less diverse, resulting in increased risk. Institutional investors that have a greater pro rata ownership interest in the Series than the Portfolio could have effective voting control over the operation of the Series. Further, if the Series changes its investment objective in a manner which is inconsistent with the investment objective of the Portfolio and the shareholders of the Portfolio fail to approve a similar change in the investment objective of the Portfolio, the Portfolio would be forced to withdraw its investment in the Series and either seek to invest its assets in another registered investment company with the same investment objective as the Portfolio, which might not be possible, or retain an investment advisor to manage the Portfolio's assets in accordance with its own investment objective, possibly at increased cost. A withdrawal by the Portfolio of its investment in the Series could result in a distribution in kind of portfolio securities (as opposed to a cash distribution) to the Portfolio. Should such a distribution occur, the Portfolio could incur brokerage fees or other transaction costs in converting such securities to cash in order to pay redemptions. In addition, a distribution in kind to the Portfolio could result in a less diversified portfolio of investments and could affect adversely the liquidity of the Portfolio. Moreover, a distribution in kind by the Series may constitute a taxable exchange for federal income tax purposes resulting in gain or loss to the Portfolio. Any net capital gains so realized will be distributed to the Portfolio's shareholders as described in "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" below. Finally, the Portfolio's investment in the shares of a registered investment company such as the Series is relatively new and results in certain operational and other complexities. However, management believes that the benefits to be gained by shareholders outweigh the additional complexities and that the risks attendant to such investment are not inherently different from the risks of direct investment in securities of the type in which the Series invests. 5 <PAGE> INVESTMENT OBJECTIVE AND POLICIES PORTFOLIO CHARACTERISTICS AND POLICIES The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio pursues its objective by investing all of its assets in the Series, which has the same investment objective and policies as the Portfolio. The Series seeks to achieve its objective by investing in common stocks of small U.S. companies which the Advisor believes to be value stocks at the time of purchase. Securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value (a "book to market ratio"). Generally, the shares of a company will be considered to have a high book to market ratio if the ratio equals or exceeds the ratios of any of the 30% of companies with the highest positive book to market ratios whose shares are listed on the NYSE, and, except as described below, will be considered eligible for investment. In measuring value, the Advisor may consider additional factors such as cash flow, economic conditions and developments in the issuer's industry. A company will be considered "small" if its market capitalization (i.e., the market price of its common stock multiplied by the number of outstanding shares) is less than the market capitalization of the NYSE-listed company with the median market capitalization of all such listed companies. PORTFOLIO STRUCTURE The Series will operate as a diversified investment company. Further, the Series will not invest more than 25% of its total assets in securities of companies in a single industry. Ordinarily, at least 80% of the assets of the Series will be invested in a broad and diverse group of readily marketable common stocks of small U.S. companies with high book to market ratios, as described above. The Series may invest a portion of its assets, ordinarily not more than 20%, in high quality, highly liquid fixed income securities, such as money market instruments, and short-term repurchase agreements. The Series may invest in futures contracts and options on futures contracts. To the extent that the Series invests in futures contracts for other than bona fide hedging purposes, it will not purchase futures contracts if more than 5% of the Series' total assets are then invested as initial margin deposits on such contracts or options. The Series will purchase securities that are listed on the principal U.S. national securities exchanges and traded over-the-counter. The Series will be structured on a market capitalization basis, generally by basing the amount of each security purchased on the issuer's relative market capitalization, with a view to creating in the Series a reasonable reflection of the relative market capitalizations of its portfolio companies. However, the Advisor may exclude the securities of a company that otherwise meets the applicable criteria described above if the Advisor determines, in its best judgment, that other conditions exist that make the inclusion of such security inappropriate. Deviation from strict market capitalization weighting will also occur because the Series intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by the Series may be reduced from time to time from the level which adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the Series' assets may be invested in interest-bearing obligations, such as money-market instruments, for this purpose, thereby causing further deviation from market capitalization weighting. Such investments would be made on a temporary basis pending investment in equity securities pursuant to the Series' investment objective. The Series may make block purchases of eligible securities at opportune prices even though such purchases exceed the number of shares which, at the time of purchase, adherence to the policy of market capitalization weighting would otherwise require. While such transactions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the Series. Changes in the composition and relative ranking (in terms of market capitalization and book to market ratio) of the stocks which are eligible for purchase by the Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On not less than a semi-annual basis, the Advisor will prepare a current list of small U.S. companies with high book to market ratios whose stock is 6 <PAGE> eligible for investment. Only common stocks whose market capitalizations are not more than the maximum on such list will be purchased by the Series. Additional investments will not be made in securities which have appreciated in value to such an extent that they are not then considered by the Advisor to be small companies. This may result in further deviation from market capitalization weighting and such deviation could be substantial if a significant amount of the Series' holdings increase in value sufficiently to be excluded from the then current market capitalization requirement for eligible securities, but not by a sufficient amount to warrant their sale. It is management's belief that the value stocks of small U.S. companies offer, over a long term, a prudent opportunity for capital appreciation but, at the same time, selecting a limited number of such issues for inclusion in the Series involves greater risk than including a large number of them. The Advisor does not anticipate that a significant number of securities which meet the market capitalization criteria will be selectively excluded from the Series. The Series does not seek current income as an investment objective and investments will not be based upon an issuer's dividend payment policy or record. However, many of the companies whose securities will be included in the Series do pay dividends. It is anticipated, therefore, that the Series will receive dividend income. PORTFOLIO TRANSACTIONS The Series does not intend to purchase or sell securities based on the prospects for the economy, the securities markets or the individual issuers whose shares are eligible for purchase. As described under "Portfolio Structure," investments will be made in virtually all eligible securities on a market capitalization weighted basis. Generally, securities will be purchased with the expectation that they will be held for longer than one year. The Series may sell portfolio securities when the issuer's market capitalization increases to a level that substantially exceeds that of the issuer with the largest market capitalization which is then eligible for investment by the Series. In addition, the Series may sell portfolio securities when their book to market ratio falls substantially below that of the security with the lowest such ratio that is then eligible for purchase by the Series. While the Series anticipates that it will generally retain securities of issuers with relatively smaller market capitalizations for longer periods, despite any decrease in the issuer's book to market ratio, securities may be sold at any time when, in the Advisor's judgment, circumstances warrant their sale. The annual portfolio turnover rates of the Series for the fiscal years ended November 30, 1996 and 1997, respectively, were 14.91% and 25.47%. SECURITIES LOANS The Series is authorized to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While the Series may earn additional income from lending securities, such activity is incidental to the Series' investment objective. The value of securities loaned may not exceed 33 1/3% of the value of the Series' total assets. In connection with such loans, the Series will receive collateral consisting of cash or U.S. Government securities, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. In addition, the Series will be able to terminate the loan at any time and will receive reasonable interest on the loan, as well as amounts equal to any dividends, interest or other distributions on the loaned securities. In the event of the bankruptcy of the borrower, the Series could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. The Portfolio is also authorized to lend its portfolio securities. However, as long as it holds only shares of the Series, it will not do so. 7 <PAGE> RISK FACTORS SMALL COMPANY SECURITIES Typically, securities of small companies are less liquid than securities of large companies. Recognizing this factor, the Series will endeavor to effect securities transactions in a manner to avoid causing significant price fluctuations in the market for these securities. BORROWING The Series has reserved the right to borrow amounts not exceeding 33% of its net assets for the purposes of making redemption payments. When advantageous opportunities to do so exist, the Series may also purchase securities when borrowings exceed 5% of the value of its net assets. Such purchases can be considered to be "leveraging," and, in such circumstances, the net asset value of the Series may increase or decrease at a greater rate than would be the case if the Series had not leveraged. The interest payable on the amount borrowed would increase the Series' expenses and, if the appreciation and income produced by the investments purchased when the Series has borrowed are less than the cost of borrowing, the investment performance of the Series will be reduced as a result of leveraging. PORTFOLIO STRATEGIES The method employed by the Advisor to manage the Series differs from the process employed by many other investment advisors in that the Advisor will rely on fundamental analysis of the investment merits of securities to a limited extent to eliminate potential acquisitions rather than rely on this technique to select securities. Further, because securities generally will be held long-term and will not be eliminated based on short-term price fluctuations, the Advisor generally will not act upon general market movements or short-term price fluctuations of securities to as great an extent as many other investment advisors. REPURCHASE AGREEMENTS In addition, the Series may invest in repurchase agreements. In the event of a bankruptcy of the other party to a repurchase agreement, the Trust could experience delay in recovering securities underlying the agreement. Management believes that the risks associated with repurchase agreements can be controlled through stringent security selection criteria and careful monitoring procedures. FUTURES CONTRACTS AND OPTIONS ON FUTURES The Series also may invest in futures contracts and options on index futures. To the extent that the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, the Series will not enter into such transactions if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that, in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. These investments entail the risk that an imperfect correlation may exist between changes in the market value of the stocks owned by the Series and the prices of such futures contracts and options, and, at times, the market for such contracts and options might lack liquidity, thereby inhibiting a Series' ability to close a position in such investments. Gains or losses on investments in options and futures depend on the direction of securities prices, interest rates and other economic factors, and the loss from investing in futures contracts is potentially unlimited. The Series' investment in futures and options are subject to special tax rules that may affect the amount, timing, and character of the income earned by the Series and the Portfolio's distributions. (These special rules are discussed in the statement of additional information.) 8 <PAGE> MANAGEMENT OF THE PORTFOLIO The Advisor serves as investment advisor to the Series and, as such, is responsible for the management of its assets. Investment decisions for the Series are made by the Investment Committee of the Advisor, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of the Advisor who are elected annually. The Advisor provides the Series with a trading department and selects brokers and dealers to effect securities transactions. Securities transactions are placed with a view to obtaining the best price and execution of such transactions. The Advisor is authorized to pay a higher commission to a broker, dealer or exchange member than another such organization might charge if it determines, in good faith, that the commission paid is reasonable in relation to the research or brokerage services provided by such organization. For the fiscal year ended November 30, 1997, the Advisor received a fee for its advisory services to the Series equal to 0.20% of the average net assets of the Series and the total expenses of the Portfolio were 0.48% of its average net assets. The Portfolio and the Series each bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage commissions and transfer taxes in connection with the acquisition and disposition of portfolio securities, taxes, insurance premiums, costs incidental to meetings of its shareholders and directors or trustees, the cost of filing its registration statements under federal securities laws and the cost of any filings required under state securities laws, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to the Portfolio or the Series are so allocated and expenses which are not allocable to the Portfolio and the Series are borne by the Portfolio and the Series on the basis of their relative net assets. The Advisor was organized in May, 1981, and is engaged in the business of providing investment management services to institutional investors. Assets under management total approximately $26 billion. David G. Booth and Rex A. Sinquefield (directors and officers of both the Fund and the Advisor, trustees and officers of the Trust and shareholders of the Advisor) may be deemed controlling persons of the Advisor. The Board of Directors is responsible for establishing Portfolio policies and for overseeing the management of the Portfolio. Each of the Directors and officers of the Fund is also a Trustee and officer of the Trust. The Directors of the Fund, including all of the disinterested Directors, have adopted written procedures to monitor potential conflicts of interest that might develop between the Portfolio and the Series. The Portfolio's statement of additional information furnishes information about the Directors and officers of the Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional information.) ADMINISTRATIVE SERVICES The Fund has entered into an administration agreement with the Advisor on behalf of the Portfolio. Pursuant to the administration agreement, the Advisor will perform various services, including: supervision of the services provided by the Portfolio's custodian and dividend disbursing agent and others who provide services to the Fund for the benefit of the Portfolio; assisting the Fund to comply with the provisions of federal, state, local and foreign securities, tax and other laws applicable to the Portfolio; providing shareholders of record with information about the Portfolio and their investments as they or the Fund may request; assisting the Fund to conduct meetings of shareholders of record; furnishing information 9 <PAGE> as the Board of Directors may require regarding the Series; and any other administrative services for the benefit of the Portfolio as the Board of Directors may reasonably request. The Advisor also provides the Fund with office space and personnel. The annual fee paid monthly by the Portfolio to the Advisor for administrative services is .01% of the Portfolio's average monthly net assets. The Advisor has agreed to waive its fee under the administration agreement and, to the extent that such waiver is insufficient, to assume expenses of the Portfolio to the extent necessary to keep the cumulative annual expenses to not more than 0.75% of the average net assets of the Portfolio on an annualized basis. The Advisor retains the right in its sole discretion to modify or eliminate the waiver of a portion of its fees and assumption of expenses in the future. The Fund intends to enter into shareholder service agreements with certain Shareholder Services Agents on behalf of the Portfolio. The Shareholder Services Agents ordinarily will include (i) with respect to participants in a 401(k) plan that invests in the Portfolio, the person designated to service the employer's plan, and (ii) institutions whose clients, customers or members invest in the Portfolio. These services to be provided under the shareholder service agreements may include any of the following: individual recordkeeping for 401(k) plan participants and clients, customers or members of institutions (collectively referred to herein as "Participants"); sending statements to Participants reflecting account activities such as purchases, redemptions and dividend payments; responding to Participant inquiries regarding their accounts; tax reporting with respect to dividends, distributions and redemptions; receiving, aggregating and processing Participant orders; and providing the Portfolio with information necessary for the Fund to comply with the state securities laws. The fee paid by the Portfolio to the Shareholder Services Agent of each employer plan or institution is an annual rate of .10% of the aggregate daily value of all shares held in an account maintained by such Shareholder Services Agent, paid on a monthly basis. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES The Portfolio intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for federal income taxes to the extent that its net investment income and net realized capital gains are distributed. The Portfolio's policy is to distribute substantially all net investment income and any realized net capital gains annually in December after the close of the Fund's fiscal year on November 30. The Series also intends to qualify as a regulated investment company under the Code. Special tax rules may apply in determining the income and gains that the Series earns on its investments. Also, foreign governments may impose taxes on the income and gains from the Series' investments in foreign securities. These rules may, in turn, affect the amount of distributions that the Portfolio pays to its shareholders. Shareholders of the Portfolio will automatically receive all income dividends and any capital gains distributions in additional shares of the Portfolio at net asset value (as of the business date following the dividend record date). The Portfolio receives income in the form of income dividends paid by the Series. This income, less the expenses incurred in operations, is the Portfolio's net investment income from which income dividends are distributed as described above. The Portfolio also may receive capital gains distributions from the Series and may realize capital gains upon the redemption of the shares of the Series. Any net realized capital gains of the Portfolio will be distributed as described above. Dividends and distributions paid to a 401(k) plan accumulate free of federal income tax. Whether paid in cash or additional shares and regardless of the length of time the Portfolio's shares have been owned by shareholders who are subject to federal income taxes, distributions from long-term capital gains are taxable as such. Dividends from net investment income or net short-term capital gains will be taxable as ordinary 10 <PAGE> income, whether received in cash or in additional shares. Dividends from net investment income will generally qualify in part for the corporate dividends received deduction, but the portion of dividends so qualified depends on the aggregate qualifying dividend income received by the Series from domestic (U.S.) sources. For those investors subject to tax, if purchases of shares of the Portfolio are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution. Shareholders are notified annually by the Fund as to the federal tax status of dividends and distributions paid by the Portfolio. Dividends which are declared in December to shareholders of record but which, for operational reasons, may not be paid to the shareholder until the following January, will be treated for tax purposes as if paid by the Portfolio and received by the shareholder on December 31 of the calendar year in which they are declared. The sale of shares of the Portfolio is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares of the Portfolio for shares of another portfolio of the Fund. Any loss incurred on sale or exchange of the Portfolio's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. In addition to federal taxes, shareholders may be subject to state and local taxes on distributions from the Portfolio and on gains on redemption or exchange of Portfolio shares. The Portfolio is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on the account registration form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding. The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in the Portfolio. PURCHASE OF SHARES Shares of the Portfolio are sold only (i) to fund deferred compensation plans which are exempt from taxation under section 401(k) of the Code and (ii) to clients, customers or members of certain institutions. Provided that shares of the Portfolio are available under an employer's plan or through an institution, shares may be purchased by following the procedures adopted by the respective employer or institution and approved by the Fund's management for making investments. Shares are available through the Shareholder Services Agent designated under the employer's plan or by the institution. Investors who want to consider investing in the Portfolio should contact their employer or institution for details. Institutions which purchase shares of the Portfolio for the accounts of their customers may impose separate charges on those customers for account services. The Fund does not impose a minimum purchase requirement, but investors who wish to purchase shares of the Portfolio should determine whether their employer's plan or institution imposes a minimum transaction requirement. VALUATION OF SHARES The net asset values per share of the Portfolio and the Series are calculated as of the close of the NYSE by dividing the total market value of their respective investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Portfolio and the Series, respectively. The value of the Portfolio's shares will 11 <PAGE> fluctuate in relation to the investment experience of the Series. Securities held by the Series which are listed on a securities exchange and for which market quotations are available are valued at the last quoted sale price of the day or, if there is no such reported sale, the Series values such securities at the mean between the most recent quoted bid and asked prices. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the mean between the most recent quoted bid and asked prices. The value of other assets and securities for which no quotations are readily available (including restricted securities) are determined in good faith at fair value in accordance with procedures adopted by the Board of Trustees of the Trust. Provided that the Shareholder Services Agent has received the investor's investment instructions in good order and the Custodian has received the investor's payment, shares of the Portfolio will be priced at the net asset value calculated next after receipt of the order by PFPC Inc., the transfer agent for the Portfolio. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. The Fund reserves the right to redeem shares owned by any purchaser whose order is canceled to recover any resulting loss to the Fund and may prohibit or restrict the manner in which such purchaser may place further orders. Management believes that any dilutive effective of the cost of investing the proceeds of the sale of the shares of the Portfolio will be minimal and, therefore, the shares of the Portfolio are currently sold at net asset value, without imposition of a fee that would be used to reimburse the Portfolio for such cost (a "reimbursement fee"). However, a reimbursement fee may be charged prospectively from time to time based upon the future experience of the Portfolio and the Series which would be used to defray the costs of investing in securities (such as brokerage commissions, taxes and other transaction costs). Any such charge will be described in the prospectus. DISTRIBUTION The Fund acts as distributor of the Portfolio's shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of DFA, pursuant to which DFA Securities Inc. is responsible for supervising the sale of the Portfolio's shares. No compensation is paid by the Fund to DFA Securities Inc. under this agreement. EXCHANGE OF SHARES Provided such transactions are permitted under the employer's 401(k) plan or by the institution, investors may exchange shares of the Portfolio for those of the DFA International Value Portfolio II or the U.S. Large Cap Value Portfolio II by completing the necessary documentation as required by the Shareholder Services Agent designated under the employer's plan or by the institution. The exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the markets. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of any of the portfolios or otherwise adversely affect the Fund, the exchange privilege may be terminated. Exchanges will be accepted only if the Fund may issue the shares of the portfolio being acquired in compliance with the securities laws of the investor's state of residence. The redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the Shareholder Services Agent has received appropriate instructions in the form required by such Shareholder Services Agent. There is no fee imposed on an exchange. However, the Fund reserves the right to impose an administrative fee in order to cover the costs incurred in processing an exchange. Any such fee will be disclosed in the prospectus. 12 <PAGE> An exchange is treated as a redemption and a purchase. Therefore, an investor could realize a taxable gain or a loss on the transaction. The Fund reserves the right to revise or terminate the exchange privilege or limit the amount of or reject any exchange, as deemed necessary, at any time. REDEMPTION OF SHARES Investors who desire to redeem shares of the Portfolio must furnish a redemption request to the respective Shareholder Services Agent in the form required by such Shareholder Services Agent. The Portfolio will redeem shares at the net asset value of such shares next determined after receipt of a request for redemption in good order. Although the redemption payments will ordinarily be made within seven days after receipt, payment to investors redeeming shares which were purchased by check will not be made until the Fund can verify that the payments for the purchase have been, or will be, collected, which may take up to fifteen days or more. Investors may avoid this delay by submitting a certified check along with the purchase order. The Fund reserves the right to redeem a shareholder's account if the value of the shares in the account is $500 or less, whether because of redemptions, a decline in the Portfolio's net asset value per share or any other reason. Before the Fund involuntarily redeems shares from such an account and sends the proceeds to the stockholder, the Fund will give written notice of the redemption to the stockholder at least sixty days in advance of the redemption date. The stockholder will then have sixty days from the date of the notice to make an additional investment in the Portfolio in order to bring the value of the shares in the account to more than $500 and avoid such involuntary redemption. The redemption price to be paid to a stockholder for shares redeemed by the Fund under this right will be the aggregate net asset value of the shares in the account at the close of business on the redemption date. When in the best interests of the Portfolio, the Portfolio may make a redemption payment, in whole or in part, by a distribution of portfolio securities that the Portfolio receives from the Series in lieu of cash in accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage charges and other transaction costs selling securities that were received in payment of redemptions. GENERAL INFORMATION The Portfolio and the Series may disseminate reports of their investment performance from time to time. Investment performance is calculated on a total return basis; that is by including all net investment income and any realized and unrealized net capital gains or losses during the period for which investment performance is reported. If dividends or capital gains distributions have been paid during the relevant period, the calculation of investment performance will include such dividends and capital gains distributions as though reinvested in shares of the Portfolio. Standard quotations of total return are computed in accordance with SEC Guidelines and are presented whenever any non-standard quotations are disseminated. Non-standardized total return quotations may differ from the SEC Guideline computations by covering different time periods. In all cases, disclosures are made when performance quotations differ from the SEC Guidelines. Performance data is based on historical earnings and is not intended to indicate future performance. Rates of return expressed on an annual basis will usually not equal the sum of returns expressed for consecutive interim periods due to the compounding of the interim yields. The Fund's annual report to shareholders of the Portfolio for the fiscal year ended November 30, 1997, contains additional performance information. A copy of the annual report is available upon request and without charge. The Fund was incorporated under Maryland law on March 19, 1990. The shares of the Portfolio, when issued and paid for in accordance with the Portfolio's prospectus, will be fully paid and non-assessable shares, with equal, non-cumulative voting rights and no preferences as to conversion, exchange, dividends, redemptions or any other feature. With respect to matters which require shareholder approval, shareholders are entitled to vote only 13 <PAGE> with respect to matters which affect the interest of the class of shares (Portfolio) which they hold, except as otherwise required by applicable law. If liquidation of the Fund should occur, shareholders would be entitled to receive on a per class basis the assets of the particular Portfolio whose shares they own, as well as a proportionate share of Fund assets not attributable to any particular Portfolio. Ordinarily, the Fund does not intend to hold annual meetings of shareholders, except as required by the 1940 Act or other applicable law. The Fund's bylaws provide that special meetings of shareholders shall be called at the written request of at least 10% of the votes entitled to be cast at such meeting. Such meeting may be called to consider any matter, including the removal of one or more directors. Shareholders will receive shareholder communications with respect to such matters as required by the 1940 Act, including semi-annual and annual financial statements of the Fund, the latter being audited. The DFA Investment Trust Company was organized as a Delaware business trust on October 27, 1992. The Trust offers shares of its Series only to institutional investors in private offerings. The Fund may withdraw the investment of the Portfolio in the Series at any time, if the Board of Directors of the Fund determines that it is in the best interests of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of the Fund would consider what action might be taken, including the investment of all of the assets of the Portfolio in another pooled investment entity having the same investment objective as the Portfolio or the hiring of an investment advisor to manage the Portfolio's assets in accordance with the investment policies described above. Whenever the Portfolio, as an investor in the Series, is asked to vote on a shareholder proposal , the Fund will solicit voting instructions from the Portfolio's shareholders with respect to the proposal. The Directors of the Fund will then vote the Portfolio's shares in the Series in accordance with the voting instructions received from the Portfolio's shareholders. The Directors of the Fund will vote shares of the Portfolio for which they receive no voting instructions in accordance with their best judgment. As of January 30, 1998, the following person owned more than 25% of the voting securities of the Portfolio: <TABLE> <S> <C> BellSouth Corporation 100% Bankers Trust Company as Trustee* 34 Exchange Place Jersey City, NJ 07302 </TABLE> *Owner of record only Shareholder inquiries may be made by writing or calling the Shareholder Services Agent at the address or telephone number set forth in the employer's plan documents or in documents provided by the institution. 14 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 INVESTMENT ADVISOR DIMENSIONAL FUND ADVISORS INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 CUSTODIAN PNC BANK, N.A. 200 Stevens Drive, Airport Business Center Lester, PA 19113 ACCOUNTING SERVICES, DIVIDEND DISBURSING AND TRANSFER AGENT PFPC INC. 400 Bellevue Parkway Wilmington, DE 19809 LEGAL COUNSEL STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 INDEPENDENT ACCOUNTANTS COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center 19th and Market Streets Philadelphia, PA 19103 <PAGE> U.S. 6-10 VALUE PORTFOLIO II DIMENSIONAL INVESTMENT GROUP INC. 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401 TELEPHONE: (310) 395-8005 STATEMENT OF ADDITIONAL INFORMATION MARCH 3, 1998 This statement of additional information is not a prospectus but should be read in conjunction with the prospectus of U.S. 6-10 Value Portfolio II (the "Portfolio") of Dimensional Investment Group Inc. (the "Fund"), dated March 3, 1998, as amended from time to time, which can be obtained by writing or calling the Shareholder Services Agent for your employer's plan. TABLE OF CONTENTS <TABLE> <CAPTION> PAGE <S> <C> INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . 2 BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2 INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 3 FUTURES CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 FEDERAL TAX TREATMENT OF FUTURES CONTRACTS . . . . . . . . . . . . . . . 5 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . 6 ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . 9 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 9 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . 9 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 10 </TABLE> <PAGE> INVESTMENT OBJECTIVE AND POLICIES The following information supplements the information set forth in the prospectus under the caption "INVESTMENT OBJECTIVE AND POLICIES" and applies to the U.S. 6-10 Value Series (the "Series") of The DFA Investment Trust Company (the "Trust"). Because the structure of the Series is based on the relative market capitalizations of eligible holdings, it is possible that the Series might include at least 5% of the outstanding voting securities of one or more issuers. In such circumstances, the Fund and the issuer would be deemed "affiliated persons" under the Investment Company Act of 1940 (the "1940 Act") and certain requirements of the 1940 Act regulating dealings between affiliates might become applicable. However, based on the present capitalizations of the groups of companies eligible for inclusion in the Series and the anticipated amount of the Series' assets intended to be invested in such securities, management does not anticipate that the Series will include as much as 5% of the voting securities of any issuer. BROKERAGE TRANSACTIONS During the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid brokerage commissions of $1,027,015, $2,754,009 and $4,591,853, respectively. The substantial increases or decreases in the amount of brokerage commissions paid by the Series from year to year resulted from increases or decreases in the amount of securities that were bought and sold by the Series. Portfolio transactions of the Series will be placed with a view to receiving the best price and execution. In addition, the Advisor will seek to acquire and dispose of securities in a manner which would cause as little fluctuation in the market prices of stocks being purchased or sold as possible in light of the size of the transactions being effected, and brokers will be selected with these goals in view. The Advisor monitors the performance of brokers which effect transactions for the Series to determine the effect that their trading has on the market prices of the securities in which it invests. The Advisor also checks the rate of commission being paid by the Series to its brokers to ascertain that they are competitive with those charged by other brokers for similar services. Transactions also may be placed with brokers who provide the Advisor with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. The Investment Management Agreement of the Series permits the Advisor knowingly to pay commissions on these transactions which are greater than another broker might charge if the Advisor, in good faith, determines that the commissions paid are reasonable in relation to the research or brokerage services provided by the broker or dealer when viewed in terms of either a particular transaction or the Advisor's overall responsibilities to the accounts under its management. During fiscal year 1997, the Series paid commissions for securities transactions to brokers which provided market price monitoring services, market studies and research services to the Series of $1,899,654 with respect to securities transactions valued at $453,009,643. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Series. The over-the-counter ("OTC") companies eligible for purchase by the Series are thinly traded securities. Therefore, the Advisor believes it needs maximum flexibility to effect OTC trades on a best execution basis. To that end, the Advisor places buy and sell orders with market makers, third market brokers, Instinet and with dealers on an agency basis when the Advisor determines that the securities may not be available from other sources at a more favorable price. Third market brokers enable the Advisor to trade with other institutional holders directly on a net basis. This allows the Advisor sometimes to trade larger blocks than would be possible by going through a single market maker. The Advisor places buy and sell orders on Instinet when the Advisor determines that the securities may not be available from other sources at a more favorable price. Instinet is an electronic information and 2 <PAGE> communication network whose subscribers include most market makers as well as many institutions. Instinet charges a commission for each trade executed on its system. On any given trade, the Series, by trading through Instinet, would pay a spread to a dealer on the other side of the trade plus a commission to Instinet. However, placing a buy (or sell) order on Instinet communicates to many (potentially all) market makers and institutions at once. This can create a more complete picture of the market and thus increase the likelihood that the Series can effect transactions at the best available prices. The Portfolio will not incur any brokerage or other costs in connection with its purchase or redemption of shares of the Series, except if the Portfolio receives securities from the Series to satisfy the Portfolio's redemption request. INVESTMENT LIMITATIONS The Portfolio has adopted certain limitations which may not be changed without the approval of the holders of a majority of the outstanding voting securities of the Portfolio. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be effected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of such Portfolio. The investment limitations of the Series are the same as those of the Portfolio. The Portfolio will not: (1) invest in commodities or real estate, including limited partnership interests therein, although it may purchase and sell securities of companies which deal in real estate and securities which are secured by interests in real estate and may purchase or sell financial futures contracts and options thereon; (2) make loans of cash, except through the acquisition of repurchase agreements and obligations customarily purchased by institutional investors; (3) as to 75% of its total assets, invest in the securities of any issuer (except obligations of the U.S. Government and its agencies and instrumentalities) if, as a result, more than 5% of the Portfolio's total assets, at market, would be invested in the securities of such issuer; (4) purchase or retain securities of an issuer, if those officers and directors of the Fund or the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; (5) borrow, except from banks as a temporary measure for extraordinary or emergency purposes and then, in no event, in excess of 33% of its net assets, or pledge not more than 33% of such assets to secure such loans; (6) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in (5) above; (7) invest more than 15% of the value of the Portfolio's total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; (8) engage in the business of underwriting securities issued by others; (9) invest for the purpose of exercising control over management of any company; (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; 3 <PAGE> (11) invest more than 5% of its total assets in securities of companies which have (with predecessors) a record of less than three years' continuous operation; (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; (13) write or acquire options or interests in oil, gas or other mineral exploration, leases or development programs; (14) purchase warrants, except that the Portfolio may acquire warrants as a result of corporate actions involving its holding of other equity securities; (15) purchase securities on margin or sell short; (16) acquire more than 10% of the voting securities of any issuer, provided that this limitation applies only to 75% of the assets of the Portfolio; or (17) issue senior securities (as such term is defined in Section 18(f) of the 1940 Act), except to the extent permitted by the 1940 Act. The investment limitations described in (3), (4), (7), (9), (10), (11), (12) and (16) above do not prohibit the Portfolio from investing all or substantially all of its assets in the shares of another registered open-end investment company, such as the Series. The investment limitations described in (1) and (15) above do not prohibit the Portfolio from making margin deposits in connection with the purchase or sale of financial futures contracts and options thereon to the extent permitted under applicable regulations. Although (2) above prohibits cash loans, the Portfolio is authorized to lend portfolio securities. Inasmuch as the Portfolio will only hold shares of the Series, the Portfolio does not intend to lend those shares. Pursuant to Rule 144A under the Securities Act of 1933 (the "1933 Act"), the Series may purchase certain unregistered (i.e. restricted) securities upon a determination that a liquid institutional market exists for the securities. If it is decided that a liquid market does exist, the securities will not be subject to the Series' limitations on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Trustees of the Trust has delegated the day-to-day function of making liquidity determinations to the Advisor. For Rule 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Trustees and the Advisor will continue to monitor the liquidity of Rule 144A securities. Although the Series has retained authority to buy and sell financial futures contracts and options thereon, it has no present intention to do so. Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from its total assets those assets which represent collateral received by the Series for its securities lending transactions. 4 <PAGE> Unless otherwise indicated, all limitations applicable to the Portfolio's and Series' investments apply only at the time that a transaction is undertaken. Any subsequent change in the percentage of the Portfolio's or Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in the Portfolio's or Series' total assets will not require the Portfolio or Series to dispose of an investment until the Advisor determines that it is practicable to sell or close out the position without undue market or tax consequences. FUTURES CONTRACTS The Series is authorized to enter into futures contracts and options on futures contracts for the purpose of remaining fully invested and to maintain liquidity to pay redemptions. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of defined securities at a specified future time and at a specified price. Futures contracts which are standardized as to maturity date and underlying financial instrument are traded on national futures exchanges. The Series will be required to make a margin deposit in cash or government securities with a broker or custodian to initiate and maintain positions in futures contracts. Minimal initial margin requirements are established by the futures exchange and brokers may establish margin requirements which are higher than the exchange requirements. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes, to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, reduction in the contract value may reduce the required margin resulting in a repayment of excess margin to the Series. Variation margin payments are made to and from the futures broker for as long as the contract remains open. The Series expects to earn income on its margin deposits. To the extent that the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, the Series will not enter into such transaction if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that in the case of an option that is in-the-money at the time of purchase the in-the-money amount may be excluded in calculating the 5%. Pursuant to published positions of the Securities and Exchange Commission (the "Commission"), the Series may be required to maintain segregated accounts consisting of liquid assets such as cash, U.S. government securities, or other high grade debt obligations (or, as permitted under applicable regulation, enter into offsetting positions) in connection with its futures contract transactions in order to cover its obligations with respect to such contracts. Positions in futures contracts may be closed out only on an exchange which provides a secondary market. However, there can be no assurance that a liquid secondary market will exist for any particular futures contract at any specific time. Therefore, it might not be possible to close a futures position and, in the event of adverse price movements, the Series would continue to be required to continue to make variation margin deposits. in such circumstances, if the Series has insufficient cash, it might have to sell portfolio securities to meet daily margin requirements at a time when it might be disadvantageous to do so. Management intends to minimize the possibility that it will be unable to close out a futures contract by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. FEDERAL TAX TREATMENT OF FUTURES CONTRACTS Except for transactions the Series has identified as hedging transactions, the Series is required for federal income tax purposes to recognize as income for each taxable year its net unrealized gains and losses on certain futures contracts as of the end of the year as well as those actually realized during the year. In most cases, any gain or loss recognized with respect to a futures contract is considered to be 60% long-term gain or loss and 40% short-term capital gain or loss, without regard to the holding period of the contract. Furthermore, sales of futures contracts which are intended to hedge against a change in the value of securities held by the Series may affect the holding period of such securities and, consequently, the nature of the gain or loss on such securities upon disposition. 5 <PAGE> In order for the Series to continue to qualify for federal income tax treatment as a regulated investment company, at least 90% of its gross income for a taxable year must be derived from qualifying income; i.e., dividends, interest, income derived from loans of securities, gains from the sale of securities and other income derived with respect to the Series' business of investing in securities. It is anticipated that any net gain realized from closing futures contracts will be considered gain from the sale of securities and, therefore, constitute qualifying income for purposes of the 90% requirement. The Series will distribute to shareholders annually any net capital gains which have been recognized for federal income tax purposes (including unrealized gains at the end of the Series' fiscal year) on futures transactions. Such distributions will be combined with distributions of capital gains realized on the Series' other investments. DIRECTORS AND OFFICERS The names, addresses and dates of birth of the directors and officers of the Fund and a brief statement of their present positions and principal occupations during the past five years is set forth below. DIRECTORS David G. Booth, Director*, (12/2/46), President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director, of the following companies: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc. (registered investment company). Trustee, President and Chairman-Chief Executive Officer of The DFA Investment Trust Company (registered investment company). Chairman and Director, Dimensional Fund Advisors Ltd. George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company and First Prairie Funds (registered investment companies). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Public Director, Chicago Mercantile Exchange. 6 <PAGE> Myron S. Scholes, (7/1/42), Director, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. Rex A. Sinquefield, (9/7/44), Director*, Chairman-Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd. *Interested Director of the Fund. OFFICERS Each of the officers listed below hold the same office (except as otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc. Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA. Truman Clark, (4/8/41), Vice President, Santa Monica, CA. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. Maureen Connors, (11/17/36), Vice President and Assistant Secretary, Santa Monica, CA. Robert Deere, (10/8/57), Vice President, Santa Monica, CA. Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Richard Eustice, (8/5/65), Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA. Kamyab Hashemi-Nejad, 1/22/61, Vice President, Controller and Assistant Treasurer, Santa Monica, CA. Stephen P. Manus, 12/26/50, Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. Karen McGinley, 3/10/66, Vice President, Santa Monica, CA. Catherine L. Newell, 5/7/64, Vice President and Assistant Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989 to 1996. David Plecha, (10/26/61), Vice President, Santa Monica, CA. George Sands, (2/8/56), Vice President, Santa Monica, CA. 7 <PAGE> Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Jeanne C. Sinquefield, Ph.D., (12/2/46), Executive Vice President, Santa Monica, CA. Scott Thornton, (3/1/63), Vice President, Santa Monica, CA. Weston Wellington, (3/1/51), Vice President, Santa Monica, CA. Director of Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994. Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife. Directors and officers as a group own less than 1% of the Portfolio's outstanding stock. Set forth below is a table listing, for each director entitled to receive compensation, the compensation received from the Fund during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year. <TABLE> <CAPTION> Total Aggregate Compensation from Compensation Fund Director from Fund and Fund Complex - -------- --------------- ----------------- <S> <C> <C> George M. Constantinides $5,000 $30,000 John P. Gould $5,000 $30,000 Roger G. Ibbotson $5,000 $30,000 Merton H. Miller $5,000 $30,000 Myron S. Scholes $5,000 $30,000 </TABLE> ADMINISTRATIVE SERVICES PFPC Inc. ("PFPC") serves as the accounting services, dividend disbursing and transfer agent for the Portfolio and the Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include day-to-day keeping and maintenance of certain records, calculation of the offering price of the shares, preparation of reports, liaison with its custodian, and transfer and dividend disbursing agency services. For its services, the Portfolio pays PFPC a monthly fee of $1,000. OTHER INFORMATION For the services it provides as investment advisor to the Series, the Advisor is paid a monthly fee calculated as a percentage of average net assets of the Series. For the fiscal years ended November 30, 1995, 1996 and 1997, the Series paid advisory fees of $976,000, $1,933,000 and, $3,534,000, respectively. The Series has more than one investor; this dollar amount represents the total dollar amount of advisory fees paid by the Series to the Advisor. The Fund was known as DFA U.S. Large Cap Inc. from February, 1992, until the Fund amended its Articles of Incorporation in April, 1993, to change to its present name. Prior to a February, 1992, amendment 8 <PAGE> to the Fund's Articles of Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. Until August 1, 1997, the Portfolio was known as U.S. Small Cap Value Portfolio II, and the Series was known as the DFA U.S. Small Cap Value Series. PNC Bank, N.A. serves as the custodian for the Portfolio and the Series. The custodian maintains a separate account or accounts for the Portfolio and Series; receives, holds and releases portfolio securities on account of the Portfolios and Series; makes receipts and disbursements of money on behalf of the Portfolios and Series; and collects and receives income and other payments and distributions on account of the Portfolio's and Series' portfolio securities. Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the Fund's financial statements on an annual basis. PRINCIPAL HOLDERS OF SECURITIES As of January 30, 1998, the following person beneficially owned 5% or more of the outstanding stock of the Portfolio, as set forth below: BellSouth Corporation 100% Bankers Trust Company as Trustee* 34 Exchange Place Jersey City, NJ 07302 * Owner of record only PURCHASE OF SHARES The following information supplements the information set forth in the prospectus under the caption "PURCHASE OF SHARES." The Fund will accept purchase and redemption orders on each day that the New York Stock Exchange ("NYSE") NYSE is open for business, regardless of whether the Federal Reserve System is closed. However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Fund will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days that the NYSE is closed, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Fund is closed. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Fund or the Portfolio. REDEMPTION OF SHARES The following information supplements the information set forth in the prospectus under the caption "REDEMPTION OF SHARES." The Fund may suspend redemption privileges or postpone the date of payment: (1) during any period when the NYSE is closed, or trading on the NYSE is restricted as determined by the Commission, (2) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities 9 <PAGE> owned by it, or fairly to determine the value of its assets, and (3) for such other periods as the Commission may permit. CALCULATION OF PERFORMANCE DATA Following are quotations of the annualized percentage total returns for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable) using the standardized method of calculation required by the Commission. ONE YEAR FIVE YEARS TEN YEARS -------- ---------- --------- 33.59% (39 mos.) n/a 23.14% For the purposes of calculating the performance of the Portfolio, the performance of the Series will be utilized for the period prior to when the Portfolio commenced operations, and, if applicable, restated to reflect the Portfolio's fees and expenses. As the following formula indicates, the Portfolio and Series each determines its average annual total return by finding the average annual compounded rates of return over the stated time period that would equate a hypothetical initial purchase order of $1,000 to its redeemable value (including capital appreciation/depreciation and dividends and distributions paid and reinvested less any fees charged to a shareholder account) at the end of the stated time period. The calculation assumes that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The calculation also assumes the account was completely redeemed at the end of each period and the deduction of all applicable charges and fees. According to the Commission's formula: P(1 + T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one-, five- and ten-year periods at the end of the one-, five- and ten-year periods (or fractional portion thereof). In addition to the standardized method of calculating performance required by the Commission, the Portfolio and Series may disseminate other performance data 10 <PAGE> and may advertise total return calculated on a monthly basis. The Portfolio may compare its investment performance to appropriate market and mutual fund indices and investments for which reliable performance data is available. Such indices are generally unmanaged and are prepared by entities and organizations which track the performance of investment companies or investment advisors. Unmanaged indices often do not reflect deductions for administrative and management costs and expenses. The performance of the Portfolio may also be compared in publications to averages, performance rankings, or other information prepared by recognized mutual fund statistical services. Any performance information, whether related to the Portfolio or to the Advisor, should be considered in light of the Portfolio's investment objectives and policies, characteristics and the quality of the portfolio and market conditions during the time period indicated and should not be considered to be representative of what may be achieved in the future. FINANCIAL STATEMENTS The audited financial statements and financial highlights of the Portfolio for the Fund's fiscal year ended November 30, 1997, as set forth in the Fund's annual report to shareholders of the Portfolio, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited financial statements of the Series for the Trust's fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. A shareholder may obtain a copy of the reports upon request and without charge, by contacting the Fund at the address or telephone number appearing on the cover of this statement of additional information. 11 <PAGE> PROSPECTUS MARCH 3, 1998 RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO This prospectus describes RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO and RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO (collectively, the "Fixed Income Portfolios") and RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO (together with the Fixed Income Portfolios, the "Portfolios"), each a series of shares issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, (310) 395-8005. Each Portfolio is an open-end, management investment company whose shares are offered, without a sales charge, to clients of Reinhardt Werba Bowen Advisory Services ("RWBAS"). The Fund issues thirteen series of shares, each of which represents a separate class of the Fund's common stock, having its own investment objective and policies. This prospectus relates to three series of shares. The investment objective of RWB/DFA U.S. High Book to Market Portfolio is to achieve long-term capital appreciation. The investment objective of RWB/DFA Two-Year Corporate Fixed Income Portfolio is to maximize total returns consistent with the preservation of capital and the investment objective of RWB/DFA Two-Year Government Portfolio is to maximize total returns available from the universe of debt obligations of the U.S. government and U.S. government agency obligations and consistent with preservation of capital. THE RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF U.S. LARGE CAP VALUE SERIES ("U.S. LARGE CAP VALUE SERIES") OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"), AN OPEN-END, MANAGEMENT INVESTMENT COMPANY. U.S. LARGE CAP VALUE SERIES HAS THE SAME INVESTMENT OBJECTIVES, POLICIES AND LIMITATIONS AS THE RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO. THE INVESTMENT EXPERIENCE OF THE PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE INVESTMENT EXPERIENCE OF U.S. LARGE CAP VALUE SERIES. INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "SPECIAL INFORMATION ABOUT THE RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO." This prospectus sets forth information about the Portfolios that prospective investors should know before investing and should be read carefully and retained for future reference. A statement of additional information about the Portfolios, dated March 3, 1998, as amended from time to time, which is incorporated herein by reference, has been filed with the Securities and Exchange Commission and is available upon request, without charge, by writing or calling the Fund at the above address or telephone number. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY <PAGE> OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. <PAGE> TABLE OF CONTENTS <TABLE> <CAPTION> PAGE <S> <C> HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 4 SPECIAL INFORMATION ABOUT THE RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 9 Portfolio Characteristics and Policies. . . . . . . . . . . . . . . . . 9 Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . 10 INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME PORTFOLIOS . . . . . . . . 10 RWB/DFA Two-Year Corporate Fixed Income Portfolio . . . . . . . . . . . 10 RWB/DFA Two-Year Government Portfolio . . . . . . . . . . . . . . . . . 11 Description of Investments. . . . . . . . . . . . . . . . . . . . . . . 11 Investments in the Banking Industry . . . . . . . . . . . . . . . . . . 12 Portfolio Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . 13 SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Foreign Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Portfolio Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Futures Contracts and Options on Futures. . . . . . . . . . . . . . . . 14 Banking Industry Concentration. . . . . . . . . . . . . . . . . . . . . 15 Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 15 MANAGEMENT OF THE PORTFOLIOS . . . . . . . . . . . . . . . . . . . . . . . . 15 Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . 16 Client Service Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 16 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . . 17 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 In Kind Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 VALUATION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 </TABLE> <PAGE> HIGHLIGHTS This prospectus relates to three separate Portfolios of the Fund. Each Portfolio, in effect, represents a separate mutual fund with its own investment objective and policies. The investment objective of each Portfolio is a fundamental policy and may not be changed without the affirmative vote of a majority of its outstanding securities. Clients of RWBAS may choose to invest in one or more of the Portfolios. Proceeds from the sale of shares of a Portfolio will be invested in accordance with that Portfolio's investment objective and policies. INVESTMENT OBJECTIVE - RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO PAGE 8 The investment objective of the Portfolio is to achieve long-term capital appreciation. The Portfolio will invest all of its assets in the U.S. Large Cap Value Series of the Trust, which in turn will invest in the common stocks of U.S. companies that are value stocks, primarily because they have a high book value in relation to their market value. The U.S. Large Cap Value Series will purchase common stocks of companies whose market capitalizations equal or exceed that of a company having the median market capitalization of companies whose shares are listed on the New York Stock Exchange (the "NYSE"). (See "RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT OBJECTIVE AND POLICIES.") INVESTMENT OBJECTIVE - RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO PAGE 11 The investment objective of the Portfolio is to maximize total returns consistent with the preservation of capital. Generally, the Portfolio will acquire high quality obligations which mature within two years from the date of settlement. In addition, the Portfolio intends to concentrate investments in the banking industry under certain circumstances. (See "FIXED INCOME PORTFOLIOS - INVESTMENT OBJECTIVES AND POLICIES" and "Investments in the Banking Industry.") INVESTMENT OBJECTIVE - RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO PAGE 11 The investment objective of the Portfolio is to maximize total returns available from the universe of debt obligations of the U.S. government and U.S. government agencies and consistent with preservation of capital. Generally, the Portfolio will acquire U.S. government obligations and U.S. government agency obligations that mature within two years from the date of settlement and repurchase agreements. (See "FIXED INCOME PORTFOLIOS - -INVESTMENT OBJECTIVES AND POLICIES.") RISK FACTORS PAGE 14 The RWB/DFA U.S. High Book to Market Portfolio (indirectly through its investments in the U.S. Large Cap Value Series) and the Fixed Income Portfolios may invest in financial futures contracts and options thereon. The RWB/DFA Two-Year Corporate Fixed Income Portfolio is authorized to invest in dollar-denominated obligations of U.S. subsidiaries and branches of foreign banks and dollar-denominated obligations of foreign issuers traded in the U.S. The RWB/DFA Two-Year Corporate Fixed Income Portfolio is authorized to concentrate investments in the banking industry in certain circumstances. Each Portfolio is authorized to invest in repurchase agreements. Those policies and the policy of the RWB/DFA U.S. High Book to Market Portfolio to invest in the shares of the U.S. Large Cap Value Series of the Trust involve certain risks. (See "RISK FACTORS.") 1 <PAGE> MANAGEMENT AND ADMINISTRATIVE SERVICES PAGE 15 Dimensional Fund Advisors Inc. (the "Advisor") provides each Portfolio with administrative services and also serves as investment advisor to the Fixed Income Portfolios and the U.S. Large Cap Value Series of the Trust. RWBAS serves as client service agent to each Portfolio. (See "MANAGEMENT OF THE PORTFOLIOS.") DIVIDEND POLICY PAGE 17 The RWB/DFA U.S. High Book to Market Portfolio and the Fixed Income Portfolios distribute dividends from their net investment income quarterly. Each of the Portfolios will make any distributions from realized net capital gains on an annual basis. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") PURCHASE, VALUATION AND REDEMPTION OF SHARES PAGE 18 The shares of the Portfolios are offered at net asset value, which is calculated as of the close of the NYSE on each day that the NYSE is open for business. The value of the RWB/DFA U.S. High Book to Market Portfolio's shares will fluctuate in relation to the investment experience of the U.S. Large Cap Value Series. The redemption price of a share of each Portfolio is equal to its net asset value. (See "PURCHASE OF SHARES" and "REDEMPTION OF SHARES.") 2 <PAGE> SHAREHOLDER TRANSACTION EXPENSES None* Except as indicted below, the expenses in the following tables are based on those incurred by the Portfolios and the U.S. Large Cap Value Series, in the case of RWB/DFA U.S. High Book to Market Portfolio, for the fiscal year ended November 30, 1997. ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO(1) Management Fee 0.10% Administration Fee 0.01% Other Expenses 0.25% Total Operating Expenses 0.36% RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO(2)(3) Management Fee 0.15% Other Expenses 0.17% Total Operating Expenses 0.32% RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO(2)(3) Management Fee 0.15% Other Expenses 0.22% Total Operating Expenses 0.37% *Most shares of the Portfolios that will be purchased through omnibus accounts maintained by securities firms may be subject to a service fee or commission on such purchases. (1)The "Management Fee" is payable by the U.S. Large Cap Value Series and the "Administration Fee" is payable by the RWB/DFA U.S. High Book to Market Portfolio. The amount set forth in "Other Expenses" represents the aggregate amount that is payable by both the Series and the Portfolio, and also includes a client services fee of 0.09% payable by the RWB/DFA U.S. High Book to Market Portfolio to RWBAS. (2)A client services fee of 0.03% was payable by the Fixed Income Portfolios to RWBAS; however, RWBAS waived its fee through December 31, 1996. Absent such waiver by RWBAS, the estimated annualized ratio of total operating expenses to average net assets for the fiscal year ended November 30, 1997 would have been 0.35% for RWB/DFA Two-Year Corporate Fixed Income Portfolio and 0.38% for RWB/DFA Two-Year Government Portfolio. (3)Prior to November 30, 1997, the RWB/DFA Two-Year Corporate Fixed Income Portfolio invested all of its assets in DFA Two-Year Corporate Fixed Income Series of the Trust and the RWB/DFA Two-Year Government Portfolio invested all of its assets in DFA Two-Year Government Series of the Trust. Beginning March 2, 1998, the client service fee of 0.03% payable to RWBAS will increase to 0.04% reflecting the elimination of the Administration Fee of 0.01% previously paid when the Portfolios invested in the Series. The above figures have been restated to reflect the estimated annualized operating expenses of the Fixed Income Portfolios as though each Portfolio had invested its assets directly in the underlying securities held by the Series during the fiscal year ended November 30, 1997. 3 <PAGE> EXAMPLE You would pay the following transaction and annual operating expenses on a $1,000 investment in each Portfolio, assuming a 5% annual return over each of the following time periods and redemption at the end of each time period: <TABLE> <CAPTION> 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- <S> <C> <C> <C> <C> RWB/DFA U.S. High Book to Market Portfolio $4 $12 $20 $46 RWB/DFA Two-Year Corporate Fixed Income Portfolio $3 $11 $19 $43 RWB/DFA Two-Year Government Portfolio $4 $12 $21 $47 </TABLE> The purpose of the above fee table and Example is to assist investors in understanding the various costs and expenses that an investor in the Portfolios will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. With respect to the RWB/DFA U.S. High Book to Market Portfolio, the table summarizes the aggregate estimated annual operating expenses of both the Portfolio and the U.S. Large Cap Value Series. (See "MANAGEMENT OF THE PORTFOLIOS" for a description of Portfolio and Series expenses.) The Board of Directors of the Fund has considered whether such expenses will be more or less than they would be if such Portfolio were to invest directly in the securities held by the U.S. Large Cap Value Series. The aggregate amount of expenses for the Portfolio and its corresponding Series may be greater than it would be if the Portfolio were to invest directly in the securities held by its corresponding Series. However, the total expense ratios for the Portfolio and its corresponding Series are expected to be less over time than such ratios would be if the Portfolio were to invest directly in the underlying securities. This is because this arrangement enables institutional investors, including the Portfolio, to pool their assets, which may be expected to result in economies by spreading certain fixed costs over a larger asset base. Each shareholder in the U.S. Large Cap Value Series, including the RWB/DFA U.S. High Book to Market Portfolio, will pay its proportionate share of the expenses of the Series. 4 <PAGE> CONDENSED FINANCIAL INFORMATION The following financial highlights are part of the audited financial statements of each Portfolio. The information for the fiscal year ended November 30, 1997 has been audited by independent accountants. The financial statements, related notes and the report of the independent accountants covering such financial information and financial highlights for the Portfolios' fiscal year ended November 30, 1997, are incorporated by reference into the Portfolios' statement of additional information from the Fund's annual report to shareholders for the year ended November 30, 1997. Further information about the Portfolios' performance is contained in the Fund's annual report to shareholders of the Portfolios for the year ended November 30, 1997. A copy of the annual report may be obtained from the Fund upon request at no charge. 5 <PAGE> RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> YEAR JUNE 7, ENDED TO NOV. 30, NOV. 30, 1997 1996 ------- -------- <S> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . $10.77 $10.00 INCOME FROM INVESTMENT OPERATIONS Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20 0.08 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . . . . . . . . . 2.45 0.72 Total from Investment Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.65 0.80 LESS DISTRIBUTIONS Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.20) (0.03) Net Realized Gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.10) -- Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.30) (0.03) Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13.12 $10.77 Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.01% 8.06%# Net Assets, End of Period (thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . $128,484 $ 40,708 Ratio of Expenses to Average Net Assets (1) . . . . . . . . . . . . . . . . . . . . . . . 0.36% 0.71%* </TABLE> 6 <PAGE> <TABLE> <CAPTION> YEAR JUNE 7, ENDED TO NOV. 30, NOV. 30, 1997 1996 ------- -------- <S> <C> <C> Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . . . . . . . . . 1.76% 2.70%* Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A Average Commission Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . . . . . . . . . . . . . . . . . 17.71% 20.12%(a) Average Commission Rate of Master Fund Series (2) . . . . . . . . . . . . . . . . . . . . $0.0494 $0.0499(a) </TABLE> _____________________ *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (2) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal years beginning after September 1, 1995. (a) Items calculated for the year ended November 30, 1996. 7 <PAGE> RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> YEAR JUNE 7, ENDED TO NOV. 30, NOV. 30, 1997 1996 -------- -------- <S> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . . . . . . . . . . $10.24 $10.00 -------- -------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.57 0.26 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . . . (0.01) 0.11 -------- -------- Total from Investment Operations . . . . . . . . . . . . . . . . . . . . 0.56 0.37 -------- -------- LESS DISTRIBUTIONS Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.56) (0.13) Net Realized Gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01) -- -------- -------- Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.57) (0.13) -------- -------- Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . . . . . . $10.23 $10.24 -------- -------- Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.79% 3.69%# Net Assets, End of Period (thousands) . . . . . . . . . . . . . . . . . . . . $153,772 $122,807 Ratio of Expenses to Average Net Assets (1) . . . . . . . . . . . . . . . . . 0.34%(a) 0.31%*(a) Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . . . 5.83%(a) 5.72%*(a) Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . . . . . . . . . . . 147.78% 81.97%* </TABLE> 8 <PAGE> *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (a) Had certain waivers and assumptions of expenses not been in effect, the ratios of expenses to average net assets for the periods ended November 30, 1997 and 1996 would have been 0.35%, and 0.34%, respectively and the ratios of net investment income to average net assets for the periods ended November 30, 1997 and 1996 would have been 5.82% and 5.69%, respectively. 9 <PAGE> RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) <TABLE> <CAPTION> YEAR JUNE 7, ENDED TO NOV. 30, NOV. 30, 1997 1996 -------- -------- <S> <C> <C> Net Asset Value, Beginning of Period . . . . . . . . . . . . . . . . . . . . $ 10.23 $ 10.00 -------- -------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.54 0.26 Net Gains (Losses) on Securities (Realized and Unrealized) . . . . . . . . 0.01 0.10 -------- -------- Total from Investment Operations. . . . . . . . . . . . . . . . . . . . . 0.55 0.36 -------- -------- LESS DISTRIBUTIONS Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.53) (0.13) Net Realized Gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.05) -- -------- -------- Total Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.58) (0.13) -------- -------- Net Asset Value, End of Period . . . . . . . . . . . . . . . . . . . . . . . $ 10.20 $ 10.23 -------- -------- Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.58% 3.60%# Net Assets, End of Period (thousands) . . . . . . . . . . . . . . . . . . . . $131,066 $104,644 -------- -------- Ratio of Expenses to Average Net Assets (1) . . . . . . . . . . . . . . . . . 0.37%(a) 0.38%*(a) Ratio of Net Investment Income to Average Net Assets. . . . . . . . . . . . . 5.53%(a) 5.81%*(a) Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A Portfolio Turnover Rate of Master Fund Series . . . . . . . . . . . . . . . . 153.67% 200.59%* </TABLE> 10 <PAGE> - --------------------------- *Annualized #Non-Annualized (1) Represents the combined ratio for the Portfolio and its respective pro-rata share of its Master Fund Series. (a) Had certain waivers and assumptions of expenses not been in effect, the ratio of expenses to average net assets for the periods ended November 30, 1997 and 1996 would have been 0.38% and 0.41% and the ratios of net investment income to average net assets for the periods ended November 30, 1997 and 1996 would have been 5.52% and 5.78%. 11 <PAGE> SPECIAL INFORMATION ABOUT THE RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO The RWB/DFA U.S. High Book to Market Portfolio, unlike many other investment companies which directly acquire and manage their own portfolio of securities, seeks to achieve its investment objective by investing all of its investable assets in the U.S. Large Cap Value Series of the Trust, an open-end, management investment company, registered under the Investment Company Act of 1940 ("1940 Act"). The U.S. Large Cap Value Series has the same investment objective as the Portfolio. The investment objective of the Portfolio may not be changed without the affirmative vote of a majority of its outstanding securities, and the investment objective of the U.S. Large Cap Value Series may not be changed without the affirmative vote of a majority of its outstanding securities. Shareholders of the Portfolio will receive written notice thirty days prior to any change in the investment objective of the Series. This prospectus describes the investment objective, policies and restrictions of RWB/DFA U.S. High Book to Market Portfolio and its corresponding Series. (See "RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT OBJECTIVE AND POLICIES.") In addition, an investor should read "MANAGEMENT OF THE PORTFOLIOS" for a description of the management and other expenses associated with the Portfolio's investment in the Trust. Other institutional investors, including other mutual funds, may invest in the U.S. Large Cap Value Series, and the expenses of such other investors and, correspondingly, their returns may differ from those of the Portfolio. Please contact the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for information about the availability of investing in the U.S. Large Cap Value Series other than through the Portfolio. The shares of the U.S. Large Cap Value Series will be offered to institutional investors for the purpose of increasing the funds available for investment, to reduce expenses as a percentage of total assets and to achieve other economies that might be available at higher asset levels. For example, the Series might be able to place larger block trades at more advantageous prices and to participate in securities transactions of larger denominations, thereby reducing the relative amount of certain transaction costs in relation to the total size of the transaction. Investment in the Series by other institutional investors offers potential benefits to the Series and, through their investment in the Series, also to the Portfolio. However, economies and expense reductions might not be achieved and additional investment opportunities, such as increased diversification, might not be available if other institutions do not invest in the Series. Also, if an institutional investor were to redeem its interest in the Series, the remaining investors in the Series could experience higher pro rata operating expenses, thereby producing lower returns, and the Series' security holdings may become less diverse, resulting in increased risk. Institutional investors that have a greater pro rata ownership interest in the Series than the RWB/DFA U.S. High Book to Market Portfolio could have effective voting control over the operation of the Series. Further, if the U.S. Large Cap Value Series changes its investment objective in a manner which is inconsistent with the investment objective of the RWB/DFA U.S. High Book to Market Portfolio and the shareholders of the Portfolio fail to approve a similar change in the investment objective of the Portfolio, the Portfolio would be forced to withdraw its investment in the Series and either seek to invest its assets in another registered investment company with the same investment objective as the Portfolio, which might not be possible, or retain an investment advisor to manage the Portfolio's assets in accordance with its own investment objective, possibly at increased cost. A withdrawal by the Portfolio of its investment in the U.S. Large Cap Value Series could result in a distribution in kind of portfolio securities (as opposed to a cash distribution) to the Portfolio. Should such a distribution occur, the Portfolio could incur brokerage fees or other transaction costs in converting such securities to cash in order to pay redemptions. In addition, a distribution in kind to the Portfolio could result in a less diversified portfolio of investments and could affect adversely the liquidity of the Portfolio. Moreover, a distribution in kind by the U.S. Large Cap Value Series to the RWB/DFA U.S. High Book to Market Portfolio may constitute a taxable exchange for federal income tax purposes resulting in gain or loss to the Portfolio. Any net capital gains so realized will be distributed to the Portfolio's shareholders as described below under "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES." 12 <PAGE> Finally, the Portfolio's investment in the shares of a registered investment company such as the Trust is relatively new and results in certain operational and other complexities. However, management believes that the benefits to be gained by shareholders outweigh the additional complexities and that the risks attendant to such investment are not inherently different from the risks of direct investment in securities of the type in which the U.S. Large Cap Value Series invests. RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT OBJECTIVE AND POLICIES PORTFOLIO CHARACTERISTICS AND POLICIES The investment objective of the RWB/DFA U.S. High Book to Market Portfolio is to achieve long-term capital appreciation. The Portfolio pursues its objective by investing all of its assets in the U.S. Large Cap Value Series, which has the same investment objective and policies as the Portfolio. The U.S. Large Cap Value Series seeks to achieve its objective by investing in common stocks of large U.S. companies which the Advisor believes to be value stocks at the time of purchase. Securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value (a "book to market ratio"). Generally, a company's shares will be considered to have a high book to market ratio if the ratio equals or exceeds the ratios of any of the 30% of companies with the highest positive book to market ratios whose shares are listed on the NYSE and, except as described below under "Portfolio Structure," will be considered eligible for investment. In measuring value, the Advisor may consider additional factors such as cash flow, economic conditions and developments in the issuer's industry. A company will be considered "large" if its market capitalization (i.e., the market price of its common stock multiplied by the number of outstanding shares) equals or exceeds that of the company having the median market capitalization of companies whose shares are listed on the NYSE. PORTFOLIO STRUCTURE The U.S. Large Cap Value Series will operate as a diversified investment company. Further, the U.S. Large Cap Value Series will not invest more than 25% of its total assets in securities of companies in a single industry. Ordinarily, at least 80% of the assets of the U.S. Large Cap Value Series will be invested in a broad and diverse group of readily marketable common stocks of large U.S. companies with high book to market ratios, as described above. The U.S. Large Cap Value Series may invest a portion of its assets, ordinarily not more than 20%, in high quality, highly liquid fixed income securities, such as money market instruments, and short-term repurchase agreements. The U.S. Large Cap Value Series may invest in futures contracts and options on futures contracts. To the extent that the U.S. Large Cap Value Series invests in futures contracts for other than bona fide hedging purposes, it will not purchase futures contracts if more than 5% of its total assets are then invested in initial margin deposits on such contracts or options. The U.S. Large Cap Value Series will purchase securities that are listed on the principal U.S. national securities exchanges and traded over-the-counter. The U.S. Large Cap Value Series will be structured on a market capitalization basis, generally by basing the amount of each security purchased on the issuer's relative market capitalization, with a view to creating in the U.S. Large Cap Value Series a reasonable reflection of the relative market capitalizations of its portfolio companies. However, the Advisor may exclude the securities of a company that otherwise meets the applicable criteria described above if the Advisor determines, in its best judgment, that other conditions exist that make the inclusion of such security inappropriate. Deviation from strict market capitalization weighting will also occur because the U.S. Large Cap Value Series intends to purchase round lots only. In order to retain sufficient liquidity, the relative amount of any security held by the U.S. Large Cap Value Series may be reduced, from time to time, from the level which adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the U.S. Large Cap Value Series' assets may be invested in interest-bearing obligations, as described above, thereby causing further deviation from market capitalization weighting. Such investments would be made on a temporary basis 13 <PAGE> pending investment in equity securities pursuant to the U.S. Large Cap Value Series' investment objective. The U.S. Large Cap Value Series may make block purchases of eligible securities at opportune prices even though such purchases exceed the number of shares which, at the time of purchase, strict adherence to the policy of market capitalization weighting would otherwise require. While such transactions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the U.S. Large Cap Value Series. Changes in the composition and relative ranking (in terms of market capitalization and book to market ratio) of the stocks which are eligible for purchase by the U.S. Large Cap Value Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On not less than a semi-annual basis, the Advisor will prepare a current list of large U.S. companies with high book to market ratios whose stock is eligible for investment. Only common stocks whose market capitalizations are not less than the minimum on such list will be purchased by the U.S. Large Cap Value Series. Additional investments will not be made in securities of issuers which have depreciated in value to such an extent that they are not then considered by the Advisor to be large companies. This may result in further deviation from market capitalization weighting and such deviation could be substantial if a significant amount of the U.S. Large Cap Value Series' holdings decrease in value sufficiently to be excluded from the then current market capitalization requirement for eligible securities, but not by a sufficient amount to warrant their sale. It is management's belief that the value stocks of large U.S. companies offer, over a long term, a prudent opportunity for capital appreciation but, at the same time, selecting a limited number of such issues for inclusion in the U.S. Large Cap Value Series involves greater risk than including a large number of them. The Advisor does not anticipate that a significant number of securities which meet the market capitalization criteria will be selectively excluded from the U.S. Large Cap Value Series. The U.S. Large Cap Value Series does not seek current income as an investment objective and investments will not be based upon an issuer's dividend payment policy or record. However, many of the companies whose securities will be included in the U.S. Large Cap Value Series do pay dividends. It is anticipated, therefore, that the U.S. Large Cap Value Series will receive dividend income. PORTFOLIO TRANSACTIONS The U.S. Large Cap Value Series does not intend to purchase or sell securities based on the prospects for the economy, the securities markets or the individual issuers whose shares are eligible for purchase. As described under "Portfolio Structure," investments will be made in virtually all eligible securities on a market capitalization weighted basis. Generally, securities will be purchased with the expectation that they will be held for longer than one year. The U.S. Large Cap Value Series may sell portfolio securities when the issuer's market capitalization falls substantially below that of the issuer with the minimum market capitalization which is then eligible for purchase by the U.S. Large Cap Value Series. In addition, the U.S. Large Cap Value Series may sell portfolio securities when their book to market ratio falls substantially below that of the security with the lowest such ratio that is then eligible for purchase by the Series. However, securities may be sold at any time when, in the Advisor's judgment, circumstances warrant their sale. The annual portfolio turnover rates of the Series for the fiscal years ended November 30, 1996 and 1997, respectively, were 20.12% and 17.71%. 14 <PAGE> INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME PORTFOLIOS RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO The investment objective of RWB/DFA Two-Year Corporate Fixed Income Portfolio is to maximize total returns consistent with the preservation of capital. This objective will be pursued by investing in U.S. government obligations, U.S. government agency obligations, dollar-denominated obligations of foreign issuers issued in the U.S., bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate obligations, commercial paper, repurchase agreements and obligations of supranational organizations. It is the RWB/DFA Two-Year Corporate Fixed Income Portfolio's policy to acquire obligations which mature within two years from the date of settlement. The RWB/DFA Two-Year Corporate Fixed Income Portfolio principally invests in certificates of deposit, commercial paper, bankers' acceptances, notes and bonds. The Portfolio will invest more than 25% of its total assets in obligations of U.S. and/or foreign banks and bank holding companies when the yield to maturity on these instruments exceeds the yield to maturity on all other eligible portfolio investments of similar quality for a period of five consecutive days when the NYSE is open for trading. (See "Investments in the Banking Industry.") The RWB/DFA Two-Year Corporate Fixed Income Portfolio may invest in futures contracts and options on futures contracts. To the extent that the Portfolio invests in futures contracts and options thereon for other than bona fide hedging purposes, it will not purchase futures contracts or options if more than 5% of its total assets are then invested in initial margin deposits on such contracts or premiums paid for options. RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO The investment objective of the RWB/DFA Two-Year Government Portfolio is to maximize total returns available from the universe of debt obligations of the U.S. government and U.S. government agencies and consistent with the preservation of capital. Generally, this objective will be pursued by acquiring U.S. government obligations and U.S. government agency obligations that mature within two years from the date of settlement. The RWB/DFA Two-Year Government Portfolio will also acquire repurchase agreements. The Portfolio may invest in futures contracts and options on futures contracts. To the extent that the Portfolio invests in futures contracts and options thereon for other than bona fide hedging purposes, it will not purchase futures contracts or options if more than 5% of its total assets are then invested in initial margin deposits on such contracts or premiums paid for options. DESCRIPTION OF INVESTMENTS The following is a description of the categories of investments which may be acquired by the Fixed Income Portfolios: <TABLE> <CAPTION> PERMISSIBLE CATEGORIES ----------- <S> <C> RWB/DFA Two-Year Corporate Fixed Income Portfolio 1-7 RWB/DFA Two-Year Government Portfolio 1, 2, 6 </TABLE> 1. U.S. GOVERNMENT OBLIGATIONS - Debt securities issued by the U.S. Treasury which are direct obligations of the U.S. government, including bills, notes and bonds. 2. U.S. GOVERNMENT AGENCY OBLIGATIONS - Issued or guaranteed by U.S. government-sponsored instrumentalities and federal agencies, including the Federal National Mortgage Association, Federal Home Loan Bank and the Federal Housing Administration. 15 <PAGE> 3. CORPORATE DEBT OBLIGATIONS - Non-convertible corporate debt securities (e.g., bonds and debentures) which are issued by companies whose commercial paper is rated Prime-1 by Moody's Investors Services, Inc. ("Moody's") or A-1 by Standard & Poor's Rating Group, a Division of The McGraw-Hill Companies ("S&P") and dollar-denominated obligations of foreign issuers issued in the U.S. If the issuer's commercial paper is unrated, then the debt security would have to be rated at least AA by S&P or Aa2 by Moody's. If there is neither a commercial paper rating nor a rating of the debt security, then the Advisor must determine that the debt security is of comparable quality to equivalent issues of the same issuer rated at least AA or Aa2. 4. BANK OBLIGATIONS - Obligations of U.S. banks and savings and loan associations and dollar-denominated obligations of U.S. subsidiaries and branches of foreign banks, such as certificates of deposit (including marketable variable rate certificates of deposit) and bankers' acceptances. Bank certificates of deposit will be acquired only if the bank has assets in excess of $1,000,000,000. 5. COMMERCIAL PAPER - Rated, at the time of purchase, A-1 or better by S&P or Prime-1 by Moody's, or, if not rated, issued by a corporation having an outstanding unsecured debt issue rated Aaa by Moody's or AAA by S&P, and having a maximum maturity of nine months. 6. REPURCHASE AGREEMENTS - Instruments through which the Series purchases securities ("underlying securities") from a bank, or a registered U.S. government securities dealer, with an agreement by the seller to repurchase the security at an agreed price, plus interest at a specified rate. The underlying securities will be limited to U.S. government and agency obligations described in (1) and (2) above. The Series will not enter into a repurchase agreement with a duration of more than seven days if, as a result, more than 10% of the value of the Series' total assets would be so invested. The Series will also only invest in repurchase agreements with a bank if the bank has at least $1,000,000,000 in assets and is approved by the Investment Committee of the Advisor. The Advisor will monitor the market value of the securities plus any accrued interest thereon so that they will at least equal the repurchase price. 7. SUPRANATIONAL ORGANIZATION OBLIGATIONS - Debt securities of supranational organizations such as the European Coal and Steel Community, the European Economic Community and the World Bank, which are chartered to promote economic development. The categories of investments that may be acquired by the RWB/DFA Two-Year Corporate Fixed Income and RWB/DFA Two-Year Government Portfolios may include both fixed and floating rate securities. Floating rate securities bear interest at rates that vary with prevailing market rates. Interest rate adjustments are made periodically (e.g., every six months), usually based on a money market index such as the London Interbank Offered Rate (LIBOR) or the Treasury bill rate. INVESTMENTS IN THE BANKING INDUSTRY The RWB/DFA Two-Year Corporate Fixed Income Portfolio will invest more than 25% of its total assets in obligations of U.S. and/or foreign banks and bank holding companies when the yield to maturity on these investments exceeds the yield to maturity on all other eligible portfolio investments for a period of five consecutive days when the NYSE is open for trading. For the purpose of this policy, which is a fundamental policy of the RWB/DFA Two-Year Corporate Fixed Income Portfolio, which can only be changed by a vote of the shareholders of the Portfolio, banks and bank holding companies are considered to constitute a single industry, the banking industry. When investment in such obligations exceeds 25% of the total net assets of the RWB/DFA Two-Year Corporate Fixed Income Portfolio, the Portfolio will be considered to be concentrating its investments in the banking industry. As of the date of this prospectus, the RWB/DFA Two-Year Corporate Fixed Income Portfolio is concentrating its investments in the banking industry. The types of bank and bank holding company obligations in which the RWB/DFA Two-Year Corporate Fixed Income Portfolio may invest include: dollar-denominated certificates of deposit, bankers' acceptances, commercial paper and other debt obligations issued in the United States and which mature within two years of the 16 <PAGE> date of settlement, provided such obligations meet the Portfolio's established credit rating criteria as stated under "Description of Investments." In addition, the RWB/DFA Two-Year Corporate Fixed Income Portfolio is authorized to invest more than 25% of its total assets in Treasury bonds, bills and notes and obligations of federal agencies and instrumentalities. PORTFOLIO STRATEGY The RWB/DFA Two-Year Corporate Fixed Income Portfolio will be managed with a view to capturing credit risk premiums and term or maturity premiums. As used herein, the term "credit risk premium" means the anticipated incremental return on investment for holding obligations considered to have greater credit risk than direct obligations of the U.S. Treasury and "maturity risk premium" means the anticipated incremental return on investment for holding securities having maturities of longer than one month compared to securities having a maturity of one month. The Advisor believes that credit risk premiums are available largely through investment in high grade commercial paper, certificates of deposit and corporate obligations. The holding period for assets of the RWB/DFA Two-Year Corporate Fixed Income Portfolio will be chosen with a view to maximizing anticipated monthly returns, net of trading costs. The Fixed Income Portfolios are expected to have high portfolio turnover rates due to the relatively short maturities of the securities to be acquired. The rate of portfolio turnover will depend upon market and other conditions; it will not be a limiting factor when management believes that portfolio changes are appropriate. It is anticipated that the annual turnover rate of the RWB/DFA Two-Year Corporate Fixed Income Portfolio could be 0% to 200%, and the RWB/DFA Two-Year Government Portfolio could be 100% to 500%. Prior to November 30, 1997, the RWB/DFA Two-Year Corporate Fixed Income Portfolio invested all of its assets in DFA Two-Year Corporate Fixed Income Series of the Trust, and the RWB/DFA Two-Year Government Portfolio invested all of its assets in DFA Two-Year Government Series of the Trust. The annual portfolio turnover rates of the DFA Two-Year Corporate Fixed Income Series and the DFA Two-Year Government Series of the Trust for the fiscal year ended November 30, 1997 were 147.78% and 153.67%, respectively. While the Fixed Income Portfolios acquire securities in principal transactions and, therefore, do not pay brokerage commissions, the spread between the bid and asked prices of a security may be considered to be a "cost" of trading. Such costs ordinarily increase with trading activity. However, as stated above, securities ordinarily will be sold when, in the Advisor's judgment, the monthly return of the RWB/DFA Two-Year Corporate Fixed Income Portfolio or the RWB/DFA Two-Year Government Portfolio will be increased as a result of portfolio transactions after taking in to account the cost of trading. It is anticipated that securities will be acquired in the secondary markets for short term instruments. SECURITIES LOANS The Portfolios and the U.S. Large Cap Value Series of the Trust are authorized to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While the Portfolios or the Series may earn additional income from lending securities, such activity is incidental to the Portfolios' or the Series' investment objective. The value of securities loaned may not exceed 33 1/3% of the value of the Portfolios' or the Series' total assets. In connection with such loans, the Portfolios or the Series will receive collateral consisting of cash or U.S. government securities, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. In addition, the Portfolios or the Series will be able to terminate the loan at any time, will receive reasonable interest on the loan, as well as amounts equal to any dividends, interest or other distributions on the loaned securities. In the event of the bankruptcy of the borrower, the Portfolios or the Series could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. Although the RWB/DFA U.S. High Book to Market Portfolio is authorized to lend its portfolio securities, as long as it holds only shares of the U.S. Large Cap Value Series, it will not do so. 17 <PAGE> RISK FACTORS FOREIGN SECURITIES The RWB/DFA Two-Year Corporate Fixed Income Portfolio invests in foreign issuers. Such investments involve risks that are not associated with investments in U.S. public companies. Such risks may include legal, political and or diplomatic actions of foreign governments, such as imposition of withholding taxes on interest and dividend income payable on the securities held, possible seizure or nationalization of foreign deposits, establishment of exchange controls or the adoption of other foreign governmental restrictions which might adversely affect the value of the assets held by the RWB/DFA Two-Year Corporate Fixed Income Portfolio. Further, foreign issuers are not generally subject to uniform accounting, auditing and financial reporting standards comparable to those of U.S. public companies and there may be less publicly available information about such companies than comparable U.S. companies. The RWB/DFA Two-Year Corporate Fixed Income Portfolio may also invest in obligations of supranational organizations. The value of the obligations of these organizations may be adversely affected if one or more of their supporting governments discontinue their support. The economies of many countries in which the RWB/DFA Two-Year Corporate Fixed Income Portfolio invests are not as diverse or resilient as the U.S. economy, and have significantly less financial resources. Some countries are more heavily dependent on international trade and may be affected to a greater extent by protectionist measures of their governments, or dependent upon a relatively limited number of commodities and, thus, sensitive to changes in world prices for these commodities. In many foreign countries, stock markets are more variable than U.S. markets for two reasons. Contemporaneous declines in both (i) foreign securities prices in local currencies and (ii) the value of local currencies in relation to the U.S. dollar can have a significant negative impact on the net asset value of RWB/DFA Two-Year Corporate Fixed Income Portfolio. The net asset value of the Portfolio is denominated in U.S. dollars, and, therefore, declines in market price of both the foreign securities held by the RWB/DFA Two-Year Corporate Fixed Income Portfolio and the foreign currency in which those securities are denominated will be reflected in the net asset value of the Portfolio's shares. BORROWING Each Portfolio and the U.S. Large Cap Value Series of the Trust has reserved the right to borrow amounts not exceeding 33% of its net assets for the purpose of making redemption payments. When advantageous opportunities to do so exist, each Portfolio and the U.S. Large Cap Value Series may also purchase securities when borrowings exceed 5% of the value of its net assets. Such purchases can be considered to be "leveraging" and, in such circumstances, the net asset value of the Series or Portfolio may increase or decrease at a greater rate than would be the case if the Series or Portfolio had not leveraged. The interest payable on the amount borrowed would increase the Series' or Portfolios' expenses and, if the appreciation and income produced by the investments purchased when the Series or Portfolios has borrowed are less than the cost of borrowing, the investment performance of the Series or Portfolio will be reduced as a result of leveraging. PORTFOLIO STRATEGY The method employed by the Advisor to manage the U.S. Large Cap Value Series differs from the process employed by many other investment advisors in that the Advisor will rely on fundamental analysis of the investment merits of securities to a limited extent to eliminate potential acquisitions rather than rely on this technique to select securities. Further, because securities generally will be held long-term and will not be eliminated based on short-term price fluctuations, the Advisor generally will not act upon general market movements or short-term price fluctuations of securities to as great an extent as many other investment advisors. 18 <PAGE> FUTURES CONTRACTS AND OPTIONS ON FUTURES Each Portfolio and the U.S. Large Cap Value Series also may invest in futures contracts and options on futures. To the extent that a Portfolio or the U.S. Large Cap Value Series invests in futures contracts and options thereon for other than bona fide hedging purposes, neither the Portfolios nor the Series will enter into such transactions if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Portfolios' or the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that, in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. These investments entail the risk that an imperfect correlation may exist between changes in the market value of the stocks owned by the Portfolios or the Series and the prices of such futures contracts and options and, at times, the market for such contracts and options might lack liquidity, thereby inhibiting the Portfolios' or the Series' ability to close a position in such investments. Gains or losses on investments in options and futures depends on the direction of securities prices, interest rates and other economic factors and the loss from investing in futures transactions is potentially unlimited. The Portfolios' or the Series' investments in futures and options are subject to special tax rules that may affect the amount, timing and character of the income earned by the Portfolios or the Series. These rules may, in turn, affect the distributions received by the Portfolios' shareholders. (These special tax rules are discussed in the statement of additional information.) BANKING INDUSTRY CONCENTRATION Concentrating in obligations of the banking industry may involve additional risk by foregoing the safety of investing in a variety of industries. Changes in the market's perception of the riskiness of banks relative to non-banks could cause more fluctuations in the net asset value of the RWB/DFA Two-Year Corporate Fixed Income Portfolio than might occur in a less concentrated portfolio. REPURCHASE AGREEMENTS Each Portfolio and the U.S. Large Cap Value Series may invest in repurchase agreements. In the event of bankruptcy of the other party to a repurchase agreement, the Fund or the Trust could experience delay in recovering the securities underlying such agreement. Management believes that this risk can be controlled through stringent security selection criteria and careful monitoring procedures. MANAGEMENT OF THE PORTFOLIOS The Advisor serves as investment advisor to the Fixed Income Portfolios and U.S. Large Cap Value Series and, as such, is responsible for the management of their respective assets. Investment decisions for the Fixed Income Portfolios and the U.S. Large Cap Value Series are made by the Investment Committee of the Advisor, which meets on a regular basis and also as needed to consider investment issues. The Investment Committee is composed of certain officers and directors of the Advisor who are elected annually. The Advisor provides the Fixed Income Portfolios and the U.S. Large Cap Value Series with a trading department and selects brokers and dealers to effect securities transactions. Securities transactions are placed with a view to obtaining the best price and execution of such transactions. The Advisor is authorized to pay a higher commission to a broker, dealer or exchange member than another such organization might charge if it determines, in good faith, that the commission paid is reasonable in relation to the research or brokerage services provided by such organization. For the fiscal year ended November 30, 1997, the U.S. Large Cap Value Series, the Two-Year Corporate Fixed Income Series and the Two-Year Government Series each paid an investment management fee to the Advisor equal to .10%, .15%, and .15%, respectively, of its average net assets on an annual basis. For the fiscal year ended November 30, 1997, the total expenses of the RWB/DFA U.S. High Book to Market Portfolio, the RWB/DFA Two-Year Corporate Fixed 19 <PAGE> Income Portfolio and the RWB/DFA Two-Year Government Portfolio were 0.36%, 0.34% and 0.37%, respectively. Each Portfolio and the U.S. Large Cap Value Series bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage commissions and transfer taxes in connection with the acquisition and disposition of portfolio securities, taxes, insurance premiums, costs incidental to meetings of its shareholders and directors or trustees, the cost of filing its registration statements under federal securities laws and the cost of any filings required under state securities laws, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to a particular Portfolio or Series are so allocated and expenses which are not allocable to a particular Portfolio or Series are borne by the Portfolio and Series on the basis of their relative net assets. The Advisor was organized in May, 1981, and is engaged in the business of providing investment management services to institutional investors. Assets under management total approximately $26 billion. David G. Booth and Rex A. Sinquefield (directors and officers of both the Fund and the Advisor, trustees and officers of the Trust and shareholders of the Advisor) may be deemed controlling persons of the Advisor. The Board of Directors is responsible for establishing Portfolio policies and for overseeing the management of the Portfolios. Each of the Directors and officers of the Fund is also a Trustee and officer of the Trust. The Directors of the Fund, including all of the disinterested Directors, have adopted written procedures to monitor potential conflicts of interest that might develop between the RWB/DFA U.S. High Book to Market Portfolio and the U.S. Large Cap Value Series. The statement of additional information relating to the Portfolios furnishes information about the Directors and officers of the Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional information.) ADMINISTRATIVE SERVICES The Fund has entered into an administration agreement with the Advisor on behalf of RWB/DFA U.S. High Book to Market Portfolio. Pursuant to the administration agreement, the Advisor will perform various services, including: supervision of the services provided by the Portfolio's custodian and dividend disbursing agent and others who provide services to the Fund for the benefit of the Portfolio; assisting the Fund to comply with the provisions of federal, state, local and foreign securities, tax and other laws applicable to the Portfolio; providing shareholders of record with information about the Portfolio and their investments as they or the Fund may request; assisting the Fund to conduct meetings of shareholders of record; furnishing information as the Board of Directors may require regarding the U.S. Large Cap Value Series; and any other administrative services for the benefit of the Portfolio as the Board of Directors may reasonably request. The Advisor also provides the Fund with office space and personnel. For these administrative services, the RWB/DFA U.S. High Book to Market Portfolio pays the Advisor a monthly fee which, on an annual basis, equals .01% of the average daily net assets of the Portfolio. PFPC Inc. ("PFPC") serves as the administrative and accounting services, dividend disbursing and transfer agent for the Portfolios and the U.S. Large Cap Value Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include administrative services such as day-to-day keeping and maintenance of certain records, calculation of the offering price of the shares, preparation of reports, liaison with its custodians, and transfer and dividend disbursing agency services. CLIENT SERVICE AGENT Pursuant to a Client Service Agent Agreement with each Portfolio, RWBAS performs various services for the Portfolios, including establishment of a toll-free telephone number for shareholders of each Portfolio to use to obtain or receive up-to-date account information; providing to shareholders quarterly and other reports with respect to the performance of each Portfolio; and providing shareholders with such information regarding the operations 20 <PAGE> and affairs of each Portfolio, and their investment in its shares, as the shareholders or the Board of Directors may reasonably request. For its services, each Portfolio pays RWBAS a monthly fee which, on an annual basis, equals .09% of the average daily net assets of the RWB/DFA U.S. High Book to Market Portfolio and .03% of the Fixed Income Portfolios. RWBAS agreed to waive its client services fee for the Fixed Income Portfolios through December 31, 1996. Beginning March 2, 1998, the monthly fee payable to RWBAS will increase to an amount which on an annual basis equals .04% of the Fixed Income Portfolios. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES Each Portfolio of the Fund intends to qualify each year as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for federal income taxes to the extent that its net investment income and net realized capital gains are distributed. The Portfolios distribute dividends from their net investment income quarterly. The Portfolios will distribute any realized net capital gains annually after the end of the Fund's fiscal year. Each Portfolio of the Fund is treated as a separate corporation for federal tax purposes. As noted above, the RWB/DFA U.S. High Book to Market Portfolio seeks to achieve its investment objective by investing all of its investable assets in the U.S. Large Cap Value Series of the Trust. The U.S. Large Cap Value Series intends to qualify each year as a regulated investment company under the Code. Special tax rules may apply in determining the income and gains that the Series earns on its investments. These rules may, in turn, affect the amount of distributions that the RWB/DFA U.S. High Book to Market Portfolio pays to its shareholders. The RWB/DFA U.S. High Book to Market Portfolio receives income in the form of income dividends paid by the U.S. Large Cap Value Series. This income, less the expenses incurred in operations, is the Portfolio's net investment income from which income dividends are distributed as described above. The Portfolio also may receive capital gains distributions from the U.S. Large Cap Value Series and may realize capital gains upon the redemption of the shares of the U.S. Large Cap Value Series. Any net realized capital gains of the RWB/DFA U.S. High Book to Market Portfolio will be distributed as described below. Whether paid in cash or additional shares and regardless of the length of time a Portfolio's shares have been owned by shareholders who are subject to federal income taxes, distributions from long-term capital gains are taxable as such. Dividends from net investment income or net short-term capital gains will be taxable as ordinary income, whether received in cash or in additional shares. For those investors subject to tax, if purchases of shares of a Portfolio are made shortly before the record date for a dividend or capital gains distribution, a portion of the investment will be returned as a taxable distribution. Shareholders are notified annually by the Fund as to the federal tax status of dividends and distributions paid by the Portfolio whose shares they own. Shareholders of each Portfolio will automatically receive all income dividends and any capital gains distributions in additional shares of the Portfolio whose shares they hold at net asset value (as of the business date following the dividend record date), unless upon written notice to the transfer agent the shareholder selects one of the following options: Income Option - to receive income dividends in cash and capital gains distributions in additional shares at net asset value. Capital Gains Option - to receive capital gains distributions in cash and income dividends in additional shares at net asset value. Cash Option - to receive both income dividends and capital gains distributions in cash. Dividends which are declared in October, November or December to shareholders of record in such a month but which, for operational reasons, may not be paid to the shareholder until the following January, will be 21 <PAGE> treated for tax purposes as if paid by the Portfolio and received by the shareholder on December 31 of the calendar year in which they are declared. The sale of shares of a Portfolio is a taxable event and may result in a capital gain or loss to shareholders subject to tax. Capital gain or loss may be realized from an ordinary redemption of shares or an exchange of shares between two Portfolios of the Fund. Any loss incurred on sale or exchange of a Portfolio's shares, held for six months or less, will be treated as a long-term capital loss to the extent of capital gain dividends received with respect to such shares. Since virtually all of the net investment income from the Fixed Income Portfolios is expected to arise from earned interest, it is not expected that either of the Portfolios' distributions will be eligible for the dividends received deduction for corporations. The portion of dividends paid by the RWB/DFA U.S. High Book to Market Portfolio from net investment income that is eligible for the corporate dividends received deduction depends on the Portfolio's pro rata share of the aggregate qualifying dividend income received by the U.S. Large Cap Value Series from domestic (U.S.) sources. The Series may be subject to foreign withholding taxes on income from certain of its foreign securities. These taxes will, in turn, reduce the amount of distributions the RWB/DFA U.S. High Book to Market Portfolio pays to its shareholders. If the Series purchases shares in certain foreign entities, called "passive foreign investment companies," the Series may be subject to U.S. federal income tax and a related interest charge on a portion of any "excess distribution" or gain from the disposition of such shares even if such income is distributed as a taxable dividend by the Series to the RWB/DFA U.S. High Book to Market Portfolio. In addition to federal taxes, shareholders may be subject to state and local taxes on distributions from a Portfolio and on gains arising on redemption or exchange of Portfolio shares. Except in the case of the RWB/DFA U.S. High Book to Market Portfolio, distributions of interest income and capital gains realized from certain types of U.S. government securities may be exempt from state personal income taxes. A Portfolio is required to withhold 31% of taxable dividends, capital gains distributions, and redemptions paid to shareholders who have not complied with IRS taxpayer identification regulations. You may avoid this withholding requirement by certifying on the account registration form your proper Taxpayer Identification Number and by certifying that you are not subject to backup withholding. The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisers concerning the federal, state, local or foreign tax consequences of an investment in a Portfolio. PURCHASE OF SHARES Only clients of RWBAS are eligible to purchase shares of the Portfolios. Investors should first contact RWBAS at (800) 366-7266, ext. 124, to notify RWBAS of the proposed investment. Most shares of the Portfolios that will be purchased or sold through omnibus accounts maintained by securities firms may be subject to a service fee or commission for such transactions. Clients of RWBAS may also be subject to investment advisory fees under their own arrangements with RWBAS. Purchases of shares will be made in full and fractional shares calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued. 22 <PAGE> IN KIND PURCHASES If accepted by the Fund, shares of a Portfolio may be purchased in exchange for securities which are eligible for acquisition by such Portfolio or, with respect to the RWB/DFA U.S. High Book to Market Portfolio, by the U.S. Large Cap Value Series or otherwise represented in the Portfolio's or the Series' portfolio as described in this prospectus. Securities to be exchanged which are accepted by the Fund and Fund shares to be issued therefore will be valued as set forth under "VALUATION OF SHARES" at the time of the next determination of net asset value after such acceptance. All dividends, interests, subscription, or other rights pertaining to such securities shall become the property of the Portfolio whose shares are being acquired and must be delivered to the Fund by the investor upon receipt from the issuer. The Fund will not accept securities in exchange for shares of a Portfolio unless: (1) such securities are, at the time of the exchange, eligible to be included, or otherwise represented, in the Portfolio or the U.S. Large Cap Value Series, as applicable, and current market quotations are readily available for such securities; (2) the investor represents and agrees that all securities offered to be exchanged are not subject to any restrictions upon their sale by the Portfolio under the Securities Act of 1933 or under the laws of the country in which the principal market for such securities exists or otherwise; and (3) at the discretion of the Fund, the value of any such security (except U.S. government securities) being exchanged together with other securities of the same issuer owned by the Portfolio or the U.S. Large Cap Value Series, as applicable, may not exceed 5% of the net assets of the Portfolio or the Series immediately after the transaction. The Fund will accept such securities for investment and not for resale. A gain or loss for federal income tax purposes will generally be realized by investors who are subject to federal taxation upon the exchange depending upon the cost of the securities. Investors interested in such exchanges should contact the Advisor. VALUATION OF SHARES The net asset value per share of each Portfolio and the U.S. Large Cap Value Series is calculated as of the close of the NYSE by dividing the total market value of its investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Series or Portfolio. The value of the RWB/DFA U.S. High Book to Market Portfolio's shares will fluctuate in relation to the investment experience of the U.S. Large Cap Value Series. Securities held by a Portfolio or the U.S. Large Cap Value Series which are listed on a securities exchange and for which market quotations are available are valued at the last quoted sale price of the day or, if there is no such reported sale, the U.S. Large Cap Value Series values such securities at the mean between the most recent quoted bid and asked prices. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted securities for which market quotations are readily available are valued at the mean between the most recent quoted bid and asked prices. The value of other assets and securities for which no quotations are readily available (including restricted securities) are determined in good faith at fair value in accordance with procedures adopted by the Board of Directors of the Fund or the Board of Trustees of the Trust, as applicable. The value of the shares of the Fixed Income Portfolios will tend to fluctuate with interest rates because, unlike money market funds, these Portfolios do not seek to stabilize the value of their respective shares by use of the "amortized cost" method of asset valuation. Net asset value includes interest on fixed income securities which is accrued daily. Securities which are traded over-the-counter and on a stock exchange will be valued according to the broadest and most representative market, and it is expected that for bonds and other fixed-income securities this ordinarily will be the over-the-counter market. Securities held by the Fixed Income Portfolios may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the current market value of such securities. Other assets and securities for which quotations are not readily available will be valued in good faith at fair value using methods determined by the Board of Directors. 23 <PAGE> Provided that RWBAS has received the investor's investment instructions in good order and the Custodian has received the investor's payment, shares of the Portfolio selected will be priced at the net asset value calculated next after receipt of the order by PFPC. If an order to purchase shares must be canceled due to non-payment, the purchaser will be responsible for any loss incurred by the Fund arising out of such cancellation. The Fund reserves the right to redeem shares owned by any purchaser whose order is canceled to recover any resulting loss to the Fund and may prohibit or restrict the manner in which such purchaser may place further orders. Management believes that any dilutive effect of the cost of investing the proceeds of the sale of the shares of the Portfolios is minimal and, therefore, the shares of the Portfolios are currently sold at net asset value, without imposition of a fee that would be used to reimburse a Portfolio for such cost ("reimbursement fee"). Reimbursement fees may be charged prospectively from time to time based upon the future experience of the Fixed Income Portfolios and, with respect to the RWB/DFA U.S. High Book to Market Portfolio, the U.S. Large Cap Value Series. Any such charges will be described in the prospectus. DISTRIBUTION The Fund acts as distributor of the Portfolios' shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of DFA, pursuant to which DFA Securities Inc. is responsible for supervising the sale of the Portfolios' shares. No compensation is paid by the Fund to DFA Securities Inc. under this agreement. EXCHANGE OF SHARES An investor may exchange shares of one Portfolio for those of another Portfolio described in this prospectus or a portfolio of DFA Investment Dimensions Group Inc., an open-end, management investment company ("DFAIDG"), by first contacting RWBAS and completing the documentation required by RWBAS and the Advisor. The minimum amount for an exchange into a portfolio of DFAIDG is $100,000. Exchanges are accepted only into those portfolios of DFAIDG that are eligible for the exchange privilege of DFAIDG. Investors should contact RWBAS for a list of those portfolios of DFAIDG that accept exchanges. The exchange privilege is not intended to afford shareholders a way to speculate on short-term movements in the markets. Accordingly, in order to prevent excessive use of the exchange privilege that may potentially disrupt the management of the Portfolios or otherwise adversely affect the Fund or DFAIDG , any proposed exchange will be subject to the approval of the Advisor. Such approval will depend on: (i) the size of the proposed exchange; (ii) the prior number of exchanges by that shareholder; (iii) the nature of the underlying securities and the cash position of the Portfolio and of the portfolio of DFAIDG involved in the proposed exchange; (iv) the transaction costs involved in processing the exchange; and (v) the total number of redemptions by exchange already made out of the Portfolio. The redemption and purchase prices of shares redeemed and purchased by exchange, respectively, are the net asset values next determined after the Advisor has received an Exchange Form in good order, plus any applicable reimbursement fee on purchases by exchange. "Good order" means a completed Exchange Form specifying the dollar amount to be exchanged, signed by all registered owners of the shares; and if the Fund does not have on file the authorized signatures for the account, a guarantee of the signature of each registered owner by an "eligible guarantor institution." Such institutions generally include national or state banks, savings associations, savings and loan associations, trust companies, savings banks, credit unions and members of a recognized stock exchange. Exchanges will be accepted only if the registrations of the two accounts are identical, stock certificates 24 <PAGE> have not been issued and the Fund may issue the shares of the portfolio being acquired in compliance with the securities laws of the investor's state of residence. There is no fee imposed on an exchange. However, the Fund reserves the right to impose an administrative fee in order to cover the costs incurred in processing an exchange. Any such fee will be disclosed in the prospectus. An exchange is treated as a redemption and a purchase. Therefore, the investor could realize a taxable gain or loss on the transaction. The Fund reserves the right to revise or terminate the exchange privilege or limit the amount of or reject any exchange, as deemed necessary, at any time. REDEMPTION OF SHARES An investor who desires to redeem shares of a Portfolio must furnish a redemption request to RWBAS in the form required by RWBAS. The Portfolio will redeem shares at the net asset value of such shares next determined after receipt of a request for redemption in good order by PFPC. Although the redemption payments will ordinarily be made within seven days after receipt, payment to investors redeeming shares which were purchased by check will not be made until the Fund can verify that the payments for the purchase have been, or will be, collected, which may take up to fifteen days or more. Investors may avoid this delay by submitting a certified check along with the purchase order. With respect to each Portfolio, the Fund reserves the right to redeem a shareholder's account if the value of the shares in a specific account is $500 or less, whether because of redemptions, a decline in the portfolio's net asset value per share or any other reason. Before the Fund involuntarily redeems shares from such an account and sends the proceeds to the stockholder, the Fund will give written notice of the redemption to the stockholder at least sixty days in advance of the redemption date. The stockholder will then have sixty days from the date of the notice to make an additional investment in the Fund in order to bring the value of the shares in the account for a specific portfolio to more than $500 and avoid such involuntary redemption. The redemption price to be paid to a stockholder for shares redeemed by the Fund under this right will be the aggregate net asset value of the shares in the account at the close of business on the redemption date. When in the best interests of a Portfolio, the Portfolio may make a redemption payment, in whole or in part, by a distribution of portfolio securities from the Portfolio being redeemed (in the case of the RWB/DFA U.S. High Book to Market Portfolio, by a distribution of portfolio securities that the Portfolio receives from the U.S. Large Cap Value Series) in lieu of cash in accordance with Rule 18f-1 under the 1940 Act. Investors may incur brokerage charges and other transaction costs selling securities which were received in payment of redemptions. GENERAL INFORMATION The Portfolios and the U.S. Large Cap Value Series may disseminate reports of their investment performance from time to time. Investment performance is calculated on a total return basis; that is by including all net investment income and any realized and unrealized net capital gains or losses during the period for which investment performance is reported. If dividends or capital gains distributions have been paid during the relevant period, the calculation of investment performance will include such dividends and capital gains distributions as though reinvested in shares of the Portfolio. Standard quotations of total return are computed in accordance with SEC Guidelines and are presented whenever any non-standard quotations are disseminated. Non-standardized total return quotations may differ from the SEC Guideline computations by covering different time periods. In all cases, disclosures are made when performance quotations differ from the SEC Guidelines. Performance data is based on historical earnings and is not intended to indicate future performance. Rates of return expressed on an annual basis will 25 <PAGE> usually not equal the sum of returns expressed for consecutive interim periods due to the compounding of the interim yields. The Fund's annual report to shareholders of the Portfolios for the fiscal year ended November 30, 1997, contains additional performance information. A copy of the annual report is available upon request and without charge. The Fund was incorporated under Maryland law on March 19, 1990. The shares of each Portfolio, when issued and paid for in accordance with the Portfolios' prospectus, will be fully paid and nonassessable shares, with equal, non-cumulative voting rights and no preferences as to conversion, exchange, dividends, redemption or any other feature. With respect to matters which require shareholder approval, shareholders are entitled to vote only with respect to matters which affect the interest of the class of shares (Portfolio) which they hold, except as otherwise required by applicable law. If liquidation of the Fund should occur, shareholders would be entitled to receive on a per class basis the assets of the particular Portfolio whose shares they own, as well as a proportionate share of Fund assets not attributable to any particular Portfolio. Ordinarily, the Fund does not intend to hold annual meetings of shareholders, except as required by the 1940 Act or other applicable law. The Fund's by-laws provide that special meetings of shareholders shall be called at the written request of at least 10% of the votes entitled to be cast at such meeting. Such meeting may be called to consider any matter, including the removal of one or more directors. Shareholders will receive shareholder communications with respect to such matters as required by the 1940 Act, including semi-annual and annual financial statements of the Fund, the latter being audited. The DFA Investment Trust Company was organized as a Delaware business trust on October 27, 1992. The Trust offers shares of its Series only to institutional investors in private offerings. The Fund may withdraw the investment of the RWB/DFA U.S. High Book to Market Portfolio in the U.S. Large Cap Value Series at any time, if the Board of Directors of the Fund determines that it is in the best interests of the Portfolio to do so. Upon any such withdrawal, the Board of Directors of the Fund would consider what action might be taken, including the investment of all of the assets of the Portfolio in another pooled investment entity having the same investment objective as the Portfolio or the hiring of an investment advisor to manage the Portfolio's assets in accordance with the investment policies described above. Whenever the RWB/DFA U.S. High Book to Market Portfolio, as an investor in the U.S. Large Cap Value Series, is asked to vote on a shareholder proposal, the Fund will solicit voting instructions from the Portfolio's shareholders with respect to the proposal. The Directors of the Fund will then vote the Portfolio's shares in the Series in accordance with the voting instructions received from the Portfolio's shareholders. The Directors of the Fund will vote shares of the Portfolio for which they receive no voting instructions in accordance with their best judgment. As of January 30, 1998, the following person(s) owned more than 25% of the voting securities of each Portfolio: RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO Charles Schwab & Co.-REIN* 82.87% 101 Montgomery Street San Francisco, CA 94104 RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO Charles Schwab & Co.-CASH* 87.09% 101 Montgomery Street San Francisco, CA 94104 RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO Charles Schwab & Co.-CASH* 91.88% 26 <PAGE> 101 Montgomery Street San Francisco, CA 94104 *Owners of Record Only Shareholder inquiries may be made by writing or calling the Client Service Agent at the address or telephone number appearing on the back cover of this prospectus. Only those individuals whose signatures are on file for the account in question may receive specific account information or make changes in the account registration. 27 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 INVESTMENT ADVISOR DIMENSIONAL FUND ADVISORS INC. 1299 Ocean Avenue 11th floor Santa Monica, CA 90401 Tel. No. (310) 395-8005 CLIENT SERVICE AGENT Reinhardt Werba Bowen Advisory Services 1190 Saratoga Avenue, Suite 200 San Jose, CA 95129 Tel. No. (800) 366-7266 CUSTODIAN PNC BANK, N.A. 200 Stevens Drive, Airport Business Center Lester, PA 19113 ACCOUNTING SERVICES, DIVIDEND DISBURSING AND TRANSFER AGENT PFPC INC. 400 Bellevue Parkway Wilmington, DE 19809 LEGAL COUNSEL STRADLEY, RONON, STEVENS & YOUNG, LLP <PAGE> 2600 One Commerce Square Philadelphia, PA 19103-7098 INDEPENDENT ACCOUNTANTS COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center 19th and Market Streets Philadelphia, PA 19103 29 <PAGE> DIMENSIONAL INVESTMENT GROUP INC. RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401 TELEPHONE: (310) 395-8005 STATEMENT OF ADDITIONAL INFORMATION MARCH 3, 1998 This statement of additional information is not a prospectus but should be read in conjunction with the prospectus of RWB/DFA U.S. High Book to Market Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-Year Government Portfolio (individually, a "Portfolio" and collectively, the "Portfolios") of Dimensional Investment Group Inc. (the "Fund"), dated March 3, 1998, as amended from time to time, which can be obtained from the Fund by writing to the Fund at the above address or by calling the above telephone number. TABLE OF CONTENTS PAGE INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . 2 BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FUTURES CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 FEDERAL TAX TREATMENT OF FUTURES CONTRACTS . . . . . . . . . . . . . . . . . 6 DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 9 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 9 PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . 11 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 <PAGE> INVESTMENT OBJECTIVE AND POLICIES The following information supplements the information set forth in the prospectus under the caption "RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO - -INVESTMENT OBJECTIVE AND POLICIES" and applies to the DFA U.S. Large Cap Value Series (the "U.S. Large Cap Value Series") of The DFA Investment Trust Company (the "Trust"). Because the structure of the U.S. Large Cap Value Series is based on the relative market capitalizations of eligible holdings, it is possible that the U.S. Large Cap Value Series might include at least 5% of the outstanding voting securities of one or more issuers. In such circumstances, the Fund and the issuer would be deemed "affiliated persons" under the Investment Company Act of 1940 ("1940 Act") and certain requirements of the 1940 Act regulating dealings between affiliates might become applicable. However, based on the present capitalizations of the groups of companies eligible for inclusion in the U.S. Large Cap Value Series and the anticipated amount of the Series' assets intended to be invested in such securities, management does not anticipate that the U.S. Large Cap Value Series will include as much as 5% of the voting securities of any issuer. BROKERAGE TRANSACTIONS The RWB/DFA Two-Year Corporate Fixed Income Portfolio and the RWB/DFA Two-Year Government Portfolio (collectively, the "Fixed Income Portfolios") acquire and sell securities on a net basis with dealers which are major market makers in such securities. The Investment Committee of the Advisor selects dealers on the basis of their size, market making and credit analysis ability. When executing portfolio transactions for the Fixed Income Portfolios, the Advisor seeks to obtain the most favorable price for the securities being traded among the dealers with whom the Fixed Income Portfolios effect transactions. Portfolio transactions will be placed with a view to receiving the best price and execution. In addition, the Advisor will seek to acquire and dispose of securities in a manner which would cause as little fluctuation in the market prices of stocks being purchased or sold as possible in light of the size of the transactions being effected. Brokers will be selected with these goals in view. The Advisor monitors the performance of brokers which effect transactions for the Fixed Income Portfolios, if any, and the U.S. Large Cap Value Series to determine the effect that their trading has on the market prices of the securities in which they invest. The Advisor also checks the rate of commission being paid by the Fixed Income Portfolios, if any, and the U.S. Large Cap Value Series to brokers to ascertain that such rates are competitive with those charged by other brokers for similar services. For the fiscal years ended November 30, 1997, 1996 and 1995, the U.S. Large Cap Value Series paid brokerage commissions of $929,005, $934,452 and $410,503, respectively. The substantial increases or decreases in the amount of brokerage commissions paid by the Series from year to year resulted from increases or decreases in the amount of securities that were bought and sold by the Series. Transactions also may be placed with brokers who provide the Advisor with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. The Investment Advisory Agreement for the Fixed Income Portfolios and the Investment Management Agreement for the U.S. Large Cap Value Series permit the Advisor knowingly to pay commissions on these transactions which are greater than another broker might charge if the Advisor, in good faith, determines that the commissions paid are reasonable in relation to the research or brokerage services provided by the broker or dealer when viewed in terms of either a particular transaction or the Advisor's overall responsibilities to assets under its management. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Series. During the fiscal year ended November 30, 1997, the U.S. Large Cap Value Series paid $122,527 in commissions (on securities transactions totalling $78,961,638 in value) to brokers which provided market price monitoring services, market studies and research services to the Series. 2 <PAGE> The over-the-counter market ("OTC") companies eligible for purchase by the U.S. Large Cap Value Series are thinly traded securities. Therefore, the Advisor believes it needs maximum flexibility to effect OTC trades on a best execution basis. To that end, the Advisor places buy and sell orders with market makers, third market brokers, Instinet and with dealers on an agency basis when the Advisor determines that the securities may not be available from other sources at a more favorable price. Third market brokers enable the Advisor to trade with other institutional holders directly on a net basis. This allows the Advisor sometimes to trade larger blocks than would be possible by going through a single market maker. The Advisor places buy and sell orders on Instinet when the Advisor determines that the securities may not be available from other sources at a more favorable price. Instinet is an electronic information and communication network whose subscribers include most market makers as well as many institutions. Instinet charges a commission for each trade executed on its system. On any given trade the U.S. Large Cap Value Series, by trading through Instinet, would pay a spread to a dealer on the other side of the trade plus a commission to Instinet. However, placing a buy (or sell) order on Instinet communicates to many (potentially all) market makers and institutions at once. This can create a more complete picture of the market and thus increase the likelihood that the U.S. Large Cap Value Series can effect transactions at the best available prices. The RWB/DFA U.S. High Book to Market Portfolio will not incur any brokerage or other costs in connection with its purchase or redemption of shares of the U.S. Large Cap Value Series, except if the Portfolio receives securities from the Series to satisfy the Portfolio's redemption request. INVESTMENT LIMITATIONS Each of the Portfolios has adopted certain limitations which may not be changed with respect to any Portfolio without the approval of the holders of a majority of the outstanding voting securities of the Portfolio. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Portfolio (to be effected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of such Portfolio. The investment limitations of the U.S. Large Cap Value Series are the same as those of the RWB/DFA U.S. High Book to Market Portfolio. The Portfolios will not: (1) invest in commodities or real estate, including limited partnership interests therein, although they may purchase and sell securities of companies which deal in real estate and securities which are secured by interests in real estate and may purchase or sell financial futures contracts and options thereon; (2) make loans of cash, except through the acquisition of repurchase agreements and obligations customarily purchased by institutional investors; (3) as to 75% of the total assets of a Portfolio, invest in the securities of any issuer (except obligations of the U.S. Government and its instrumentalities) if, as a result, more than 5% of the Portfolio's total assets, at market, would be invested in the securities of such issuer; (4) purchase or retain securities of an issuer, if those officers and directors of the Fund or the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; (5) borrow, except from banks as a temporary measure for extraordinary or emergency purposes and then, in no event, in excess of 33% of its net assets, or pledge more than 33% of such assets to secure such loans; 3 <PAGE> (6) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in (5) above; (7) invest more than 15% of the value of the Portfolio's total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; (8) engage in the business of underwriting securities issued by others; (9) invest for the purpose of exercising control over management of any company; (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; (11) invest more than 5% of its total assets in securities of companies which have (with predecessors) a record of less than three years' continuous operation; (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry, except the RWB/DFA Two-Year Corporate Fixed Income Portfolio shall invest more than 25% of its total assets in obligations of banks and bank holding companies in the circumstances described in the prospectus under "Investments in the Banking Industry" and as otherwise described under "Portfolio Strategy;" (13) write or acquire options (except as described in (1) above) or interests in oil, gas or other mineral exploration, leases or development programs; (14) purchase warrants, except that the RWB/DFA U.S. High Book to Market Portfolio may acquire warrants as a result of corporate actions involving its holdings of equity securities; (15) purchase securities on margin or sell short; (16) acquire more than 10% of the voting securities of any issuer, provided that this limitation applies only to 75% of the assets of the RWB/DFA U.S. High Book to Market Portfolio; or (17) issue senior securities (as such term is defined in Section 18(f) of the 1940 Act), except to the extent permitted under the 1940 Act. The investment limitations described in (3), (4), (7), (9), (10), (11), (12) and (16) above do not prohibit the RWB/DFA U.S. High Book to Market Portfolio from investing all or substantially all of its assets in the shares of another registered open-end investment company, such as the U.S. Large Cap Value Series of the Trust. The investment limitations described in (1) and (15) above do not prohibit a Portfolio that may purchase or sell financial futures contracts and options thereon from making margin deposits to the extent permitted under applicable regulations. Although (2) above prohibits cash loans, the Portfolios are authorized to lend portfolio securities. Inasmuch as the RWB/DFA U.S. High Book to Market Portfolio will only hold shares of the U.S. Large Cap Value Series, such Portfolio does not intend to lend those shares. The RWB/DFA Two-Year Corporate Fixed Income Portfolio may invest in commercial paper that is exempt from the registration requirements of the Securities Act of 1933 (the "1933 Act"), subject to the requirements regarding credit ratings stated in the prospectus under "Description of Investments." Further, pursuant 4 <PAGE> to Rule 144A under the 1933 Act, the Portfolios may purchase certain unregistered (i.e. restricted) securities upon a determination that a liquid institutional market exists for the securities. If it is decided that a liquid market does exist, the securities will not be subject to the 15% limitation on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Directors has delegated the day-to-day function of making liquidity determinations to the Advisor. For Rule 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Directors and the Advisor will continue to monitor the liquidity of Rule 144A securities. While the Portfolios and the U.S. Large Cap Value Series have retained authority to buy and sell financial futures contracts and options thereon, they have no present intention to do so. Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from its total assets those assets which represent collateral received by the Series for its securities lending transactions. Unless otherwise indicated, all limitations applicable to the investments of the Portfolios and the U.S. Large Cap Value Series apply only at the time that a transaction is undertaken. Any subsequent change in a rating assigned by any rating service to a security or change in the percentage of a Portfolio's or the U.S. Large Cap Value Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in a Portfolio's or the Series' total assets will not require a Portfolio or the Series to dispose of an investment until the Advisor determines that it is practicable to sell or closeout the investment without undue market or tax consequences. In the event that ratings services assign different ratings to the same security, the Advisor will determine which rating it believes best reflects the security's quality and risk at that time, which may be the higher of the several assigned ratings. FUTURES CONTRACTS Please note that while the following discussion relates to the policies of a Portfolio with respect to futures contracts, it should be understood that with respect to the RWB/DFA U.S. High Book to Market Portfolio, the discussion applies to the U.S. Large Cap Value Series of the Trust in which such Portfolio invests all of its assets. The Portfolios and the U.S. Large Cap Value Series may enter into futures contracts and options on futures contracts only for the purpose of remaining fully invested and to maintain liquidity to pay redemptions. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of defined securities at a specified future time and at a specified price. Futures contracts which are standardized as to maturity date and underlying financial instrument are traded on national futures exchanges. A Portfolio or the U.S. Large Cap Value Series will be required to make a margin deposit in cash or government securities with a broker or custodian to initiate and maintain positions in futures contracts. Minimal initial margin requirements are established by the futures exchange and brokers may establish margin requirements which are higher than the exchange requirements. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes, to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, reduction in the contract value may reduce the required margin resulting in a repayment of excess margin to a Portfolio or the U.S. Large Cap Value Series. Variation margin payments are made to and from the futures broker for as long as the contract remains open. The Portfolios and the U.S. Large Cap Value Series expect to earn income on their margin deposits. To the extent that a Portfolio or the Series invests in futures contracts and options thereon for other than bona fide hedging purposes, no Portfolio or Series will enter into such transactions if, immediately thereafter, the sum of the amount of initial margin deposits and premiums paid for open futures options would exceed 5% of the Portfolio's or the Series' total assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that, in the case of an option that is in-the-money at the time of purchase, the in-the-money 5 <PAGE> amount may be excluded in calculating the 5%. Pursuant to published positions of the Securities and Exchange Commission (the "Commission"), the Portfolios or the Series may be required to maintain segregated accounts consisting of liquid assets, such as cash or liquid securities (or, as permitted under applicable regulation, enter into offsetting positions) in connection with their futures contract transactions in order to cover their obligations with respect to such contracts. Positions in futures contracts may be closed out only on an exchange which provides a secondary market. However, there can be no assurance that a liquid secondary market will exist for any particular futures contract at any specific time. Therefore, it might not be possible to close a futures position and, in the event of adverse price movements, a Portfolio or the U.S. Large Cap Value Series would continue to be required to make variation margin deposits. In such circumstances, if a Portfolio or the U.S. Large Cap Value Series has insufficient cash, it might have to sell portfolio securities to meet daily margin requirements at a time when it might be disadvantageous to do so. Management intends to minimize the possibility that it will be unable to close out a futures contract by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. FEDERAL TAX TREATMENT OF FUTURES CONTRACTS Except for transactions a Portfolio or the U.S. Large Cap Value Series has identified as hedging transactions, the Portfolio or Series is required for federal income tax purposes to recognize as income for each taxable year its net unrealized gains and losses on certain futures contracts as of the end of the year as well as those actually realized during the year. In most cases, any gain or loss recognized with respect to a futures contract is considered to be 60% long-term gain or loss and 40% short-term capital gain or loss, without regard to the holding period of the contract. Furthermore, sales of futures contracts which are intended to hedge against a change in the value of securities held by a Portfolio or the U.S. Large Cap Value Series may affect the holding period of such securities and, consequently, the nature of the gain or loss on such securities upon disposition. In order for a Portfolio or the U.S. Large Cap Value Series to continue to qualify for federal income tax treatment as a regulated investment company, at least 90% of its gross income for a taxable year must be derived from qualifying income; i.e., dividends, interest, income derived from loans of securities, gains from the sale of securities and other income derived with respect to the Portfolio's or the Series' business of investing in securities. It is anticipated that any net gain realized from closing futures contracts will be considered gain from the sale of securities and, therefore, constitute qualifying income for purposes of the 90% requirement. The Portfolios and the U.S. Large Cap Value Series will distribute to shareholders annually any net capital gains which have been recognized for federal income tax purposes (including unrealized gains at the end of the Portfolios' or the Series' fiscal year) on futures transactions. Such distributions will be combined with distributions of capital gains realized on the Portfolios' or the Series' other investments. DIRECTORS AND OFFICERS The names, addresses and dates of birth of the directors and officers of the Fund and a brief statement of their present positions and principal occupations during the past five years is set forth below. 6 <PAGE> DIRECTORS David G. Booth, Director*, (12/2/46), President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director, of the following companies: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. (registered investment company) and Dimensional Emerging Markets Fund Inc. (registered investment company). Trustee, President and Chairman-Chief Executive Officer of The DFA Investment Trust Company (registered investment company). Chairman and Director, Dimensional Fund Advisors Ltd. George M. Constantinides, (9/22/47), Director, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. John P. Gould, (1/19/39), Director, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company and First Prairie Funds (registered investment companies). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). Roger G. Ibbotson, (5/27/43), Director, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, (5/16/23), Director, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc. and Public Director, Chicago Mercantile Exchange. Myron S. Scholes, (7/1/42), Director, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. Rex A. Sinquefield, (9/7/44), Director*, Chairman - Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc. Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company. Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd. *Interested Director of the Fund. OFFICERS Each of the officers listed below hold the same office (except as otherwise noted) in the following entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund Inc. Arthur Barlow, (11/7/55), Vice President, Santa Monica, CA. 7 <PAGE> Truman Clark, (4/8/41), Vice President, Santa Monica, CA. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. Maureen Connors, (11/17/36), Vice President and Assistant Secretary, Santa Monica, CA. Robert Deere, (10/8/57), Vice President, Santa Monica, CA. Irene R. Diamant, (7/16/50), Vice President and Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Richard Eustice, (8/5/65), Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., (1/21/61), Vice President, Santa Monica, CA. Kamyab Hashemi-Nejad, (1/22/61), Vice President, Controller and Assistant Treasurer, Santa Monica, CA. Stephen P. Manus, (12/26/50), Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. Karen McGinley, (3/10/66), Vice President, Santa Monica, CA. Catherine L. Newell, (5/7/64), Vice President and Assistant Secretary (for all entities other than Dimensional Fund Advisors Ltd.), Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989 to 1996. David Plecha, (10/26/61), Vice President, Santa Monica, CA. George Sands, (2/8/56), Vice President, Santa Monica, CA. Michael T. Scardina, (10/12/55), Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Jeanne C. Sinquefield, Ph.D., (12/2/46), Executive Vice President, Santa Monica, CA. Scott Thornton, (3/1/63), Vice President, Santa Monica, CA. Weston Wellington, (3/1/51), Vice President, Santa Monica, CA. Director of Research, LPL Financial Services, Inc., Boston, MA from 1987 to 1994. Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife. **Directors and officers as a group own less than 1% of each Portfolio's outstanding stock. Set forth below is a table listing, for each director entitled to receive compensation, the compensation received from the Fund during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year. Aggregate Total Compensation from Compensation Fund Director from Fund and Fund Complex - -------- ------------ ----------------------- 8 <PAGE> <TABLE> <S> <C> <C> George M. Constantinides $5,000 $30,000 John P. Gould $5,000 $30,000 Roger G. Ibbotson $5,000 $30,000 Merton H. Miller $5,000 $30,000 Myron S. Scholes $5,000 $30,000 </TABLE> *moved from here; text not shown ADMINISTRATIVE SERVICES PFPC Inc. ("PFPC") serves as the accounting services, dividend disbursing and transfer agent for the Portfolios and the U.S. Large Cap Value Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Directors of the Fund and include day-to-day keeping and maintenance of certain records, calculation of the net asset value of the shares, preparation of reports, liaison with the Portfolios' and the Series' custodian, and dividend disbursing agency services. For its services, the RWB/DFA U.S. High Book to Market Portfolio pays PFPC a monthly fee of $1,000. The RWB/DFA Two-Year Corporate Fixed Income Portfolio and the RWB/DFA Two-Year Government Portfolio each pay PFPC .0513% of the first $100 million of net assets; .0308% of the next $100 million of net assets; and .0205% of net assets over $200 million. OTHER INFORMATION For the services it provides as investment advisor to the Fixed Income Portfolios and the U.S. Large Cap Value Series, the Advisor is paid a monthly fee calculated as a percentage of average net assets of each Fixed Income Portfolio and the U.S. Large Cap Value Series. Prior to November 30, 1997, the RWB/DFA Two-Year Corporate Fixed Income Portfolio invested all of its assets in DFA Two-Year Corporate Fixed Income Series of the Trust and the RWB/DFA Two-Year Government Portfolio invested all of its assets in DFA Two-Year Government Series of the Trust. For the fiscal year ended November 30, 1997, the DFA Two-Year Corporate Fixed Income Series, the DFA Two-Year Government Series and the U.S. Large Cap Value Series paid advisory fees of $210,435, $175,486 and $1,255,135, respectively. The U.S. Large Cap Value Series has more than one investor; this dollar amount represents the total dollar amount of advisory fees paid by the U.S. Large Cap Value Series to the Advisor. The Fund was known as DFA U.S. Large Cap Inc. from February 1992, until the Fund amended its Articles of Incorporation in April 1993, to change to its present name. Prior to a February 1992, amendment to the Fund's Articles of Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. The Fund commenced offering shares of the Portfolios in May 1996. PNC Bank, N.A. serves as the custodian for the Portfolios and the U.S. Large Cap Value Series. The custodian maintains a separate account or accounts for the Portfolios and the Series; receives, holds and releases portfolio securities on account of the Portfolios and the Series; makes receipts and disbursements of money on behalf of the Portfolios and the Series; and collects and receives income and other payments and distributions on account of the Portfolios' and the Series' portfolio securities. 9 <PAGE> Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the Fund's financial statements on an annual basis. PRINCIPAL HOLDERS OF SECURITIES As of January 30, 1998, the following person(s) beneficially owned 5% or more of the outstanding stock of each Portfolio: RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO <TABLE> <S> <C> Charles Schwab & Co.-REIN* 82.87% 101 Montgomery Street San Francisco, CA 94104 Donaldson, Lufkin & Jenrette Securities Corp.- Pershing Division* 15.77% P.O. Box 2052 Jersey City, NJ 07303 RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO Charles Schwab & Co.-CASH* 87.09% 101 Montgomery Street San Francisco, CA 94104 Donaldson, Lufkin & Jenrette Securities Corp.- Pershing Division* 10.03% P.O. Box 2052 Jersey City, NJ 07303 RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO Charles Schwab & Co.-CASH* 91.88% 101 Montgomery Street San Francisco, CA 94104 Donaldson, Lufkin & Jenrette Securities Corp.- Pershing Division* 6.48% P.O. Box 2052 Jersey City, NJ 07303 *Owners of record only. </TABLE> PURCHASE OF SHARES The following information supplements the information set forth in the prospectus under the caption "PURCHASE OF SHARES." The Fund will accept purchase and redemption orders on each day that the New York Stock Exchange ("NYSE") is open for business, regardless of whether the Federal Reserve System is closed. 10 <PAGE> However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Fund will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days as the NYSE, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Fund is closed. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of any or all Portfolios or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Fund or a Portfolio. Securities accepted in exchange for shares of a Portfolio will be acquired for investment purposes and will be considered for sale under the same circumstances as other securities in the Portfolio. REDEMPTION OF SHARES The following information supplements the information set forth in the prospectus under the caption "REDEMPTION OF SHARES." The Fund may suspend redemption privileges or postpone the date of payment: (1) during any period when the NYSE is closed, or trading on the NYSE is restricted as determined by the Commission, (2) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for the Fund to dispose of securities owned by it, or fairly to determine the value of its assets, and (3) for such other periods as the Commission may permit. Shareholders may transfer shares of a Portfolio to another person by making a written request therefore to the Advisor who will transmit the request to PFPC. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of request, the stock certificate or any stock power must be guaranteed in the same manner as described in the prospectus under "REDEMPTION OF SHARES." As with redemptions, the written request must be received in good order before any transfer can be made. CALCULATION OF PERFORMANCE DATA Following are quotations of the annualized percentage total returns for each Portfolio for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable) using the standardized method of calculation required by the Commission. 11 <PAGE> <TABLE> <CAPTION> One Year Five Years Ten Years <S> <C> <C> <C> (8 mos.) RWB/DFA U.S. High Book to Market Portfolio 25.00% 22.19% n/a (17 mos.) RWB/DFA Two-Year Corporate Fixed Income Portfolio 5.67% 6.29% n/a (17 mos.) (17 mos.) RWB/DFA Two-Year Government Portfolio 5.58% 6.31% n/a </TABLE> For purposes of calculating the performance of the RWB/DFA U.S. High Book to Market Portfolio, the performance of the U.S. Large Cap Value Series will be utilized for the period prior to when the Portfolio commenced operations, and, if applicable, restated to reflect the Portfolio's fees and expenses. As the following formula indicates, each Portfolio and the U.S. Large Cap Value Series determines its average annual total return by finding the average annual compound rates of return over the stated time period that would equate a hypothetical initial purchase order of $1,000 to its redeemable value (including capital appreciation/depreciation and dividends and distributions paid and reinvested less any fees charged to a shareholder account) at the end of the stated time period. The calculation assumes that all dividends and distributions are reinvested at the public offering price on the reinvestment dates during the period. The calculation also assumes the account was completely redeemed at the end of each period and the deduction of all applicable charges and fees. According to the Commission's formula: P(1 + T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the one-, five- and ten-year periods at the end of the one-, five-and ten-year periods (or fractional portion thereof). In addition to the standardized method of calculating performance required by the Commission, the Portfolios and the U.S. Large Cap Value Series may disseminate other performance data and may advertise total return calculated on a monthly basis. 12 <PAGE> The Portfolios may compare their investment performance to appropriate market and mutual fund indices and investments for which reliable performance data is available. Such indices are generally unmanaged and are prepared by entities and organizations which track the performance of investment companies or investment advisors. Unmanaged indices often do not reflect deductions for administrative and management costs and expenses. The performance of the Portfolios may also be compared in publications to averages, performance rankings or other information prepared by recognized mutual fund statistical services. Any performance information, whether related to the Portfolios or to the Advisor, should be considered in light of a Portfolio's investment objectives and policies, characteristics and the quality of the Portfolio and market conditions during the time period indicated and should not be considered to be representative of what may be achieved in the future. FINANCIAL STATEMENTS The audited financial statements and financial highlights of each Portfolio for the Fund's fiscal year ended November 30, 1997, as set forth in the Fund's annual report to shareholders of the Portfolios, and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited financial statements of the U.S. Large Cap Value Series, DFA Two-Year Corporate Fixed Income Series and DFA Two-Year Government Series of the Trust for the Trust's fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders and the report thereon of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. A shareholder may obtain a copy of the reports upon request and without charge, by contacting the Fund at the address or telephone number appearing on the cover of this statement of additional information. 13 <PAGE> PART C OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS. (a) FINANCIAL STATEMENTS. Audited financial statements dated November 30, 1997 for each series of the Registrant were filed on February 5, 1998 via the U.S. Securities and Exchange Commission's EDGAR System in the Annual Report to shareholders of DIMENSIONAL INVESTMENT GROUP INC. pursuant to Rule 30b2-1 under the Investment Company Act of 1940 ("1940 Act"). Such financial statements are incorporated by reference into the Statement of Additional Information of DFA International Value Portfolio IV and Emerging Markets Portfolio II dated February 13, 1998, and are incorporated by reference into the Statements of Additional Information of each series of the Registrant other than the DFA International Value Portfolio IV and Emerging Markets Portfolio II, each dated February 27, 1998. Audited financial statements of DFA International Value Series and Emerging Markets Series of The DFA Investment Trust Company (the "Trust") for the fiscal year ended November 30, 1997, as set forth in the Trust's Annual Report to shareholders, were filed on February 5, 1998 with the SEC pursuant to Rule 30b2-1 under the 1940 Act and are incorporated by reference into the Statement of Additional Information of DFA International Value Portfolio IV and Emerging Markets Portfolio II dated February 13, 1998. Audited financial statements of Emerging Markets Series, U.S. 6-10 Small Company Series, U.S. 6-10 Value Series, U.S. Large Cap Value Series, DFA One-Year Fixed Income Series, DFA International Value Series, DFA Two-Year Corporate Fixed Income Series and DFA Two-Year Government Series of the Trust for the fiscal year ended November 30, 1997, as set forth in the Trust's Annual Report to shareholders, were filed on February 5, 1998 with the SEC pursuant to Rule 30b2-1 under the 1940 Act and are incorporated by reference into the Statements of Additional Information of each series of the Registrant, other-than the DFA International Value Portfolio IV and Emerging Markets Portfolio II, dated February 27, 1998. C-1 <PAGE> (b) EXHIBITS. (1) CHARTER, AS NOW IN EFFECT. (a) Form of Articles of Restatement. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 11/12 to the Registration Statement of the Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. (b) Form of Articles Supplementary. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 16/17 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: June 20, 1997. (2) BY-LAWS, AS NOW IN EFFECT. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 18/19 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: February 13, 1998. (3) VOTING TRUST AGREEMENT. None. (4) INSTRUMENTS DEFINING RIGHTS OF HOLDERS OF SECURITIES BEING REGISTERED. (a) See Article Fifth of the Registrant's Articles of Restatement INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 11/12 to the Registration Statement of the Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. (5) (a) INVESTMENT ADVISORY CONTRACTS: (1) Form of Investment Advisory Agreement between Registrant and DFA re: the RWB/DFA Two-Year Corporate Fixed Income Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 17/18 to the Registration Statement of the Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: October 1, 1997. C-2 <PAGE> (2) Form of Investment Advisory Agreement between Registrant and DFA re: the RWB/DFA Two-Year Government Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 17/18 to the Registration Statement of the Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: October 1, 1997. (6) UNDERWRITING DISTRIBUTION CONTRACT BETWEEN THE REGISTRANT AND A PRINCIPAL UNDERWRITER. Distribution Agreement dated April 16, 1993 between the Registrant and DFA Securities Inc. is filed herewith. (7) None. (8) CUSTODY AGREEMENTS. (a) Form of Custodian Agreement between the Registrant and PNC Bank, N.A. (formerly Provident National Bank) (the "Custody Agreement") is filed herewith. (1) Form of Amendment Number One to the Custody Agreement is filed herewith. (2) Form of Amendment Number Two to the Custody Agreement is filed herewith. (3) Form of Amendment Number Three to the Custody Agreement***. (4) Form of Amendment Number Four to the Custody Agreement***. (5) Form of Amendment Number Five to the Custody Agreement is filed herewith. (6) Form of Amendment Number Six to the Custody Agreement. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. C-3 <PAGE> (7) Form of Amendment Number Seven to the Custody Agreement INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 16/17 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: June 20, 1997. (8) Form of Amendment Number Eight to the Custody Agreement re: DFA International Value Portfolio IV and Emerging Markets Portfolio II. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 16/17 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: June 20, 1997. (9) (a) Form of Transfer Agency Agreement between the Registrant and PFPC Inc. (formerly Provident Financial Processing Corporation) (the "Transfer Agency Agreement") is filed herewith. (1) Form of Amendment to the Transfer Agency Agreement***. (2) Form of Amendment Number One to the Transfer Agency Agreement is filed herewith. (3) Form of Amendment Number Two to the Transfer Agency Agreement is filed herewith. (4) Form of Amendment Number Three to the Transfer Agency Agreement***. (5) Form of Amendment Number Four to the Transfer Agency Agreement***. (6) Form of Amendment Number Five to the Transfer Agency Agreement is filed herewith. (7) Form of Amendment Number Six dated March 1, 1996 to the Transfer Agency Agreement re: the RWB/DFA U.S. High Book to Market Portfolio, RWB/DFA Two-Year Corporate Fixed Income C-4 <PAGE> Portfolio and RWB/DFA Two-Year Government Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement of Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. (8) Form of Amendment Number Seven to the Transfer Agency Agreement re: DFA International Value Portfolio IV and Emerging Markets Portfolio II. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 16/17 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: June 20, 1997. (b) Form of Administration and Accounting Services Agreement between the Registrant and PFPC Inc. (formerly with Provident Financial Processing Corporation) (the "Accounting Services Agreement") is filed herewith. (1) Form of Amendment to the Accounting Services Agreement**. (2) Form of Amendment Number One to the Accounting Services Agreement is filed herewith. (3) Form of Amendment Number Two to the Accounting Services Agreement is filed herewith. (4) Form of Amendment Number Three to the Accounting Services Agreement***. (5) Form of Amendment Number Four to the Accounting Services Agreement***. (6) Form of Amendment Number Five to the Accounting Services Agreement is filed herewith. (7) Form of Amendment Number Six dated March 1, 1996 to the Accounting C-5 <PAGE> Services Agreement re: RWB/DFA U.S. High Book to Market Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-Year Government Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement of Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. (8) Form of Amendment Number Seven to the Accounting Services Agreement re: DFA International Value Portfolio IV and Emerging Markets Portfolio II. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 16/17 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: June 20, 1997. (c) ADMINISTRATION AGREEMENTS. (1) Form of between the Registrant and Dimensional Fund Advisors Inc. ("DFA") dated May 3, 1993 re: the DFA 6-10 Institutional Portfolio, is filed herewith. (2) Form of between the Registrant and DFA dated December 1, 1993 re: the DFA International Value Portfolio, is filed herewith. (3) Form of between the Registrant and DFA re: the DFA International Value Portfolio II, is filed herewith. (4) Form of between the Registrant and DFA dated January 1, 1994 re: the U.S. 6-10 Value Portfolio II, is filed herewith. (5) Form of between the Registrant and DFA dated July 1, 1994 re: the U.S. Large Cap Value Portfolio II, is filed herewith. C-6 <PAGE> (6) Form of between the Registrant and DFA dated September 30, 1994 re: the DFA One-Year Fixed Income Portfolio II, is filed herewith. (7) Form of between the Registrant and DFA dated December 20, 1994 re: the U.S. Large Cap Value Portfolio III, is filed herewith. (8) Form of between the Registrant and DFA dated December 20, 1994 re: the DFA International Value Portfolio III, is filed herewith. (9) Form of between the Registrant and DFA dated March 1, 1996 re: the RWB/DFA U.S. High Book to Market Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement of Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. (10) Form of between the Registrant and DFA dated March 1, 1996 re: the RWB/DFA Two-Year Corporate Fixed Income Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement of Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. (11) Form of between the Registrant and DFA dated March 1, 1996 re: the RWB/DFA Two-Year Government Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement of Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. C-7 <PAGE> (12) Form of re: DFA International Value Portfolio IV INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 16/17 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: June 20, 1997. (13) Form of re: Emerging Markets Portfolio II. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 16/17 to the Registration Statement on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: June 20, 1997. (d) CLIENT SERVICE AGREEMENTS. (1) Form of re: the RWB/DFA Two-Year Corporate Fixed Income Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement of Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. (2) Form of re: the RWB/DFA Two-Year Government Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement of Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. (3) Form of Client Service Agent Agreement re: the RWB/DFA U.S. High Book-to-Market Portfolio. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 12/13 to the Registration Statement of Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: December 15, 1995. C-8 <PAGE> (e) OTHER. (1) Form of Facility Agreement with Dimensional Fund Advisors Inc.**. (2) Form of Shareholder Service Agreements. (i) Administrative Service Agreement dated July 1, 1996 between Bankers Trust Company and the Registrant, on behalf of the U.S. Small Cap Value Portfolio II, the U.S. Large Cap Value Portfolio II and the DFA International Value Portfolio II, is filed herewith. (ii) Services Agreement, dated as of July 1, 1994 between Charles Schwab & Co., Inc. and the Registrant, on behalf of the U.S. Small Cap Portfolio II, the U.S. Large Cap Portfolio II and the DFA International Value Portfolio II, is filed herewith. (iii) Client Service Agreement dated March 13, 1996 by and between Reinhardt, Werba, Bowen, Inc. ("RWB") and the Registrant, on behalf of the RWB/DFA Two-Year Government Portfolio, is filed herewith. (iv) Client Service Agreement dated March 13, 1996 by and between RWB and the Registrant, on behalf of the RWB/DFA Two-Year Corporate Fixed Income Portfolio, is filed herewith. (v) Client Service Agreement dated March 13, 1996 by and between RWB and the Registrant, on behalf of the RWB/DFA U.S. High Book to Market Portfolio, is filed herewith. (10) OPINION OF COUNSEL. Not Applicable. C-9 <PAGE> (11) CONSENTS. Consent of Coopers & Lybrand, L.L.P. is filed herewith. (12) FINANCIAL STATEMENTS OMITTED FROM ITEM 23. Not applicable. (13) AGREEMENTS OF UNDERSTANDINGS MADE IN CONSIDERATION FOR PROVIDING INITIAL CAPITAL. (a) Form of Subscription Agreement under Section 14(a)(3) of Investment Company Act of 1940**. (14) MODEL PLAN USED IN THE ESTABLISHMENT OF ANY RETIREMENT PLAN. None. (15) (a) PLANS ENTERED INTO PURSUANT TO RULE 12B-1. None. (b) AGREEMENTS RELATING TO IMPLEMENTATION WITH PLAN. None. (16) SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS. Filed herewith. (17) FINANCIAL DATA SCHEDULES. Financial Data Schedules dated November 30, 1997 relating to the: (1) DFA 6-10 Institutional Portfolio of the Registrant. (2) DFA International Value Portfolio of the Registrant. (3) DFA International Value Portfolio II of the Registrant. (4) U.S. 6-10 Value Portfolio II of the Registrant. (5) U.S. Large Cap Value Portfolio II of the Registrant. (6) DFA One-Year Fixed Income Portfolio II of the Registrant. (7) U.S. Large Cap Value Portfolio III of the Registrant. (8) DFA International Value Portfolio III of the Registrant. C-10 <PAGE> (9) RWB/DFA U.S. High-Book-to-Market Portfolio of the Registrant. (10) RWB/DFA Two-Year Corporate Fixed Income Portfolio of the Registrant. (11) RWB/DFA Two-Year Government Portfolio of the Registrant. (12) DFA International Value Portfolio IV of the Registrant. (13) Emerging Markets Portfolio II of the Registrant. (18) PLANS PURSUANT TO RULE 18F-3. Not applicable. (19) POWERS-OF-ATTORNEY. (a) On behalf of the Registrant, dated July 18, 1997, appointing David G. Booth, Rex A. Sinquefield, Michael T. Scardina, Irene R. Diamant, Catherine L. Newell and Stephen W. Kline, Esquire as attorneys in fact. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 17/18 to the Registration Statement of the Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: October 1, 1997. (b) On behalf of DFA Investment Trust Company, dated July 18, 1997, appointing David G. Booth, Rex A. Sinquefield, Michael T. Scardina, Irene R. Diamant, Catherine L. Newell and Stephen W. Kline, Esquire as attorneys in fact. INCORPORATED HEREIN BY REFERENCE TO: Filing: Post-Effective Amendment No. 17/18 to the Registration Statement of the Registrant on Form N-1A. File Nos.: 33-33980 and 811-6067. Filing Date: October 1, 1997. ** Previously filed with this registration statement and incorporated herein by reference. *** To be filed by amendment. ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. None. C-11 <PAGE> ITEM 26. NUMBER OF HOLDERS OF SECURITIES. <TABLE> <CAPTION> (1) (2) Number of Record Title of Class Holders as of (PAR VALUE $.01) DECEMBER 31, 1997 ---------------- ----------------- <S> <C> DFA 6-10 Institutional Portfolio 2 DFA International Value Portfolio 69 DFA International Value Portfolio II 1 U.S. 6-10 Value Portfolio II 1 U.S. Large Cap Value Portfolio II 1 DFA One-Year Fixed Income Portfolio II 6 DFA International Value Portfolio III 1 U.S. Large Cap Value Portfolio III 3 RWB/DFA U.S. High Book-to-Market Portfolio 4 RWB/DFA Two-Year Corporate Fixed Income Portfolio 4 RWB/DFA Two-Year Government Portfolio 4 DFA International Value Portfolio IV 1 Emerging Markets Portfolio II 1 </TABLE> ITEM 27. INDEMNIFICATION. (a) Section 1 of Article Ten of the Registrant's By-Laws, as approved through December 20, 1995, provides for indemnification, as set forth below (with respect to the indemnification of the Officers and Directors of the Corporation): (1) The Corporation shall indemnify each Officer and Director made party to a proceeding, by reason of service in such capacity, to the fullest extent, and in the manner provided under Section 2-418 of the Maryland General Corporation Law: (i) unless it is proved that the person seeking indemnification did not meet the standard of conduct set forth in subsection (b)(1) of such section; and (ii) provided, that the Corporation shall not indemnify any Officer or Director for any liability to the Corporation or its security holders arising from the willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person's office. (2) The provisions of clause (i) of paragraph (a) herein notwithstanding, the Corporation shall indemnify each Officer and Director against C-12 <PAGE> reasonable expenses incurred in connection with the successful defense of any proceeding to which such Officer or Director is a party by reason of service in such capacity. (3) The Corporation, in the manner and to the extent provided by applicable law, shall advance to each Officer and Director who is made party to a proceeding by reason of service in such capacity the reasonable expenses incurred by such person in connection therewith. (b) Registrant's Articles of Incorporation provide the following under Article Seventh: (1) To the fullest extent that limitations on the liability of directors and officers are permitted by the Maryland General Corporation Law, as amended from time to time, no director or officer of the Corporation shall have any liability to the Corporation or its stockholders for money damages. This limitation on liability applies to liabilities occurring for acts or omissions occurring at the time a person serves as a director or officer of the Corporation, whether or not such person is a director or officer at the time of any proceeding in which liability is asserted. (2) Notwithstanding the foregoing, this Article SEVENTH shall not operate to protect any director or officer of the Corporation against any liability to the Corporation or its stockholders to which such person would otherwise be subject by reason or willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of such person's office. ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR. Registrant's Investment Advisor, Dimensional Fund Advisors Inc. (the "Advisor"), was organized in May, 1981. The principal place of business of the Advisor is 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. The Advisor is engaged in the business of providing investment advice primarily to institutional investors. The Advisor is also the investment manager for three other registered open-end investment C-13 <PAGE> companies, The DFA Investment Trust Company, Dimensional Emerging Market Funds Inc. and DFA Investment Dimensions Group Inc. The Advisor also serves as sub-advisor for certain other registered investment companies. For additional information, please see "Management of the Fund" in the Prospectuses and "Directors and Officers" in the Statements of Additional Information of this Registration Statement. Additional information as to the Advisor and the directors and officers of the Advisor is included in the Advisor's Form ADV filed with the Commission (File No. 801-16283), which is incorporated herein by reference and sets forth the officers and directors of the Advisor and information as to any business, profession, vocation or employment of a substantial nature engaged in by those officers and directors during the past two years. ITEM 29. PRINCIPAL UNDERWRITERS. (a) NAMES OF INVESTMENT COMPANIES FOR WHICH THE REGISTRANT'S PRINCIPAL UNDERWRITER ALSO ACTS AS PRINCIPAL UNDERWRITER. Not Applicable. (b) Registrant distributes its own shares. It has entered into an agreement with DFA Securities Inc. dated April 16, 1993 which provides that DFA Securities Inc., 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, will supervise the sale of Registrant's shares. This agreement is subject to the requirements of Section 15(b) of the Investment Company Act of 1940. (c) COMMISSIONS AND OTHER COMPENSATION RECEIVED BY EACH PRINCIPAL UNDERWRITER WHO IS NOT AN AFFILIATED PERSON OF THE REGISTRANT. Not applicable. ITEM 30. LOCATION OF ACCOUNTS AND RECORDS Most accounts and records are maintained by PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809. Other records are maintained by Registrant at its business office at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. ITEM 31. MANAGEMENT SERVICES. None C-14 <PAGE> ITEM 32. UNDERTAKINGS. (a) Not applicable. (b) The Registrant hereby undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. C-15 <PAGE> SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Post-Effective Amendment Nos. 19/20 to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment Nos. 19/20 to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Santa Monica and the State of California on the 26th day of February, 1998. DIMENSIONAL INVESTMENT GROUP INC. By: David G. Booth* ---------------------------------- David G. Booth President Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment Nos. 19/20 to the Registration Statement has been signed by the following persons in the capacities and on the date indicated. <TABLE> <CAPTION> Signature Title Date - --------- ----- ---- <S> <C> <C> David G. Booth* Director and - ------------------------- Chairman-Chief February 26, 1998 David G. Booth Executive Officer Rex A. Sinquefield* Director and - ------------------------- Chairman-Chief February 26, 1998 Rex A. Sinquefield Investment Officer Michael T. Scardina* Chief Financial - ------------------------- Officer, Treasurer February 26, 1998 Michael T. Scardina and Vice President George M. Constantinides* Director February 26, 1998 - ------------------------- George M. Constantinides John P. Gould* Director February 26, 1998 - ------------------------- John P. Gould Roger G. Ibbotson* Director February 26, 1998 - ------------------------- Roger G. Ibbotson Merton H. Miller* Director February 26, 1998 - ------------------------- Merton H. Miller Myron S. Scholes* Director February 26, 1998 - ------------------------- Myron S. Scholes </TABLE> * By: Irene R. Diamant ------------------------- Irene R. Diamant, attorney-in-fact (Pursuant to Power of Attorney C-16 <PAGE> SIGNATURES The DFA Investment Trust Company consents to the filing of this Post-Effective Amendment Nos. 19/20 to the Registration Statement of Dimensional Investment Group Inc. which is signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Monica and State of California on the 26th day of February, 1998. THE DFA INVESTMENT TRUST COMPANY By: David G. Booth* --------------------------------- David G. Booth President and Chairman-Chief Executive Officer The undersigned Trustees and Principal Officers of The DFA Investment Trust Company consent to the filing of this Post-Effective Amendment Nos. 19/20 to the Registration Statement of Dimensional Investment Group Inc. on the dates indicated. <TABLE> <CAPTION> Signature Title Date - --------- ----- ---- <S> <C> <C> David G. Booth* Trustee and - ------------------------- Chairman-Chief February 26, 1998 David G. Booth Executive Officer Rex A. Sinquefield* Trustee and - ------------------------- Chairman-Chief February 26, 1998 Rex A. Sinquefield Investment Officer Michael T. Scardina* Chief Financial - ------------------------- Officer, Treasurer February 26, 1998 Michael T. Scardina and Vice President George M. Constantinides* Trustee February 26, 1998 - ------------------------- George M. Constantinides John P. Gould* Trustee February 26, 1998 - ------------------------- John P. Gould Roger G. Ibbotson* Trustee February 26, 1998 - ------------------------- Roger G. Ibbotson Merton H. Miller* Trustee February 26, 1998 - ------------------------- Merton H. Miller Myron S. Scholes* Trustee February 26, 1998 - ------------------------- Myron S. Scholes </TABLE> * By: Irene R. Diamant ---------------------------------- Irene R. Diamant, attorney-in-fact (Pursuant to Power of Attorney C-17 <PAGE> EXHIBIT INDEX ------------- EXHIBIT NO. EXHIBIT 99 (b)(6) Distribution Agreement dated April 16, 1993 between the Registrant and DFA Securities Inc. 99 (b)(8)(a) Form of Custodian Agreement between the Registrant and PNC Bank, N.A. (the "Custody Agreement") 99 (b)(8)(a)(1) Form of Amendment Number One to the Custody Agreement 99 (b)(8)(a)(2) Form of Amendment Number Two to the Custody Agreement 99 (b)(8)(a)(5) Form of Amendment Number Five to the Custody Agreement 99 (b)(9)(a) Form of Transfer Agency Agreement between the Registrant and PFPC Inc. (the "Transfer Agency Agreement") 99 (b)(9)(a)(2) Form of Amendment Number One to the Transfer Agency Agreement 99 (b)(9)(a)(3) Form of Amendment Number Two to the Transfer Agency Agreement 99 (b)(9)(a)(5) Form of Amendment Number Five to the Transfer Agency Agreement 99 (b)(9)(b) Form of Administration and Accounting Services Agreements between the Registrant and PFPC Inc. (the "Accounting Services Agreement") 99 (b)(9)(b)(2) Form of Amendment Number One to the Accounting Services Agreement 99 (b)(9)(b)(3) Form of Amendment Number Two to the Accounting Services Agreement 99 (b)(9)(b)(6) Form of Amendment Number Five to the Accounting Services Agreement 99 (b)(9)(c)(1) Form of Administration Agreement between the Registrant and Dimensional Fund Advisors Inc. ("DFA") dated May 3, 1993 re: the DFA 6-10 Institutional Portfolio 99 (b)(9)(c)(2) Form of Administration Agreement between the Registrant and DFA dated December 1, 1993 re: the DFA International Value Portfolio 99 (b)(9)(c)(3) Form of Administration Agreement between the Registrant and DFA re: the DFA International Value Portfolio II. C-18 <PAGE> 99 (b)(9)(c)(4) Form of Administration Agreement between the Registrant and DFA dated July 1, 1994 re: the U.S. 6-10 Value Portfolio II 99 (b)(9)(c)(5) Form of Administration Agreement between the Registrant and DFA dated July 1, 1994 re: the U.S. Large Cap Value Portfolio II 99 (b)(9)(c)(6) Form of Administration Agreement between the Registrant and DFA dated September 30, 1994 re: the DFA One-Year Fixed Income Portfolio II 99 (b)(9)(c)(7) Form of Administration Agreement between the Registrant and DFA dated December 20, 1994 re: the U.S. Large Cap Value Portfolio III 99 (b)(9)(c)(8) Form of Administration Agreement between the Registrant and DFA dated December 20, 1994 re: the DFA International Value Portfolio III 99 (b)(9)(e)(2)(i) Administrative Service Agreement dated July 1, 1996 between Bankers Trust Company and the Registrant, on behalf of the U.S. Small Cap Value Portfolio II, the U.S. Large Cap Value Portfolio II and the DFA International Value Portfolio II 99 (b)(9)(e)(2)(ii) Services Agreement dated as of July 1, 1994 between Charles Schwab & Co., Inc. and the Registrant, on behalf of the U.S. Small Cap Portfolio II, the U.S. Large Cap Portfolio II and the DFA International Value Portfolio II 99 (b)(9)(e)(2)(iii) Client Service Agreement dated March 13, 1996 by and between Reinhardt, Werba, Bowen, Inc. ("RWD") and the Registrant, on behalf of the RWB/DFA Two-Year Government Portfolio 99 (b)(9)(e)(2)(iv) Client Service Agreement dated March 13, 1996 by and between RWB and the Registrant, on behalf of the RWB/DFA Two-Year Corporate Fixed Income Portfolio 99 (b)(9)(e)(2)(v) Client Service Agreement dated March 13, 1996 by and between RWB and the Registrant, on behalf of the RWB/DFA U.S. High Book to Market Portfolio 99(b)(9)(e)(2)(vi) Amendment to Client Service Agreement dated March 13, 1996 by and between RWB and the Registrant, on behalf of the RWB/DFA U.S. High Book to Market Portfolio 99 (b)(11) Consent of Coopers & Lybrand, L.L.P. C-19 </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.B-6 <SEQUENCE>2 <DESCRIPTION>EXHIBIT 99.(B)(6) <TEXT> <PAGE> AGREEMENT Agreement made this 16th day of April, 1993, between Dimensional Investment Group Inc. (the "Fund"), a Maryland corporation, and DFA Securities Inc. ("DFA Securities"), an Illinois corporation. In consideration of the premises and mutual covenants contained herein, the parties, intending to be legally bound, hereby agree as follows: (1) The Fund hereby authorizes DFA Securities to supervise the sale of common stock issued by the Fund pursuant to the Registration Statement filed by the Fund with the U.S. Securities and Exchange Commission on Form N-1A (SEC File No. 33-33980), as amended from time to time, during the term of this Agreement. (2) Sales of Fund shares shall be effected in the manner provided for in the then current prospectus of the Fund and in the account registration forms provided by the Fund to DFA Securities. (3) In carrying out its responsibilities under this Agreement, DFA Securities shall use its best efforts to ensure that persons engaged as Regional Directors and Regional Representatives of DFA Securities comply with applicable Federal and state regulatory requirements regarding the sale of securities, and with Sections 26(f) and (g) of the Rules of Fair Practice of the National Association of Securities Dealers, Inc. ("NASD"). (4) DFA Securities will utilize its best efforts to encourage and promote the sale of Fund shares and, to this end, at its own expense may prepare and disseminate research and resource material as may be reasonably necessary or desirable to promote the sale of Fund shares. Any such material which refers to the Fund shall be approved in writing by an executive officer of the Fund prior to dissemination. (5) The Fund shall be responsible for, and shall bear the costs of, registration of Fund shares under applicable Federal and state securities laws. DFA Securities shall be responsible for, and shall bear the cost of, its own registration as a securities dealer under Federal and state law and of its membership in the NASD and the cost of prospectuses provided to persons who are not stockholders of the Fund. (6) This Agreement shall become effective on the effective date of post-effective amendment number 2 to the Registration Statement of the Fund, provided that prior to such date this <PAGE> Agreement has been approved by a vote of a majority of the Directors of the Fund. (7) This Agreement shall terminate automatically in the event of its assignment and may be terminated by either party without penalty upon sixty days' written notice. (8) Any notice required or permitted to be given by either party to the other shall be deemed sufficient if sent by registered or certified mail, postage prepaid, addressed by the party giving notice to the other party at the last address furnished by the other to the party giving notice: if to the Fund, at 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401, and if to DFA Securities, at 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401. (9) This Agreement shall be construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Fund and DFA Securities have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the day and year above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ David G. Booth --------------------------------- DFA SECURITIES INC. Dated: April 16, 1993 By: /s/ David G. Booth ------------------- --------------------------------- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(8)(A) <SEQUENCE>3 <DESCRIPTION>EXHIBIT 99.(B)(8)(A) <TEXT> <PAGE> CUSTODIAN AGREEMENT THIS AGREEMENT is made as of July 12, 1991, by and between DFA U.S. LARGE CAP PORTFOLIO INC., a Maryland Corporation (the "Fund") and PROVIDENT NATIONAL BANK, a national banking association ("Provident"). W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end, diversified, management investment company under the Investment Company Act of 1940, as amended ("the 1940 Act"); and WHEREAS, the Fund desires to retain Provident to serve as the Fund's custodian and Provident is willing to serve as the Fund's custodian; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. APPOINTMENT. The Fund hereby appoints Provident to act as custodian of the portfolio securities, cash and other property belonging to the Fund for the period and on the terms set forth in this Agreement. Provident accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Paragraph 21 of this Agreement. <PAGE> 2. DELIVERY OF DOCUMENTS. The Fund has furnished Provident with copies properly certified or authenticated of each of the following: (a) Resolutions of the Fund's Board of Directors authorizing the appointment of Provident as custodian of the portfolio securities, cash and other property belonging to the Fund as provided herein and approving this Agreement; (b) Appendix A identifying and containing the signatures of the Fund's officers authorized to issue Oral Instructions and to sign Written Instructions, as hereinafter defined, on behalf of the Fund; (c) The Fund's Articles of Incorporation filed with the Department of Assessments and Taxation of the State of Maryland on March 19, 1990 and all amendments thereto (such Articles of Incorporation, as presently in effect and as they shall from time to time be amended, are herein called the "Charter"); (d) The Fund's By-Laws and all amendments thereto (such By-Laws, as presently in effect and as they shall from time to time be amended, are herein called the "By-Laws"); (e) The current Facility Agreement between Dimensional Fund Advisers Inc. ("DFA") and the Fund (the "Facility Agreement"); (f) The Agreement between the Fund and DFA Securities Inc.; (g) The Transfer Agency Agreement between Provident Financial Processing Corporation (the "Transfer Agent") and the Fund dated as of July 12, 1991 (the "Transfer Agency Agreement"); 2 <PAGE> (h) The Administration and Accounting Services Agreement between Provident Financial Processing Corporation and the Fund dated as of July 12, 1991 (the "Accounting Services Agreement"); (i) The Fund's most recent Registration Statement on Form N-1A under the Securities Act of 1933, as amended ("the 1933 Act") (File No. 33- ) and under the 1940 Act as filed with the SEC on May 14, 1991 relating to shares of the Fund's Common Stock, $.0l par value ("Shares"), and all amendments thereto; and (j) The Fund's most recent prospectus and Statement of Additional Information relating to Shares (such prospectus and Statement of Additional Information, as presently in effect and all amendments and supplements thereto are herein called the "Prospectus"). The Fund will furnish Provident from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any. 3. DEFINITIONS. (a) "AUTHORIZED PERSON". As used in this Agreement, the term "Authorized Person" means any of the officers of the Fund and any other person, whether or not any such person is an officer or employee of the Fund, duly authorized by the Board of Directors of the Fund to give Oral and Written Instructions on behalf of the Fund and listed on the Certificate annexed hereto as Appendix A or any amendment thereto as may be received by Provident from time to time. (b) "BOOK-ENTRY SYSTEM". As used in this Agreement, the 3 <PAGE> term "Book-Entry System" means the Federal Reserve Treasury book-entry system for United States and federal agency securities, its successor or successors and its nominee or nominees and any book-entry system maintained by a clearing agency registered with the SEC under Section 17A of the Securities Exchange Act of 1934 (the "1934 Act"). (c) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral Instructions" means oral instructions actually received by Provident from an Authorized Person or from a person reasonably believed by Provident to be an Authorized Person. The Fund agrees to deliver to Provident, at the time and in the manner specified in Paragraph 8(b) of this Agreement, Written Instructions confirming Oral Instructions. (d) "PROPERTY". The term "Property", as used in this Agreement, means: (i) any and all securities, forward currency contracts, exchange listed financial futures contracts and other property which the Fund may from time to time deposit, or cause to be deposited, with Provident or which Provident may from time to time hold for the Fund; (ii) all income in respect of any of such securities, forward currency contracts, exchange listed financial futures contracts or other property; (iii) all proceeds of the sale of any of such securities, forward currency contracts, exchange listed financial futures contracts or other property; and 4 <PAGE> (iv) all proceeds of the sale of securities issued by the Fund, which are received by Provident from time to time from or on behalf of the Fund. (e) PFPC. As used in this Agreement, "PFPC" means Provident Financial Processing Corporation. (f) "WRITTEN INSTRUCTIONS". As used in this Agreement, the term "Written Instructions" means written instructions delivered by hand, mail, tested telegram, cable, telex or facsimile sending device, and received by Provident and signed by an Authorized Person. Written Instructions include electronic transmissions properly originated and confirmed by the Fund. (g) "AFFILIATE". As used herein, "Affiliate" means any company that controls, is controlled by or is under common control with Provident. 4. DELIVERY AND REGISTRATION OF THE PROPERTY. The Fund will deliver or cause to be delivered to Provident all securities and all moneys owned by the Fund, including cash or securities received for the issuance of its Shares, at any time during the period of this Agreement. Provident will not be responsible for such securities and such moneys until actually received by it. All securities delivered to Provident (other than in bearer form) shall be registered in the name of the Fund or in the name of a nominee of the Fund or in the name of any nominee of Provident (with or without indication of fiduciary status), or in the name of any subcustodian or any nominee of any such sub-custodian appointed pursuant to Paragraph 6 hereof or shall be properly endorsed and in 5 <PAGE> form for transfer satisfactory to Provident. 5. RECEIPT AND DISBURSEMENT OF MONEY. (a) Provident shall open and maintain a separate custodial account or accounts in the name of the Fund, subject only to draft or order by Provident acting pursuant to the terms of this Agreement, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Fund. Provident shall make payments of cash to, or for the account of, the Fund from such cash only (i) for the purchase of securities as provided in Paragraph 13 hereof; (ii) upon receipt of Written Instructions, for the payment of interest, dividends, distributions, taxes, administration, accounting, advisory or management fees or expenses which are to be borne by the Fund under the terms of this Agreement, the Advisory Agreements, the Administration and Accounting Services Agreement and the Transfer Agency Agreement; (iii) upon receipt of Written Instructions, for payments in connection with the conversion, exchange or surrender of securities owned or subscribed to by the Fund and held by or to be delivered to Provident; (iv) to a sub-custodian pursuant to Paragraph 6 hereof; (v) for the redemption of the Fund's Shares pursuant to the procedures set forth in the Fund's prospectus dated May 14, 1991 or Written Instructions amending such procedures; (vi) for payment of the amount of dividends received in respect of securities sold short; or (vii) upon receipt of Written Instructions, for other Fund purposes. No payment pursuant to (i) above shall be made unless Provident has 6 <PAGE> received a copy of the broker's or dealer's confirmation or the payee's invoice, as appropriate, and as provided in Paragraph 13 hereof. (b) Provident is hereby authorized to endorse and collect all checks, drafts or other orders for the payment of money received as custodian for the account of the Fund. 6. RECEIPT OF SECURITIES. (a) Except as provided by Paragraph 7 hereof, Provident shall hold and physically segregate in a separate account, identifiable at all times from those of any other persons, firms, or corporations, all securities and other property received by it for the account of the Fund. All such securities and other property shall be held or disposed of by Provident for the Fund pursuant to the terms of this Agreement. In the absence of Written Instructions accompanied by a certified resolution of the Fund's Board of Directors authorizing the transaction, Provident shall have no power or authority to withdraw, deliver, assign, hypothecate, pledge or otherwise dispose of any such securities and investments except in accordance with the express terms provided for in this Agreement. In no case may any Director, officer, employee or agent of the Fund withdraw any securities upon their mere receipt. In connection with its customary and normal duties under this Paragraph 6, Provident may, at its own expense, enter into sub-custodian agreements with other banks or trust companies for the receipt of certain securities and cash to be held by Provident for the account of the Fund pursuant to this Agreement; provided that each such bank or trust company 7 <PAGE> has an aggregate capital, surplus and undivided profits, as shown by its last published report, of not less than one million dollars ($1,000,000) for a Provident subsidiary or affiliate, or of not less than twenty million dollars ($20,000,000) if such bank or trust company is not a Provident subsidiary or affiliate and that in either case such bank or trust company agrees with Provident to comply with all relevant provisions of the 1940 Act and applicable rules and regulations thereunder. Provident shall remain responsible for the performance of all of its duties under this Agreement and shall hold the Fund harmless from the acts and omissions of any bank or trust company that it might choose pursuant to this Paragraph 6. Provident shall notify the Fund in any event that it appoints a sub-custodian hereunder and shall provide the Fund with such information in respect thereof as the Fund may reasonable request. (b) Where securities are transferred to an account of the Fund established pursuant to Paragraph 7 hereof, Provident shall also by book entry or otherwise identify as belonging to the Fund the quantity of securities in a fungible bulk of securities registered in the name of Provident (or its nominee) or shown in Provident's account on the books of the Book-Entry System. On the following business day, Provident shall furnish PFPC with confirmations and a summary of all transfers to or from the account of the Fund. At least monthly and from time to time, Provident shall furnish the Fund and PFPC with a detailed statement of the Property held for the Fund under this Agreement. 8 <PAGE> 7. USE OF BOOK-ENTRY SYSTEM AND DEPOSITORY. The Fund shall deliver to Provident certified resolutions of the Board of Directors of the Fund approving, authorizing and instructing Provident on a continuous and on-going basis until instructed to the contrary by Oral or Written Instructions actually received by Provident (a) to deposit in the Book-Entry System all securities belonging to the Fund eligible for deposit therein and (b) to utilize the Book-Entry System to the extent possible in connection with settlements of purchases and sales of securities by the Fund, and deliveries and returns of securities loaned, subject to repurchase agreements or used as collateral in connection with borrowing. Without limiting the generality of such use, it is agreed that the following provisions shall apply thereto: (a) Securities and any cash of the Fund deposited in the Book-Entry System will at all times be segregated from any assets and cash controlled by Provident in other than a fiduciary or custodian capacity but may be commingled with other assets held in such capacities. Provident and its sub-custodian, if any, will pay out money only upon receipt of securities and will deliver securities only upon the receipt of money. (b) All books and records maintained by Provident which relate to the Fund's participation in the Book-Entry System will at all times during Provident's regular business hours be open to the, inspection of the Fund's duly authorized employees, designees and agents, and the Fund will be furnished with all information respect of the services rendered to it as it may require. 9 <PAGE> (c) Provident will provide the Fund with copies of any report obtained by Provident on the system of internal accounting control of the Book-Entry System promptly after receipt of such a report by Provident. Provident will also provide the Fund with such reports on its own system of internal control as the Fund may reasonably request from time to time. (d) In the event that any securities transaction for the Fund fails to settle in accordance with Instructions received by Provident. Provident shall promptly so notify PFPC and Provident shall use its best efforts to settle or cause to be settled such transactions in accordance with such Instructions. 8. INSTRUCTIONS CONSISTENT WITH, ETC. (a) Unless otherwise provided in this Agreement, Provident shall act only upon oral and Written Instructions. Although Provident may know of the provisions of such Charter or By-Laws or any vote, resolution or proceeding of the Shareholders, or of the Board of Directors, or of any committee thereof. (b) Provident shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by Provident pursuant to this Agreement. The Fund agrees to forward or request PFPC to forward to Provident Written Instructions confirming Oral Instructions in such manner that the Written Instructions are received by Provident by the close of business of the same day that such Oral Instructions are given to Provident. The Fund agrees that the fact that such confirming Written Instructions are not received by Provident shall in no way affect 10 <PAGE> the validity of the transactions or enforceability of the transactions authorized by the Fund by giving oral Instructions. The Fund agrees that Provident shall incur no liability to the Fund in acting in good faith upon Oral Instructions given to Provident hereunder concerning such transactions provided such instructions reasonably appear to have been received from an Authorized Person, provided however, Provident shall not be so protected if such oral or Written Instructions were received from an Affiliate who has acted negligently, unless such an Affiliate has received and transmitted erroneous instructions received from an Authorized Person who is not an Affiliate. 9. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary Written Instructions, Provident is authorized to, and shall take, as necessary, the following actions: (a) COLLECTION OF INCOME AND OTHER PAYMENTS. Provident shall: (i) collect and receive for the account of the Fund, all income and other payments and distributions, including (without limitation) stock dividends, rights, bond coupons, option premiums and similar items, included or to be included in the Property, and promptly advise the Fund of such receipt and shall credit such income, as collected, to the Fund's custodian account; (ii) endorse and deposit for collection, in the name of the Fund, checks, drafts, or other orders for the payment of money on the same day as received; (iii) receive and hold for the account of the Fund 11 <PAGE> all securities received as a distribution on the Fund's securities as a result of a stock dividend, share split-up or reorganization, recapitalization, readjustment or other rearrangement or distribution of rights or similar securities issued with respect to any portfolio securities belonging to the Fund held by Provident hereunder; (iv) present for payment and collect the amount payable upon all securities which may mature or be called, redeemed, or retired, or otherwise become payable on the date such securities become payable; and (v) take any action which may be necessary and proper in connection with the collection and receipt of such income and other payments and the endorsement for collection of checks, drafts, and other negotiable instruments as described in Paragraph 24 of this Agreement. (b) MISCELLANEOUS TRANSACTIONS. Provident is authorized to deliver or cause to be delivered Property against payment or other consideration or written receipt therefor in the following cases: (i) for examination by a broker selling for the account of the Fund in accordance with street delivery custom; (ii) for the exchange of interim receipts or temporary securities for definitive securities; and (iii) for transfer of securities into the name of the Fund or Provident or nominee of either, or for exchange of securities for a different number of bonds, certificates, or other 12 <PAGE> evidence, representing the same aggregate face amount or number of units bearing the same interest rate, maturity date and call provisions, if any; provided that, in any such case, the new securities are to be delivered to Provident. 10. TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral or Written Instructions are not otherwise, Provident, directly or through the use of the Book-Entry System, shall: (a) execute and deliver to such persons as may be designated in such Oral or Written Instructions, proxies, consents, authorizations, and any other instruments whereby the authority of the Fund as owner of any securities may be exercised; (b) deliver any securities held for the Fund against receipt of other securities or cash issued or paid in connection with the liquidation, reorganization, refinancing, tender offer, merger, consolidation or recapitalization of any corporation, or the exercise of any conversion privilege; (c) deliver any securities held for the Fund to any protective committee, reorganization committee or other person in connection with the reorganization, refinancing, merger, consolidation, recapitalization or sale of assets of any corporation, and receive and hold under the terms of this Agreement such certificates of deposit, interim receipts or other instruments or documents as may be issued to it to evidence such delivery; (d) make such transfers or exchanges of the assets of the Fund and take such other steps as shall be stated in said Oral or Written Instructions to be for the purpose of effectuating any 13 <PAGE> duly authorized plan of liquidation, reorganization, merger, consolidation or recapitalization of the Fund; (e) release securities belonging to the Fund to any bank or trust company for the purpose of pledge or hypothecation to secure any loan incurred by the Fund; provided, however, that securities shall be released only upon payment to Provident of the monies borrowed, except that in cases where additional collateral is required to secure a borrowing already made, subject to proper prior authorization, further securities may be released for that purpose; and repay such loan upon redelivery to it of the securities pledged or hypothecated therefor and upon surrender of the note or notes evidencing the loan; and (f) release and deliver securities owned by the Fund in connection with any repurchase agreement entered into on behalf of the Fund, but only on receipt of payment therefor; and pay out moneys of the Fund in connection with such repurchase agreements, but only upon the delivery of the securities; and (g) otherwise receive, transfer, exchange (including exchanges of Shares of the Fund for securities and redemption of Shares of the Fund in securities owned by the Fund), lend or deliver securities in accordance with Oral or Written Instructions. 11. SEGREGATED ACCOUNTS. (a) In the event that the Fund engages in transactions involving forward currency contracts, exchange listed financial futures contracts or options thereon, or buys, sells, or writes option on securities, Provident shall upon receipt of Written or 14 <PAGE> Oral Instructions establish and maintain a segregated account or accounts on its records for and on behalf of the Fund, into which account or accounts may be transferred cash and/or securities, including securities in the Book-Entry System or with a Depository (i) for the purposes of compliance by the Fund with the procedures required a securities or options exchange or futures commissions merchant; and (ii) shall establish other segregated accounts for other proper purposes hereunder in accordance with Written or Oral Instructions. (b)(i) Promptly after each loan of securities specifically allocated to the Fund held by Provident hereunder, the Fund shall deliver or cause to be delivered to Provident Written Instructions specifying with respect to each such loan: (a) the name of the issuer and the title of the securities, (b) the number of shares or the principal amount loaned, (c) the date of the loan and delivery, (d) the total amount to be delivered to Provident against the loan of the securities, including the amount of cash collateral and the premium, if any, separately identified, and (e) the name of the broker, dealer, or financial institution to which the loan was made. Provident shall deliver the securities thus designated to the broker, dealer or financial institution to which the loan was made upon receipt of the total amount designated as to be delivered against the loan of securities. Provident may accept payment in connection with a delivery otherwise than through the Book-Entry System only in the form of a certified or bank cashier's check payable to the order of the Fund or Provident drawn on New 15 <PAGE> York Clearing House funds and may deliver securities in accordance with the customs prevailing among dealers in securities. (ii) Promptly after each termination of the loan of securities by the Fund, the Fund shall deliver or cause to be delivered to Provident Written Instructions specifying with respect to each such loan termination and return of securities: (a) the name of the issuer and the title of the securities to be returned, (b) the number of shares or the principal amount to be returned, (c) the date of termination, (d) the total amount to be delivered by Provident (including the cash collateral for such securities minus any offsetting credits as described in said Written Instructions) , and (e) the name of the broker, dealer, or financial institution from which the securities will be returned. Provident shall receive all securities returned from the broker, dealer, or financial institution to which such securities were loaned and upon receipt thereof shall pay, out of the moneys held for the account of the Fund, the total amount payable upon such return of securities as set forth in the Written Instructions. 12. DIVIDENDS AND DISTRIBUTIONS. The Fund itself or through PFPC shall furnish Provident with appropriate evidence of action by the Fund's Board of Directors declaring and authorizing the payment of any dividends and distributions in respect of the Fund. Upon receipt by Provident of Written Instructions with respect to dividends and distributions declared by the Fund's Board of Directors and payable to Shareholders who have elected in the proper manner to receive their distributions or dividends in cash, 16 <PAGE> and in conformance with procedures mutually agreed upon by Provident, the Fund, and PFPC, Provident shall pay to PFPC, an amount equal to the amount indicated in said Written Instructions as payable by the Fund to such Shareholders for distribution in cash by PFPC to such Shareholders. In lieu of remitting to PFPC cash dividends and distributions, Provident may arrange for the direct payment of cash dividends and distributions to Shareholders by Provident in accordance with such procedures and controls as are mutually agreed upon from time to time by and among the Fund, Provident and PFPC. In accordance with the Prospectus, the Internal Revenue Code and regulations promulgated thereunder, and with such procedures and controls as are mutually agreed upon from time to time by and among the Fund, Provident and PFPC, Provident shall arrange for the establishment of IRA custodian accounts for such Shareholders holding Shares through IRA accounts. 13. PURCHASES OF SECURITIES. Promptly after each purchase of securities by the Advisor for the Fund, the Fund, through PFPC, shall deliver to Provident Oral or Written Instructions specifying with respect to each such purchase: (a) the name of the issuer and the title of the securities including CUSIP number, if applicable, (b) the number of shares or the principal amount purchased and accrued interest, if any, (c) the date of purchase and settlement, (d) the purchase price per unit, (e) the total amount payable upon such purchase and (f) the name of the person from whom or the broker through whom the purchase was made. Provident shall pay out 17 <PAGE> of the monies held for the account of the Fund the total amount payable to the person from whom or the broker through whom the purchase was made, provided that the same conforms to the total amount payable as set forth in such Oral or Written Instructions. In the event that such a transaction fails to settle in accordance with such Oral or Written Instructions, Provident shall promptly so notify the Fund and PFPC and shall use its best efforts to settle or cause to be settled such transactions in accordance with such Instructions. 14. SALES OF SECURITIES. Promptly after each sale of securities by the Fund or exercise of an option written by the Fund, the Fund, through PFPC, shall deliver to Provident Oral Instructions, specifying with respect to each such sale: (a) the name of the issuer and the title of the security including CUSIP number, if applicable, (b) the number of shares or principal amount sold, and accrued interest, if any, (c) the date of sale, (d) the sale price per unit, (e) the total amount payable to the Fund upon such sale, (f) the name of the broker through whom or the person to whom the sale was made, and (g) the location to which the security must be delivered. Provident shall deliver the securities upon such sale, provided that the same conforms to the total amount payable as set forth in such Oral Instructions. Subject to the foregoing, Provident may accept payment in such form as shall be satisfactory to it, and may deliver securities and arrange for payment in accordance with the customs prevailing among dealers in securities. If any such transaction fails to settle in accordance 18 <PAGE> with such Instructions, Provident shall promptly notify the Fund and shall use its best efforts to settle or cause to be settled such transaction in accordance with such instructions. 15. RECORDS. Provident shall prepare and maintain written records of all cash and property and income and disbursements of the Fund. The books and records pertaining to the Fund which are in the possession of Provident shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable laws and regulations and shall be returned to the Fund or its designee upon request. The Fund and the Fund's authorized representatives and designees, shall have access to such books and records at all times during Provident's normal business hours. Upon the request of the Fund, copies of any such books and records shall be provided by Provident to the Fund or the Fund's authorized representative or designee at the Fund's expense. 16. REPORTS AND OTHER INFORMATION. (a) Provident shall furnish the Fund the following reports: (1) such periodic and special reports as the Fund may reasonably request; (2) a monthly statement summarizing all transactions and entries for the account of the Fund, listing the portfolio securities belonging to the Fund with the average cost of each issue at the end of such month, and stating the cash account of the Fund including disbursements; 19 <PAGE> (3) the reports to be furnished to the Fund pursuant to Rule 17f-4; and (4) such other information as may be agreed upon from time to time between the Fund and Provident. (b) Provident shall transmit promptly to the Fund any proxy statement, proxy materials, notice of a call, tender offer or conversion, redemption, reorganization and similar communications received by it as custodian of the Property. (c) In addition to its obligations under paragraph 16 (b) herein, Provident shall use its best efforts to communicate to the Fund such material information concerning the securities held by the Fund as shall come into Provident's possession via electronic services or issuer notification, but Provident shall have no obligation to monitor any publication, newspapers or similar periodicals for such information and shall not be liable to the Fund in respect of the activity covered by this Paragraph 16(c). 17. COOPERATION WITH ACCOUNTANTS. Provident shall cooperate with Fund's independent public accountants and shall take all reasonable action in the performance of its obligations under this Agreement to assure that the necessary information is made available to such accountants for the expression of their opinion, as such may be required from time to time by the Fund. 18. CONFIDENTIALITY. Provident agrees on behalf of itself and its employees to treat confidentially all records and other information relative to the Fund and its prior, present, or potential Shareholders, except, after prior notification to and 20 <PAGE> approval in writing by the Fund, which approval may not be withheld where Provident reasonably believes that it may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. 19. RIGHT TO RECEIVE ADVICE. Provident shall be protected in any action or inaction which it takes in reliance on advice of Provident's counsel. Provident shall notify the Fund of the receipt of such advice within a reasonable time. 20. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Provident agrees to perform its duties hereunder in accordance with applicable law; however; Provident assumes no responsibility for ensuring that the Fund complies with the requirements of the 1933 Act, the 1940 Act, the CEA, and any laws, rules and regulations of governmental authorities having jurisdiction. 21. COMPENSATION. As compensation for the services rendered by Provident during the term of this Agreement, the Fund will pay to Provident the fees set forth in the Fee Schedule annexed hereto as Schedule A and incorporated herein. 22. INDEMNIFICATION. (a) The Fund, as sole owner of the Property, agrees to indemnify and hold harmless Provident and its nominees from all taxes, charges, expenses (except expenses that are inherent to its duties hereunder) , assessments, claims and liabilities (including, without limitation, liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and any state and foreign securities and blue sky laws, all as or may be 21 <PAGE> amended from time to time) including (without limitation) reasonable attorneys' fees and disbursements, arising directly or indirectly (a) solely from the fact that securities included in the Property are registered in the name of any such nominee or (b) from any action or thing which Provident takes or does or omits to take or do (i) at the request or on the direction of or in reliance on the advice of the Fund or the Fund's counsel on behalf of the Fund or (ii) upon Oral or Written Instructions, provided that Oral or Written Instructions were not received from an Affiliate who has acted negligently (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate) and provided further neither Provident nor any of its nominees shall be indemnified against any liability (or any expenses incident to such liability) arising out of Provident's or such nominee's own misfeasance, bad faith, negligence or disregard of its duties or responsibilities described in this Agreement. In the event of any advance of cash for any purpose made by Provident pursuant to Oral or Written Instructions of the Fund, or in the event that Provident or its nominee shall incur or be assessed any taxes, charges, expenses,, assessments, claims or liabilities described in the previous sentence of this Paragraph 22(a), except such as may arise from its or its nominee I s own negligent action, negligent failure to act, disregard of its duties hereunder or misconduct, any Property at any time held for the account of the Fund shall be security therefor. (b) Provident shall not pay or settle any claim, demand, 22 <PAGE> expense or liability in respect of which Provident is entitled to be indemnified pursuant to paragraph (a) above (an "Indemnifiable Claim") without the express written consent of the Fund. Provident shall notify the Fund promptly of receipt of notification of an Indemnifiable Claim. Unless the Fund notifies Provident within 30 days of receipt of Written Notice of such Indemnifiable Claim that the Fund does not intend to defend such Indemnifiable Claim, the Fund shall defend Provident from such Indemnifiable Claim. The Fund shall have the right to defend any Indemnifiable Claim at its own expense, such defense to be conducted by counsel selected by the Fund. Further, Provident may join the Fund in such defense at Provident's own expense, but to the extent that it shall so desire the Fund shall direct such defense. If the Fund shall fail or refuse to defend, pay or settle an Indemnifiable Claim, Provident, at the Fund's expense consistent with limitations concerning attorney's fees expressed in Paragraph 22(a) hereof, may provide its own defense. 23. RESPONSIBILITY OF PROVIDENT. Provident hereby represents that it is experienced in the provision of the services covered by this Agreement. In the performance of its duties hereunder, Provident shall be obligated to exercise due care and diligence and to act in good faith and in a timely manner to assure the accuracy and completeness of all services performed under this Agreement. Provident shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by Provident in writing. Provident shall be 23 <PAGE> responsible for its own negligent failure to perform its duties under this Agreement. In assessing negligence for purposes of this Agreement, the parties agree that the standard of care applied to Provident's conduct shall be the care that would be exercised by a similarly situated service provider, supplying substantially the same services under substantially similar circumstances. Notwithstanding the foregoing, Provident shall not be responsible for losses beyond its control, provided that Provident has acted in accordance with the provisions of this Agreement and the standard of care set forth above; and provided further that Provident shall only be responsible for that portion of losses or damages suffered by the Fund attributable to the negligence of Provident. Losses shall be beyond Provident's control if they result from or occur because of delays or errors or loss of data provided by a person other than Provident or its Affiliates, or acts of civil or military authority, national emergencies, labor difficulties (other than those of Provident or its Affiliates), fire, failure of equipment caused by failures external to the premises of Provident or its Affiliates, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply external to the premises of Provident or its Affiliates. Without limiting the generality of the foregoing or of any other provision of this Agreement, Provident in connection with its duties under this Agreement shall not be under any duty or obligation to inquire into and shall not be liable for or in 24 <PAGE> respect of the validity or invalidity or authority or lack thereof of any Oral or Written Instruction received from the Fund, or an Affiliate, provided such Affiliate has not acted negligently (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate), notice or other instrument which conforms to the applicable requirements of this Agreement, and which Provident reasonably believes to be genuine. Provident shall have no liability to the Fund for any losses or damages the nature of which is or was remote, unforeseen, unforeseeable or beyond the scope of reasonable anticipation at the time this Agreement was executed. 24. COLLECTIONS. All collections of monies or other property in respect, or which are to become part, of the Property (but not the safekeeping thereof upon receipt by Provident) shall be at the sole risk of the Fund. In any case in which Provident does not receive any payment due the Fund within a reasonable time after Provident has made proper demands for the same, it shall so notify the Fund in writing, including copies of all demand letters, any written responses thereto, and memoranda of all oral responses thereto and to telephonic demands, and await instructions from the Fund. Provident shall not be obliged to take legal action for collection unless and until reasonably indemnified to its satisfaction. Provident shall also notify the Fund as soon as reasonably practicable whenever income due on securities is not collected in due course. 25 <PAGE> 25. DURATION AND TERMINATION. This Agreement shall continue in effect for a period of one year from the date that the Fund begins to invest in stocks that comprise the Standard & Poor's 500 Composite Stock Price Index (the "investment date") . This Agreement may be terminated by either party on or after the first anniversary of the investment date upon not less than 180 days prior written notice to the other party. The foregoing provisions notwithstanding, either party may terminate this Agreement in the event of a material breach of the terms hereof after written notice to the other party of such breach and a reasonable time for cure of such breach, unless such breach is not curable and, in such circumstances, this Agreement shall terminate, at the option of the injured party, three months after the date such notice is given. Upon any termination of this Agreement Provident shall deliver cash, securities, Property and the records maintained hereunder for the Fund to a successor custodian designated by the Fund, and if no such successor is designated, Provident may deliver such cash, securities, Property and records to a bank or trust company of its own selection, having an aggregate capital, surplus and undivided profits, as shown by its last published report, of not less than twenty million dollars ($20,000,000) as a custodian for the Fund to be held under terms similar to those of this Agreement, provided, however, that Provident shall not be required to make any such delivery or payment until full payment shall have been made or provided for by the Fund of all liabilities constituting a charge on or against the property of the Fund then held by Provident or on 26 <PAGE> or against Provident and until full payment shall have been made to Provident of all of its fees, compensation, costs and expenses as provided herein. 26. NOTICES. All notices and other communications, including Written Instructions (collectively referred to as "Notice" or "Notices" in this paragraph), hereunder shall be in writing or by confirming telegram, cable, telex, or facsimile sending device. Notices shall be addressed (a) if to Provident at Provident's address, Airport Business Center, 200 Stevens Drive, Lester, Pennsylvania 19113, marked for the attention of the Custodian Services Department (or its successor); (b) if to the Fund, at the address of the Fund; or (c) if to neither of the foregoing, at such other address as shall have been notified to the sender of any such Notice or other communication. All postage, cable, telegram, telex and facsimile sending device charges arising from the sending of a Notice hereunder shall be paid by the sender. 27. FURTHER ACTIONS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. 28. AMENDMENTS. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. 29. DELEGATION. On thirty (30) days prior written notice to the Fund, Provident may assign its rights and delegate its duties hereunder to any wholly-owned direct or indirect subsidiary of Provident or PNC Financial Corp, provided that (i) the delegate 27 <PAGE> agrees with Provident to comply with all relevant provisions of the 1940 Act and this Agreement; and (ii) Provident and such delegate shall promptly provide such information as the Fund may request, and respond to such questions as the Fund may ask, relative to the delegation, including (without limitation) the capabilities of the delegate. In the event of such delegation, Provident shall remain liable under this Agreement. 30. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 31. MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter hereof, provided that the parties hereto may embody in one or more separate documents their agreement, if any, with respect to delegated and/or Oral Instructions. The captions in this Agreement are included for convenience of reference only and in no way defined or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement shall be deemed to be a contract made in Pennsylvania and governed by Pennsylvania law. If any provision of this Agreement shall be held or made invalid by a court decision, statue, rule or 28 <PAGE> otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below on the day and year first above written. DFA U.S. LARGE CAP PORTFOLIO INC. By: /s/ Deborah J. Ferris ---------------------------------- PROVIDENT NATIONAL BANK By: /s/ Joseph Gramlich ---------------------------------- 29 <PAGE> APPENDIX A (To identify and furnish signatures of "Authorized Persons" as referred to in the Custody Agreement and the Transfer Agency Agreement of the Fund.) 30 <PAGE> SCHEDULE A The Fund will pay Provident National Bank ("Provident") for its services under this Custodian Agreement and Provident Financial Processing Corporation ("PFPC") for its services under both a Transfer Agency Agreement with the Fund, dated July 12, 1991, and under an Administration and Accounting Services Agreement with the Fund, dated July 12, 1991, an aggregate monthly fee of 1/12 of .0175% of the Fund's average daily gross assets, exclusive of out-of-pocket expenses; PROVIDED, HOWEVER, that the Fund will pay Provident and PFPC a minimum aggregate annual fee of $70,000. PFPC will receive payment of the aggregate monthly fee. There will be no transaction-based custody fee. Fees will begin to accrue on the date that the Fund begins to invest in stocks that comprise the Standard & Poor's 500 Composite Stock Price Index (the "investment date") and the twelve month period for calculating the minimum annual fee shall begin on the investment date. The following out-of-pocket expenses shall be billed by Provident on a monthly basis, in arrears, to the extent incurred, commencing on the effective date of the Custodian Agreement; (i) Federal Express charges; (ii) Postage; (iii) Record storage; (iv) Dividend/Interest claim fees charged to Provident; and (v) Payments to depositories (i.e., $.50 to DTC per DTC transaction). The following out-of-pocket expenses shall be billed by PFPC on a monthly basis, in arrears, to the extent incurred, commencing on the effective date of the Transfer Agency and the Administration and Accounting Services Agreements; (i) Pricing services - domestic and international prices - support terminals - pink sheets; (ii) Federal Express charges; (iii) Postage; and (iv) Record storage. 31 </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(8)(A)(1) <SEQUENCE>4 <DESCRIPTION>EXHIBIT 99 (B)(8)(A)(1) <TEXT> <PAGE> CUSTODIAN AGREEMENT AMENDMENT NUMBER ONE THIS AGREEMENT is made as of the 3rd day of May, 1993 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund") , and PNC BANK, NATIONAL ASSOCIATION, successor by merger to "Provident National Bank" ("PNC Bank"). W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PNC Bank to provide certain custodian services pursuant to a Custodian Agreement dated as of July 12, 1991 (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PNC Bank provided such services to the one class of shares of the Fund that was in existence on July 12, 1991; and WHEREAS, the Fund has since organized one new Portfolio, designated "The DFA 6-10 Institutional Portfolio" (the "New Portfolio"), and the parties hereto desire that PNC Bank shall provide the New Portfolio with the same services that PNC Bank provided to the original class of shares of the Fund pursuant to <PAGE> the Agreement. NOW, THFREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PNC Bank copies of: (a) Post-Effective Amendment Number 2 of the registration statement of the Fund, as effective with the U. S. Securities and Exchange Commission on May 3, 1993, wherein the New Portfolio is described; (b) The exhibits to such post-effective amendment, all of which pertain to the New Portfolio; (c) Amendment Number One dated May 3, 1993 of the Administration and Accounting Services Agreement between the Fund and PFPC Inc. dated as of July 12, 1991; and (d) Amendment Number One dated May 3, 1993 of the Transfer Agency Agreement between the Fund and PFPC Inc. dated as of July 12, 1991. 2. The Agreement hereby is amended effective May 3, 1993 by: (a) adding the following sentence immediately after the second sentence of Section 1 therein, "As of May 3, 1993, the Fund delivered to PNC Bank a Prospectus dated May 3, 1993 wherein a new class of Fund shares designated "The DFA 6-10 Institutional Portfolio" is described and the parties agree that the terms of -2- <PAGE> this Agreement shall apply to the Portfolio described in such Prospectus."; (b) adding the following words, "and as amended May 3, 1993" after the words, "as filed with the SEC on May 14, 1991" in Section 2(i); (c) deleting the following words, "May 14, 1991" and inserting in lieu thereof, "May 3, 1993" in Section 5(a)(v); and (d) deleting the first sentence of Section 25 and inserting in lieu thereof: "This Agreement shall continue in effect for one year from the date that The DFA 6-10 Institutional Portfolio begins to invest in securities pursuant to its investment objective and policies (the 'investment date')." 3. The Fee Schedules of PNC Bank applicable to the New Portfolio shall be as agreed in writing from time to time. 4. In all other respects the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number One to the Agreement to be executed by their -3- <PAGE> duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant -------------------------------- Title: Vice President ----------------------------- PNC BANK, NATIONAL ASSOCIATION By: /s/ [Illegible] -------------------------------- Title: Vice President ----------------------------- -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(8)(A)(2) <SEQUENCE>5 <DESCRIPTION>EXHIBIT 99 (B)(8)(A)(2) <TEXT> <PAGE> CUSTODIAN SERVICES AGREEMENT AMENDMENT NUMBER TWO THIS AGREEMENT is made as of the 1st day of December, 1993 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund"), and PNC BANK, N.A., formerly "Provident National Bank" ("PNC"). W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PNC to provide certain custodian services pursuant to a Custodian Agreement dated as of July 12, 1991 and amended on May 3, 1993 (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PNC presently provides such services to the Portfolio of the Fund that was in existence on May 3, 1993; and WHEREAS, the Fund has since organized one new Portfolio, designated "The DFA International Value Portfolio" (the "New Portfolio"), and the parties hereto desire that PNC shall provide the New Portfolio with the same services that PNC provides to the other Portfolio of the Fund pursuant to the Agreement; and WHEREAS, Section 28 of the Agreement provides that the <PAGE> Agreement may be amended as agreed to in writing by PNC and the Fund. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PNC copies of: (a) Post-Effective Amendment Number 3 of the registration statement of the Fund, as effective with the U. S. Securities and Exchange Commission on December 1, 1993, wherein the New Portfolio is described; (b) The exhibits to such post-effective amendment consisting of Articles Supplementary to the Articles of Incorporation, amended By-Laws and the form of administration agreement, all of which pertain to the New Portfolio; (c) Amendment Number Two dated December 1, 1993 of the Transfer Agency Agreement between PFPC Inc. and the Fund dated as of July 12, 1991; and (d) Amendment Number Two dated December 1, 1993 of the Administration and Accounting Services Agreement between PFPC Inc. and the Fund dated as of July 12, 1991. 2. The Agreement hereby is amended effective December 1, 1993 by: (a) adding the following sentence immediately after the third sentence of Section I therein, "As of December 1, 1993, 2 <PAGE> the Fund delivered to PFPC a Prospectus dated December 1, 1993 wherein a new class of Fund shares designated the "The DFA International Value Portfolio" is described and the parties agree that the terms of this Agreement shall apply to the two Portfolios described in such Prospectus."; (b) adding the following words, "and as amended December 1, 1993" after the words, "as amended May 3, 1993" in Section 2(i); (c) deleting the following words, "May 3, 1993" and inserting in lieu thereof the words, "December 1, 1993" in Section 5(a)(v); and (d) adding a new sentence immediately following the third sentence of Section 25 as follows: "The foregoing provisions of this Section 25 notwithstanding, this Agreement with respect to The DFA International Value Portfolio may be terminated by either party upon not less than 180 days prior written notice to the other party." 3. The Fee Schedules of PFPC applicable to the New Portfolio shall be as agreed in writing from time to time. 4. In all other respects the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number One to the Agreement to be executed by their 3 <PAGE> duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant, VP -------------------------------- PNC BANK, N.A. By: /s/ Joseph Gramlich -------------------------------- 4 </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(8)(A)(5) <SEQUENCE>6 <DESCRIPTION>EXHIBIT 99 (B)(8)(A)(5) <TEXT> <PAGE> CUSTODIAN SERVICES AGREEMENT AMENDMENT NUMBER FIVE THIS AGREEMENT is made as of the 20th day of December, 1994 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund"), and PNC BANK, N.A., formerly "Provident National Bank" ("PNC"). W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PNC to provide certain custodian services pursuant to a Custodian Agreement dated as of July 12, 1991 and as amended (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PNC presently provides such services to the six existing Portfolios of the Fund; and WHEREAS, the Fund has recently organized two new Portfolios, designated "DFA International Value Portfolio III" and "U.S. Large Cap Value Portfolio III" (the "New Portfolios"), and the parties hereto desire that PNC shall provide the New Portfolios with the same services that PNC provides to the other Portfolios of the Fund pursuant to the Agreement; and <PAGE> WHEREAS, Section 28 of the Agreement provides that the Agreement may be amended as agreed to in writing by PNC and the Fund. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PNC copies of: (a) Post-Effective Amendment Number 7 of the registration statement of the Fund, as effective with the U.S. Securities and Exchange Commission on December 20, 1994, wherein the New Portfolios are described; (b) The exhibits to such post-effective amendment including the Articles Supplementary to the Articles of Incorporation, specimen securities and the forms of administration agreements with respect to the New Portfolios; (c) Amendment Number Five dated December 20, 1994 of the Transfer Agency Agreement between PFPC Inc. and the Fund dated as of July 12, 1991; and (d) Amendment Number Five dated December 20, 1994 of the Administration and Accounting Services Agreement between PFPC Inc. and the Fund dated as of July 12, 1991. 2. The Agreement hereby is amended effective December 20, 1994 by: (a) adding the following sentence immediately after -2- <PAGE> the second sentence of Section 1 therein, "As of December 20, 1994, the Fund delivered to PFPC a Prospectus dated December 20, 1994 wherein two new classes of Fund shares designated the 'DFA International Value Portfolio III' and 'U.S. Large Cap Value Portfolio III' are described and the parties agree that the terms of this Agreement shall apply to the two Portfolios described in such Prospectus."; and (b) adding a new sentence immediately following the second sentence of Section 25 as follows: "The foregoing provisions of this Section 25 notwithstanding, this Agreement with respect to DFA International Value Portfolio III and U.S. Large Cap Value Portfolio III may be terminated by either party upon not less than 180 days prior written notice to the other party." 3. The Fee Schedules of PNC applicable to the New Portfolios shall be as agreed in writing from time to time. 4. In all other respects the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number Five to the Agreement to be executed by their -3- <PAGE> duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant ------------------------------- Vice President PNC BANK, N.A. By: /s/ Joseph Gramlich ------------------------------- S.V.P. -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(A) <SEQUENCE>7 <DESCRIPTION>EXHIBIT 99 (B)(9)(A) <TEXT> <PAGE> TRANSFER AGENCY AGREEMENT THIS AGREEMENT is made as of the 12th day of July 1991, between DFA U.S. LARGE CAP PORTFOLIO INC., a Maryland corporation (the "Fund"), and PROVIDENT FINANCIAL PROCESSING CORPORATION, a Delaware corporation which is an indirect wholly-owned subsidiary of PNC Financial Corp (the "Transfer Agent" or "PFPC"). W I T N E S S E T H WHEREAS, the Fund is registered as an open-end, diversified management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund desires to retain the Transfer Agent to serve as the Fund's transfer agent, registrar, and dividend disbursing agent, and the Transfer Agent is willing to furnish such services; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. APPOINTMENT. The Fund hereby appoints the Transfer Agent to serve as transfer agent, registrar and dividend disbursing agent for the Fund with respect to the shares of the Fund's Common Stock, $.0l par value ("Shares") for the period and on the terms set forth in this Agreement. The Fund presently issues one separate series or class of shares which is described in the Prospectus delivered <PAGE> to the Transfer Agent herewith and the Fund may classify and reclassify additional Shares hereafter. The Transfer Agent shall identify to each such series or class property belonging to such series or class and in such reports, records, confirmations and notices to the Fund and other services provided hereunder shall promptly identify the series or class to which such property, record, report, confirmation or service pertains and shall issue shares on a per series basis as provided in the Prospectus. The Transfer Agent accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Paragraph 16 of this Agreement. Any class of shares created by the Fund after the date hereof shall be included hereunder upon the mutual agreement of the Fund and the Transfer Agent. 2. DELIVERY OF DOCUMENTS. The Fund has furnished the Transfer Agent with copies properly certified or authenticated of each of the following: (a) Resolutions of the Fund's Board of Directors authorizing the appointment of the Transfer Agent as transfer agent and registrar and dividend disbursing agent for the Fund and approving this Agreement; (b) Appendix A identifying and containing the signatures of the Fund's officers and other persons authorized to issue oral Instructions and to sign Written Instructions, as hereinafter defined, on behalf of the Fund and to execute stock certificates representing Shares; 2 <PAGE> (c) The Fund's Articles of Incorporation filed with the Department of Assessments and Taxation of the State of Maryland on March 19, 1990 and all amendments thereto (such Articles of Incorporation, as presently in effect and as they shall from time to time be amended, are herein called the "Charter"); (d) The Fund's By-Laws and all amendments thereto (such By-Laws, as presently in effect and as they shall from time to time be amended, are herein called "By-Laws"); (e) The current Facility Agreement with Dimensional Fund Advisors Inc. ("DFA") and the Fund (the "Facility Agreement"); (f) The Custodian Agreement between Provident National Fund dated as of July 12, 1991 (the "Custodian Bank and the Fund dated as of July 12, 1991 (the "Custodian Agreement"); (g) The Administration and Accounting Services Agreement between the Transfer Agent and Fund dated of July 12, 1991 (the "Accounting Services Agreement"); (h) The current Agreement between the Fund and DFA Securities Inc.; (i) The current form of Shareholder Agreement; (j) The Fund's most recent Registration Statement on Form N-lA under the Securities Act of 1933, as amended (the "1933 Act") (File No. 33-___________) and under the 1940 Act, as filed with the SEC on May 14, 1991 relating to Shares, and all amendments thereto; and (k) The Fund's most recent prospectus or prospectuses and Statements of Additional Information relating to Shares (such 3 <PAGE> prospectus, or prospectuses, and Statements of Additional Information as presently in effect and all amendments and supplements thereto are herein called the "Prospectus"). The Fund will furnish the Transfer Agent from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any. 3. DEFINITIONS. (a) "AUTHORIZED PERSON". As used in this Agreement, the term "Authorized Person" means any officer of the Fund and any other person, whether or not any such person is an officer or employee of the Fund, duly authorized by the Board of Directors of the Fund to give Oral and Written Instructions on behalf of the Fund and listed on the Certificate annexed hereto as Appendix A or any amendment thereto as may be received by the Transfer Agent from time to time. (b) "AFFILIATE". As used herein, "Affiliate" means any company that controls, is controlled by, or is under common control with PFPC. (c) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral Instructions" means oral instructions actually received by the Transfer Agent from an Authorized Person or from a person reasonably believed by the Transfer Agent to be an Authorized Person. The Fund agrees to deliver to the Transfer Agent, at the time and in the manner specified in Paragraph 4(b) of this Agreement, Written Instructions confirming Oral Instructions. 4 <PAGE> (d) "PFPC". As used in this Agreement "PFPC" means Provident Financial Processing corporation. (e) "WRITTEN INSTRUCTIONS". As used in this Agreement, the term "Written Instructions" means written instructions delivered by hand, mail, tested telegram, cable, telex or facsimile sending device, and received by the Transfer Agent and signed by an Authorized Person. Written Instructions include electronic transmission properly originated and confirmed by the Fund. (f) "SHARES". As used in this Agreement the term "Shares" means each separate class of shares of common stock issued by the Fund that are subject to this Agreement and as to which the services provided hereunder relate. 4. INSTRUCTIONS CONSISTENT WITH CHARTER, ETC. (a) Unless otherwise provided in this Agreement, the Transfer Agent shall act only upon Oral or Written Instructions. Although the Transfer Agent may know of the provisions of the Charter and By-Laws of the Fund, the Transfer Agent may assume that any Oral or Written Instructions received hereunder are not in any way inconsistent with any provisions of such Charter or By-Laws or any vote, resolution or proceeding of the Shareholders, or of the Board of Directors, or of any committee thereof. (b) the Transfer Agent shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Transfer Agent pursuant to this Agreement. The Fund agrees to forward to the Transfer Agent Written Instructions confirming Oral Instructions in such manner that the Written 5 <PAGE> Instructions are received by the Transfer Agent by the close of business of the same day that such Oral Instructions are given to the Transfer Agent. The Fund agrees that the fact that such confirming Written Instructions are not received by the Transfer Agent shall in no way affect the validity of the transactions or enforceability of the transactions authorized by the Fund by giving Oral Instructions. The Fund agrees that the Transfer Agent shall incur no liability to the Fund in acting upon Oral Instructions given to the Transfer Agent hereunder concerning such transactions, provided such instructions reasonably appear to have been received from an Authorized Person and provided further, if such Oral or Written Instructions were received from an Affiliate, that such Affiliate has acted without negligence (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate). (c) In the case of any negative stock split, recapitalization or other capital adjustment requiring a change in the form of Share certificates, the Transfer Agent will, at the Fund's expense, issue Share certificates in the new form in exchange for, or upon transfer of, outstanding Share certificates in the old form, upon receiving: (i) A Certificate authorizing the issuance of Share certificates in the new form; (ii) A certified copy of any amendment to the Articles of Incorporation with respect to the change; 6 <PAGE> (iii) Specimen Share certificates for each class of Shares in the new form approved by the Board of Directors of the Fund, with a Certificate signed by the Secretary of the Fund as to such approval; and (iv) An opinion of counsel for the Fund with respect to the validity of the Shares in the new form and the status of such Shares under the Securities Act of 1933, as amended, and any other applicable federal law or regulation (i.e., if subject to registration, that the Shares have been registered and that the Registration Statement has become effective or, if exempt, the specific grounds therefor). 5. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary Written Instructions, the Transfer Agent is authorized to take the following actions: (a) ISSUANCE OF SHARES. Upon receipt of a purchase order from the Fund, an investor or in accordance with Written or Oral Instructions for the purchase of Shares and sufficient information to enable the Transfer Agent to establish a Shareholder account, and after confirmation of receipt or crediting of Federal funds for such order or receipt of such other consideration for such shares as may be described in the Prospectus from the Fund's Custodian, the Transfer Agent shall issue and credit the account of such investor with Shares based on the current net asset value or public offering price of such Shares as described in the Prospectus. 7 <PAGE> (b) TRANSFER OF SHARES; UNCERTIFICATED SECURITIES. Where a Shareholder does not hold a certificate representing the number of Shares in his account and does provide the Transfer Agent with instructions for the transfer of such Shares which include a signature guaranteed by a national bank or member of a National Securities Exchange and such other appropriate documentation to permit a transfer, then the Transfer Agent shall register such Shares and shall deliver them pursuant to instructions received from the transferor, pursuant to the law of the State of Maryland and other applicable law relating to the transfer of shares of common stock. (c) STOCK CERTIFICATES. If at any time the Fund issues stock certificates, the following provisions will apply: (i) The Fund will supply the Transfer Agent with a sufficient supply of stock certificates representing Shares, in the form approved from time to time by the Board of Directors of the Fund, and, from time to time, shall replenish such supply upon request of the Transfer Agent. Such stock certificates shall be properly signed, manually or by facsimile signature, by the duly authorized officers of the Fund, whose names and positions shall be set forth as indicated on Appendix A, and shall bear the corporate seal or facsimile thereof of the Fund, and notwithstanding the death, resignation or removal of any officer of the Fund, such executed certificates bearing the manual or facsimile signature of such officer shall remain valid and may be issued 8 <PAGE> to Shareholders until the Transfer Agent is otherwise directed by Written Instructions. (ii) In the case of the loss or destruction of any certificate representing Shares, no new certificate shall be issued in lieu thereof, unless there shall first have been furnished. an appropriate bond of indemnity issued by the surety company approved by the Transfer Agent, except upon the receipt by the Transfer Agent of Written Instructions from the Fund. (iii) Upon receipt of signed stock certificates in proper form for transfer, and upon cancellation or destruction thereof, the Transfer Agent shall countersign, register and issue and new certificates for the same number of Shares in the name of the transferee and shall deliver them pursuant to instructions received from the transferor and the law of the State of Maryland relating to the transfer of shares of common stock. (iv) Upon receipt of the stock certificates, which shall be in proper form for transfer, together with the Shareholder's instructions to hold such stock certificates for safekeeping, the Transfer Agent shall reduce such Shares to uncertificated status, while retaining the appropriate registration in the name of the Shareholder upon the transfer books. (v) Upon receipt of written instructions from a 9 <PAGE> Shareholder of uncertificated securities for a certificate in the number of shares in his account, the Transfer Agent will issue such stock certificates and deliver them to the Shareholder. (d) REDEMPTION OF SHARES. Upon receipt of a redemption order from a stockholder and/or in accordance with Written Instructions, the Transfer Agent shall promptly notify PFPC, in its capacity as administrator, and the Custodian of the amount necessary to pay such redemption and shall redeem the number of Shares indicated thereon from the redeeming Shareholder's account pursuant to the procedures set forth in the prospectus dated May 14, 1991 or pursuant to Written Instruction amending such procedures of the Fund and receive from the Fund's Custodian and disburse to the redeeming Shareholder the redemption proceeds therefor, or arrange for direct payment of redemption proceeds to such Shareholders by the Fund's Custodian, by wire transfer or otherwise as provided in Written Instructions in accordance with such procedures and controls as are provided in the Prospectus or as may be mutually agreed upon from time to time by and among the Fund, the Transfer Agent and the Fund's Custodian. Pursuant to procedures set forth in the Fund's prospectus and in the Shareholder Agreement signed by each Shareholder, the Fund may require a Shareholder to redeem its shares. 6. AUTHORIZED SHARES. The Fund's authorized capital stock is described in the Fund's Charter, as amended, including Articles supplementary thereto. The Transfer Agent shall record issues of 10 <PAGE> all Shares and shall notify the Fund in case any proposed issue of Shares by the Fund shall result in an over-issue as defined by Section 8-104(2) of Article 8 of the Maryland Uniform Commercial Code. In case any issue of Shares would result in such an overissue, the Transfer Agent shall refuse to issue said Shares and shall not countersign and issue certificates for such Shares. The Fund agrees to notify the Transfer Agent promptly of any change in the number of authorized Shares and of any change in the number of Shares registered under the 1933 Act or termination of the Fund's declaration under Rule 24f-2 under the 1940 Act. The Transfer Agent shall provide the Fund with the necessary information to prepare 24f-2 Notices under the 1940 Act. 7. DIVIDENDS AND DISTRIBUTIONS. The Fund shall furnish the Transfer Agent with appropriate evidence of action by the Fund's Board of Directors authorizing the declaration and payment of dividends and distributions as described in the then current Prospectus. The Transfer Agent shall notify the Custodian of the amount of cash necessary to pay such dividend or distribution and, after deducting any amount required to be withheld by any applicable tax laws, rules and regulations or other applicable laws, rules and regulations, the Transfer Agent shall in accordance with the instructions in proper form from a Shareholder and the provisions of the Fund's Charter and the procedures set forth in the prospectus dated May 14, 1991 or Written Instructions amending such procedures, issue and credit the account of the Shareholder with Shares, or, if the Shareholder so elects, pay such dividends 11 <PAGE> or distribution in cash to the Shareholders and in either case, in accordance with the procedures set forth in the prospectus dated May 14, 1991 or Written Instructions amending such procedures. In lieu of receiving from the Fund's Custodian and paying to Shareholders cash dividends or distributions, the Transfer Agent may arrange for the direct payment of cash dividends and distributions to Shareholders by the Fund's Custodian, in accordance with such procedures and controls as are mutually agreed upon from time to time by and among the Fund, the Transfer Agent and the Fund's Custodian. The Transfer Agent shall prepare, file with the Internal Revenue Service and other appropriate taxing authorities, and address and mail to Shareholders such returns and information relating to dividends and distributions paid by the Fund as are required to be so prepared, filed and mailed by applicable laws, rules and regulations, or such substitute form of notice as may from time to time be permitted or required by the Internal Revenue Service. On behalf of the Fund, the Transfer Agent shall process and confirm shareholder address changes, recording new addresses, and shall mail certain requests for Shareholders' certifications under penalties of perjury and pay on a timely basis to the appropriate Federal authorities any taxes to be withheld on dividends and distributions paid by the Fund, all as required by applicable Federal tax laws and regulations. In accordance with the procedures set forth in the prospectus dated May 14, 1991 or Written Instructions amending such 12 <PAGE> procedures, and such procedures and controls as are mutually agreed upon from time to time by and among the Fund, the Transfer Agent and the Fund's Custodian, the Transfer Agent shall (a) arrange for issuance of Shares obtained through (1) transfers of funds from Shareholders' accounts at financial institutions, including securities brokers and dealers and (2) exchange of Shares for eligible portfolio securities; and (b) arrange for the exchange of Shares of a series for Shares of another series. 8. COMMUNICATIONS WITH SHAREHOLDERS. (a) COMMUNICATIONS TO SHAREHOLDERS. The Transfer Agent will address and mail all communications by the Fund to its Shareholders, with copies to such persons as may be designated in Written Instructions from the Fund. Without limiting the foregoing, PFPC will prepare, address and mail confirmations of purchases and sales of Fund Shares, account changes, dividends and distributions, 1099's and other tax information, and monthly statements, and will address and mail dividend and distribution notices, reports to Shareholders and proxy material for it meetings of Shareholders. The Transfer Agent will receive and tabulate the proxy cards for the meetings of the Fund's Shareholders and notify the Fund of the results of such tabulations. (b) CORRESPONDENCE. The Transfer Agent will answer such correspondence from Shareholders, securities brokers and others relating to its duties hereunder and such other correspondence as may from time to time be mutually agreed upon between the Transfer Agent and the Fund. 13 <PAGE> 9. RECORDS. The Transfer Agent shall maintain records of the accounts for each shareholder showing the following information: (a) name, address and United States Tax Identification or social security number; (b) number and class of Shares held and number and class of Shares for which certificates, if any, have been issued, including certificate numbers and denominations; (c) historical information regarding the account of each Shareholder, including dividends and distributions paid and the date and price for all transactions on a Shareholder's account; (d) any stop or restraining order placed against a Shareholder's account; (e) any correspondence relating to the current maintenance of a Shareholder's account; (f) information with respect to withholdings; and, (g) any information required in order for the Transfer Agent to perform any calculations contemplated or required by this Agreement. The books and records pertaining to the Fund which are in the possession of the Transfer Agent shall be the property of the Fund and shall be returned to the Fund or its designee upon request. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records at all times during the Transfer Agent's normal business hours. Upon the request of the 14 <PAGE> Fund, copies of any such books and records shall be provided by the Transfer Agent to the Fund or the Fund's authorized representative or designee at the Fund's expense. 10. ONGOING FUNCTIONS. The Transfer Agent will perform the following functions on an ongoing basis: (a) furnish state-by-state registration reports to the Fund; (b) provide toll-free lines for direct Shareholder use, plus customer liaison staff with on-line inquiry capacity; (c) provide the Fund with duplicate confirmations of stockholder activity, whether executed through a dealer or directly with the Transfer Agent; (d) provide detail for underwriter or broker confirmations and other participating dealer Shareholder accounting, in accordance with such procedures as may be agreed upon between the Fund and the Transfer Agent; (e) provide Shareholder lists and statistical information concerning accounts to the Fund; and (f) provide timely notification of Fund activity and such other information as may be agreed upon from time to time between the Transfer Agent and the Fund's Custodian, to the Fund or the Custodian and such reports to the Fund as provided in Schedule A hereto. 11. COOPERATION WITH ACCOUNTANTS. The Transfer Agent shall cooperate with the Fund's independent public accountants and shall take all reasonable action in the performance of its obligations 15 <PAGE> under this Agreement to assure that the necessary information is made available to such accountants for the expression of their opinion as such may be required by the Fund from time to time. 12. CONFIDENTIALITY. The Transfer Agent agrees on behalf of itself and its employees to treat confidentially all records and other information relative to the Fund and its prior, present or potential Shareholders, except after prompt prior notification to and approval in writing by the Fund, which approval may not be withheld where the Transfer Agent reasonably believes that it may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. 13. EQUIPMENT FAILURES. In the event of equipment failures beyond the Transfer Agent's control, the Transfer Agent shall, at no additional expense to the Fund, promptly notify the Fund and take prompt, reasonable steps to minimize service interruptions but shall have no liability with respect thereto except, at its own expense, to reconstruct any records of the Fund that PFPC is required to prepare and maintain hereunder. The foregoing obligation shall not extend to computer terminals located outside of premises maintained by the Transfer Agent; provided, that this exception shall not apply to equipment dedicated solely for use of PFPC and that PFPC has agreed to maintain as long as such equipment has not been altered by the Fund, or any of its affiliates. The Transfer Agent shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable 16 <PAGE> provision for emergency use of electronic data processing equipment to the extent appropriate equipment is available. An equipment failure shall be beyond PFPC's control if it results from one or more of the events described in the last sentence of the first paragraph of Paragraph 18 hereunder. 14. RIGHT TO RECEIVE ADVICE. PFPC shall be protected in any action or inaction PFPC takes in reliance on PFPC's counsel. PFPC shall notify the Fund of the receipt of such advice within a reasonable time. 15. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. PFPC agrees to perform its duties hereunder in accordance with applicable law; however, PFPC assumes no responsibility for ensuring that the Fund complies with the applicable requirements of the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and any laws, rules and regulations of governmental authorities having jurisdiction. 16. COMPENSATION. As compensation for the services rendered by PFPC during the term of this Agreement, the Fund will pay to PFPC an annual fee calculated daily and payable monthly, as may be agreed to in writing from time to time by the Fund and PFPC. 17. INDEMNIFICATION. (a) The Fund agrees to indemnify and hold harmless the Transfer Agent from all taxes, charges, expenses (except expenses that are inherent to its duties hereunder), assessments, claims and liabilities (including, without limitation, liabilities arising under the 1933 Act, the Securities Exchange Act of 1934, 17 <PAGE> the 1940 Act, the CEA, and any state and foreign securities and blue sky laws, all as or to be amended from time to time) including (without limitation) reasonable attorneys' fees and disbursements, arising directly or indirectly from any action or thing which the Transfer Agent takes or does or omits to take or do (i) at the request or on the direction of or in reliance on the advice of the Fund or the Fund's counsel on behalf of the Fund or (ii) upon oral or Written Instructions provided by the Fund, the Advisor or any Sub-Advisor designated in writing by the Advisor and any Affiliate, provided that such Affiliate has not acted negligently (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate), and provided further, that the Transfer Agent shall not be indemnified against any liability (or any expenses incident to such liability) arising out of the Transfer Agent's own misfeasance, bad faith or negligence or disregard of its duties or responsibilities described in this Agreement. (b) PFPC shall not pay or settle any claim, demand, expense or liability to which it may seek indemnity pursuant to paragraph (a) above an ("Indemnifiable Claim") without the express written consent of the Fund. The Transfer Agent shall notify the Fund promptly of receipt of notification of an Indemnifiable Claim. Unless the Fund notifies PFPC within 30 days of receipt of Written Notice of such Indemnifiable Claim that the Fund does not intend to defend such Indemnifiable Claim, the Fund shall defend PFPC from such Indemnifiable Claim. The Fund shall have the right to defend 18 <PAGE> any Indemnifiable Claim at its own expense, such defense to be conducted by counsel selected by the Fund. Further, the Transfer Agent may join the Fund in such defense at the Transfer Agent's own expense, but to the extent that it shall so desire, the Fund shall direct such defense. If the Fund shall fail or refuse to defend, PAY or settle an Indemnifiable Claim, the Transfer Agent, at the Fund's expense consistent with limitations concerning attorney's fees expressed in Paragraph 17(a) hereof, may provide its own defense. 18. RESPONSIBILITY OF THE TRANSFER AGENT. PFPC hereby represents that it is experienced in the provision of the services covered by this Agreement. In the performance of its duties hereunder, the Transfer Agent shall be obligated to exercise due care and diligence and to act in a timely manner and in good faith to assure the accuracy and completeness of all services performed under this Agreement. PFPC shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by PFPC in writing. PFPC shall be responsible for its own negligent failure to perform its duties under this Agreement. In assessing negligence for purposes of this Agreement, the parties agree that the standard of care applied to PFPC's conduct shall be the care that would be exercised by a similarly situated service provider, supplying substantially the same services under substantially similar circumstances. Notwithstanding the foregoing, PFPC shall not be responsible for losses beyond its control, provided that PFPC has 19 <PAGE> acted in accordance with the provisions of this Agreement and the standard of care set forth above; and provided further that the Transfer Agent shall only be responsible for that portion of losses or damages suffered by the Fund attributable to the negligence of PFPC. Losses shall be beyond PFPC's control if they result from or occur because of delays or errors or loss of data provided by persons other than the Transfer Agent, its Affiliates or their respective employees or agents, or acts of civil or military authority, national emergencies, labor difficulties (other than those of PFPC or its Affiliates), fire, equipment failure caused from forces external to the premises of PFPC or its Affiliates, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply and such other circumstances beyond PFPC's control. Without limiting the generality of the foregoing or of any other provision of this Agreement, PFPC in connection with its duties under this Agreement shall not be under any duty or obligation to inquire into and shall not be liable for or in respect of the validity or invalidity or authority or lack thereof of any oral or Written Instruction received from the Fund, or an Affiliate, provided such Affiliate has not acted without negligence (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate), notice or other instrument which conforms to the applicable requirements of this Agreement, and which PFPC reasonably believes to be genuine. 20 <PAGE> PFPC shall have no liability to the Fund for any losses or damages the nature of which is or was remote, unforeseen, unforeseeable or beyond the scope of reasonable anticipation at the time this Agreement was executed. 19. DURATION AND TERMINATION. This Agreement shall continue in effect for one year from the date that the Fund begins to invest in stocks that comprise the Standard & Poor's 500 Composite Stock Price Index (the "investment date") . This Agreement may be terminated by either party on or after the first anniversary of the investment date upon not less than 180 days prior written notice to the other party. The foregoing provisions notwithstanding, either party may terminate this Agreement in the event of a material breach of the terms hereof after written notice to the other party of such breach and a reasonable time for cure of such breach, unless such breach is not curable and, in such circumstances, this Agreement shall terminate, at the option of the injured party, three months after the date such notice is given. 20. REGISTRATION AS A TRANSFER AGENT. The Transfer Agent represents that it is currently registered with the appropriate Federal agency for the registration of transfer agents, and that it will remain so registered for the duration of this Agreement. The Transfer Agent agrees that it will promptly notify the Fund in the event of any material change in its status as a registered transfer agent. Should the Transfer Agent fail to be registered with the appropriate Federal agency as a transfer agent at any time during 21 <PAGE> this Agreement, the Fund may, on written notice to the Transfer Agent, immediately terminate this Agreement. 21. NOTICES. All notices and other communications, including Written Instructions (collectively referred to as "Notice" or "Notices" in this Paragraph), hereunder shall be in writing or by confirming telegram, cable, telex or facsimile sending device. Notices shall be addressed (a) if to the Transfer Agent at Provident Financial Processing Corporation, 103 Bellevue Parkway, Wilmington, Delaware 19809; (b) if to the Fund, at the address of the Fund; or (c) if to neither of the foregoing, at such other address as shall have been notified to the sender of any such Notice or other communication. All postage, cable, telegram, telex and facsimile sending device charges arising from the sending of a Notice hereunder shall be paid by the sender. 22. FURTHER ACTIONS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. 23. AMENDMENTS. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. 24. DELEGATION OF DUTIES. On thirty (30) days prior written notice to the Fund, the Transfer Agent may assign its rights and delegate its duties hereunder to any wholly-owned direct or indirect subsidiary of Provident National Bank or PNC Financial Corp, provided that (i) the delegate agrees with the Transfer Agent to comply with all relevant provisions of this Agreement and 22 <PAGE> applicable law; and (ii) the Transfer Agent and such delegate shall promptly provide such information as the Fund may request, and respond to such questions as the Fund may ask, relative to the delegation, including (without limitation) the capabilities of the delegate. In the event of such delegation, PFPC shall remain liable under this Agreement. 25. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 26. MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof, provided that the parties hereto may embody in one or more separate documents their agreement, if any, any agreements with respect to Written and/or Oral Instructions. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof of otherwise affect their construction or effect. This Agreement shall be deemed to be a contract made in Delaware and governed by Delaware law- If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. 23 <PAGE> IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below on the day and year first above written. DFA U.S. LARGE CAP PORTFOLIO INC. By: /s/ Deborah J. Ferris -------------------------------- PROVIDENT FINANCIAL PROCESSING CORPORATION By: /s/ Joseph Gramlich -------------------------------- 24 <PAGE> INDEX Paragraph Page - --------- ---- 1. Appointment 2. Delivery of Documents 3. Definitions 4. Instructions Consistent with Charter Declaration, etc. 5. Transactions Not Requiring Instructions 6. Authorized Shares 7. Dividends and Distributions S. Communications with Shareholders 9. Records 10. Ongoing 11. Cooperation with Accountants 12. Confidentiality 13. Equipment Failures 14. Right to Receive 15. Compliance with Government Rules and Regulations 16. Compensation 17. Indemnification 18. Responsibility of the Transfer Agent 19. Duration and Termination 20. Registration as a Transfer Agent 21. Notices 22. Further Actions 23. Amendments 24. Delegation of Duties 25. Counterparts 26. Miscellaneous 25 </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(A)(2) <SEQUENCE>8 <DESCRIPTION>EXHIBIT 99 (B)(9)(A)(2) <TEXT> <PAGE> TRANSFER AGENCY AGREEMENT AMENDMENT NUMBER ONE THIS AGREEMENT is made as of the 3rd day of May, 1993 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund") , and PFPC INC., formerly "Provident Financial Processing Corporation", a Delaware corporation ("PFPC"), which is an indirect wholly-owned subsidiary of PNC Bank Corp. W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PFPC to provide certain transfer agency services pursuant to a Transfer Agency Agreement dated as of July 12, 1991 (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PFPC provided such services to the one class of shares of the Fund that was in existence on July 12, 1991; and WHEREAS, the Fund has since organized one new Portfolio, designated "The DFA 6-10 Institutional Portfolio" (the "New Portfolio"), and the parties hereto desire that PFPC shall provide the New Portfolio with the same services that PFPC provided to the <PAGE> original class of shares of the Fund pursuant to the Agreement; and WHEREAS, Section 1 of the Agreement provides that PFPC shall provide such services to any Portfolio organized by the Fund after the date of the Agreement upon the mutual consent of PFPC and the Fund. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PFPC copies of: (a) Post-Effective Amendment Number 2 of the registration statement of the Fund, as effective with the U.S. Securities and Exchange Commission on May 3, 1993, wherein the New Portfolio is described; (b) The exhibits to such post-effective amendment, all of which pertain to the New Portfolio; and (c) Amendment Number One dated May 3, 1993 of the Administration and Accounting Services Agreement between the parties dated as of July 12, 1991. 2. The Agreement hereby is amended effective May 3, 1993 by: (a) adding the following sentence immediately after the third sentence of Section 1 therein, "As of May 3, 1993, the Fund delivered to PFPC a Prospectus dated May 3, 1993 wherein a new class of Fund shares designated "The DFA 6-10 Institutional -2- <PAGE> Portfolio" is described and the parties agree that the terms of this Agreement shall apply to the Portfolio described in such Prospectus."; (b) deleting the following words, "May 14, 1991" and inserting in lieu thereof, "May 3, 1993" in Section 5(d); (c) deleting the following words, "May 14, 1991", where they appear in Section 7 and inserting in lieu thereof, "May 3, 1993"; and (d) deleting the first sentence of Section 19 and inserting in lieu thereof: "This Agreement shall continue in effect for one year from the date that The DFA 6-10 Institutional Portfolio begins to invest in securities pursuant to its investment objective and policies (the 'investment date')." 3. The Fee Schedules of PFPC applicable to the New Portfolio shall be as agreed in writing from time to time. 4. In all other respects the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number One to the Agreement to be executed by their -3- <PAGE> duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant --------------------------------- Title: Vice President ------------------------------ PFPC INC. By: /s/ Robert Perlsweig --------------------------------- Title: Sr. Vice President ------------------------------ -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(A)(3) <SEQUENCE>9 <DESCRIPTION>EXHIBIT 99(B)(9)(A)(3) <TEXT> <PAGE> TRANSFER AGENCY AGREEMENT AMENDMENT NUMBER TWO THIS AGREEMENT is made as of the 1st day of December, 1993 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund"), and PFPC INC., formerly "Provident Financial Processing Corporation" ("PFPC") , a Delaware corporation, which is an indirect wholly-owned subsidiary of PNC Financial Corp. W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PFPC to provide certain transfer agency services pursuant to a Transfer Agency Agreement dated as of July 12, 1991 and amended on May 3, 1993 (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PFPC presently provides such services to the Portfolio of the Fund that was in existence on May 3, 1993; and WHEREAS, the Fund has since organized one new Portfolio, designated "The DFA International Value Portfolio" (the "New Portfolio"), and the parties hereto desire that PFPC shall provide the New Portfolio with the same services that PFPC provides to the <PAGE> other Portfolio of the Fund pursuant to the Agreement; and WHEREAS, Section 1 of the Agreement provides that PFPC shall provide such services to any Portfolio organized by the Fund after the date of the Agreement as agreed to in writing by PFPC and the Fund. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PFPC copies of: (a) Post-Effective Amendment Number 3 of the registration statement of the Fund, as effective with the U. S. Securities and Exchange Commission on December 1, 1993, wherein the New Portfolio is described; (b) The exhibits to such post-effective amendment consisting of Articles Supplementary to the Articles of Incorporation, amended By-Laws and the form of administration agreement, all of which pertain to the New Portfolio; (c) Amendment Number Two dated December 1, 1993 of the Administration and Accounting Services Agreement between the parties dated as of July 12, 1991; and (d) Amendment Number Two dated December 1, 1993 of the Custodian Agreement between PNC Bank, N.A. and the Fund dated as of July 12, 1991. 2. The Agreement hereby is amended effective -2- <PAGE> December 1, 1993 by: (a) adding the following sentence immediately after the second sentence of Section 1 therein, "As of December 1, 1993, the Fund delivered to PFPC a Prospectus dated December 1, 1993 wherein a new class of Fund shares designated the "The DFA International Value Portfolio" is described and the parties agree that the terms of this Agreement shall apply to the two Portfolios described in such Prospectus."; (b) adding the following words, "and as amended December 1, 1993" after the words, "as amended May 3, 1993" in Section 2(j); (c) deleting the following words, "May 3, 1993" and inserting in lieu thereof, "December 1, 1993" in Section 5(d); (d) deleting the following words, "May 3, 1993", where they appear in Section 7 and inserting in lieu thereof, "December 1, 1993"; and (e) adding a new sentence immediately following the third sentence of Section 19 as follows: "The foregoing provisions of this Section 19 notwithstanding, this Agreement with respect to The DFA International Value Portfolio may be terminated by either party upon not less than 180 days prior written notice to the other party." 3. The Fee Schedules of PFPC applicable to the New Portfolio shall be as agreed in writing from time to time. -3- <PAGE> 4. In all other respects the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number One to the Agreement to be executed by their duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant, VP ----------------------------------- PFPC INC. By: /s/ Joseph Gramlich ----------------------------------- -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(A)(5) <SEQUENCE>10 <DESCRIPTION>EXHIBIT 99 (B)(9)(A)(5) <TEXT> <PAGE> TRANSFER AGENCY AGREEMENT AMENDMENT NUMBER FIVE THIS AGREEMENT is made as of the 20th day of December, 1994 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund"), and PFPC INC., formerly "Provident Financial Processing Corporation" ("PFPC"), a Delaware corporation, which is an indirect wholly-owned subsidiary of PNC Financial Corp. W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PFPC to provide certain transfer agency services pursuant to a Transfer Agency Agreement dated as of July 12, 1991 and as amended (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PFPC presently provides such services to the six existing Portfolios of the Fund; and WHEREAS, the Fund has since organized two new Portfolios, designated "DFA International Value Portfolio III" and "U.S. Large Cap Value Portfolio III" (the "New Portfolios"), and the parties hereto desire that PFPC shall provide the New Portfolios with the same services that PFPC provides to the other Portfolios of the <PAGE> Fund pursuant to the Agreement; and WHEREAS, Section 1 of the Agreement provides that PFPC shall provide such services to any Portfolio organized by the Fund after the date of the Agreement as agreed to in writing by PFPC and the Fund. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PFPC copies of: (a) Post-Effective Amendment Number 7 of the registration statement of the Fund, as effective with the U.S. Securities and Exchange Commission on December 20, 1994, wherein the New Portfolios are described; (b) The exhibits to such post-effective amendment including the Articles Supplementary to the Articles of Incorporation, specimen securities and the forms of administration agreements with respect to the New Portfolios; (c) Amendment Number Five dated December 20, 1994 of the Administration and Accounting Services Agreement between the parties dated as of July 12, 1991; and (d) Amendment Number Five dated December 20, 1994 of the Custodian Agreement between PNC Bank, N.A. and the Fund dated as of July 12, 1991. 2. The Agreement hereby is amended effective -2- <PAGE> December 20, 1994 by: (a) adding the following sentence immediately after the second sentence of Section 1 therein, "As of December 20, 1994, the Fund delivered to PFPC a Prospectus dated December 20, 1994 wherein two new classes of Fund shares designated the 'DFA International Value Portfolio III' and 'U.S. Large Cap Value Portfolio III' are described and the parties agree that the terms of this Agreement shall apply to the two Portfolios described in such Prospectus."; and (b) adding a new sentence immediately following the third sentence of Section 19 as follows: "The foregoing provisions of this Section 19 notwithstanding, this Agreement with respect to DFA International Value Portfolio III and U.S. Large Cap Value Portfolio III may be terminated by either party upon not less than 180 days prior written notice to the other party." 3. The Fee Schedules of PFPC applicable to the New Portfolios shall be as agreed in writing from time to time. -3- <PAGE> 4. In all other respects the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number Five to the Agreement to be executed by their duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant ------------------------------- Vice President PFPC INC. By: /s/ Joseph Gramlich ------------------------------- S.V.P. -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(B) <SEQUENCE>11 <DESCRIPTION>EXHIBIT 99 (B)(9)(B) <TEXT> <PAGE> ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT THIS AGREEMENT is made as of the 12th day of July 1991, by and between DFA U.S. LARGE CAP PORTFOLIO INC., a Maryland corporation (the "Fund"), and PROVIDENT FINANCIAL PROCESSING CORPORATION ("PFPC"), a Delaware corporation which is an indirect wholly-owned subsidiary of PNC Financial Corp. W I T N E S S E T H WHEREAS, the Fund is registered as an open-end, diversified management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund wishes to retain PFPC to provide certain administrative and accounting services, and PFPC is willing to furnish such services; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. APPOINTMENT. The Fund hereby appoints PFPC to provide certain administrative and accounting services to the Fund for the period and on the terms set forth in this Agreement. PFPC accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Paragraph 12 of this Agreement. The Fund presently issues one series or class of shares which is described in the Prospectus delivered to <PAGE> PFPC herewith, and may from time to time issue separate series or classes or classify and reclassify shares of such series or class. Hereinafter each such class shall be referred to as a "Portfolio". The records, notices, reports and services provided by PFPC hereunder shall be prepared, kept, maintained and furnished by PFPC in respect of each Portfolio of the Fund existing on the date hereof, and any Portfolio(s) organized by the Fund after the date hereof as agreed in writing by the Fund and PFPC. 2. DELIVERY OF DOCUMENTS. The Trustee has furnished PFPC with copies properly certified or authenticated of each of the following: (a) Resolutions of the Fund's Board of Directors authorizing the appointment of PFPC to provide certain administration and accounting services for the Fund and approving this Agreement; (b) Appendix A identifying and containing the signatures of the Fund's officers and other persons authorized to issue Oral Instructions and to sign Written Instructions, as hereinafter defined, on behalf of the Fund; (c) The Fund's Articles of Incorporation filed with the Maryland Department of Assessments and Taxation on March 19, 1990 and all amendments thereto (such Articles of Incorporation as presently in effect and as they shall from time to time be amended, are herein called the "Charter"); 2 <PAGE> (d) The Fund's By-Laws and all amendments thereto (such By-Laws, as presently in effect and as they shall from time to time be amended, are herein called "By-Laws"); (e) The current Facility Agreement with Dimensional Fund Advisors Inc. ("DFA") and the Fund (the "Advisory Agreements"); (f) The current Agreement between the Fund and DFA Securities Inc.; (g) The Custodian Agreement between Provident National Bank ("Provident") and the Fund dated as of July 12, 1991 (the "Custodian Agreement"); (h) The Transfer Agency Agreement between Provident Financial Processing Corporation and the Fund dated as of July 12, 1991 (the "Transfer Agency Agreement"); (i) The Fund's most recent Registration Statement on Form N-lA under the Securities Act of 1933 (the "1933 Act") (File No. 33-__________) and under the 1940 Act, as filed with the SEC on May 14, 1991 relating to Shares of the Fund's Common Stock (hereinafter "Shares"), $.01 par value, and all amendments thereto; and (j) The Fund's most recent prospectus or prospectuses and Statements of Additional Information relating to the Portfolios (such prospectuses and all amendments and supplements to such Prospectus and Statement of Additional Information are herein called the "Prospectus"). 3 <PAGE> The Fund will furnish PFPC from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any. 3. DEFINITIONS. (a) "AUTHORIZED PERSON". As used in this Agreement, the term "Authorized Person" means any officer of the Fund and any other person, whether or not any such person is an officer or employee of the Fund, duly authorized by the Board of Directors of the Fund to give Oral and Written Instructions on behalf of the Fund and listed on Appendix A listing persons duly authorized to give Oral or Written Instructions on behalf of the Fund as may be received by PFPC from time to time. (b) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral Instructions" means oral instructions actually received by PFPC from an Authorized Person or from a person reasonably believed by PFPC to be an Authorized Person. The Fund agrees to deliver to PFPC, at the time and in the manner specified in Paragraph 4(b) of this Agreement, Written Instructions confirming Oral Instructions. (c) "WRITTEN INSTRUCTIONS". As used in this Agreement, the term "Written Instructions" means written instructions delivered by hand, mail, tested telegram, cable, telex or facsimile sending device, and received by PFPC, signed by two Authorized Persons. Written Instructions include electronic transmissions properly originated and confirmed by the Fund. 4 <PAGE> (d) "AFFILIATE". As used herein, "Affiliate" means any company that controls, is controlled by, or is under common control with PFPC. 4. INSTRUCTIONS CONSISTENT WITH CHARTER, ETC. (a) Unless otherwise provided in this Agreement, PFPC shall act only upon Oral or Written Instructions. Although PFPC may know of the provisions of the Charter and By-Laws of the Fund, PFPC may assume that any Oral or Written Instructions received hereunder are not in any way inconsistent with any provisions of such Charter or By-Laws, or any vote, resolution or proceeding of the Shareholders, or of the Board of Directors, or of any committee thereof. (b) PFPC shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by PFPC from the Fund and any Affiliate, provided such Affiliate has not acted negligently (unless such an Affiliate has received and transmitted erroneous instructions received from an Authorized Person who is not an Affiliate) pursuant to this Agreement. The Fund agrees to forward to PFPC Written Instructions confirming Oral Instructions in such manner that the Written Instructions are received by PFPC, whether by hand delivery, telex, facsimile sending device or otherwise, by the close of business of the same day that such Oral Instructions are given to PFPC. The Fund agrees that the fact that such confirming Written Instructions are not received by PFPC shall in no way affect the validity of the transactions or enforceability of the transactions authorized by 5 <PAGE> the Fund by giving Oral Instructions. The Fund agrees that PFPC shall incur no liability to the Fund in acting upon Oral Instructions given to PFPC by the Fund hereunder concerning such transactions, provided such instructions reasonably appear to have been received from an Authorized Person. 5. SERVICES ON A CONTINUING BASIS. (a) In preparing the accounting records of the Fund, PFPC shall comply with generally accepted accounting principles (GAAP) or with an alternative method described in Written Instructions provided that such alternative method is not unreasonable and would not be burdensome to PFPC. PFPC will perform the following accounting services for the Fund on an ongoing or a daily basis, as appropriate, it being understood that the services provided hereunder shall be provided on a per Portfolio basis in a manner that properly identifies the Portfolio as to which such services relate: (1) On a daily basis, journalize the Fund's investment, capital Share and income and expense activities and post to the general ledger; (2) Verify with the custodian, investment buy/sell trade tickets which may be sent electronically via modem from the Fund and which may include securities acquired for Fund shares when received from the Fund transmit verified trades to the Fund's custodian for proper 6 <PAGE> settlement, and PFPC shall promptly notify the Fund of any trades received which have not been so verified; (3) Maintain individual ledgers for investment securities; (4) Maintain historical tax lots for each security; (5) Reconcile cash and investment balances with the custodian, and provide the Fund with the beginning cash balances available for investment purposes; (6) Update the cash availability and projected receivables/payables throughout the day as required by the Fund and direct the custodian to invest idle cash in repurchase agreements, and/or registered investment companies, and/or in other liquid investments as mutually agreed upon in accordance with the Written Instructions of the Fund. (7) Post to and prepare the Statement of Assets and Liabilities and the Statement of Operations; (8) Calculate various contractual expenses (e.g., advisory and custody fees) and confirm to the Fund the amounts paid by the Fund in respect of such contracts as provided for therein; 7 <PAGE> (9) Monitor the expense accruals and notify Fund management of any proposed adjustments; (10) Control all disbursements and authorize such disbursements upon Written Instructions; (11) Calculate capital gains and losses; (12) Determine net income; (13) Obtain security market quotes from independent pricing services approved by the Fund, or if such quotes are unavailable, then obtain such prices from, or in accordance with the directions of, the Fund, and in either case calculate the market value of the Fund's investments; (14) Transmit or mail a copy of the daily portfolio valuations and a listing of acquisitions and dispositions of securities of the Fund and, as of each month-end, transmit or mail a floppy diskette reflecting securities holdings to the Fund; (15) Consistent with the requirements of the prospectus dated May 14, 1991 or Written Instructions which change those requirements, compute the net asset values and, where applicable, the public offering prices of the Portfolios and promptly report thereon to NASDAQ and the custodian; 8 <PAGE> ' (16) Compute, and report to the Fund, each Portfolio's yields, total return, expense ratios, portfolio turnover rate, and, portfolio average dollar-weighted maturity; and (17) Compute amounts of foreign currency needed to settle foreign securities transactions, and in accordance with Written Instructions, enter into forward currency contracts with banks and brokers. (b) In addition to the accounting services described in the foregoing Paragraph 5(a), PFPC will: (1) Prepare monthly financial statements, which will include the following items (the form and content of such statements shall be in accordance with generally accepted accounting principles): Schedule of Investments Statement of Assets and Liabilities Statement of Shareholders' Equity Statement of Operations Statement of Changes in Net Assets Cash Statement Schedule of Capital Gains and Losses; (2) Prepare quarterly broker security transactions summaries, including monthly reports of brokerage commissions paid setting forth such information as the Fund may reasonably request and as to which the parties may agree; (3) Prepare monthly security transaction listings; (4) Supply various Fund statistical data and reports as requested by the Fund on an ongoing basis including the reports set forth on Schedule A hereto; 9 <PAGE> (5) Prepare for execution and file the Fund's Federal and state income tax returns, Federal Excise Tax returns, tax returns for the States of Maryland and California and any supporting schedules to such returns and assist the Fund in determining the amount, types and timing of dividend and capital gains distributions necessary for each Portfolio to avoid being required to pay Federal Income or Excise taxes on its income and gains; (6) Assist in the preparation of and file the Fund's Semi-Annual Reports with the SEC on Form N-SAR; (7) Assist in the preparation of and file with the SEC the Fund's annual, semi-annual, and quarterly Shareholder reports; (8) Assist in the preparation of registration statements on Form N-lA and other filings relating to the registration of Shares; (9) Monitor and report monthly to the Fund's Board each Portfolio's status as a regulated investment company under Sub-chapter M of the Internal Revenue Code of 1986, as amended; (10) In the event that any securities transaction of the Fund fails to settle in accordance with Written or Oral Instructions, PFPC shall promptly notify the Fund; and (11) Monitor each Portfolio's securities positions to determine whether, with respect to 75 percent of the value of each Portfolio's total assets, more than 5 percent of the value of 10 <PAGE> each Portfolio's total assets are invested in any one issuer and, if so, alert the Fund as soon as practicable of such circumstances. 6. RECORDS. PFPC shall keep the following records: (a) all books and records with respect to the Fund's books of account, including without limitation those required by rule 3la-1 under the 1940 Act (except paragraphs b(4) and (9)) and records necessary to support each Portfolio's tax returns; and (b) records of the Fund's securities and exchange listed financial futures and forward currency transactions. The books and records pertaining to the Fund which are in the possession of PFPC shall be the property of the Fund and shall be returned to the Fund or its designee upon request. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records at all times during PFPC's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by PFPC to the Fund or the Fund's authorized designee or representative at the Fund's expense. 7. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's independent public accountants and shall provide them with account analyses, fiscal year summaries, and such other information, including audit related schedules, as may be necessary to assure that the necessary information is made available to such accountants for the expression of their opinion, as such may be required by the Fund from time to time. 11 <PAGE> 8. CONFIDENTIALITY. PFPC agrees on behalf of itself and its employees to treat confidentially all records and other information relative to the Fund and its prior, present or potential Shareholders or relative to the Advisor, except, after prior notification to and approval in writing by the Fund, which approval may not be withheld where PFPC may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. 9. EQUIPMENT FAILURES. In the event of equipment failures beyond PFPC's control, PFPC shall, at no additional expense to the Fund, promptly notify the Fund and take prompt, reasonable steps to minimize service interruptions but shall have no liability with respect thereto except, at its own expense, to reconstruct any records of the Fund that PFPC is required to prepare and maintain hereunder. PFPC shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provision for emergency use of electronic data processing equipment to the extent appropriate equipment is available. An equipment failure shall be beyond PFPC's control if it results from one or more of the events described in the last sentence of the first paragraph of Paragraph 14 hereunder. 10. RIGHT TO RECEIVE ADVICE. PFPC shall be protected in any action or inaction PFPC takes in reliance on advice of PFPC Is counsel. PFPC shall promptly 12 <PAGE> notify the Fund of the receipt of such advice within reasonable time. 11. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. PFPC agrees to perform its duties hereunder in accordance with applicable law; however, PFPC assumes no responsibility for ensuring that the Fund complies with the applicable requirements of the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and any laws, rules and regulations of governmental authorities having jurisdiction. 12. COMPENSATION. As compensation for the services rendered by PFPC during the term of this Agreement, the Fund will pay to PFPC an annual fee calculated daily and payable monthly, as may be agreed to in writing from time to time by the Fund and PFPC. 13. INDEMNIFICATION. (a) The Fund agrees to indemnify and hold harmless PFPC and its sub-contractors from all taxes, charges, expenses (except expenses that are inherent to its duties hereunder) , assessments, claims and liabilities (including, without limitation, liabilities arising under the 1933 Act, the Securities Exchange Act of 1934, the 1940 Act, the CEA, and any state and foreign securities and blue sky laws, all as or to be amended from time to time) including (without limitation) reasonable attorneys' fees and disbursements, arising directly or indirectly from any action or thing which PFPC takes or does or omits to take or do (i) at the request or on the direction of or in reliance on the advice of the Fund or the Fund's counsel on behalf of the Fund or (ii) upon Oral or Written Instructions provided by the Fund, or an 13 <PAGE> Affiliate, provided such Affiliate has not acted negligently (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate) PROVIDED, that neither PFPC nor any of its subcontractors shall be indemnified against any liability (or any expenses incident to such liability) arising out of PFPC's own misfeasance, bad faith, negligence or disregard of its duties or responsibilities described in this Agreement. (b) PFPC shall not pay or settle any claim, demand, expense or liability in respect of which PFPC is entitled to be indemnified pursuant to paragraph (a) above an ("Indemnifiable Claim") without the express written consent of the Fund. PFPC shall notify the Fund promptly of receipt of notification of an Indemnifiable Claim. Unless the Fund notifies PFPC within 30 days of receipt of Written Notice of such Indemnifiable Claim that the Fund does not intend to defend such Indemnifiable Claim, the Fund shall defend PFPC from such Indemnifiable Claim. The Fund shall have the right to defend any Indemnifiable Claim at its own expense, such defense to be conducted by counsel selected by the Fund. Further, PFPC may join the Fund in such defense at PFPC's own expense, but to the extent that it shall so desire, the Fund shall direct such defense. If the Fund shall fail or refuse to defend, pay or settle an Indemnifiable Claim, PFPC, at the Fund's expense consistent with limitations concerning attorney's fees expressed in Paragraph 13(a) hereof, may provide its own defense. 14 <PAGE> 14. RESPONSIBILITY OF PFPC. PFPC hereby represents that it is experienced in the provision of the services covered by this Agreement. In the performance of its duties hereunder, PFPC shall be obligated to exercise due care and diligence and to act in a timely manner and in good faith to assure the accuracy and completeness of all services performed under this Agreement. PFPC shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by PFPC in writing. PFPC shall be responsible for its own negligent failure to perform its duties under this Agreement. In assessing negligence for purposes of this Agreement, the parties agree that the standard of care applied to PFPC's conduct shall be the care that would be exercised by a similarly situated service provider, supplying substantially the same services under substantially similar circumstances. Notwithstanding the foregoing, PFPC shall not be responsible for losses beyond its control, provided that PFPC has acted in accordance with the provisions of this Agreement and the standard of care set forth above and provided further that PFPC shall only be responsible for that portion of losses or damages suffered by the Fund attributable to the negligence of PFPC. Losses shall be beyond PFPC's control if they result from or occur because of delays or errors or loss of data provided by a person other than PFPC or its Affiliates, or their respective employees or agents, or acts of civil or military authority, national emergencies, labor difficulties (other than those of PFPC or its Affiliates), fire, equipment failure resulting 15 <PAGE> from forces external to the premises of PFPC or its Affiliates, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply external to the premises of PFPC or its Affiliates and such other circumstances beyond PFPC's control. Without limiting the generality of the foregoing or of any other provision of this Agreement, PFPC in connection with its duties under this Agreement shall not be under any duty or obligation to inquire into and shall not be liable for or in respect of the validity or invalidity or authority or lack thereof of any Oral or Written Instruction received from the Fund, or an Affiliate, provided such Affiliate has not acted negligently (unless such an Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate), notice or other instrument which conforms to the applicable requirements of this Agreement, and which PFPC reasonably believes to be genuine. PFPC shall have no liability to the Fund for any losses or damages, the nature of which is or was remote, unforeseen, unforeseeable or beyond the scope of reasonable anticipation at the time this Agreement was executed. 15. DURATION AND TERMINATION. This Agreement shall continue in effect for one year from the date that the Fund begins to invest in stocks that comprise the Standard & Poor's 500 Composite Stock Price Index (the "investment date"). This Agreement may be terminated by either party on or after the first anniversary of the 16 <PAGE> investment date upon not less than 180 days prior written notice to the other party. The foregoing provisions notwithstanding, either party may terminate this Agreement in the event of a material breach of the terms hereof after written notice to the other party of such breach and a reasonable time for cure of such breach, unless such breach is not curable and, in such circumstances, this Agreement shall terminate, at the option of the injured party, three months after the date such notice is given. 16. NOTICES. All notices and other communications, including Written Instructions (collectively referred to as "Notice" or "Notices" in this Paragraph), hereunder shall be in writing or by confirming telegram, cable, telex or facsimile sending device. Notices shall be addressed (a) if to PFPC at PFPC's address, Bellevue Corporate Center, 103 Bellevue Parkway, Wilmington, Delaware 19809; (b) if to the Fund, at the address of the Fund; or (c) if to neither of the foregoing, at such other address as shall have been notified to the sender of any such Notice or other communication. All postage, cable, telex and facsimile sending device charges arising from the sending of a Notice hereunder shall be paid by the sender. 17. FURTHER ACTIONS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. 18. AMENDMENTS. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. 17 <PAGE> 19. DELEGATION. On thirty (30) days prior written notice to the Fund, PFPC may assign its rights and delegate its duties hereunder to any wholly-owned direct or indirect subsidiary of PFPC National Bank or PNC Financial Corp provided that (i) the delegate agrees with PFPC to comply with all relevant provisions of this Agreement and applicable law; and (ii) PFPC and such delegate shall promptly provide such information as the Fund may request, and respond to such questions as the Fund may ask, relative to the delegation, including (without limitation) the capabilities of the delegate. In the event of such delegation, PFPC shall remain liable under this Agreement. 20. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 21. MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof, provided that the parties hereto may embody in one or more separate documents their agreement, if any, with respect to Written and/or Oral Instructions. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof of otherwise affect their construction or effect. This Agreement shall be deemed to be a contract made in Delaware and governed by Delaware law. If any provision of this Agreement shall be held or made invalid by a court decision, 18 <PAGE> statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below on the day and year first above written. DFA U.S. LARGE CAP PORTFOLIO INC. By: /s/ Deborah J. Ferris ----------------------------------- PROVIDENT FINANCIAL PROCESSING CORPORATION By: /s/ Joseph Gramlich ----------------------------------- 19 </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(B)(2) <SEQUENCE>12 <DESCRIPTION>EXHIBIT 99 (B)(9)(B)(2) <TEXT> <PAGE> ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT AMENDMENT NUMBER ONE THIS AGREEMENT is made as of the 3rd day of May, 1993 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund") , and PFPC INC., formerly "Provident Financial Processing Corporation", a Delaware corporation ("PFPC"), which is an indirect wholly-owned subsidiary of PNC Bank Corp. W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PFPC to provide certain administration and accounting services pursuant to an Administration and Accounting Services Agreement dated as of July 12, 1991 (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PFPC provided such services to the one class of shares of the Fund that was in existence on July 12, 1991; and WHEREAS, the Fund has since organized one new Portfolio, designated "The DFA 6-10 Institutional Portfolio" (the "New Portfolio"), and the parties hereto desire that PFPC shall provide <PAGE> the New Portfolio with the same services that PFPC provided to the original class of shares of the Fund pursuant to the Agreement; and WHEREAS, Section 1 of the Agreement provides that PFPC shall provide such services to any Portfolio organized by the Fund after the date of the Agreement upon the mutual consent of PFPC and the Fund. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PFPC copies of: (a) Post-Effective Amendment Number 2 of the registration statement of the Fund, as effective with the U.S. Securities and Exchange Commission on May 3, 1993, wherein the New Portfolio is described; (b) The exhibits to such post-effective amendment, all of which pertain to the New Portfolio; and (c) Amendment Number One dated May 3, 1993 of the Transfer Agency Agreement between the parties dated as of July 12, 1991. 2. The Agreement hereby is amended effective May 3, 1993 by: (a) adding the following sentence immediately after the third sentence of Section 1 therein, "As of May 3, 1993, the Fund delivered to PFPC a Prospectus dated May 3, 1993 wherein a new -2- <PAGE> class of Fund shares designated "The DFA 6-10 Institutional Portfolio" is described and the parties agree that the terms of this Agreement shall apply to the Portfolio described in such Prospectus."; (b) adding the following words, "and as amended May 3, 1993" after the words "May 14, 1991" in Section 2(i); (c) deleting the following words, "May 14, 1991" and inserting in lieu thereof, "May 3, 1993" in Section 5(a)(15); and (d) deleting the first sentence of Section 15 and inserting in lieu thereof: "This Agreement shall continue in effect for one year from the date that The DFA 6-10 Institutional Portfolio begins to invest in securities pursuant to its investment objective and policies (the 'investment date')." 3. The Fee Schedules of PFPC applicable to the New Portfolio shall be as agreed in writing from time to time. 4. In all other respects the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number One to the Agreement to be executed by their -3- <PAGE> duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant ------------------------------- Title: Vice President ---------------------------- PFPC INC. By: /s/ Joseph Gramlich ------------------------------- Title: V.P. ---------------------------- -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(B)(3) <SEQUENCE>13 <DESCRIPTION>EXHIBIT 99 (B)(9)(B)(3) <TEXT> <PAGE> ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT AMENDMENT NUMBER TWO THIS AGREEMENT is made as of the 1st day of December, 1993 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund"), and PFPC INC., formerly "Provident Financial Processing Corporation" ("PFPC"), a Delaware corporation, which is an indirect wholly-owned subsidiary of PNC Financial Corp. W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PFPC to provide certain administration and accounting services pursuant to an Administration and Accounting Services Agreement dated as of July 12, 1991 and amended on May 3, 1993 (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PFPC presently provides such services to the Portfolio of the Fund that was in existence on May 3, 1993; and WHEREAS, the Fund has since organized one new Portfolio, designated "The DFA International Value Portfolio" (the "New Portfolio"), and the parties hereto desire that PFPC shall provide <PAGE> the New Portfolio with the same services that PFPC provides to the other Portfolio of the Fund pursuant to the Agreement; and WHEREAS, Section 1 of the Agreement provides that PFPC shall provide such services to any Portfolio organized by the Fund after the date of the Agreement as agreed to in writing by PFPC and the Fund. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PFPC copies of: (a) Post-Effective Amendment Number 3 of the registration statement of the Fund, as effective with the U.S. Securities and Exchange Commission on December 1, 1993, wherein the New Portfolio is described; (b) The exhibits to such post-effective amendment consisting of Articles Supplementary to the Articles of Incorporation, amended By-Laws and the form of administration agreement, all of which pertain to the New Portfolio; (c) Amendment Number Two dated December 1, 1993 of the Transfer Agency Agreement between the parties dated as of July 12, 1991; and (d) Amendment Number Two dated December 1, 1993 of the Custodian Agreement between PNC Bank, N.A. and the Fund dated as of July 12, 1991. 2 <PAGE> 2. The Agreement hereby is amended effective December 1, 1993 by: (a) adding the following sentence immediately after the third sentence of Section 1 therein, "As of December 1, 1993, the Fund delivered to PFPC a Prospectus dated December 1, 1993 wherein a new class of Fund shares designated the "The DFA International Value Portfolio" is described and the parties agree that the terms of this Agreement shall apply to the two Portfolios described in such Prospectus."; (b) adding the following words, "and as amended December 1, 1993" after the words, "as amended May 3, 1993" in Section 2(i); (c) deleting the following words, "May 3, 1993" and inserting in lieu thereof, "December 1, 1993" in Section 5(a)(15); and (d) adding a new sentence immediately following the third sentence of Section 19 as follows: "The foregoing provisions of this Section 19 notwithstanding, this Agreement with respect to The DFA International Value Portfolio may be terminated by either party upon not less than 180 days prior written notice to the other party." 3. The Fee Schedules of PFPC applicable to the New Portfolio shall be as agreed in writing from time to time. 4. In all other respects the Agreement shall remain unchanged and in full force and effect. 3 <PAGE> IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number One to the Agreement to be executed by their duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant, VP ---------------------------------- PFPC INC. By: /s/ Joseph Gramlich ---------------------------------- 4 </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(B)(6) <SEQUENCE>14 <DESCRIPTION>EXHIBIT 99 (B)(9)(B)(6) <TEXT> <PAGE> ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT AMENDMENT NUMBER FIVE THIS AGREEMENT is made as of the 20th day of December, 1994 by and between DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.", a Maryland corporation (the "Fund"), and PFPC INC., formerly "Provident Financial Processing Corporation" ("PFPC"), a Delaware corporation, which is an indirect wholly-owned subsidiary of PNC Financial Corp. W I T N E S S E T H : WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund has retained PFPC to provide certain administration and accounting services pursuant to an Administration and Accounting Services Agreement dated as of July 12, 1991 and as amended (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PFPC presently provides such services to the six existing Portfolios of the Fund; and WHEREAS, the Fund has since organized two new Portfolios, designated "DFA International Value Portfolio III" and "U.S. Large Cap Value Portfolio III" (the "New Portfolios"), and the parties <PAGE> hereto desire that PFPC shall provide the New Portfolios with the same services that PFPC provides to the other Portfolios of the Fund pursuant to the Agreement; and WHEREAS, Section 1 of the Agreement provides that PFPC shall provide such services to any Portfolio organized by the Fund after the date of the Agreement as agreed to in writing by PFPC and the Fund. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows: 1. The Fund has delivered to PFPC copies of: (a) Post-Effective Amendment Number 7 of the registration statement of the Fund, as effective with the U.S. Securities and Exchange Commission on December 20, 1994, wherein the New Portfolios are described; (b) The exhibits to such post-effective amendment including the Articles Supplementary to the Articles of Incorporation, specimen securities and the forms of administration agreements with respect to the New Portfolios; (c) Amendment Number Five dated December 20, 1994 of the Transfer Agency Agreement between the parties dated as of July 12, 1991; and (d) Amendment Number Five dated December 20, 1994 of the Custodian Agreement between PNC Bank, N.A. and the Fund dated as of July 12, 1991. -2- <PAGE> 2. The Agreement hereby is amended effective December 20, 1994 by: (a) adding the following sentence immediately after the third sentence of Section 1 therein, "As of December 20, 1994, the Fund delivered to PFPC a Prospectus dated December 20, 1994 wherein two new classes of Fund shares designated the 'DFA International Value Portfolio III' and 'U.S. Large Cap Value Portfolio III' are described and the parties agree that the terms of this Agreement shall apply to the two Portfolios described in such Prospectus."; and (b) adding a new sentence immediately following the third sentence of Section 19 as follows: "The foregoing provisions of this Section 19 notwithstanding, this Agreement with respect to DFA International Value Portfolio III and U.S. Large Cap Value Portfolio III may be terminated by either party upon not less than 180 days prior written notice to the other party." 3. The Fee Schedules of PFPC applicable to the New Portfolios shall be as agreed in writing from time to time. 4. In all other respects the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number Five to the Agreement to be executed by their -3- <PAGE> duly authorized officers designated below on the day and year first above written. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ Irene R. Diamant ------------------------------- Vice President PFPC INC. By: /s/ Joseph Gramlich ------------------------------- S.V.P. -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(C)(1) <SEQUENCE>15 <DESCRIPTION>EXHIBIT 99 (B)(9)(C)(1) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. THE DFA 6-10 INSTITUTIONAL PORTFOLIO ADMINISTRATION AGREEMENT AGREEMENT made this 3rd day of May, 1993, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of The DFA 6-10 Institutional Portfolio (the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services, assistance and facilities of an administrator and to have an administrator perform various administrative and other services for it; and WHEREAS, the Administrator desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the Administrator to supervise the administrative affairs of the Portfolio, subject to the direction of the Board of Directors and the officers of the Fund on the terms hereinafter set forth. The Administrator hereby accepts such employment and agrees to render the services described herein for the compensation herein provided. 2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR. A. The Administrator shall supervise the administrative affairs of the Fund as they pertain to the Portfolio. Specifically, the Administrator shall: (1) supervise the services provided to the Fund for the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing agent, printers, insurance carriers (as well as agents and brokers), <PAGE> independent accountants, legal counsel and other persons who provide services to the Fund for the benefit of the Portfolio; (2) assist the Fund to comply with the provisions of applicable federal, state, local and foreign securities, tax, organizational and other laws that (i) govern the business of the Fund in respect of the Portfolio (except those that govern investment of the Portfolio's assets), (ii) regulate the offering of the Portfolio's shares and (iii) provide for the taxation of the Portfolio; (3) provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request; (4) assist the Portfolio to conduct meetings of its shareholders if and when called by the board of directors of the Fund; (5) furnish such information as the board of directors of the Fund may require regarding any investment company in whose shares the Portfolio may invest; and (6) provide such other administrative services for the benefit of the Portfolio as the board of directors may reasonably request. B. In carrying out its responsibilities under Section A herein, to the extent the Administrator deems necessary or desirable and at the expense of the Portfolio, the Administrator shall be entitled to consult with, and obtain the assistance of, the persons described in Section A, paragraph (1) herein who provide services to the Fund. C. The Administrator, at its own expense, shall provide the Fund with such office facilities and equipment as may be necessary to conduct the administrative affairs of the Fund in respect of the Portfolio. 3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all of its own expenses incurred to conduct its administrative affairs. 4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by the Administrator as provided in -2- <PAGE> Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of .07 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to the Fund or in respect of the Portfolio are not to be deemed exclusive, and the Administrator shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 7. DURATION AND TERMINATION. A. This Agreement shall become effective on the date written below, provided that prior to such date it shall have been approved by the board of directors of the Fund, and shall continue in effect until terminated by the Fund or the Administrator on 60 days written notice to the other. B. Any notice under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. -3- <PAGE> IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and effective on the 3rd day of May, 1993. DIMENSIONAL FUND DIMENSIONAL INVESTMENT ADVISORS INC. GROUP INC. By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------ --------------------------- Chairman-Chief President Investment Officer -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(C)(2) <SEQUENCE>16 <DESCRIPTION>EXHIBIT 99 (B)(9)(C)(2) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. THE DFA INTERNATIONAL VALUE PORTFOLIO ADMINISTRATION AGREEMENT AGREEMENT made this 1st day of December, 1993, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of The DFA International Value Portfolio (the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services, assistance and facilities of an administrator and to have an administrator perform various administrative and other services for it; and WHEREAS, the Administrator desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the Administrator to supervise the administrative affairs of the Portfolio, subject to the direction of the Board of Directors and the officers of the Fund on the terms hereinafter set forth. The Administrator hereby accepts such employment and agrees to render the services described herein for the compensation herein provided. 2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR. A. The Administrator shall supervise the administrative affairs of the Fund as they pertain to the Portfolio. Specifically, the Administrator shall: (1) supervise the services provided to the Fund for the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing agent, printers, insurance carriers (as well as agents and brokers), <PAGE> independent accountants, legal counsel and other persons who provide services to the Fund for the benefit of the Portfolio; (2) assist the Fund to comply with the provisions of applicable federal, state, local and foreign securities, tax, organizational and other laws that (i) govern the business of the Fund in respect of the Portfolio (except those that govern investment of the Portfolio's assets), (ii) regulate the offering of the Portfolio's shares and (iii) provide for the taxation of the Portfolio; (3) provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request; (4) assist the Portfolio to conduct meetings of its shareholders if and when called by the board of directors of the Fund; (5) furnish such information as the board of directors of the Fund may require regarding any investment company in whose shares the Portfolio may invest; and (6) provide such other administrative services for the benefit of the Portfolio as the board of directors may reasonably request. B. In carrying out its responsibilities under Section A herein, to the extent the Administrator deems necessary or desirable and at the expense of the Portfolio, the Administrator shall be entitled to consult with, and obtain the assistance of, the persons described in Section A, paragraph (1) herein who provide services to the Fund. C. The Administrator, at its own expense, shall provide the Fund with such office facilities and equipment as may be necessary to conduct the administrative affairs of the Fund in respect of the Portfolio. 3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all of its own expenses incurred to conduct its administrative affairs. 4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by the Administrator as provided in -2- <PAGE> Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of .20 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to the Fund or in respect of the Portfolio are not to be deemed exclusive, and the Administrator shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 7. DURATION AND TERMINATION. A. This Agreement shall become effective on the date written below, provided that prior to such date it shall have been approved by the board of directors of the Fund, and shall continue in effect until terminated by the Fund or the Administrator on 60 days written notice to the other. B. Any notice under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. -3- <PAGE> IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and effective on the 1st day of December, 1993. DIMENSIONAL FUND DIMENSIONAL INVESTMENT ADVISORS INC. GROUP INC. By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------ --------------------------- Chairman-Chief President Investment Officer -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(C)(3) <SEQUENCE>17 <DESCRIPTION>EXHIBIT 99 (B)(9)(C)(3) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. DFA INTERNATIONAL VALUE PORTFOLIO II ADMINISTRATION AGREEMENT AGREEMENT made this 1st day of July, 1994, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the DFA International Value Portfolio II (the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services, assistance and facilities of an administrator and to have an administrator perform various administrative and other services for it; and WHEREAS, the Administrator desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the Administrator to supervise the administrative affairs of the Portfolio, subject to the direction of the board of directors and the officers of the Fund on the terms hereinafter set forth. The Administrator hereby accepts such employment and agrees to render the services described herein for the compensation herein provided. 2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR. A. The Administrator shall supervise the administrative affairs of the Fund as they pertain to the Portfolio. Specifically, the Administrator shall: (1) supervise the services provided to the Fund for the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing agent, printers, insurance <PAGE> carriers (as well as agents and brokers), independent accountants, legal counsel and other persons who provide services to the Fund for the benefit of the Portfolio; (2) assist the Fund to comply with the provisions of applicable federal, state, local and foreign securities, tax, organizational and other laws that (i) govern the business of the Fund in respect of the Portfolio (except those that govern investment of the Portfolio's assets), (ii) regulate the offering of the Portfolio's shares and (iii) provide for the taxation of the Portfolio; (3) provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request; (4) assist the Portfolio to conduct meetings of its shareholders if and when called by the board of directors of the Fund; (5) furnish such information as the board of directors of the Fund may require regarding any investment company in whose shares the Portfolio may invest; and (6) provide such other administrative services for the benefit of the Portfolio as the board of directors may reasonably request. B. In carrying out its responsibilities under Section A herein, to the extent the Administrator deems necessary or desirable and at the expense of the Portfolio, the Administrator shall be entitled to consult with, and obtain the assistance of, the persons described in Section A, paragraph (1) herein who provide services to the Fund. C. The Administrator, at its own expense, shall provide the Fund with such office facilities and equipment as may be necessary to conduct the administrative affairs of the Fund in respect of the Portfolio. 3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all of its own expenses incurred to conduct its administrative affairs. -2- <PAGE> 4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by the Administrator as provided in Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of .20 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to the Fund or in respect of the Portfolio are not to be deemed exclusive, and the Administrator shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 7. DURATION AND TERMINATION. A. This Agreement shall become effective on the date written below, provided that prior to such date it shall have been approved by the board of directors of the Fund, and shall continue in effect until terminated by the Fund or the Administrator on 60 days' written notice to the other. B. Any notice under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the parties hereto have caused this -3- <PAGE> Agreement to be executed and effective on the 1st day of July, 1994. DIMENSIONAL FUND DIMENSIONAL INVESTMENT ADVISORS INC. GROUP INC. By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------ --------------------------- Chairman-Chief President Investment Officer -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(C)(4) <SEQUENCE>18 <DESCRIPTION>EXHIBIT 99 (B)(9)(C)(4) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. U.S. SMALL CAP VALUE PORTFOLIO II ADMINISTRATION AGREEMENT AGREEMENT made this 1st day of July, 1994, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the U.S. Small Cap Value Portfolio II (the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services, assistance and facilities of an administrator and to have an administrator perform various administrative and other services for it; and WHEREAS, the Administrator desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the Administrator to supervise the administrative affairs of the Portfolio, subject to the direction of the board of directors and the officers of the Fund on the terms hereinafter set forth. The Administrator hereby accepts such employment and agrees to render the services described herein for the compensation herein provided. 2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR. A. The Administrator shall supervise the administrative affairs of the Fund as they pertain to the Portfolio. Specifically, the Administrator shall: (1) supervise the services provided to the Fund for the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing agent, printers, insurance carriers (as well as agents and brokers), <PAGE> independent accountants, legal counsel and other persons who provide services to the Fund for the benefit of the Portfolio; (2) assist the Fund to comply with the provisions of applicable federal, state, local and foreign securities, tax, organizational and other laws that (i) govern the business of the Fund in respect of the Portfolio (except those that govern investment of the Portfolio's assets), (ii) regulate the offering of the Portfolio's shares and (iii) provide for the taxation of the Portfolio; (3) provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request; (4) assist the Portfolio to conduct meetings of its shareholders if and when called by the board of directors of the Fund; (5) furnish such information as the board of directors of the Fund may require regarding any investment company in whose shares the Portfolio may invest; and (6) provide such other administrative services for the benefit of the Portfolio as the board of directors may reasonably request. B. In carrying out its responsibilities under Section A herein, to the extent the Administrator deems necessary or desirable and at the expense of the Portfolio, the Administrator shall be entitled to consult with, and obtain the assistance of, the persons described in Section A, paragraph (1) herein who provide services to the Fund. C. The Administrator, at its own expense, shall provide the Fund with such office facilities and equipment as may be necessary to conduct the administrative affairs of the Fund in respect of the Portfolio. 3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all of its own expenses incurred to conduct its administrative affairs. 4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by the Administrator as provided in -2- <PAGE> Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of .30 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to the Fund or in respect of the Portfolio are not to be deemed exclusive, and the Administrator shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 7. DURATION AND TERMINATION. A. This Agreement shall become effective on the date written below, provided that prior to such date it shall have been approved by the board of directors of the Fund, and shall continue in effect until terminated by the Fund or the Administrator on 60 days' written notice to the other. B. Any notice under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the parties hereto have caused this -3- <PAGE> Agreement to be executed and effective on the 1st day of July, 1994. DIMENSIONAL FUND DIMENSIONAL INVESTMENT ADVISORS INC. GROUP INC. By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------ ---------------------------- Chairman-Chief President Investment Officer -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(C)(5) <SEQUENCE>19 <DESCRIPTION>EXHIBIT 99 (B)(9)(C)(5) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. U.S. LARGE CAP VALUE PORTFOLIO II ADMINISTRATION AGREEMENT AGREEMENT made this 1st day of July, 1994, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the U.S. Large Cap Value Portfolio II (the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services, assistance and facilities of an administrator and to have an administrator perform various administrative and other services for it; and WHEREAS, the Administrator desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the Administrator to supervise the administrative affairs of the Portfolio, subject to the direction of the board of directors and the officers of the Fund on the terms hereinafter set forth. The Administrator hereby accepts such employment and agrees to render the services described herein for the compensation herein provided. 2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR. A. The Administrator shall supervise the administrative affairs of the Fund as they pertain to the Portfolio. Specifically, the Administrator shall: (1) supervise the services provided to the Fund for the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing agent, printers, insurance carriers (as well as agents and brokers), <PAGE> independent accountants, legal counsel and other persons who provide services to the Fund for the benefit of the Portfolio; (2) assist the Fund to comply with the provisions of applicable federal, state, local and foreign securities, tax, organizational and other laws that (i) govern the business of the Fund in respect of the Portfolio (except those that govern investment of the Portfolio's assets), (ii) regulate the offering of the Portfolio's shares and (iii) provide for the taxation of the Portfolio; (3) provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request; (4) assist the Portfolio to conduct meetings of its shareholders if and when called by the board of directors of the Fund; (5) furnish such information as the board of directors of the Fund may require regarding any investment company in whose shares the Portfolio may invest; and (6) provide such other administrative services for the benefit of the Portfolio as the board of directors may reasonably request. B. In carrying out its responsibilities under Section A herein, to the extent the Administrator deems necessary or desirable and at the expense of the Portfolio, the Administrator shall be entitled to consult with, and obtain the assistance of, the persons described in Section A, paragraph (1) herein who provide services to the Fund. C. The Administrator, at its own expense, shall provide the Fund with such office facilities and equipment as may be necessary to conduct the administrative affairs of the Fund in respect of the Portfolio. 3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all of its own expenses incurred to conduct its administrative affairs. 4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by the Administrator as provided in -2- <PAGE> Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of .15 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to the Fund or in respect of the Portfolio are not to be deemed exclusive, and the Administrator shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 7. DURATION AND TERMINATION. A. This Agreement shall become effective on the date written below, provided that prior to such date it shall have been approved by the board of directors of the Fund, and shall continue in effect until terminated by the Fund or the Administrator on 60 days' written notice to the other. B. Any notice under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the parties hereto have caused this -3- <PAGE> Agreement to be executed and effective on the 1st day of July, 1994. DIMENSIONAL FUND DIMENSIONAL INVESTMENT ADVISORS INC. GROUP INC. By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------ ---------------------------- Chairman-Chief President Investment Officer -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(C)(6) <SEQUENCE>20 <DESCRIPTION>EXHIBIT 99 (B)(9)(C)(6) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. DFA ONE-YEAR FIXED INCOME PORTFOLIO II ADMINISTRATION AGREEMENT AGREEMENT made this 30th day of September, 1994, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the DFA One-Year Fixed Income Portfolio II (the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services, assistance and facilities of an administrator and to have an administrator perform various administrative and other services for it; and WHEREAS, the Administrator desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the Administrator to supervise the administrative affairs of the Portfolio, subject to the direction of the board of directors and the officers of the Fund on the terms hereinafter set forth. The Administrator hereby accepts such employment and agrees to render the services described herein for the compensation herein provided. 2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR. A. The Administrator shall supervise the administrative affairs of the Fund as they pertain to the Portfolio. Specifically, the Administrator shall: (1) supervise the services provided to the Fund for the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing agent, printers, insurance <PAGE> carriers (as well as agents and brokers), independent accountants, legal counsel and other persons who provide services to the Fund for the benefit of the Portfolio; (2) assist the Fund to comply with the provisions of applicable federal, state, local and foreign securities, tax, organizational and other laws that (i) govern the business of the Fund in respect of the Portfolio (except those that govern investment of the Portfolio's assets), (ii) regulate the offering of the Portfolio's shares and (iii) provide for the taxation of the Portfolio; (3) provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request; (4) assist the Portfolio to conduct meetings of its shareholders if and when called by the board of directors of the Fund; (5) furnish such information as the board of directors of the Fund may require regarding any investment company in whose shares the Portfolio may invest; and (6) provide such other administrative services for the benefit of the Portfolio as the board of directors may reasonably request. B. In carrying out its responsibilities under Section A herein, to the extent the Administrator deems necessary or desirable and at the expense of the Portfolio, the Administrator shall be entitled to consult with, and obtain the assistance of, the persons described in Section A, paragraph (1) herein who provide services to the Fund. C. The Administrator, at its own expense, shall provide the Fund with such office facilities and equipment as may be necessary to conduct the administrative affairs of the Fund in respect of the Portfolio. 3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all of its own expenses incurred to conduct its administrative affairs. -2- <PAGE> 4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by the Administrator as provided in Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of .10 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to the Fund or in respect of the Portfolio are not to be deemed exclusive, and the Administrator shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 7. DURATION AND TERMINATION. A. This Agreement shall become effective on the date written below, provided that prior to such date it shall have been approved by the board of directors of the Fund, and shall continue in effect until terminated by the Fund or the Administrator on 60 days' written notice to the other. B. Any notice under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the parties hereto have caused this -3- <PAGE> Agreement to be executed and effective on the 30th day of September, 1994. DIMENSIONAL FUND DIMENSIONAL INVESTMENT ADVISORS INC. GROUP INC. By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ----------------------------- ------------------------------ Chairman-Chief President Investment Officer -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(C)(7) <SEQUENCE>21 <DESCRIPTION>EXHIBIT 99 (B)(9)(C)(7) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. U.S. LARGE CAP VALUE PORTFOLIO III ADMINISTRATION AGREEMENT AGREEMENT made this 20th day of December, 1994, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the U.S. Large Cap Value Portfolio III (the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services, assistance and facilities of an administrator and to have an administrator perform various administrative and other services for it; and WHEREAS, the Administrator desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the Administrator to supervise the administrative affairs of the Portfolio, subject to the direction of the board of directors and the officers of the Fund on the terms hereinafter set forth. The Administrator hereby accepts such employment and agrees to render the services described herein for the compensation herein provided. 2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR. A. The Administrator shall supervise the administrative affairs of the Fund as they pertain to the Portfolio. Specifically, the Administrator shall: (1) supervise the services provided to the Fund for the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing agent, printers, insurance carriers (as well as agents and brokers), <PAGE> independent accountants, legal counsel and other persons who provide services to the Fund for the benefit of the Portfolio; (2) assist the Fund to comply with the provisions of applicable federal, state, local and foreign securities, tax, organizational and other laws that (i) govern the business of the Fund in respect of the Portfolio (except those that govern investment of the Portfolio's assets), (ii) regulate the offering of the Portfolio's shares and (iii) provide for the taxation of the Portfolio; (3) provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request; (4) assist the Portfolio to conduct meetings of its shareholders if and when called by the board of directors of the Fund; (5) furnish such information as the board of directors of the Fund may require regarding any investment company in whose shares the Portfolio may invest; and (6) provide such other administrative services for the benefit of the Portfolio as the board of directors may reasonably request. B. In carrying out its responsibilities under Section A herein, to the extent the Administrator deems necessary or desirable and at the expense of the Portfolio, the Administrator shall be entitled to consult with, and obtain the assistance of, the persons described in Section A, paragraph (1) herein who provide services to the Fund. C. The Administrator, at its own expense, shall provide the Fund with such office facilities and equipment as may be necessary to conduct the administrative affairs of the Fund in respect of the Portfolio. 3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all of its own expenses incurred to conduct its administrative affairs. 4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by the Administrator as provided in -2- <PAGE> Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of .01 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to the Fund or in respect of the Portfolio are not to be deemed exclusive, and the Administrator shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 7. DURATION AND TERMINATION. A. This Agreement shall become effective on the date written below, provided that prior to such date it shall have been approved by the board of directors of the Fund, and shall continue in effect until terminated by the Fund or the Administrator on 60 days' written notice to the other. B. Any notice under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the parties hereto have caused this -3- <PAGE> Agreement to be executed and effective on the 20th day of December, 1994. DIMENSIONAL FUND DIMENSIONAL INVESTMENT ADVISORS INC. GROUP INC. By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------------ ------------------------------ Chairman-Chief President Investment Officer -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(C)(8) <SEQUENCE>22 <DESCRIPTION>EXHIBIT 99 (B)(9)(C)(8) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. THE DFA INTERNATIONAL VALUE PORTFOLIO III ADMINISTRATION AGREEMENT AGREEMENT made this 20th day of December, 1994, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the International Value Portfolio III (the "Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Administrator"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services, assistance and facilities of an administrator and to have an administrator perform various administrative and other services for it; and WHEREAS, the Administrator desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the Administrator to supervise the administrative affairs of the Portfolio, subject to the direction of the board of directors and the officers of the Fund on the terms hereinafter set forth. The Administrator hereby accepts such employment and agrees to render the services described herein for the compensation herein provided. 2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR. A. The Administrator shall supervise the administrative affairs of the Fund as they pertain to the Portfolio. Specifically, the Administrator shall: (1) supervise the services provided to the Fund for the benefit of the Portfolio by the Portfolio's custodian, transfer and dividend disbursing agent, printers, insurance <PAGE> carriers (as well as agents and brokers), independent accountants, legal counsel and other persons who provide services to the Fund for the benefit of the Portfolio; (2) assist the Fund to comply with the provisions of applicable federal, state, local and foreign securities, tax, organizational and other laws that (i) govern the business of the Fund in respect of the Portfolio (except those that govern investment of the Portfolio's assets), (ii) regulate the offering of the Portfolio's shares and (iii) provide for the taxation of the Portfolio; (3) provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request; (4) assist the Portfolio to conduct meetings of its shareholders if and when called by the board of directors of the Fund; (5) furnish such information as the board of directors of the Fund may require regarding any investment company in whose shares the Portfolio may invest; and (6) provide such other administrative services for the benefit of the Portfolio as the board of directors may reasonably request. B. In carrying out its responsibilities under Section A herein, to the extent the Administrator deems necessary or desirable and at the expense of the Portfolio, the Administrator shall be entitled to consult with, and obtain the assistance of, the persons described in Section A, paragraph (1) herein who provide services to the Fund. C. The Administrator, at its own expense, shall provide the Fund with such office facilities and equipment as may be necessary to conduct the administrative affairs of the Fund in respect of the Portfolio. 3. EXPENSES OF THE FUND. It is understood that the Portfolio will pay all of its own expenses incurred to conduct its administrative affairs. -2- <PAGE> 4. COMPENSATION OF THE ADMINISTRATOR. For the services to be rendered by the Administrator as provided in Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of .01 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator to the Fund or in respect of the Portfolio are not to be deemed exclusive, and the Administrator shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 7. DURATION AND TERMINATION. A. This Agreement shall become effective on the date written below, provided that prior to such date it shall have been approved by the board of directors of the Fund, and shall continue in effect until terminated by the Fund or the Administrator on 60 days' written notice to the other. B. Any notice under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the parties hereto have caused this -3- <PAGE> Agreement to be executed and effective on the 20th day of December, 1994. DIMENSIONAL FUND DIMENSIONAL INVESTMENT ADVISORS INC. GROUP INC. By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------ --------------------------- Chairman-Chief President Investment Officer -4- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(E)(2)(I <SEQUENCE>23 <DESCRIPTION>EXHIBIT 99 (B)(9)(E)(2)(I) <TEXT> <PAGE> ADMINISTRATIVE SERVICE AGREEMENT This Agreement dated as of July 1, 1996 between Bankers Trust Company ("Sub-Administrator" or "Servicing Agent") and Dimensional Investment Group, Inc. ("Company"), on behalf of three of its portfolios, the U.S. Small Cap Value Portfolio II, the U.S. Large Cap Value Portfolio II and the DFA International Value Portfolio II (referred to collectively hereinafter as the "Funds"). WHEREAS, the Sub-Administrator provides administrative services comprised of recordkeeping and reporting and processing services to qualified retirement plans ("Plan" or "Plans"); and WHEREAS, it is contemplated that a trustee, sponsor or administrative committee of a Plan ("Plan Representative") will invest on behalf of Plan participants, or offer to Plan participants ("Participants") the opportunity to invest their assets, in the Funds; and WHEREAS, the Sub-Administrator and the Funds desire that the purchase and redemption of the Funds' shares ("Shares") be facilitated through one or more master accounts ("Accounts") with each Fund and its designated transfer agent established by the Sub-Administrator or the Plan Trustee ("Plan Trustee") in the name of the Plan, in the Sub-Administrator's or Plan Trustee's own name, or as nominee; and WHEREAS, the Funds have the power and authority to appoint qualified entities to provide administrative services to the Funds; and WHEREAS, the Funds desire the Sub-Administrator to provide to the Accounts certain administrative services listed on Schedule A hereto ("Administrative Services") and the Sub-Administrator is willing and able to furnish such Administrative Services on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the promises and mutual covenants hereinafter contained, the parties agree as follows: ARTICLE 1. TERMS OF APPOINTMENT SECTION 1.1 Subject to the terms and conditions set forth in this Agreement, the Appendix, and the Schedules attached hereto and made a part hereof, the Company, on behalf of the Funds, hereby employs and appoints the Sub-Administrator to act as, and the Sub-Administrator agrees to act as, its Servicing Agent with respect to Shares purchased and held by the Plans. <PAGE> SECTION 1.2 The Sub-Administrator shall maintain on behalf of the Plans, one or more Accounts with each Fund or its designated transfer agent. The Accounts shall be held by the Sub-Administrator or the Plan Trustee in the name of the Plans, in either of their own names or as nominee. The Administrative Services provided by the Sub-Administrator on behalf of the Plans shall not be the responsibility of the Funds or their designated transfer agents. SECTION 1.3 The Sub-Administrator agrees to perform the Administrative Services with respect to the Plans and their Participants which make up the Accounts. SECTION 1.4 The parties hereto agree that the Administrative Services are shareholder administrative services and are not investment advisory or distribution related services. SECTION 1.5 Each party shall maintain and preserve all records as required by law to be maintained and preserved in connection with the provision of the services contemplated hereunder. Upon the request of a party, the other party shall provide copies of all records as may be necessary to (a) monitor and review the performance of either party's activities; (b) assist either party in resolving disputes, reconciling records or responding to an auditor's inquires; (c) comply with any request of a governmental body or self-regulatory organization; (d) verify compliance by a party with the terms of this Agreement; (e) make required regulatory reports; and (f) perform general customer service. SECTION 1.6 In addition to the Administrative Services, the Sub-Administrator shall perform such other duties and functions as are reflected in Schedule A, as amended from time to time, signed and dated by both parties hereto. The fees payable to the Sub-Administrator as compensation for the Administrative Services and such other duties and functions shall be reflected in Schedule B, as amended from time to time, signed and dated by each party hereto. SECTION 1.7 The Sub-Administrator's performance of the Administrative Services, including without limitation the purchase and redemption of Shares in each Fund, will be subject to the terms and conditions set forth in each Fund's prospectus and statement of additional information. ARTICLE 2. FEES SECTION 2.1 For acting as the Servicing Agent to the Funds and for the performance of Administrative Services to the Funds by the Sub-Administrator pursuant to this Agreement, the -2- <PAGE> Funds agree to pay the Sub-Administrator a fee based upon the net asset value of Shares held by Accounts, as set out in the initial fee schedule attached hereto as Schedule B. The parties agree that all payments for services made by the Funds under this Agreement shall be in accordance with an invoice provided by the Funds to the Sub-Administrator that shall be based on each Fund's records with its transfer agent. SECTION 2.2 The Funds agree to provide an invoice and pay all fees within thirty (30) business days after the last day of each month. The Sub-Administrator shall advise the Funds in writing within 20 days of receipt of the invoice if it disagrees with any information set forth on the invoice. All payments and invoices to the Sub-Administrator shall be sent to the attention of BTNY Services, Inc., GRSS Billing Department, 34 Exchange Place-5th Floor, Jersey City, New Jersey 07302. ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE FUNDS The Company represents and warrants to the Sub-Administrator that the following are true and will remain true throughout the term of this Agreement. (a) The Company is a corporation duly organized and existing and in good standing under the laws of the State of Maryland. (b) The Company is an investment company registered under the Investment Company Act of 1940 ("1940 Act"). (c) The Company is authorized to enter into and perform this Agreement on behalf of the Funds, and the performance of the Company's or the Funds' obligations hereunder does not and will not violate or conflict with any governing documents or agreements of trust with respect to (i) the Company or (ii) the Funds, or any applicable law, including Section 12 of the 1940 Act. (d) The Company, on behalf of the Funds, will deliver to the Sub-Administrator evidence of such authorization as the Sub-Administrator may reasonably require, whether by way of certified resolution or otherwise. (e) Neither the Company nor the Funds shall, without the written consent of the Sub-Administrator, make representations concerning the Sub-Administrator or its affiliates. -3- <PAGE> ARTICLE 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SUB-ADMINISTRATOR The Sub-Administrator represents, warrants and covenants to the Funds that the following are true and will remain true throughout the term of this Agreement: (a) The Sub-Administrator is a corporation duly organized and existing in good standing under the laws of the State of New York. (b) The Sub-Administrator is a bank as defined in the Securities Exchange Act of 1934. (c) The Sub-Administrator has full power and authority under applicable law, and has taken all action necessary, to enter into and perform this Agreement, and the performance of its obligations hereunder does not and will not violate or conflict with any governing document or agreements of the Sub-Administrator or any applicable law. (d) The Sub-Administrator will deliver to the Funds evidence of such authorization as the Funds may reasonably require, whether by way of certified resolution or otherwise. (e) The Sub-Administrator shall not, without the written consent of the Funds, make representations concerning the Company, or the Funds or its Shares, except those contained in the then current prospectuses, statements of additional information, and current sales literature approved by the Funds. ARTICLE 5. AGENCY The Company, on behalf of the Funds, appoints the Sub-Administrator as the Funds' agent for the limited purpose of accepting orders for the purchase and redemption of Shares of the Funds by the Sub-Administrator on behalf of each Account and providing the Administrative Services described in Schedule A, as amended from time to time. The Sub-Administrator will not hold itself out to the public or engage in any other activity as a distributor for the Funds. ARTICLE 6. EXPENSES The Funds shall provide the Sub-Administrator with a sufficient quantity of prospectuses and statements of additional information to be used in connection with the Agreement. The Sub-Administrator shall bear none of the expenses for the costs of registration of the Funds' Shares, preparation and filing of prospectuses, proxy materials and reports or the preparation of -4- <PAGE> any other related statements and notices. The expense of printing and distributing to the Sub-Administrator prospectuses and statements of additional information shall be paid by each Fund or Dimensional Fund Advisors Inc., as appropriate. The Sub-Administrator shall pay the cost of distributing such materials to the Plans or Participants as set forth in Schedule A of the Agreement. ARTICLE 7. STANDARD OF CARE The Sub-Administrator shall be responsible for the performance of only such duties as are set forth herein. The Sub-Administrator will use reasonable care in providing all services under this Agreement. Under no circumstances shall the Sub-Administrator have any liability for special or consequential damages. ARTICLE 8. INDEMNIFICATION SECTION 8.1 The Sub-Administrator agrees to indemnify and hold harmless the Funds, the Company, and its directors, officers, employees, representatives, designees, agents and each person, if any, who control the Company or the Funds within the meaning of the Securities Act of 1933, as amended (the "Securities Act") (collectively, "Indemnitees") against any actual losses (excluding consequential or special damages), lawsuits, claims, damages or liabilities, including legal fees (collectively, "Loss") to which an Indemnitee may become subject insofar as such Loss arises out of: (i) the Sub-Administrator's failure to comply with the terms of this Agreement or the falsity of or breach of any representation, warranty or covenant made by the Sub-Administrator; (ii) the Sub-Administrator's negligence or willful misconduct or that of its employees, agents or contractors in connection herewith; or (iii) the Sub-Administrator's failure to provide necessary information or directions on a timely basis as requested by the Company or the Funds; PROVIDED, HOWEVER, that the Sub-Administrator will not be liable for indemnification hereunder of any Indemnitee to the extent that any Loss results from the negligence or willful misconduct of such Indemnitee. SECTION 8.2 The Company, on behalf of the Funds, agrees to indemnify and hold harmless the Sub-Administrator and its directors, officers, employees, representatives, designees, agents and each person, if any, who controls the Sub-Administrator within the meaning of the Securities Act (collectively, "Indemnitees"), against any Loss to which an Indemnitee may become subject insofar as such Loss arises out of: (i) the Company's or the Funds' failure to comply with the terms of this Agreement or falsity of or breach of any representation, -5- <PAGE> warranty or covenant made by the Company or the Funds; (ii) the Company's or the Funds' negligence or willful misconduct or that of its employees, agents or contractors in connection herewith; (iii) any action taken by the Sub-Administrator upon written instructions believed in good faith by it to have been executed by a duly authorized officer or representative of the Company or the Funds or (iv) the Company's or the Funds' failure to provide necessary information or directions on a timely basis as requested by the Sub-Administrator; PROVIDED, HOWEVER, that neither the Company nor the Funds will be liable for indemnification hereunder of any Indemnitee to the extent that any Loss results from the negligence or willful misconduct of such Indemnitee. SECTION 8.3 Promptly after receipt by any Indemnitee under this Article 8 of notice of the commencement of a claim or action that may be covered hereunder ("Claim"), the Indemnitee shall notify either the Sub-Administrator or the Funds, whichever is the indemnitor, of the commencement thereof. As a condition to indemnification hereunder, the Indemnitee shall provide the indemnitor with complete details, documents and pleadings concerning any Claim. The indemnitor will be entitled to participate with the indemnitee in the defense or settlement of any Claim at the indemnitor's expense. The Indemnitee may defend any Claim with counsel of its choice, if the indemnitor shall consent to such counsel (which consent shall not be unreasonably withheld). After notice from the indemnitor to the Indemnitee of the indemnitor's recommendation to settle the Claim, if the claimant agrees to such settlement but the Indemnitee refuses to agree to such settlement, then the Indemnitee shall be responsible for all Loss incurred prior to the time of such refusal to the extent it exceeds the amount of such settlement, plus any Loss incurred after the time of such refusal. ARTICLE 9. CONFIDENTIALITY The parties hereto agree that each shall treat confidentially the terms and conditions of this Agreement and all information provided by each party to the other regarding its business and operations. All confidential information provided by a party hereto shall be used by any other party hereto solely for the purpose of rendering services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party without consent of such providing party. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this agreement, or that is required or requested to be disclosed by any bank or other regulatory examiner, or auditor of -6- <PAGE> the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation. ARTICLE 10. ASSIGNMENT Neither this Agreement nor any rights or obligations hereunder may be assigned by any party without the prior written consent of the other party, but that this Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and permitted assigns except that the Sub-Administrator may delegate any of its administrative responsibilities to BTNY Services, Inc. and BT Services Tennessee, Inc., affiliates of the Sub-Administrator, and such other affiliates as the Sub-Administrator deems appropriate and provides prior written notice to the Company. ARTICLE 11. TERM AND TERMINATION OF AGREEMENT SECTION 11.1 This Agreement shall become effective on the date first set forth above and shall continue in effect until terminated as set forth below. SECTION 11.2 This Agreement may be terminated by either party hereto at any time upon at least sixty (60) days written notice. Sections 1.5 and 2.1 and Articles 8 and 9 shall continue in full force and effect after termination of this Agreement for a period of three years from the date of termination. SECTION 11.3 After termination of this Agreement by a Fund, no fee shall be due with respect to any Shares that are purchased and held by the Accounts after the date of termination. However, notwithstanding any such termination, the Fund or Funds will remain obligated to pay the Sub-Administrator the fee as to each Share that was considered in the calculation of the fees as of the date of termination for so long as such Shares are held by the Accounts and the Sub-Administrator continues to provide services to the Accounts by reason of a contractual relationship with the Plan Representative. This Agreement, or any provision thereof, shall survive the termination to the extent necessary for each party to perform its obligations with respect to Shares for which a fee continues to be due subsequent to such termination. -7- <PAGE> ARTICLE 12. ENTIRE AGREEMENT This Agreement and the Schedules and Appendix attached hereto set forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersede all prior agreements, arrangements and understandings, written or oral, among the parties. ARTICLE 13. AMENDMENT, MODIFICATIONS, ETC. No provision of this Agreement may be amended, modified or waived except in a writing signed by the parties hereto. No waiver of any provision hereto shall be deemed a continuing waiver unless it is so designated. No failure or delay on the part of either party in exercising any power or right precludes any other or further exercise thereof or the exercise of any other power or right. ARTICLE 14. NOTICES Except as otherwise provided in this Agreement, all requests, demands or other communications between the parties or notices in connection herewith (a) shall be in writing, hand delivered or sent by telex, telegram, cable, facsimile or other means of electronic communication agreed upon by the parties hereto addressed. (a) IF TO THE SUB-ADMINISTRATOR: BTNY Services, Inc. 34 Exchange Place Jersey City, NJ 07302 Attention: Susan Wong Telephone: (201) 860-7851 Telecopier: (201) 860-7425 cc: Suzanne Konstance Bankers Trust Company 280 Park Avenue, 33W New York, N.Y. 10017 Telephone: (212) 454-7316 Telecopier: (212) 454-2647 -8- <PAGE> (b) IF TO THE COMPANY OR TO THE FUNDS: Dimensional Investment Group Inc. 1299 Ocean Avenue-11th Floor Santa Monica, CA 90401 Attention: Irene Diamant, Vice President Telephone: (310) 576-1173 Telecopier: (310) 395-6140 Such addresses may be changed from time to time by any party by providing written notice in the manner set forth above. All notices shall be effective upon delivery. ARTICLE 15. GOVERNING LAW; CONSENT TO JURISDICTION SECTION 15.1 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to conflicts of law principles thereof which might refer such interpretations to the laws of a different state or jurisdiction. SECTION 15.2 Any suit, action or proceeding arising out of this Agreement may be instituted in any Federal Court sitting in the City of New York, State of New York, United States of America, and the parties irrevocably submit to the nonexclusive jurisdiction of any such court in any such suit, action or proceeding and waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any such suit, action, or proceeding, brought in such a court and any claim that such suit, action, or proceeding was brought in an inconvenient forum. ARTICLE 16. LEGAL RELATIONSHIP OF PARTIES The parties hereto agree that they are independent contractors and not partners or co-venturers or employees of each other, except that the Sub-Administrator shall be the agent of the Funds to the extent described herein. ARTICLE 17. CAPTIONS The paragraph headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. -9- <PAGE> ARTICLE 18. SEVERABILITY; CONFLICTS If any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions and portions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. If there is any conflict between the provisions in this Agreement and those of the prospectuses and statements of additional information of the Funds, the prospectuses and statements of additional information shall govern. ARTICLE 19. COUNTERPARTS This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Agreement. ARTICLE 20. NON-EXCLUSIVITY Both parties acknowledge that either party may enter into similar agreements with other parties relating to providing similar services to the Funds or other open-ended investment companies. IN WITNESS WHEREOF the parties have hereto affixed their hands and seals on the day and year first above written. BANKERS TRUST COMPANY By: /s/ Suzanne Konstance ------------------------------------ Name: Suzanne Konstance Title: Vice President DIMENSIONAL INVESTMENT GROUP INC., ON BEHALF OF ITS PORTFOLIOS, THE U.S. SMALL CAP VALUE PORTFOLIO II, THE U.S. LARGE CAP VALUE PORTFOLIO II AND THE DFA INTERNATIONAL VALUE PORTFOLIO II By: /s/ Irene R. Diamant ------------------------------------ Name: Irene R. Diamant Title: Vice President -10- <PAGE> SCHEDULE A DUTIES OF THE SUB-ADMINISTRATOR In accordance with procedures established from time to time by agreement between the Company, on behalf of the Funds, and the Sub-Administrator, the Sub-Administrator shall provide the following services: 1. ACCOUNT INFORMATION The Sub-Administrator shall maintain a record of the number of Shares held by the Accounts on behalf of each Plan and each of its Participants. The Sub-Administrator shall also maintain records of residence or company address and taxpayer identification number of each Participant and indicate, if applicable, whether such Shares are held in certificate form. 2. PARTICIPANT SERVICES The Sub-Administrator shall investigate all inquiries from Participants and Plan Representatives relating to the Participants' interests in the Accounts and shall respond to all communications from Participants and Plan Representatives and other persons having an interest in the Plan relating to the Sub-Administrator's duties hereunder and such other correspondence as may from time to time be mutually agreed upon between the Sub-Administrator and the Funds. 3. MAILING COMMUNICATIONS; PROXY MATERIALS The Sub-Administrator or Plan Trustee, at the request of the Sub-Administrator, shall forward to the appropriate Plan or its designee all reports to shareholders, dividend and distribution notices and proxy materials for each of the Fund's meetings of shareholders. In connection with meetings of shareholders, the Sub-Administrator or Plan Trustee, at the request of the Sub-Administrator, shall prepare with respect to Plans and/or Participants, shareholder lists, and, as appropriate, mail, and certify as to the mailing of proxy materials, process, and tabulate returned proxy cards, report or proxies voted prior to meetings, and certify Shares voted at meetings. -A1- <PAGE> 4. SALES OF SHARES (a) ACCEPTANCE OF ORDERS The Sub-Administrator shall, as agent for the Funds, receive for acceptance orders from Plans and/or Participants for the purchase of Shares each business day The New York Stock Exchange is open for regular business ("Business Day") and stamp each order with the date and time received. The Sub-Administrator, or the Trustee at the direction of the Sub-Administrator, shall forward payment for the purchase of Shares by wire on the next Business Day following Trade Date (defined hereafter) to the Custodian of the Funds ("Custodian"). If the next Business Day is a day on which the bank wire system is closed, the Sub-Administrator, or the Trustee at the direction of the Sub-Administrator, shall forward payment for the purchase of Shares by wire on the first Business Day thereafter on which the bank wire system is open. In addition, the Sub-Administrator shall, pursuant to such purchase instructions, coordinate with each Fund or its designees to issue the appropriate number of Shares and record such Shares in the appropriate Account. (b) RECORDATION OF THE ISSUANCE OF SHARES The Sub-Administrator shall record the issuance of Shares to the Plan and maintain a record of the total number of Shares which are so issued, based upon data provided to the Sub-Administrator by each Fund's transfer agent. The Sub-Administrator shall also provide each Fund or its designee with the total number of Shares which are issued and outstanding to each Plan or Account on a daily basis. Such Shares shall be reflected on appropriate accounts maintained by the Sub-Administrator reflecting outstanding Shares attributed to the individual accounts of a Plan or Participants. 5. EXCHANGE AND REDEMPTION (a) REQUIREMENTS FOR EXCHANGE OR REDEMPTION OF SHARES The Sub-Administrator shall, as agent for the Funds, process all oral or written instructions from Participants or Plans to exchange or redeem Shares in accordance with the exchange or repurchase procedures set forth in each Fund's then current prospectus and statement of additional information. The Sub-Administrator shall transfer or redeem Shares upon receipt of oral or written instructions or otherwise pursuant to the Funds' then current prospectuses and statements of additional information. Any cash redemption limitations applicable to the Funds shall apply at the Account level and not at the Plan or Participant level. (b) NOTICE TO THE CUSTODIAN AND TO THE FUNDS When Shares are redeemed, the Sub-Administrator shall, upon receipt of the instructions and documents in proper form, deliver to the Custodian and the Funds in such format as the Custodian and the -A2- <PAGE> Funds shall reasonably require, a notification setting forth the number of Shares to be redeemed. Such Shares shall be reflected on appropriate accounts maintained by the Sub-Administrator reflecting interests in outstanding Shares attributed to the individual accounts of a Plan or Participant. (c) PAYMENT OF REDEMPTION PROCEEDS If the Business Day on which it receives Instructions is a day on which the bank wire system is closed, the Custodian will wire redemption proceeds to the Sub-Administrator on the first Business Day thereafter on which the bank wire system is open. The Sub-Administrator, or the Trustee at the direction of the Sub-Administrator, shall, upon receipt of the monies paid to it by the Custodian for the redemption of Shares, pay such monies. The Sub-Administrator shall not process or effect any redemption with respect to Shares of a certain Fund after receipt by the Sub-Administrator of notification of the suspension of the determination of the net asset value of such Fund. 6. PROCEDURES The procedures to be followed for purchases, redemptions and exchanges pursuant to Sections 4 and 5 of this Schedule A shall be as follows. For each Fund and for each Account maintained by the Sub-Administrator with such Fund, prior to 7:30 a.m. Eastern Time on each Business Day, the Sub-Administrator shall transmit to the transfer agent for each Fund a single aggregate purchase or redemption order that reflects the "net" effect of all purchase or redemptions of Shares based upon instructions from the Plans (collectively, "Instructions") received prior to 4:00 p.m. Eastern Standard Time on the preceding Business Day (that Business Day) (a "Trade Date"). Purchases or redemptions of the Funds' Shares shall be deemed to have occurred as of the Trade Date at the net asset value calculated as of such Date to which the order applies, if such Instructions were received prior to 4:00 p.m. Eastern Time on a Trade Date ("Close of Trading"). In no event shall the Sub-Administrator accept Instructions on any Business Day with respect to requests by Participants that have not been received by the Sub-Administrator prior to the Close of Trading on the Business Day on which such Instructions are to be prepared. Instructions received in proper form by the Sub-Administrator after the Close of Trading on any Business Day shall be treated as if received on the next following Business Day. -A3- <PAGE> 7. PRICING INFORMATION Each Fund shall, or shall cause its transfer agent, to use its best efforts to provide to the Sub-Administrator (by facsimile or other electronic transmission acceptable to the Sub-Administrator) by 6:00 p.m. Eastern Time, the Funds' closing per share net asset value determined at the close of regular trading each day that the New York Stock Exchange is open. 8. DIVIDENDS Upon the declaration by the Company's directors of each dividend and each capital gain distribution with respect to Shares, each Fund shall, or shall cause its transfer agent to, furnish to the Sub-Administrator information setting forth the date of the declaration of such dividend or distribution, the ex-dividend date, the date of payment thereof, the record date as of which shareholders entitled to payment shall be determined, and when available, but not prior to the close of business on the ex-dividend date, the amount payable per Share to the shareholders of record as of that date, the total amount payable to the Sub-Administrator as nominee on the payment date and whether such dividend or distribution is to be paid in Shares at net asset value or in cash. On or before the payment date specified in such resolution of the directors, the Custodian will pay to the Sub-Administrator sufficient cash to make payment to the Plan of dividends or, if applicable, other distributions payable in cash. 9. BLUE SKY REPORTS The Sub-Administrator will provide to each Fund, or to its designated agent, a report within 15 days after the end of each calendar quarter in accordance with a system approved by the Funds, showing by state of residence, all sales and redemptions of Shares by Participants. The Company and the Funds shall remain fully responsible for ensuring that the Funds' Shares are registered in all jurisdictions as required by applicable state -A4- <PAGE> securities laws or the interpretation thereof by applicable regulatory authorities. Dated as of: July 1, 1996 BANKERS TRUST COMPANY By: /s/ Suzanne Konstance -------------------------------- Name: Suzanne Konstance Title: Vice President DIMENSIONAL INVESTMENT GROUP INC., ON BEHALF OF ITS PORTFOLIOS, THE U.S. SMALL CAP VALUE PORTFOLIO II, THE U.S. LARGE CAP VALUE PORTFOLIO II AND THE DFA INTERNATIONAL VALUE PORTFOLIO II By: /s/ Irene R. Diamant -------------------------------- Name: Irene R. Diamant Title: Vice President -A5- <PAGE> SCHEDULE B FEE SCHEDULE The Funds, as defined in the Administrative Service Agreement to which this Schedule B is attached, shall pay a fee with respect to the Sub-Administrator for each Fund, calculated daily and paid monthly in arrears equal to 0.10 % per annum of the daily net asset value of the total number of Shares of such Fund held in the Accounts. The calculation of the fee shall be based upon each Fund's records held by each Fund's transfer agent. Dated as of: July 1, 1996 BANKERS TRUST COMPANY By: /s/ Suzanne Konstance -------------------------------- Name: Suzanne Konstance Title: Vice President DIMENSIONAL INVESTMENT GROUP INC., ON BEHALF OF ITS PORTFOLIOS, THE U.S. SMALL CAP VALUE PORTFOLIO II, U.S. LARGE CAP VALUE PORTFOLIO II AND DFA INTERNATIONAL VALUE PORTFOLIO II By: /s/ Irene R. Diamant -------------------------------- Name: Irene Diamant Title: Vice President -B1- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(E)(2)II <SEQUENCE>24 <DESCRIPTION>EXHIBIT 99 (B)(9)(E)(2)(II) <TEXT> <PAGE> CHARLES SCHWAB MUTUAL FUND MARKETPLACE-Registered Trademark- SERVICES AGREEMENT This Agreement is made as of July 1, 1994, between Charles Schwab & Co., Inc. ("Schwab"), a California corporation, each registered investment company ("Fund Company") that has executed Schedule I, on its own behalf and on behalf of each of the series or classes of shares, if any, listed on Schedule I, as amended from time to time (such series or classes being referred to as the "Fund(s)"), and Fund Affiliate (defined below) that has executed this Agreement. Fund Company and Fund Affiliate are collectively referred to herein as "Fund Parties." In the event that there are no series or classes of shares listed on Schedule I, the term "Fund(s)" shall mean "Fund Company". WHEREAS Fund Affiliate is administrator for the Funds. WHEREAS Fund Parties wish to have Schwab perform certain recordkeeping, shareholder communication, and other services for each Fund to participants in the Bell South 401(k) plan ("Fund Shareholders"); and WHEREAS Schwab is willing to perform such services on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and the mutual promises set forth below, the parties agree as follows: 1. SERVICES a. During the term of this Agreement, Schwab shall perform the services set forth on Exhibit A hereto, as such exhibit may be amended from time to time by mutual consent of the parties (the "Services"). b. In processing purchase, redemption, transfer and exchange orders placed by Schwab on behalf of Fund Shareholders, and in order to facilitate Schwab's performance of Services, the parties agree that the Operating Agreement, dated as of July 1, 1994, between Schwab and Fund Company, as amended from time to time ("Operating Agreement"), is incorporated herein by this reference. All terms and conditions of the Operating Agreement shall be binding as between Schwab and Fund Parties, and the references to Fund Company therein shall be deemed to mean Fund Parties for the purposes of this Agreement. In the event of any inconsistency between the Operating Agreement and this Agreement, this Agreement shall control. 2. FEES For the Services, Schwab shall receive a fee (the "Fee") which shall be calculated and paid in accordance with Exhibit B hereto. Schedule II reflects the amount of the Fee that each Fund Party has agreed, as between them, to pay. Should Exhibit A be amended to revise the Services, the parties shall also amend Exhibit B and Schedule II, if necessary, in order to reflect any changes in the Fee. 3. TRANSACTION CHARGES Schwab shall not, during the term of this Agreement, assess against or collect from Fund Shareholders any transaction fee upon the purchase or redemption of any Fund's shares that are considered in calculating the Fee. 4. INDEMNIFICATION a. Schwab shall indemnify and hold harmless Fund Parties and their directors, officers, employees, and agents ("Indemnified Parties") from and against any and all losses, claims, liabilities and expenses (including reasonable attorney's fees) ("Losses") incurred by any of them arising out of (i) Schwab's dissemination of information regarding Fund Parties or a Fund that is materially incorrect and that was not provided to Schwab, or approved, by a Fund Party, its affiliated persons ("Affiliates") as defined under the Investment Company Act of 1940, as amended (the "1940 Act"), or agents or (ii) Schwab's willful misconduct or <PAGE> negligence in the performance of, or failure to perform, its obligations under this Agreement, except to the extent such Losses result from the negligence, willful misconduct or breach of this Agreement by an Indemnified Party. b. In any event, no party shall be liable for any special, consequential or incidental damages. 5. ROLE AND RELATIONSHIP OF SCHWAB The parties acknowledge and agree that the Services under this Agreement are recordkeeping, shareholder communication and related services only and are not the services of an underwriter or a principal underwriter of or dealer in the shares of the Fund within the meaning of the Securities Act of 1933, as amended, or the 1940 Act. This Agreement does not grant Schwab any right to purchase shares from any Fund (although it does not preclude Schwab from purchasing any such shares), nor does it constitute Schwab an agent of Fund Parties or any Fund for purposes of selling shares of any Fund to any dealer or the public. To the extent Schwab is involved in the purchase of shares of any Fund by Fund Shareholders, such involvement will be as agent of such Fund Shareholders only. 6. INFORMATION TO BE PROVIDED Fund Parties shall provide to Schwab prior to the effectiveness of this Agreement or as soon thereafter as practicable: a. Certified resolutions of the board of directors of each Fund Party authorizing the Fund Party to enter into this Agreement and indicating the officers authorized to execute this Agreement on behalf of the Fund Party; and b. Two (2) copies of the then-current prospectus and statement of additional information of each Fund. Fund Party shall provide Schwab with written copies of any amendments to or changes in the Fund's prospectus or statement of additional information as soon as practicable after such amendments or changes become available. 7. NOTICES All notices required by this Agreement (excluding the Operating Agreement) shall be in writing and delivered personally or sent by first class mail. Such notices will be deemed to have been received as of the earlier of actual physical receipt or three (3) days after deposit, first class postage prepaid, in the United States mail. All such notices shall be made: if to Schwab, to: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: John McGonigle Senior Vice President/Mutual Funds with a copy to: General Counsel, at the same address; if to Fund Party, to the address given below in the signature block. 8. NONEXCLUSIVITY Each Party acknowledges that the other may enter into agreements similar to this Agreement with other parties for the performance of services similar to those to be provided under this Agreement, unless otherwise agreed to in writing by the parties. <PAGE> 9. ASSIGNABILITY This Agreement is not assignable by any party without the other parties' prior written consents and any attempted assignment in contravention hereof shall be null and void; provided, however, that Schwab may, without the consent of Fund Parties, assign its rights and obligations under this Agreement to any Affiliate provided that Schwab shall first provide the Fund with written notice of such assignment as soon as is practicable and shall remain legally responsible for the performance of services under this Agreement. "Affiliate" shall mean a company controlled by or under control with Schwab. 10. EXHIBITS AND SCHEDULES All Exhibits and Schedules attached to this Agreement, as they may be amended from time to time, are by this reference incorporated into and made a part of this Agreement. 11. ENTIRE AGREEMENT; AMENDMENT This Agreement (including the Exhibits and Schedules hereto), together with the Operating Agreement, constitute the entire agreement between the parties as to the subject matter hereof and supersede any and all agreements, representations and warranties, written or oral, regarding such subject matter made prior to the time at which this Agreement has been executed and delivered by Schwab and Fund Parties. This Agreement and the Exhibits and Schedules hereto may be amended only by a writing executed by each party hereto that is to be bound by such amendment. 12. GOVERNING LAW This Agreement will be governed by and interpreted under the laws of the State of California as applied to contracts entered into and to be performed entirely within that state. 13. COUNTERPARTS This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument. 14. EFFECTIVENESS OF AGREEMENT; TERMINATION a. This Agreement will become effective as to a Fund as of the date set forth on Schedule I opposite the name of the Fund. b. This Agreement may be terminated as to a Fund by any party (i) upon ninety (90) days' written notice to the other parties or (ii) upon such shorter notice as is required by law, order, or instruction by a court of competent jurisdiction or a regulatory body or self-regulatory organization with jurisdiction over the terminating party. c. After the date of termination as to a Fund, Fund Parties will not be obligated to pay the Fee with respect to any shares of the Fund that are first held in an account hereunder after the date of such termination. However, notwithstanding any such termination, Fund Parties will remain obligated to pay Schwab the Fee as to each share of the Fund that was considered in the calculation of the Fee as of the date of termination (a "Pre-Termination Share"), for so long as such Pre-Termination Share is held in any Schwab brokerage account and Schwab continues to perform substantially all of the Services as to such Pre-Termination Share. Further, for so long as Schwab continues to perform the Services as to any Pre-Termination Shares, this Agreement will otherwise remain in full force and effect as to such Pre-Termination Shares. Fund Parties shall reimburse Schwab promptly for any reasonable expenses Schwab incurs in effecting any termination of this Agreement, including delivery to a Fund Party of any records, instruments, or documents reasonably requested by the Fund Party. The Fund or Fund Company may request Schwab to stop providing the Services with <PAGE> respect to such Pre-Termination Shares, and in such event the Fund will obtain a successor service agent to provide such Services with respect to such Shares, and in such event, payment to Schwab shall terminate. IN WITNESS WHEREOF, the parties have executed this Agreement by a duly authorized representative of the parties hereto. Charles Schwab & Co., Inc. By: /s/ John McGonigle ---------------------------------------- John McGonigle Senior Vice President Mutual Funds Date: June 16, 1994 -------------------------------------- Dimensional Fund Advisors Inc ------------------------------------------- Name of Fund Affiliate By: /s/ Irene R. Diamant ---------------------------------------- Name: Irene R. Diamant -------------------------------------- Title: Vice President ------------------------------------- Address: 1299 Ocean Avenue ------------------------------------------- 11th Floor ------------------------------------------- Santa Monica, CA 90401 ------------------------------------------- Attn: Irene R. Diamant -------------------------------------- Date: 6/30/94 -------------------------------------- <PAGE> SCHEDULE I Fund Company hereby agrees to become a party to this Agreement, on its own behalf and on behalf of each Fund listed on Schedule I hereto, as amended from time to time. Fund Date ---- ---- Dimensional Investment Group, Inc.* U. S. Large Cap Portfolio II* U. S. Small Cap Portfolio II* DFA International Value Portfolio II* *Indicates that Fund is a "no load" or "no sales charge" Fund as defined in Section 26 of the NASD's Rules of Fair Practice. Dimensional Investment Group Inc. --------------------------------------- Name of Fund Company By: /s/ Irene R. Diamant ------------------------------------ Name: Irene R. Diamant ---------------------------------- Title: Vice President --------------------------------- Address: 1299 Ocean Avenue --------------------------------------- 11th Floor --------------------------------------- Santa Monica, CA 90401 --------------------------------------- Attn: Irene R. Diamant ---------------------------------- Date: 6/30/94 ---------------------------------- Acknowledged by Accepted by Charles Schwab & Co. Inc. Dimensional Fund Advisors Inc. - ---------------------------------- Name of Fund Affiliate By: /s/ Irene R. Diamant By: /s/ John McGonigle ------------------------------- ------------------------------------ John McGonigle Name: Irene R. Diamant Senior Vice President/Mutual Funds ----------------------------- Title: Vice President Date: June 16, 1994 ---------------------------- --------------------------------------- Date: 6/30/94 ----------------------------- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(E)2)III <SEQUENCE>25 <DESCRIPTION>EXHIBIT 99 (B)(9)(E)(2)(III) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO CLIENT SERVICE AGENT AGREEMENT AGREEMENT made this 13th day of March, 1996, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the RWB/DFA Two-Year Government Portfolio (the "Portfolio"), a separate series of the Fund, and REINHARDT, WERBA, BOWEN, INC. (a California corporation) d/b/a REINHARDT WERBA BOWEN ADVISORY SERVICES ("RWB"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services and assistance of a client service agent and to have a client service agent perform various services for it; and WHEREAS, RWB desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. APPOINTMENT OF RWB. The Fund hereby appoints RWB to serve as client service agent to the Portfolio, subject to the direction of the Board of Directors and the officers of the Fund for the period and on the terms hereinafter set forth. RWB hereby accepts such appointment and agrees to provide, at its own expense, the office space, furnishings and equipment and the personnel required by it to perform the services described herein for the compensation as provided in Section 3 of this Agreement. 2. SERVICES TO BE PROVIDED BY RWB. RWB shall provide the following services to the Portfolio: A. establish and maintain a toll-free telephone number for shareholders of the Portfolio to use to obtain or receive up-to-date account information; <PAGE> B. provide to shareholders of the Portfolio quarterly reports with respect to the performance of the Portfolio, such reports to be separate and apart from the Fund's semi-annual and annual reports to shareholders; and C. provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request. 3. COMPENSATION OF RWB. For the services to be rendered by RWB as provided in Section 2 of this Agreement, the Portfolio shall pay to RWB, at the end of each month, a fee equal to one-twelfth of 0.03 percent of average daily net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 4. ACTIVITIES OF RWB. The services of RWB to the Fund or in respect of the Portfolio are not to be deemed exclusive, and RWB shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 5. RESPONSIBILITY OF RWB. In the performance of its duties hereunder, RWB shall be obligated to exercise due care and diligence and to act in a timely manner and in good faith to assure the accuracy and completeness of all services performed under this Agreement. RWB shall be under no duty to take any action on behalf of the Portfolio except as specifically set forth herein or as may be specifically agreed to by RWB in writing. RWB shall be responsible for its own negligent failure to perform its duties under this Agreement. In assessing negligence for purposes of this Agreement, the parties agree that the standard of care applied to RWB's conduct shall be the care that would be exercised by a similarly situated service provider, supplying substantially the same services under substantially similar circumstances. No provision of this Agreement shall be deemed to protect RWB against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 6. DURATION AND TERMINATION. This Agreement shall become effective on March 13, 1996, provided that prior to such date it shall have been approved by the Board of Directors of the Fund and shall continue in effect until terminated by the Fund or RWB. This Agreement may at any time be terminated without penalty by vote of the Board of Directors of the Fund on sixty days' written notice to RWB. This Agreement may be terminated by RWB after ninety days' written notice to the Fund. -2- <PAGE> 7. NOTICES. Any notices under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. AMENDMENTS. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. 10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 11. MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the 13th day of March, 1996. REINHARDT, WERBA, BOWEN, INC. DIMENSIONAL INVESTMENT GROUP d/b/a REINHARDT WERBA BOWEN INC. ADVISORY SERVICES By: /s/ Elizabeth Kabaneck By: /s/ David G. Booth -------------------------- -------------------------- Secretary President By: /s/ Michael A. Weakley -------------------------- Executive Vice President, Michael A. Weakley -3- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(E)(2)IV <SEQUENCE>26 <DESCRIPTION>EXHIBIT 99 (B)(9)(E)(2)(IV) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO CLIENT SERVICE AGENT AGREEMENT AGREEMENT made this 13th day of March, 1996, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the RWB/DFA Two-Year Corporate Fixed Income Portfolio (the "Portfolio"), a separate series of the Fund, and REINHARDT, WERBA, BOWEN, INC. (a California corporation) d/b/a REINHARDT WERBA BOWEN ADVISORY SERVICES ("RWB"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services and assistance of a client service agent and to have a client service agent perform various services for it; and WHEREAS, RWB desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. APPOINTMENT OF RWB. The Fund hereby appoints RWB to serve as client service agent to the Portfolio, subject to the direction of the Board of Directors and the officers of the Fund for the period and on the terms hereinafter set forth. RWB hereby accepts such appointment and agrees to provide, at its own expense, the office space, furnishings and equipment and the personnel required by it to perform the services described herein for the compensation as provided in Section 3 of this Agreement. 2. SERVICES TO BE PROVIDED BY RWB. RWB shall provide the following services to the Portfolio: <PAGE> A. establish and maintain a toll-free telephone number for shareholders of the Portfolio to use to obtain or receive up-to-date account information; B. provide to shareholders of the Portfolio quarterly reports with respect to the performance of the Portfolio, such reports to be separate and apart from the Fund's semi-annual and annual reports to shareholders; and C. provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request. 3. COMPENSATION OF RWB. For the services to be rendered by RWB as provided in Section 2 of this Agreement, the Portfolio shall pay to RWB, at the end of each month, a fee equal to one-twelfth of 0.03 percent of average daily net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 4. ACTIVITIES OF RWB. The services of RWB to the Fund or in respect of the Portfolio are not to be deemed exclusive, and RWB shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 5. RESPONSIBILITY OF RWB. In the performance of its duties hereunder, RWB shall be obligated to exercise due care and diligence and to act in a timely manner and in good faith to assure the accuracy and completeness of all services performed under this Agreement. RWB shall be under no duty to take any action on behalf of the Portfolio except as specifically set forth herein or as may be specifically agreed to by RWB in writing. RWB shall be responsible for its own negligent failure to perform its duties under this Agreement. In assessing negligence for purposes of this Agreement, the parties agree that the standard of care applied to RWB's conduct shall be the care that would be exercised by a similarly situated service provider, supplying substantially the same services under substantially similar circumstances. No provision of this Agreement shall be deemed to protect RWB against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 6. DURATION AND TERMINATION. This Agreement shall become effective on March 13, 1996, provided that prior to such date it shall have been approved by the Board of Directors of the Fund and shall continue in effect until terminated by the Fund -2- <PAGE> or RWB. This Agreement may at any time be terminated without penalty by vote of the Board of Directors of the Fund on sixty days' written notice to RWB. This Agreement may be terminated by RWB after ninety days' written notice to the Fund. 7. NOTICES. Any notices under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. AMENDMENTS. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. 10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 11. MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the 13th day of March, 1996. REINHARDT, WERBA, BOWEN, INC. DIMENSIONAL INVESTMENT GROUP INC. d/b/a REINHARDT WERBA BOWEN ADVISORY SERVICES By: /s/ Elizabeth Kabaneck By: /s/ David G. Booth ------------------------------ ----------------------------------- Secretary President /s/ Michael A. Weakley - -------------------------------------------- Executive Vice President, Michael A. Weakley -3- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(E)(2)(V <SEQUENCE>27 <DESCRIPTION>EXHIBIT 99 (B)(9)(E)(2)(V) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO CLIENT SERVICE AGENT AGREEMENT AGREEMENT made this 13th day of March, 1996, by and between DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on behalf of the RWB/DFA U.S. High Book To Market Portfolio (the "Portfolio"), a separate series of the Fund, and REINHARDT, WERBA, BOWEN, INC. (a California corporation) d/b/a REINHARDT WERBA BOWEN ADVISORY SERVICES ("RWB"). WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 for the purposes of investing and reinvesting its assets in securities, as set forth in its Registration Statement under the Investment Company Act of 1940 and the Securities Act of 1933, as heretofore amended and supplemented; WHEREAS, the Portfolio, as a separate series of the Fund, desires to avail itself of the services and assistance of a client service agent and to have a client service agent perform various services for it; and WHEREAS, RWB desires to provide such services to the Portfolio. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows: 1. APPOINTMENT OF RWB. The Fund hereby appoints RWB to serve as client service agent to the Portfolio, subject to the direction of the Board of Directors and the officers of the Fund for the period and on the terms hereinafter set forth. RWB hereby accepts such appointment and agrees to provide, at its own expense, the office space, furnishings and equipment and the personnel required by it to perform the services described herein for the compensation as provided in Section 3 of this Agreement. 2. SERVICES TO BE PROVIDED BY RWB. RWB shall provide the following services to the Portfolio: A. establish and maintain a toll-free telephone number for shareholders of the Portfolio to use to obtain or receive up-to-date account information; <PAGE> B. provide to shareholders of the Portfolio quarterly reports with respect to the performance of the Portfolio, such reports to be separate and apart from the Fund's semi-annual and annual reports to shareholders; and C. provide the shareholders of the Portfolio with such information regarding the operation and affairs of the Portfolio, and their investment in its shares, as they or the Fund may reasonably request. 3. COMPENSATION OF RWB. For the services to be rendered by RWB as provided in Section 2 of this Agreement, the Portfolio shall pay to RWB, at the end of each month, a fee equal to one-twelfth of 0.04 percent of average daily net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated. 4. ACTIVITIES OF RWB. The services of RWB to the Fund or in respect of the Portfolio are not to be deemed exclusive, and RWB shall be free to render similar services to others as long as its services to the Fund or in respect of the Portfolio are not impaired thereby. 5. RESPONSIBILITY OF RWB. In the performance of its duties hereunder, RWB shall be obligated to exercise due care and diligence and to act in a timely manner and in good faith to assure the accuracy and completeness of all services performed under this Agreement. RWB shall be under no duty to take any action on behalf of the Portfolio except as specifically set forth herein or as may be specifically agreed to by RWB in writing. RWB shall be responsible for its own negligent failure to perform its duties under this Agreement. In assessing negligence for purposes of this Agreement, the parties agree that the standard of care applied to RWB's conduct shall be the care that would be exercised by a similarly situated service provider, supplying substantially the same services under substantially similar circumstances. No provision of this Agreement shall be deemed to protect RWB against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement. 6. DURATION AND TERMINATION. This Agreement shall become effective on March 13, 1996, provided that prior to such date it shall have been approved by the Board of Directors of the Fund and shall continue in effect until terminated by the Fund or RWB. This Agreement may at any time be terminated without penalty by vote of the Board of Directors of the Fund on sixty days' written notice to RWB. This Agreement may be terminated by RWB after ninety days' written notice to the Fund. -2- <PAGE> 7. NOTICES. Any notices under this Agreement shall be given in writing addressed and delivered, or mailed post-paid, to the other party at the principal business office of such party. 8. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 9. AMENDMENTS. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought. 10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 11. MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the 13th day of March, 1996. REINHARDT, WERBA, BOWEN, INC. DIMENSIONAL INVESTMENT GROUP INC. d/b/a REINHARDT WERBA BOWEN ADVISORY SERVICES By: /s/ [Illegible] By: /s/ David G. Booth ------------------------------ ------------------------------ Secretary President /s/ Michael A. Weakley - ----------------------------------- Executive Vice President, Michael A. Weakley -3- </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(9)(E)(2) <SEQUENCE>28 <DESCRIPTION>EXHIBIT 99.(B)(9)(E)(2)(VI) <TEXT> <PAGE> DIMENSIONAL INVESTMENT GROUP INC. RWB/DFA HIGH BOOK TO MARKET PORTFOLIO AMENDMENT TO CLIENT SERVICE AGENT AGREEMENT This Amendment to the Client Service Agent Agreement (the "Agreement") dated March 13, 1996 by and between Dimensional Investment Group Inc. (the "Fund"), on behalf of the RWB/DFA U.S. High Book to Market Portfolio (the "Portfolio") and Reinhardt, Werba, Bowen, Inc. d/b/a/ Reinhardt Werba Advisory Services ("RWB") is made as of March 13, 1996. WHEREAS, RWB has been providing client service agent services to the Fund and the Portfolio according to the terms of the Agreement since the date of the Fund's inception, and has been compensated with a monthly fee equal to one-twelfth of 0.09 percent of average daily net assets of the Portfolio, which was the fee agreed to between the parties and has been accurately disclosed to the Portfolio's investors in the Prospectus relating to the Portfolio. WHEREAS, the term in the contract providing for RWB's compensation should be amended to reflect accurately such fee. NOW, THEREFORE, for good and adequate consideration, it is agreed as follows: 1. The first sentence of Section 3 entitled "Compensation of RWB" of the Agreement is hereby amended to read in its entirety: "For the services to be rendered by RWB as provided in Section 2 of this Agreement, the Portfolio shall pay to RWB, at the end of each month, a fee equal to one-twelfth of 0.09 percent of average daily net assets of the Portfolio." 2. Except as expressly amended hereby, the provisions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereby have caused this Amendment to be executed as of March 13, 1996. DIMENSIONAL INVESTMENT GROUP INC. By: /s/ DAVID G. BOOTH ------------------ Name: David G. Booth Title: President and Chief Executive Officer REINHARDT, WERBA, BOWEN, INC. d/b/a/ REINHARDT WERBA BOWEN ADVISORY SERVICES By: MICHAEL A. WEAKLEY ------------------ Name: Michael A. Weakley Title: Executive Vice President By: /s/ ELIZABETH KABANEH --------------------- Name: Elizabeth Kabaneh Title: Secretary </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-99.(B)(11) <SEQUENCE>29 <DESCRIPTION>EXHIBIT 99 (B)(11) <TEXT> <PAGE> CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Post-Effective Amendment No. 19 (File No. 33-980) under the Securities Act of 1933 and Post-Effective Amendment No. 20 (File No. 811-6067) under the Securities Act of 1940 to the Registration Statement on Form N-1A of Dimensional Investment Group Inc. of our reports for RWB/DFA U.S. High Book to Market Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-Year Government Portfolio dated February 26, 1998 on our audits of the financial statements and financial highlights for RWB/DFA U.S. High Book to Market Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-Year Government Portfolio of Dimensional Investment Group Inc. and The U.S. Large Cap Value Series, The DFA Two-Year Corporate Fixed Income Series and The DFA Two-Year Government Series of the DFA Investment Trust Company as of November 20, 1997 and for the respective periods then ended, which reports are included in the Annual Reports to Shareholders. We also consent to the reference to our firm under the captions "Other Information" and "Financial Statements" in the Statement of Additional Information. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 25, 1998 <PAGE> CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Post-Effective Amendment No. 19 (File No. 33-980) under the Securities Act of 1933 and Post-Effective Amendment No. 20 (File No. 811-6067) under the Securities Act of 1940 to the Registration Statement on Form N-1A of Dimensional Investment Group Inc. of our reports for DFA One-Year Fixed Income Portfolio II dated February 26, 1998 on our audits of the financial statements and financial highlights for DFA One-Year Fixed Income Portfolio II of Dimensional Investment Group Inc. and The DFA One-Year Fixed Income Series of The DFA Investment Trust Company as of November 20, 1997 and for the respective periods then ended, which reports are included in the Annual Reports to Shareholders. We also consent to the reference to our firm under the captions "Other Information" and "Financial Statements" in the Statement of Additional Information. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 25, 1998 <PAGE> CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Post-Effective Amendment No. 19 (File No. 33-980) under the Securities Act of 1933 and Post-Effective Amendment No. 20 (File No. 811-6067) under the Securities Act of 1940 to the Registration Statement on Form N-1A of Dimensional Investment Group Inc. of our report for The DFA International Value Portfolio dated February 26, 1998 on our audit of the financial statements and financial highlights for The DFA International Value Portfolio of Dimensional Investment Group Inc. and the DFA International Value Series of The DFA Investment Trust Company as of November 30, 1997 and for the respective periods then ended, which report is included in the Annual Reports to Shareholders. We also consent to the reference to our firm under the captions "Other Information" and "Financial Statements" in the Statement of Additional Information. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 25, 1998 <PAGE> CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Post-Effective Amendment No. 19 (File No. 33-980) under the Securities Act of 1933 and Post-Effective Amendment No. 20 (File No. 811-6067) under the Securities Act of 1940 to the Registration Statement on Form N-1A of Dimensional Investment Group Inc. of our report for U.S. 6-10 Value Portfolio II dated February 26, 1998 on our audit of the financial statements and financial highlights for the U.S. 6-10 Value Portfolio II of Dimensional Investment Group Inc. and U.S. 6-10 Value Series of The DFA Investment Trust Company as of November 30, 1997 and for the respective periods then ended, which report is included in the Annual Reports to Shareholders. We also consent to the reference to our firm under the captions "Other Information" and "Financial Statements" in the Statement of Additional Information. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 25, 1998 <PAGE> CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by referenece in this Post-Effective Amendment No. 19 (File No. 33-980) under the Securities Act of 1933 and Post-Effective Amendment No. 20 (File No. 811-6067) under the Secuirites Act of 1940 to the Registration Statement on Form N-1A of Dimensioanl Investment Group Inc. of our report for The DFA 6-10 Institutional Portfolio dated Feburary 26, 1998 on our audit of the fianncial statements and financial highlights for the DFA 6-10 Institutional Portfolio of Dimensional Investment Group Inc. and the U.S. 6-10 Small Company Series of The DFA Investment Trust Company as of November 30, 1997 and for the respective periods then ended, which report is included in the Annual Reports to Shareholders. We also consent to the reference to our firm under the captions "Other Information" and "Financial Statements" in the Statement of Additional Information. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 25, 1998 <PAGE> CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Post-Effective Amendment No. 19 (File No. 33-980) under the Securities Act of 1933 and Post-Effective Amendment No. 20 (File No. 811-6067) under the Securities Act of 1940 to the Registration Statement on Form N-1A of Dimensional Investment Group Inc. of our report for U.S. Large Cap Value Portfolio II dated February 26, 1998 on our audit of the financial statements and financial highlights for U.S. Large Cap Value Portfolio II of Dimensional Investment Group Inc. and the U.S. Large Cap Value Series of The DFA Investment Trust Company as of November 30, 1997 and for the respective periods then ended, which report is included in the Annual Reports to Shareholders. We also consent to the reference to our firm under the captions "Other Information" and "Financial Statements" in the Statement of Additional Information. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 25, 1998 <PAGE> CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Post-Effective Amendment No. 19 (File No. 33-980) under the Securities Act of 1933 and Post-Effective Amendment No. 20 (File No. 811-6067) under the Securities Act of 1940 to the Registration Statement on Form N-1A of Dimensional Investment Group Inc. of our reports for DFA International Value Portfolio III and U.S. Large Cap Value Portfolio III dated February 26, 1998 on our audits of the financial statements and financial highlights for DFA International Value Portfolio III and U.S. Large Cap Value Portfolio III of Dimensional Investment Group Inc. and the International Value Series and U.S. Large Cap Value Series of The DFA Investment Trust Company as of November 30, 1997 and for the respective periods then ended, which reports are included in the Annual Reports to Shareholders. We also consent to the reference to our firm under the captions "Other Information" and "Financial Statements" in the Statement of Additional Information. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 25, 1998 <PAGE> CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Post-Effective Amendment No. 19 (File No. 33-980) under the Securities Act of 1933 and Post-Effective Amendment No. 20 (File No. 811-6067) under the Securities Act of 1940 to the Registration Statement on Form N-1A of Dimensional Investment Group Inc. of our report for DFA International Value Portfolio II dated February 26, 1998 on our audit of the financial statements and financial highlights for DFA International Value Portfolio II of Dimensional Investment Group Inc. and the International Value Series of The DFA Investment Trust Company as of November 30, 1997 and for the respective periods then ended, which report is included in the Annual Reports to Shareholders. We also consent to the reference to our firm under the captions "Other Information" and "Financial Statements" in the Statement of Additional Information. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 25, 1998 </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.1 <SEQUENCE>30 <DESCRIPTION>EXHIBIT 27.1 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 01 <NAME> DFA 6-10 INSTITUTIONAL PORTFOLIO <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 11838176 <INVESTMENTS-AT-VALUE> 15982861 <RECEIVABLES> 75 <ASSETS-OTHER> 357 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 15983293 <PAYABLE-FOR-SECURITIES> 0 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 15690 <TOTAL-LIABILITIES> 15690 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 10674519 <SHARES-COMMON-STOCK> 1342240 <SHARES-COMMON-PRIOR> 752629 <ACCUMULATED-NII-CURRENT> 83704 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 1064695 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 4144685 <NET-ASSETS> 15967603 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 112208 <EXPENSES-NET> 12155 <NET-INVESTMENT-INCOME> 100053 <REALIZED-GAINS-CURRENT> 1366830 <APPREC-INCREASE-CURRENT> 1589378 <NET-CHANGE-FROM-OPS> 1684478 <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 100193 <DISTRIBUTIONS-OF-GAINS> 3855295 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 257708 <NUMBER-OF-SHARES-REDEEMED> 84464 <SHARES-REINVESTED> 416367 <NET-CHANGE-IN-ASSETS> 4977541 <ACCUMULATED-NII-PRIOR> 83844 <ACCUMULATED-GAINS-PRIOR> 3553160 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 37478 <AVERAGE-NET-ASSETS> 13023065 <PER-SHARE-NAV-BEGIN> 14.60 <PER-SHARE-NII> .08 <PER-SHARE-GAIN-APPREC> 2.46 <PER-SHARE-DIVIDEND> (.13) <PER-SHARE-DISTRIBUTIONS> (5.11) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 11.90 <EXPENSE-RATIO> .20 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.2 <SEQUENCE>31 <DESCRIPTION>EXHIBIT 27.2 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 02 <NAME> DFA INTERNATIONAL VALUE PORTFOLIO <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 359758227 <INVESTMENTS-AT-VALUE> 370171492 <RECEIVABLES> 269285 <ASSETS-OTHER> 37038 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 370477815 <PAYABLE-FOR-SECURITIES> 209030 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 151581 <TOTAL-LIABILITIES> 360611 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 353574485 <SHARES-COMMON-STOCK> 33838067 <SHARES-COMMON-PRIOR> 26608246 <ACCUMULATED-NII-CURRENT> 660929 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 5468525 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 10413265 <NET-ASSETS> 370117204 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 7215409 <EXPENSES-NET> 890837 <NET-INVESTMENT-INCOME> 6324572 <REALIZED-GAINS-CURRENT> 5085793 <APPREC-INCREASE-CURRENT> (26881379) <NET-CHANGE-FROM-OPS> (15471014) <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> (6494024) <DISTRIBUTIONS-OF-GAINS> (7928197) <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 12760378 <NUMBER-OF-SHARES-REDEEMED> 6779416 <SHARES-REINVESTED> 1248858 <NET-CHANGE-IN-ASSETS> 53408977 <ACCUMULATED-NII-PRIOR> 878056 <ACCUMULATED-GAINS-PRIOR> 8263254 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 890837 <AVERAGE-NET-ASSETS> 368737565 <PER-SHARE-NAV-BEGIN> 11.90 <PER-SHARE-NII> .19 <PER-SHARE-GAIN-APPREC> (.65) <PER-SHARE-DIVIDEND> (.21) <PER-SHARE-DISTRIBUTIONS> (.29) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 10.94 <EXPENSE-RATIO> .56 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.3 <SEQUENCE>32 <DESCRIPTION>EXHIBIT 27.3 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 03 <NAME> DFA LARGE CAP VALUE PORTFOLIO II <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 40464047 <INVESTMENTS-AT-VALUE> 50365415 <RECEIVABLES> 118208 <ASSETS-OTHER> 19173 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 50502796 <PAYABLE-FOR-SECURITIES> 118208 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 15184 <TOTAL-LIABILITIES> 133392 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 38946908 <SHARES-COMMON-STOCK> 2691025 <SHARES-COMMON-PRIOR> 1689856 <ACCUMULATED-NII-CURRENT> 559348 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 961780 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 9901368 <NET-ASSETS> 50369404 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 716508 <EXPENSES-NET> 103152 <NET-INVESTMENT-INCOME> 613356 <REALIZED-GAINS-CURRENT> 1243867 <APPREC-INCREASE-CURRENT> 6098041 <NET-CHANGE-FROM-OPS> 6583153 <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 338838 <DISTRIBUTIONS-OF-GAINS> 422162 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 1343308 <NUMBER-OF-SHARES-REDEEMED> 393008 <SHARES-REINVESTED> 50869 <NET-CHANGE-IN-ASSETS> 24290639 <ACCUMULATED-NII-PRIOR> 284830 <ACCUMULATED-GAINS-PRIOR> 140077 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 103152 <AVERAGE-NET-ASSETS> 37844438 <PER-SHARE-NAV-BEGIN> 15.43 <PER-SHARE-NII> .24 <PER-SHARE-GAIN-APPREC> 3.50 <PER-SHARE-DIVIDEND> (.20) <PER-SHARE-DISTRIBUTIONS> (.25) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 18.72 <EXPENSE-RATIO> .45 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.4 <SEQUENCE>33 <DESCRIPTION>EXHIBIT 27.4 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 04 <NAME> DFA SMALL CAP VALUE PORTFOLIO II <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 99677991 <INVESTMENTS-AT-VALUE> 125059591 <RECEIVABLES> 351873 <ASSETS-OTHER> 22366 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 125433830 <PAYABLE-FOR-SECURITIES> 351873 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 20992 <TOTAL-LIABILITIES> 372865 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 98347271 <SHARES-COMMON-STOCK> 6514979 <SHARES-COMMON-PRIOR> 2769174 <ACCUMULATED-NII-CURRENT> 450691 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 881403 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 25381600 <NET-ASSETS> 125060965 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 658774 <EXPENSES-NET> 159678 <NET-INVESTMENT-INCOME> 499096 <REALIZED-GAINS-CURRENT> 1414969 <APPREC-INCREASE-CURRENT> 19121418 <NET-CHANGE-FROM-OPS> 21035483 <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> (225062) <DISTRIBUTIONS-OF-GAINS> (759412) <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 82656642 <NUMBER-OF-SHARES-REDEEMED> 19268109 <SHARES-REINVESTED> 984474 <NET-CHANGE-IN-ASSETS> 64373007 <ACCUMULATED-NII-PRIOR> 176658 <ACCUMULATED-GAINS-PRIOR> 225846 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 159675 <AVERAGE-NET-ASSETS> 79873435 <PER-SHARE-NAV-BEGIN> 14.67 <PER-SHARE-NII> .08 <PER-SHARE-GAIN-APPREC> 4.77 <PER-SHARE-DIVIDEND> (.07) <PER-SHARE-DISTRIBUTIONS> (.25) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 19.20 <EXPENSE-RATIO> .48 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.5 <SEQUENCE>34 <DESCRIPTION>EXHIBIT 27.5 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 05 <NAME> DFA INTERNATIONAL VALUE PORTFOLIO II <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 37494600 <INVESTMENTS-AT-VALUE> 37601037 <RECEIVABLES> 141690 <ASSETS-OTHER> 20395 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 37763122 <PAYABLE-FOR-SECURITIES> 141690 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 11626 <TOTAL-LIABILITIES> 153316 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 37047124 <SHARES-COMMON-STOCK> 3532122 <SHARES-COMMON-PRIOR> 2642716 <ACCUMULATED-NII-CURRENT> 566174 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> (109929) <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 106437 <NET-ASSETS> 37609806 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 722770 <EXPENSES-NET> 116781 <NET-INVESTMENT-INCOME> 605989 <REALIZED-GAINS-CURRENT> 215064 <APPREC-INCREASE-CURRENT> (2366295) <NET-CHANGE-FROM-OPS> (1545242) <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 396612 <DISTRIBUTIONS-OF-GAINS> 266566 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 1887259 <NUMBER-OF-SHARES-REDEEMED> 1058919 <SHARES-REINVESTED> 61066 <NET-CHANGE-IN-ASSETS> 7591567 <ACCUMULATED-NII-PRIOR> 356798 <ACCUMULATED-GAINS-PRIOR> (58428) <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 94928 <AVERAGE-NET-ASSETS> 37186435 <PER-SHARE-NAV-BEGIN> 11.36 <PER-SHARE-NII> .17 <PER-SHARE-GAIN-APPREC> (.63) <PER-SHARE-DIVIDEND> (.15) <PER-SHARE-DISTRIBUTIONS> (.10) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 10.65 <EXPENSE-RATIO> .63 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.6 <SEQUENCE>35 <DESCRIPTION>EXHIBIT 27.6 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 06 <NAME> DFA ONE-YEAR FIXED INCOME PORTFOLIO II <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 9294181 <INVESTMENTS-AT-VALUE> 9333368 <RECEIVABLES> 61745 <ASSETS-OTHER> 30278 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 9425391 <PAYABLE-FOR-SECURITIES> 0 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 83785 <TOTAL-LIABILITIES> 83785 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 9315613 <SHARES-COMMON-STOCK> 919882 <SHARES-COMMON-PRIOR> 464808 <ACCUMULATED-NII-CURRENT> (4985) <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> (8209) <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 39187 <NET-ASSETS> 9341606 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 426041 <EXPENSES-NET> 48263 <NET-INVESTMENT-INCOME> 377778 <REALIZED-GAINS-CURRENT> (6135) <APPREC-INCREASE-CURRENT> 8342 <NET-CHANGE-FROM-OPS> 379985 <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 384043 <DISTRIBUTIONS-OF-GAINS> 0 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 848763 <NUMBER-OF-SHARES-REDEEMED> 431659 <SHARES-REINVESTED> 37970 <NET-CHANGE-IN-ASSETS> 4609186 <ACCUMULATED-NII-PRIOR> 1314 <ACCUMULATED-GAINS-PRIOR> (2074) <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 77284 <AVERAGE-NET-ASSETS> 7403845 <PER-SHARE-NAV-BEGIN> 10.18 <PER-SHARE-NII> .53 <PER-SHARE-GAIN-APPREC> (.01) <PER-SHARE-DIVIDEND> (.54) <PER-SHARE-DISTRIBUTIONS> 0 <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 10.16 <EXPENSE-RATIO> .75 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.7 <SEQUENCE>36 <DESCRIPTION>EXHIBIT 27.7 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 07 <NAME> DFA INTERNATIONAL VALUE PORTFOLIO III <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 275331791 <INVESTMENTS-AT-VALUE> 282825645 <RECEIVABLES> 46180 <ASSETS-OTHER> 29162 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 282900987 <PAYABLE-FOR-SECURITIES> 39373 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 43134 <TOTAL-LIABILITIES> 82507 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 267983699 <SHARES-COMMON-STOCK> 24442179 <SHARES-COMMON-PRIOR> 19561601 <ACCUMULATED-NII-CURRENT> 4763647 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 2577280 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 7493854 <NET-ASSETS> 282818480 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 5277729 <EXPENSES-NET> 164692 <NET-INVESTMENT-INCOME> 5113037 <REALIZED-GAINS-CURRENT> 4083837 <APPREC-INCREASE-CURRENT> (20727003) <NET-CHANGE-FROM-OPS> (11530129) <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 4258447 <DISTRIBUTIONS-OF-GAINS> 2441761 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 6101435 <NUMBER-OF-SHARES-REDEEMED> 1790119 <SHARES-REINVESTED> 569262 <NET-CHANGE-IN-ASSETS> 40447850 <ACCUMULATED-NII-PRIOR> 3909057 <ACCUMULATED-GAINS-PRIOR> 935204 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 164692 <AVERAGE-NET-ASSETS> 271447501 <PER-SHARE-NAV-BEGIN> 12.39 <PER-SHARE-NII> .21 <PER-SHARE-GAIN-APPREC> (.69) <PER-SHARE-DIVIDEND> (.22) <PER-SHARE-DISTRIBUTIONS> (.12) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 11.57 <EXPENSE-RATIO> .38 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.8 <SEQUENCE>37 <DESCRIPTION>EXHIBIT 27.8 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 08 <NAME> DFA LARGE CAP VALUE PORTFOLIO III <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 330440832 <INVESTMENTS-AT-VALUE> 471044843 <RECEIVABLES> 69489 <ASSETS-OTHER> 26696 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 471141028 <PAYABLE-FOR-SECURITIES> 59642 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 43858 <TOTAL-LIABILITIES> 103500 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 304571645 <SHARES-COMMON-STOCK> 24761926 <SHARES-COMMON-PRIOR> 24108794 <ACCUMULATED-NII-CURRENT> 6897980 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 18963892 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 140604011 <NET-ASSETS> 471037528 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 8011829 <EXPENSES-NET> 216505 <NET-INVESTMENT-INCOME> 7795324 <REALIZED-GAINS-CURRENT> 22637863 <APPREC-INCREASE-CURRENT> 68250912 <NET-CHANGE-FROM-OPS> 78663326 <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 6889032 <DISTRIBUTIONS-OF-GAINS> 6871590 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 4136611 <NUMBER-OF-SHARES-REDEEMED> 4024450 <SHARES-REINVESTED> 540970 <NET-CHANGE-IN-ASSETS> 91063899 <ACCUMULATED-NII-PRIOR> 5991689 <ACCUMULATED-GAINS-PRIOR> 3197619 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 216505 <AVERAGE-NET-ASSETS> 435491319 <PER-SHARE-NAV-BEGIN> 15.76 <PER-SHARE-NII> .32 <PER-SHARE-GAIN-APPREC> 3.52 <PER-SHARE-DIVIDEND> (.29) <PER-SHARE-DISTRIBUTIONS> (.29) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 19.02 <EXPENSE-RATIO> .23 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.9 <SEQUENCE>38 <DESCRIPTION>EXHIBIT 27.9 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 09 <NAME> RWB/DFA HIGH BOOK TO MARKET PORTFOLIO <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 110586540 <INVESTMENTS-AT-VALUE> 128471544 <RECEIVABLES> 116154 <ASSETS-OTHER> 37083 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 128624781 <PAYABLE-FOR-SECURITIES> 106129 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 34950 <TOTAL-LIABILITIES> 141079 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 108304172 <SHARES-COMMON-STOCK> 9793514 <SHARES-COMMON-PRIOR> 3781468 <ACCUMULATED-NII-CURRENT> 438005 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 1856521 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 17885004 <NET-ASSETS> 128483702 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 1660806 <EXPENSES-NET> 155350 <NET-INVESTMENT-INCOME> 1505456 <REALIZED-GAINS-CURRENT> 2248815 <APPREC-INCREASE-CURRENT> 14338354 <NET-CHANGE-FROM-OPS> 15759488 <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 1243528 <DISTRIBUTIONS-OF-GAINS> 390758 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 7747694 <NUMBER-OF-SHARES-REDEEMED> 1857850 <SHARES-REINVESTED> 122203 <NET-CHANGE-IN-ASSETS> 87775956 <ACCUMULATED-NII-PRIOR> 176076 <ACCUMULATED-GAINS-PRIOR> (1535) <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 155350 <AVERAGE-NET-ASSETS> 85301505 <PER-SHARE-NAV-BEGIN> 10.77 <PER-SHARE-NII> .20 <PER-SHARE-GAIN-APPREC> 2.45 <PER-SHARE-DIVIDEND> (.20) <PER-SHARE-DISTRIBUTIONS> (.10) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 13.12 <EXPENSE-RATIO> .36 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.10 <SEQUENCE>39 <DESCRIPTION>EXHIBIT 27.10 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 10 <NAME> RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 151692295 <INVESTMENTS-AT-VALUE> 151846090 <RECEIVABLES> 1965385 <ASSETS-OTHER> 122311 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 153933786 <PAYABLE-FOR-SECURITIES> 145314 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 16450 <TOTAL-LIABILITIES> 161764 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 150981464 <SHARES-COMMON-STOCK> 15030795 <SHARES-COMMON-PRIOR> 11990506 <ACCUMULATED-NII-CURRENT> 2204699 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 432065 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 153794 <NET-ASSETS> 153772022 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 8337842 <EXPENSES-NET> 167267 <NET-INVESTMENT-INCOME> 8170575 <REALIZED-GAINS-CURRENT> 593933 <APPREC-INCREASE-CURRENT> (944676) <NET-CHANGE-FROM-OPS> 7168773 <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 7542945 <DISTRIBUTIONS-OF-GAINS> 163750 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 5875446 <NUMBER-OF-SHARES-REDEEMED> 2866063 <SHARES-REINVESTED> 30906 <NET-CHANGE-IN-ASSETS> 30965041 <ACCUMULATED-NII-PRIOR> 1577068 <ACCUMULATED-GAINS-PRIOR> 1882 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 170417 <AVERAGE-NET-ASSETS> 140246598 <PER-SHARE-NAV-BEGIN> 10.24 <PER-SHARE-NII> .57 <PER-SHARE-GAIN-APPREC> (.01) <PER-SHARE-DIVIDEND> (.56) <PER-SHARE-DISTRIBUTIONS> (.01) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 10.23 <EXPENSE-RATIO> .34 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.11 <SEQUENCE>40 <DESCRIPTION>EXHIBIT 27.11 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 11 <NAME> RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 129511775 <INVESTMENTS-AT-VALUE> 129686378 <RECEIVABLES> 1349572 <ASSETS-OTHER> 57825 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 131093775 <PAYABLE-FOR-SECURITIES> 0 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 27674 <TOTAL-LIABILITIES> 27674 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 128907819 <SHARES-COMMON-STOCK> 12849988 <SHARES-COMMON-PRIOR> 10227279 <ACCUMULATED-NII-CURRENT> 1852462 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 131217 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> 174603 <NET-ASSETS> 131066101 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 6631699 <EXPENSES-NET> 167802 <NET-INVESTMENT-INCOME> 6463897 <REALIZED-GAINS-CURRENT> 133712 <APPREC-INCREASE-CURRENT> (182508) <NET-CHANGE-FROM-OPS> 6415101 <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 5994616 <DISTRIBUTIONS-OF-GAINS> 506404 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 57458519 <NUMBER-OF-SHARES-REDEEMED> 31023358 <SHARES-REINVESTED> 72626 <NET-CHANGE-IN-ASSETS> 26421867 <ACCUMULATED-NII-PRIOR> 1383181 <ACCUMULATED-GAINS-PRIOR> 503910 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 170435 <AVERAGE-NET-ASSETS> 116823560 <PER-SHARE-NAV-BEGIN> 10.23 <PER-SHARE-NII> .54 <PER-SHARE-GAIN-APPREC> .01 <PER-SHARE-DIVIDEND> (.53) <PER-SHARE-DISTRIBUTIONS> (.05) <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 10.20 <EXPENSE-RATIO> .37 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.12 <SEQUENCE>41 <DESCRIPTION>EXHIBIT 27.12 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 12 <NAME> EMERGING MARKETS PORTFOLIO II <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 12012026 <INVESTMENTS-AT-VALUE> 8817291 <RECEIVABLES> 29515 <ASSETS-OTHER> 28760 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 8875566 <PAYABLE-FOR-SECURITIES> 0 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 17844 <TOTAL-LIABILITIES> 17844 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 12062720 <SHARES-COMMON-STOCK> 1181132 <SHARES-COMMON-PRIOR> 0 <ACCUMULATED-NII-CURRENT> (6505) <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> 1192 <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> (3194735) <NET-ASSETS> 8857722 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 20094 <EXPENSES-NET> 26599 <NET-INVESTMENT-INCOME> (6505) <REALIZED-GAINS-CURRENT> 1192 <APPREC-INCREASE-CURRENT> (3194735) <NET-CHANGE-FROM-OPS> (3204998) <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 0 <DISTRIBUTIONS-OF-GAINS> 0 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 1305151 <NUMBER-OF-SHARES-REDEEMED> 124020 <SHARES-REINVESTED> 0 <NET-CHANGE-IN-ASSETS> 8857722 <ACCUMULATED-NII-PRIOR> 0 <ACCUMULATED-GAINS-PRIOR> 0 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 39641 <AVERAGE-NET-ASSETS> 11105056 <PER-SHARE-NAV-BEGIN> 10.00 <PER-SHARE-NII> (.01) <PER-SHARE-GAIN-APPREC> (2.49) <PER-SHARE-DIVIDEND> 0 <PER-SHARE-DISTRIBUTIONS> 0 <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 7.50 <EXPENSE-RATIO> 0 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27.13 <SEQUENCE>42 <DESCRIPTION>EXHIBIT 27.13 <TEXT> <TABLE> <S> <C> <PAGE> <ARTICLE> 6 <CIK> 0000861929 <NAME> DIMENSIONAL INVESTMENT GROUP, INC. <SERIES> <NUMBER> 13 <NAME> DFA INTERNATIONAL VALUE PORTFOLIO IV <S> <C> <PERIOD-TYPE> 6-MOS <FISCAL-YEAR-END> NOV-30-1997 <PERIOD-END> NOV-30-1997 <INVESTMENTS-AT-COST> 108463501 <INVESTMENTS-AT-VALUE> 97417441 <RECEIVABLES> 200224 <ASSETS-OTHER> 23406 <OTHER-ITEMS-ASSETS> 0 <TOTAL-ASSETS> 97641071 <PAYABLE-FOR-SECURITIES> 0 <SENIOR-LONG-TERM-DEBT> 0 <OTHER-ITEMS-LIABILITIES> 70812 <TOTAL-LIABILITIES> 70812 <SENIOR-EQUITY> 0 <PAID-IN-CAPITAL-COMMON> 108320442 <SHARES-COMMON-STOCK> 10779504 <SHARES-COMMON-PRIOR> 0 <ACCUMULATED-NII-CURRENT> 854105 <OVERDISTRIBUTION-NII> 0 <ACCUMULATED-NET-GAINS> (558228) <OVERDISTRIBUTION-GAINS> 0 <ACCUM-APPREC-OR-DEPREC> (11046060) <NET-ASSETS> 97570259 <DIVIDEND-INCOME> 0 <INTEREST-INCOME> 0 <OTHER-INCOME> 902250 <EXPENSES-NET> 48145 <NET-INVESTMENT-INCOME> 854105 <REALIZED-GAINS-CURRENT> (558228) <APPREC-INCREASE-CURRENT> (11046060) <NET-CHANGE-FROM-OPS> (10750183) <EQUALIZATION> 0 <DISTRIBUTIONS-OF-INCOME> 0 <DISTRIBUTIONS-OF-GAINS> 0 <DISTRIBUTIONS-OTHER> 0 <NUMBER-OF-SHARES-SOLD> 11780085 <NUMBER-OF-SHARES-REDEEMED> 1000581 <SHARES-REINVESTED> 0 <NET-CHANGE-IN-ASSETS> 97570259 <ACCUMULATED-NII-PRIOR> 0 <ACCUMULATED-GAINS-PRIOR> 0 <OVERDISTRIB-NII-PRIOR> 0 <OVERDIST-NET-GAINS-PRIOR> 0 <GROSS-ADVISORY-FEES> 0 <INTEREST-EXPENSE> 0 <GROSS-EXPENSE> 48145 <AVERAGE-NET-ASSETS> 109091227 <PER-SHARE-NAV-BEGIN> 10.00 <PER-SHARE-NII> .08 <PER-SHARE-GAIN-APPREC> (1.03) <PER-SHARE-DIVIDEND> 0 <PER-SHARE-DISTRIBUTIONS> 0 <RETURNS-OF-CAPITAL> 0 <PER-SHARE-NAV-END> 9.05 <EXPENSE-RATIO> 0 <AVG-DEBT-OUTSTANDING> 0 <AVG-DEBT-PER-SHARE> 0 </TABLE> </TEXT> </DOCUMENT> </SEC-DOCUMENT> -----END PRIVACY-ENHANCED MESSAGE-----