UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSRS
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-07840
SCHRODER SERIES TRUST
(Exact name of registrant as specified in charter)
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875 Third Avenue, 22nd Floor
New York, NY 10022
(Address of principal executive offices) (Zip code)
Schroder Series Trust
P.O. Box 8507
Boston, MA 02266
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-464-3108
DATE OF FISCAL YEAR END: OCTOBER 31, 2005
DATE OF REPORTING PERIOD: APRIL 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
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SCHRODER MUTUAL FUNDS
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APRIL 30, 2005 SEMI-ANNUAL REPORT
Schroder U.S. Large Cap Equity Fund
Schroder U.S. Opportunities Fund
Schroder International Fund
Schroder Enhanced Income Fund
Schroder U.S. Core Fixed Income Fund
Schroder Municipal Bond Fund
Schroder Short-Term Municipal Bond Fund
[LOGO] SCHRODERS
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SCHRODER MUTUAL FUNDS
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May 26, 2005
Dear Shareholder:
We are pleased to provide the Semi-Annual Report to shareholders of the Schroder
Mutual Funds, which covers the six months ended April 30, 2005. The Report
includes information designed to help you understand the status of your
investment--the Management Discussion and Analysis prepared by each portfolio
manager explains how they put your money to work in various markets; the
Schedules of Investments give you a point-in-time picture of the holdings in
your fund; and other information includes a thorough breakdown of how much you
pay Schroders to manage your assets. We encourage you to read the Report and
thank you for making Schroders part of your financial plan. Please note that the
Report includes information covering the Schroder Enhanced Income and U.S. Core
Fixed Income Funds, that were launched at the start of 2005.
The past six months offered investors in most asset classes positive returns,
although the first four months of 2005 were difficult. In the final months of
last year, investors were fairly optimistic about the world economic picture.
They bought stocks and riskier bonds, and drove prices up through January. But
by mid-February, gloom recaptured the market--rising U.S. interest rates, the
specter of potential inflation, and higher oil prices all combined to raise
doubts about the global economy's future growth. By March, investors, long
complacent about skyrocketing oil prices, saw signs in the U.S. and Europe that
higher fuel costs were beginning to impact consumer spending and business
confidence. One bright spot continued to be Asia, where China and Korea are
powering economic growth, and even Japan, so long in the doldrums, is beginning
to recover.
Given factors in the rest of the world, however, investors turned cautious and
the market shifted momentum in a number of areas. After a six-year run of
underperformance compared to small-cap stocks, U.S. large-caps found favor with
investors over the six-month period. Non-U.S. companies of all sizes generally
performed very well, as the falling dollar helped boost returns. In the U.S.,
market weakness was concentrated in those areas that are particularly sensitive
to interest rates--financial services and consumer goods, for example--and
technology stocks in general, which cannot seem to establish a new equilibrium
following the excesses of the past decade.
With oil priced in excess of $50 a barrel for most of the six-month period,
energy stocks were stellar performers, as were drillers, oil service companies
and gasoline retailers.
In the global credit markets, the abrupt change in market tone from the
beginning to the end of this reporting period brought with it a rapid widening
of credit spreads, as investors demanded higher coupons to compensate them for
the risk that rising interest rates and higher oil prices would hurt issuers'
income statements. As is common when investors face uncertainty, bond prices
begin to drift lower, as they have in 2005. Because the long-term economic
picture remains generally positive, however, intermediate- to long-term
maturities retained their value fairly well.
The U.S. continues to grow at a stronger than expected rate, and the U.S.
Federal Reserve governors have not indicated that the recent round of interest
rate increases (along with higher oil prices) have accomplished the desired
results. At the same time, inflation is mild and the economy appears to be
growing within reasonable ranges. At present, we believe that the Federal
Reserve will raise rates more than the market currently expects, continuing to
evaluate further action this year. As a consequence, investors are nervous about
the world's stock markets, and the recent rejection of the European constitution
didn't do much to calm them. The U.S. and the global economies depend on
continued consumer spending to keep company earnings growing--the availability
of cheap credit is a big part of that equation.
We expect market volatility to continue through the end of the year, and that
higher quality securities will continue to find favor with investors. We do not
see the current soft patch as the start of a more significant downturn in
growth. However, in the absence of any major stimulus from fiscal or monetary
policy, we believe that the economy is unlikely to experience much acceleration
either.
In this type of environment, we believe that the investor who maintains a
diversified portfolio--both across asset classes and geographic borders--should
be able to weather the bumpy periods better than those who have high
concentrations in one or two sectors. We encourage you to consult with your
financial advisor to ascertain whether your current mix of investments is
suitable for your long-term objectives.
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SCHRODER MUTUAL FUNDS
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Again, we thank you for including Schroders in your financial plan and we look
forward to our continued relationship.
Sincerely,
/s/ Mark A. Hemenetz
Mark A. Hemenetz, CFA
President
THE VIEWS EXPRESSED IN THE FOLLOWING REPORT WERE THOSE OF EACH RESPECTIVE FUND'S
PORTFOLIO MANAGER AS OF THE DATE SPECIFIED, AND MAY NOT REFLECT THE VIEWS OF THE
PORTFOLIO MANAGER ON THE DATE THIS SEMI-ANNUAL REPORT IS FIRST PUBLISHED OR ANY
TIME THEREAFTER. THESE VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUNDS IN
UNDERSTANDING THEIR INVESTMENT IN THE FUNDS AND DO NOT CONSTITUTE INVESTMENT
ADVICE; INVESTORS SHOULD CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR
INDIVIDUAL INVESTMENT PROGRAMS. CERTAIN SECURITIES DESCRIBED IN THESE REPORTS
MAY NO LONGER BE HELD BY THE FUNDS AND THEREFORE NO LONGER APPEAR IN THE
SCHEDULES OF INVESTMENTS AS OF APRIL 30, 2005.
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2
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SCHRODER U.S. LARGE CAP EQUITY FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (AS OF MAY 20, 2005)
PERFORMANCE
In the six months ended April 30, 2005, we are pleased to report that the
Schroder U.S. Large Cap Equity Fund rose 3.97%, compared to the S&P 500 Index
(the "Index"), a broad-based basket of U.S. stocks, which rose 3.28%.
The Fund's outperformance was largely due to stock selection, especially
materials and energy stocks. In addition, a number of retailing stocks also
outperformed in their sectors. Dragging on performance were certain technology
hardware stocks and capital goods companies.
MARKET BACKGROUND
After a six-year run of underperformance compared to small-cap stocks, U.S.
large-caps outperformed small-caps (down 0.15%, as measured by the Russell 2000
Index) over the period. U.S. stocks continued to feel the pain of the falling
dollar, and non-U.S. companies performed considerably better (up 8.71%, as
measured by the MSCI EAFE Index) than their American counterparts.
The U.S. economy continued to grow at a stronger than expected rate: the Federal
Reserve's gradual tightening of credit (along with higher oil prices) appears to
be holding inflation in check without bringing growth to a standstill. Investors
are nervous about the stock market--amid fears that higher interest rates might
deter debt-heavy American consumers from spending.
The best returns over the six-month period continued to be from energy stocks,
which profited from the dramatic increase in oil prices - in excess of $50 a
barrel (measured by the price of Brent crude) for much of this period.
Technology stocks suffered, and their gains at the end of 2004 were given up. In
addition, telecommunications companies began to feel the impact of competitive
pressures.
PORTFOLIO REVIEW
In the six-month period under review, the Fund's energy holdings benefited from
higher oil prices, which gave some companies opportunities to expand their
margins on existing inventory. The portfolio enjoyed price increases in
companies like agricultural chemical producer MONSANTO and gas and electric
utility DOMINION RESOURCES.
The Fund's underweighting in EXXON MOBIL, which rose during the period, was
offset by gains in gas and electric utility EOG RESOURCES and QUICKSILVER
RESOURCES.
The Fund also profited from good news in two holdings, OFFICE DEPOT and consumer
products conglomerate ALTRIA GROUP. OFFICE DEPOT rose on news that it had hired
a new chief executive officer. ALTRIA profited from indications that the U.S.
government might be considering a settlement in its racketeering case against
tobacco companies. We expect this stock could rise further, in the event it
becomes a break-up target.
Two stocks that hurt performance were PARKER HANNIFIN, based on weakness in the
auto sector, and FANNIE MAE, which declined as more accounting problems came to
light.
In this environment, we continue to look for companies that we believe are
positioned to grow their earnings even as profit margins come under pressure
from rising unit costs. This translates to companies with pricing power, who can
expand their margins by gaining market share or reducing costs, such as the
following:
- -- FEDERATED DEPARTMENT STOREs recently acquired MAY DEPARTMENT STORES, which
should extend its reach and offer the opportunity for cost cutting.
- -- CLEAR CHANNEL COMMUNICATIONS, which is selling shorter radio advertising
slots at a premium relative to longer ones, which should help boost margins.
- -- VIACOM which we expect will begin to see higher revenues as advertising
budgets increase along with corporate confidence.
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3
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SCHRODER U.S. LARGE CAP EQUITY FUND
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The Fund owns few wireless telecommunications companies, in the belief that the
outlook for margins and profitability remains poor, due to high competition.
Competitive pressures also appear poised to erode profit margins in the
supermarket industry, another sector underweighted in the Fund. The Fund's
portfolio cut its energy positions on concern that valuations have become too
high to support earnings projections among large integrated oil companies.
Instead the Fund held companies with what we believe is strong production growth
and the potential to profit in markets with long-term supply shortages.
OUTLOOK
We expect that interest rates will continue to rise gradually through the end of
year, although oil prices may trigger slower economic growth in the second half
of the year. This means that profit growth is also likely to slow and stock
prices will likely reflect these conditions.
With share buybacks, mergers and acquisitions supporting stock prices, however,
the slowdown could be relatively benign. We will be watching the oil markets,
the U.S. housing market and the dollar closely, as these areas could overshadow
the good news in 2005.
In this environment, we will continue to look for companies with pricing power
and expanding margins, which we believe have the potential to outperform
lower-quality counterparts in a volatile market.
PERFORMANCE INFORMATION
One Year Ended Five Years Ended Ten Years Ended
April 30, 2005 April 30, 2005 April 30, 2005
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Schroder U.S. Large Cap Equity Fund -- Investor
Shares ....................................... 5.39% (5.42)%(a) 8.35%(a)
(a) Average annual total return.
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. THE VALUE OF AN
INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT BOTH WILL FLUCTUATE AND
REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S ORIGINAL COST.
TOP 5 HOLDINGS
SECURITY % OF INVESTMENTS
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Pfizer 4.0%
Citigroup 3.5
Bank of America 3.4
Microsoft 3.1
Altria Group 2.9
SECTOR ALLOCATION
SECTOR % OF INVESTMENTS
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Financial Services 20.3%
Health Care 14.3
Capital Goods 13.2
Consumer Staples 9.3
Energy 9.0
Consumer Cyclicals 7.9
Media 4.9
Computer Software 4.3
Computer Hardware 3.7
Basic Industries 2.8
Communications Equipment 2.7
Technology-Semiconductors 2.6
Utilities 2.4
Telecommunications 1.9
Short-Term Investments 0.7
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4
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SCHRODER U.S. OPPORTUNITIES FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (AS OF MAY 20, 2005)
PERFORMANCE
In the six months ended April 30, 2005, we are pleased to report that the
Schroder U.S. Opportunities Fund rose 1.13%, compared to the Russell 2000 Index,
a broad-based basket of stocks with characteristics similar to the Fund's
portfolio, which fell 0.15%.
The Fund's outperformance was in part due to the Fund's cash position, which
helped offset the 5.3% drop in small-cap stocks in the first quarter of 2005. In
addition, strong stock selection in the health care industry and certain
technology firms contributed to performance. Dragging on performance were auto
and transportation stocks, which lost about one-fifth of their value in the
first quarter alone, slightly more than the drop in the broad sector.
MARKET BACKGROUND
After a six-year run of outperformance compared to large-cap stocks, small-caps
underperformed over the last six months of the period. Large-cap companies were
able to weather the first four months of 2005 better than their smaller
brethren, which are generally more sensitive to rising interest rates and slower
earnings growth. In the first four months of calendar 2005, small-cap valuations
(measured by the ratio between price per share and earnings per share ("P/Es"))
generally fell somewhat, because earnings have been on the rise while the market
has been weak, making P/Es more reasonable.
The U.S. economy, however, continued to grow: the Federal Reserve's gradual
tightening of credit (along with higher oil prices) appears to be holding
inflation in check without bringing growth to a standstill. Although investors
are nervous about the stock market--amid fears that higher interest rates might
deter debt-heavy American consumers from spending--they continued in the past
six months to favor equity over fixed income funds, based on the Investment
Company Institute's net new cash flow figures.
In the small-cap arena, some of the best returns continued to be from energy
stocks, which profited from the dramatic increase in oil prices - in excess of
$50 a barrel (measured by the price of Brent crude) for much of this period.
PORTFOLIO REVIEW
For the period under review, the Fund profited from both stock selection and
sector allocation. The Fund's investment strategy attempts to identify
undervalued companies before the marketplace discovers them--companies with what
we consider to be strong fundamentals and the potential for price appreciation.
This led the Fund to overweight a number of stocks that contributed to
outperformance during the period. Energy stocks did well, including three of the
biggest relative gainers in the portfolio: DENBURY RESOURCES, FOREST OIL, and
ST. MARY LAND AND EXPLORATION. The Fund also enjoyed gains in dialysis service
provider DAVITA and ASCENTIAL SOFTWARE, which was sold from the portfolio when
the company was purchased by IBM.
- -- Two of the Fund's technology holdings that held back performance in the past
six months were PEROT SYSTEMS and EPIPHANY. These stocks fell more than the
broad sector since October 31, 2004.
- -- The Fund purchased FRESH DEL MONTE PRODUCE, as a defensive move as we ride
out the current down draft in small-cap stocks. The Fund also bought
INFORMATICA, another data integration company, to replace ASCENTIAL.
- -- The Fund sold 1-800-FLOWERS on lower income projections and ACXIOM, a
management services provider, which is dealing with accounting questions
related to leasing.
On a sector level, the Fund remained overweighted in technology, health care,
producer durables and energy stocks,primarily because we found what we believe
are promising, undervalued stocks in these sectors. The portfolio was
underweighted in financial companies, based on our expectation that higher
interest rates and a flatter yield curve will hurt this sector, especially
banks. That said, three of the Fund's largest holdings were insurance companies
CONSECO, REINSURANCE GROUP OF AMERICA and PLATINUM UNDERWRITERS HOLDINGS. These
firms have strong balance sheets and good market positions--we believe their
prices do not yet reflect their true value.
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5
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SCHRODER U.S. OPPORTUNITIES FUND
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OUTLOOK
We expect that interest rates will continue to rise gradually through the end of
year, although oil prices may trigger slower economic growth in the second and
third quarters. This means that profit growth is also likely to slow and stock
prices will likely reflect these conditions.
In addition, we will be watching the oil markets, the U.S. housing market and
the dollar closely. We expect these areas will contribute to more market
volatility in 2005.
In this environment, we will adhere to our discipline in an attempt to find
fundamental, bottom-up values with strong growth potential, and the ability to
outperform the broader markets.
PERFORMANCE INFORMATION
One Year Ended Five Years Ended Ten Years Ended
April 30, 2005 April 30, 2005 April 30, 2005
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Schroder U.S. Opportunities Fund (a) --
Investor Shares .............................. 8.92% 9.81%(b) 14.90%(b)
(a) Effective January 2, 2003, Jenny B. Jones replaced Ira Unschuld as the
portfolio manager primarily responsible for making investment decisions
for the Fund. The performance results shown in the table above for prior
periods would not necessarily have been achieved under the Fund's current
management.
(b) Average annual total return.
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. THE VALUE OF AN
INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT BOTH WILL FLUCTUATE AND
REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S ORIGINAL COST.
TOP 5 HOLDINGS*
SECURITY % OF INVESTMENTS
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Conseco 1.9%
Reinsurance Group of America 1.8
Platinum Underwriters Holdings 1.6
PETCO Animal Supplies 1.6
DaVita 1.6
*Excludes U.S. Treasury Obligations and Short-Term Investments
SECTOR ALLOCATION
SECTOR % OF INVESTMENTS
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Technology 16.5%
Consumer Discretionary 16.0
Financial Services 13.5
Health Care 13.4
Producer Durables 9.1
Materials & Processing 7.5
Other Energy 5.6
Utilities 4.0
Autos & Transportation 2.9
Business Services 1.5
Other 1.0
Consumer Staples 0.4
Short-Term Investments 8.6
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6
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SCHRODER INTERNATIONAL FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (AS OF MAY 20, 2005)
PERFORMANCE
In the six months ended April 30, 2005, the Schroder International Fund rose
7.15%, compared to the Morgan Stanley Capital International EAFE Index (the
"Index"), a broad-based basket of international stocks, which rose 8.71%.
During the period, the Fund benefited from its regional strategy, which favored
emerging markets as well as Asia ex-Japan. Sectors such as consumer
discretionary and health care detracted from performance.
MARKET BACKGROUND
As 2005 progressed, the market's increasing focus on the inevitable global
economic slowdown fed by strong oil prices and tighter monetary policy in the
U.S. lead to a correction in markets around the world. Uncertainties with
respect to the impact of higher U.S. interest rates on the global economy,
contributed in 2005 to investors' caution particularly with respect to emerging
markets economies. While economic growth in Europe remained sluggish we believe
we were able to find attractive defensive opportunities, particularly in the
energy, health care and staples sectors.
Some of the best returns during the six-month period ending April 2005 in the
international markets were driven by the U.K. and Asia ex-Japan. From a sector
perspective the best performing areas were staples, energy, utilities and
industrials demonstrating investors' attraction for defensiveness in a lower
visibility environment as well as for sectors showing some long-term growth
prospects. In particular, the outperformance of the energy and industrials
sectors can be understood within the context of the attractiveness of companies
leveraging the continued increasing impact of China's influence on the world
economy and the impact of long-term underinvestment trends in key areas such as
energy.
PORTFOLIO REVIEW
At the end of the period the Fund had overweighted positions in sectors such as
industrials and energy while it had underweighted positions in financials,
health care and materials. From a regional perspective, the Fund had an
overweighted position to emerging markets, while we remain underweighted
continental Europe and the U.K.
In particular, holdings such as SHINHAN FINANCIAL, CEMEX, SWIRE and MACQUARIE
INFRASTRUCTURE GROUP contributed positively to performance. From a sector
perspective, exposure to consumer staples, energy, financials and
telecommunication added value. In particular, holdings such as ALLIED DOMECQ
(staples), BG GROUP (energy), ALLIED IRISH BANKS and TELECOM ITALIA contributed
positively to performance. Holdings such as ASTELLAS PHARMACEUTICAL or SIGNET
GROUP in the consumer area, which was negatively impacted by sentiment with
regards to the U.S. consumer sector, detracted from performance. In March, the
Fund's investment strategy was modified to reflect that the Fund expected to
invest in 40-60 securities and, accordingly, the Fund sold a number of
securities.
OUTLOOK
We expect that the impact of higher oil prices and tighter U.S. monetary policy
will continue to have a dampening impact on world growth and profits but we do
not expect a global recession. Looking forward, the strengths of the Chinese and
U.S. economies are key to global growth. We believe that the current trends in
Europe and Japan will continue to favor the candidates with strong global
franchises and restructuring potential (GROUPE DANONE, SIEMENS, CHIBA BANK).
Within Japan in particular we have increased exposure to stocks with a domestic
orientation, in particular to the real estate sector (MITSUBISHI ESTATE) as
property prices stabilize. We are also taking advantage of the current sentiment
on global growth deceleration to add selectively to our emerging market
positions. We believe that valuations are attractive and that the restructuring
that has taken place in emerging market economies in the past 10 years has
created a more stable growth environment.
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7
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SCHRODER INTERNATIONAL FUND
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PERFORMANCE INFORMATION
One Year Ended Five Years Ended Ten Years Ended
April 30, 2005 April 30, 2005 April 30, 2005
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Schroder International Fund -- Investor Shares ... 11.56% (2.71)%(a) 4.74%(a)
(a) Average annual total return.
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. THE VALUE OF AN
INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT BOTH WILL FLUCTUATE AND
REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S ORIGINAL COST.
TOP 5 HOLDINGS
SECURITY % OF INVESTMENTS
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Tesco 3.8%
Royal Dutch Petroleum 3.5
BG Group 2.7
Macquarie Infrastructure Group 2.6
Mitsubishi Corp. 2.5
GEOGRAPHIC ALLOCATION
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[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
% of Investments
Continental Europe 34.1%
U.K. 23.9
Japan 20.3
Emerging Markets 13.3
Pacific ex-Japan 7.6
Short-Term Investments 0.8
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8
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SCHRODER ENHANCED INCOME FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (AS OF MAY 20, 2005)
PERFORMANCE
In the four months from its inception date on December 31, 2004 to April 30,
2005, the Schroder Enhanced Income Fund rose 0.80% (Investor shares) and 0.72%
(Advisor shares), compared to the 3-Month LIBOR Index (the "Index"), a widely
used measure of short-term debt returns, which rose 0.98%. In the future, this
semiannual report will address six months of performance.
MARKET BACKGROUND
In the past six months, the broad U.S. bond market (up 0.98%, as measured by the
Lehman Aggregate Bond Index) underperformed the stock market (up 3.28%, as
measured by the S&P 500 Index), as investors drove up equity prices late in
2004. In 2005, however, bonds withstood the flurry of concerns about interest
rates, inflation, oil prices and stock valuations that combined to send the
stock market sharply lower.
As the U.S. Federal Reserve is raising short-term interest rates to keep the
U.S. economy from overheating, the yield curve (or the difference between bond
yields at maturities from 3 months to 30 years) flattened. In this case, that's
because the Fed's action is pushing short- to intermediate-term rates higher.
The longest bonds on the curve, 30-year Treasury bonds, are in short supply and
that may be lending support to their prices.
PORTFOLIO REVIEW
In the Fund's first four months of operation, the Fund's cash inflows were
invested primarily in asset-backed and mortgage-backed securities. The Fund's
underperformance was largely due to its cash position. Although cash balances
were deployed throughout the period, the low yield of the cash held back offset
returns as longer yields rose. On the other hand, the high quality of the
securities held by the Fund helped it profit from the flight-to-quality that
ensued as investors cast a wary eye on the rising Federal funds rate.
OUTLOOK
We expect that interest rates will continue to rise gradually through the end of
year, although oil prices may trigger slower economic growth in the second half
of the year.
In this environment, the Fund will remain positioned to benefit from additional
yield curve flattening. We expect that the Fund will invest primarily in
asset-backed securities and government mortgage-backed securities going forward.
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9
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SCHRODER ENHANCED INCOME FUND
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PERFORMANCE INFORMATION
Inception to
April 30, 2005
--------------
Schroder Enhanced Income Fund (a) --
Investor Shares .......................... 0.80%
Advisor Shares ........................... 0.72%
(a) Cumulative total return from commencement of Fund operations (December 31,
2004). Not annualized.
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. THE VALUE OF AN
INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT BOTH WILL FLUCTUATE AND
REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S ORIGINAL COST.
TOP 5 HOLDINGS*
SECURITY % OF INVESTMENTS
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AIG Funding, 2.958%, maturing 5/23/05 4.3%
General Electric Capital, 2.986%,
maturing 5/23/05 4.3
Citicorp, 2.930%, maturing 5/25/05 4.3
American General Finance, 2.930%,
maturing 5/26/05 4.3
UBS Finance, 2.777%, maturing 5/02/05 4.2
*Excludes Short-Term Investment
SECTOR ALLOCATION
SECTOR % OF INVESTMENTS
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Commercial Paper 25.6%
Collateralized Mortgage Obligations 24.0
Asset-Backed Securities 22.2
Mortgage-Backed Obligations 20.6
U.S. Treasury Obligation 1.8
Corporate Obligation 0.2
Short-Term Investment 5.6
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10
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SCHRODER U.S. CORE FIXED INCOME FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (AS OF MAY 20, 2005)
PERFORMANCE
In the four months from its inception date on December 31, 2004 to April 30,
2005, we are pleased to report that the Schroder U.S. Core Fixed Income Fund
rose 1.30% (Investor shares) and 1.21% (Advisor Shares), compared to the Lehman
Aggregate Bond Index (the "Index"), a broad-based basket of U.S. debt
securities, which rose 0.87%. In the future, this semiannual report will address
six months of performance.
The Fund's outperformance was largely due to its maturity strategy, which
underweighted the 2- to 5-year section of the yield curve. In addition, the
decision to reduce the Fund's corporate bond exposure in March also helped limit
the negative impact on prices when credit spreads (the difference between
government and corporate bond yields) began to expand. In this kind of
environment, government bond prices generally are more resilient as investors
seek the security of high credit quality assets.
MARKET BACKGROUND
In the past six months, the broad U.S. bond market (up 0.98%, as measured by the
Index) underperformed the stock market (up 3.28%, as measured by the S&P 500
Index), as investors drove up equity prices late in 2004. In 2005, however,
bonds withstood the flurry of concerns about interest rates, inflation, oil
prices and stock valuations that combined to send the stock market sharply
lower. As is usual in the investment markets, bond income provided a cushion
against volatility--and the securities even offered some price appreciation as
investors fled riskier markets.
As the U.S. Federal Reserve is raising short-term interest rates to keep the
U.S. economy from overheating, the yield curve (or the difference between bond
yields at maturities from 3 months to 30 years), flattened. In this case, that's
because the Fed's action is pushing short- to intermediate-term rates higher.
The longest bonds on the curve, 30-year Treasury bonds, are in short supply and
that may be lending support to their prices.
In the corporate sector, sectors like autos, telecommunications and
media/entertainment were hurt the most from a flight to quality. Energy and
utility bonds performed best, in the wake of higher oil prices.
PORTFOLIO REVIEW
In the Fund's first four months of operation, it outperformed the Index by
maintaining a neutral duration stance (that is to say, the portfolio was roughly
equally sensitive to interest rate changes as the Index), while managing
maturities to avoid that 2- to 3-year segment where the Fed's action seemed to
have the most impact. In addition, the Fund's longer-dated bonds actually
appreciated in price, as the yield curve flattened.
Throughout the first two months of the year, the Fund's overweighting in
corporate bonds helped performance, as yield spreads fell. But our decision not
to hold GM was prescient: in March the entire auto sector was hurt following the
big automaker's downward adjustment in earnings guidance. This move appeared to
hint at a possible downgrade of GM, long a market bellwether, and also to
intensify the market's concern about the potential impact of higher interest
rates and high oil prices.
OUTLOOK
We expect that interest rates will continue to rise gradually through the end of
year, although oil prices may trigger slower economic growth in the second half
of the year. This means that shorter-term interest rates are likely to rise and
the yield curve will continue to flatten.
Although the overall strength of the economy would seem to indicate that the
damage to corporate bonds in March and April was overdone, we expect that credit
quality will continue to be an important factor in bond prices during the rest
of the year.
In this environment, the Fund will maintain a neutral stance as to duration and
credit exposure, with an emphasis on what we believe are higher-quality paper in
the Fund. In the expected market conditions, we expect that commercial
mortgage-backed securities will replace the corporate bonds and government
mortgages the Fund sold toward the end of the current period.
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
SCHRODER U.S. CORE FIXED INCOME FUND
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
Inception to
April 30, 2005
--------------
Schroder U.S. Core Fixed Income Fund (a) --
Investor Shares .............................. 1.30%
Advisor Shares ............................... 1.21%
(a) Cumulative total return from commencement of Fund operations (December 31,
2004). Not annualized.
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. THE VALUE OF AN
INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT BOTH WILL FLUCTUATE AND
REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S ORIGINAL COST.
TOP 5 HOLDINGS
SECURITY % OF INVESTMENTS
- --------------------------------------------------------------------------------
FHLB, 2.706%, maturing 5/11/05 19.9%
FHLMC Gold TBA, 5.500%,
maturing 5/15/35 12.2
FNMA TBA, 5.000%, maturing 5/25/35 7.7
U.S. Treasury Bond, 5.375%,
maturing 2/15/31 5.6
U.S. Treasury Bill, 2.563%,
maturing 5/12/05 5.5
SECTOR ALLOCATION
SECTOR % OF INVESTMENTS
- --------------------------------------------------------------------------------
U.S. Government Agency Obligations 39.8%
U.S. Treasury Obligations 16.2
Commercial Paper 13.3
Corporate Obligations 13.1
Mortgage-Backed Obligations 8.7
Asset-Backed Securities 5.4
Collateralized Mortgage Obligations 3.0
Short-Term Investment 0.5
- --------------------------------------------------------------------------------
12
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF MAY 20, 2005)
PERFORMANCE
In the six months ended April 30, 2005, we are pleased to report that the
Schroder Municipal Bond Fund rose 1.01% (Investor shares) and 0.98% (Advisor
shares), compared to the Lehman 5-Year Municipal Bond Index (the "Index"), a
broad-based basket of intermediate municipal debt securities, which rose 0.23%.
The Fund's outperformance was largely due to the Fund's portfolio of
high-quality securities with yields generally higher than those of bonds of
similar quality, especially bonds backed or collateralized by U.S. Treasury
securities, more commonly called escrowed-to-maturity (ETM) or pre-refunded
securities. The Fund's 30-day SEC-yield (Investor share) was 3.76% as of April
30, 2005 versus the median 30-day SEC-yield of 3.00% for funds in the
intermediate municipal debt category, according to Lipper Analytical Services
Inc.
MARKET BACKGROUND
In the past six months, the broad U.S. bond market (up 0.98%, as measured by the
Lehman Aggregate Bond Index) underperformed the stock market (up 3.28%, as
measured by the S&P 500 Index), as investors drove up equity prices late in 2004
and the continued increase in the federal funds rate led to rising short-term
interest rates and declining bond prices.
The municipal bond yield curve mirrored the U.S. Treasury curve as short to
intermediate yields increased and the long-term yields remained relatively
stable during the six-month reporting period. The yield on a 5-year AAA-rated
municipal bond rose from 2.67% to 3.09% and the yield on a 30-year AAA-rated
municipal bond declined slightly from 4.51% to 4.41%.
Supply in the municipal market continued to be strong as municipalities in the
first few months of the calendar year issued debt to take advantage of a
perceived window of opportunity of lower borrowing costs. Debt issuance in the
first quarter was $96.6 billion - one of the highest in municipal history.
Demand for municipal bonds continued to match the available supply as investors
liked the safety and tax-free income of municipals.
According to Standard and Poor's (S&P), municipal credit rating upgrades
outnumbered credit rating downgrades during the first quarter of 2005 for the
first time in five years. The increase in overall credit ratings was mainly due
to the continued increase in municipal tax revenues from an improving economy.
Both Florida and Massachusetts received credit upgrades by S&P in the first few
months of 2005.
PORTFOLIO REVIEW
In the six-month period under review, the Fund outperformed the Index by
exploiting inefficiencies in the municipal bond market, which is geographically
dispersed and does not trade via a central exchange. We believe that the ability
to search for bonds that have high credit quality, but are not recognized by the
general market, helps to keep the Fund's portfolio yield high and generate more
income than broader municipal market securities.
One good example is an Illinois Health escrowed-to-maturity bond, collateralized
by U.S. Treasury securities, with an effective maturity in 2011. The Fund bought
this bond at a 4.5% yield, when comparable securities in 2011 with a AAA-rating
on the same day as the Illinois bond were yielding 3.1%, as measured by the
Bloomberg municipal scale. A Fort Bend County Texas Municipal Utility AAA-rated,
FGIC insured bond underperformed similar intermediate-term municipal bonds held
by the Fund due to its non-callable structure. Non-callable bonds generally
experienced more significant price decreases when municipal bond yields rise as
rapidly as they did during the six-month reporting period.
The Fund maintained a duration similar to the Index's as we believe no one can
accurately forecast interest rates or alter duration based on an interest rate
forecast. The Fund also attempts to maintain a diversified maturity range, which
helps limit the effect when any one segment is hurt by rising rates, as happened
in short- to intermediate-term yields during the six-month period. The Fund's
10% allocation to longer-term bonds helped performance.
- --------------------------------------------------------------------------------
13
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
OUTLOOK
We expect that short-term interest rates will continue to rise as the Federal
Reserve increases the federal funds rate to counteract any perceived threat of
inflation and to bring borrowing costs to a more sustainable and appropriate
level for the U.S. economy. Long-term rates will remain stable as the U.S.
economy continues to perform well. Rising oil prices and other commodity prices,
as well as a weakening dollar, may hamper longer-term U.S. growth.
In this environment, we will stick to our discipline which seeks to add value
through bottom-up security selection and diversification. We will maintain a
neutral stance as to duration, with continued emphasis on what we believe are
higher-quality, higher-yielding securities in the Fund's portfolio.
PERFORMANCE INFORMATION
One Year Ended Inception to
April 30, 2005 April 30, 2005
-------------- --------------
Schroder Municipal Bond Fund --
Investor Shares . . . . . . . . . . . . . . . . . . 4.82% 3.41%(a)
Advisor Shares . . . . . . . . . . . . . . . . . . . 4.56% 3.15%(a)
(a) From commencement of Fund operations on December 31, 2003.
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. THE VALUE OF AN
INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT BOTH WILL FLUCTUATE AND
REDEMP- TION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S ORIGINAL COST.
CREDIT QUALITY
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Credit Rating % of Investments
AAA 46.1%
AA 8.2
A 29.8
BBB 9.1
Not Rated 6.8
SECTOR ALLOCATION
SECTOR % OF INVESTMENTS
- --------------------------------------------------------------------------------
Housing 18.5%
Escrowed to Maturity/Pre-Refunded 14.5
Insured 10.3
Corporate Obligation 10.1
Financing 7.2
Tax Increment Financings 6.5
Corporate Supported 6.3
Federal Agency 6.0
Education 5.6
Industrial Development 4.7
General Obligation 3.6
Health Care 2.6
Certification of Participation 2.3
Transportation 0.5
Utilities 0.4
Short-Term Investment 0.9
- --------------------------------------------------------------------------------
14
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF MAY 20, 2005)
PERFORMANCE
In the six months ended April 30, 2005, we are pleased to report that the
Schroder Short-Term Municipal Bond Fund rose 1.12% (Investor shares) and 0.99%
(Advisor shares), compared to the Lehman 1-Year Municipal Bond Index (the
"Index"), a broad-based basket of short-term municipal debt securities, which
rose 0.20%.
The Fund's outperformance was largely due to its portfolio of high-quality
securities which generated a higher level of yield and income than the Index.
The Fund's superior level of income provided a cushion against declining bond
prices during the reporting period. The Fund's (Investor shares) 30-day SEC
yield as of April 30, 2005 was 3.39% versus the median 30-day SEC yield of 2.40%
for the short-term municipal debt category, according to Lipper Analytical
Services Inc.
The Fund benefited from holding a high percentage of tax-exempt municipal debt
collateralized by U.S. Treasury securities, more commonly called
escrowed-to-maturity (ETM) or pre-refunded bonds. ETM and pre-refunded bonds
perform well in a rising interest rate environment as they generally provide a
higher level of coupon income than general obligation, "market-yielding"
tax-exempt municipal bonds.
MARKET BACKGROUND
In the past six months, the broad U.S. bond market (0.98%, as measured by the
Lehman Aggregate Bond Index) underperformed the stock market (up 3.28%, as
measured by the S&P 500 Index), as investors drove up equity prices late in
2004. The bond market suffered from a continued increase in the federal funds
rate by the Federal Reserve to counteract the possibility of inflation - causing
short-term interest rates to increase. Since June of 2004, the Federal Reserve
increased the federal funds rate seven straight times - rising from a low of
1.0% to 2.75%.
Accordingly, Treasury yields increased on the short end as the 2-year Treasury
increased from 2.55% to 3.72% during the reporting period. The long-end of the
Treasury curve actually declined during the same period (from 4.82% to 4.73%) as
investors felt comfortable with the Federal Reserve's decisive action to combat
inflation.
Municipal yields took their cue from the Treasury market as the yield on a
2-year AAA-rated municipal bond yield rose from 1.89% to 2.76% and the AAA-rated
yield on a 30-year municipal bond declined slightly from 4.51% to 4.41% during
the six month period. Supply in the municipal market remained strong as
municipalities increased issuance during the first several months of 2005 to
lock in perceived lower rates. Demand by retail purchasers, property and
casualty insurance companies and "crossover" hedge fund buyers easily digested
the supply.
PORTFOLIO REVIEW
In the past six months, the Fund outperformed the Index by exploiting the
inefficiencies in the municipal bond market, which is highly fragmented in
nature and geographically dispersed. Purchasing high quality bonds that we
believed to be undervalued resulted in a higher level of yield generation and
income for the Fund's portfolio.
One good example is a single-family mortgage bond issued by the state of Oregon,
which is backed by third-party insurance, and has an estimated life through July
2007. The Fund bought this bond at a 3.84% yield to its estimated life, when
comparable-maturity AAA-rated municipal securities were yielding 2.54%, as
measured by the Bloomberg municipal scale on the day of purchase. One bond that
underperformed during the period was a Berks County Pennsylvania, AAA-rated,
MBIA-insured bond that matures in 2008 and is not callable. This bond's price
decreased more rapidly during the reporting period than similar term bonds in
the Fund's portfolio due to its non-callable structure.
The Fund maintained a duration similar to the Index's as we believe no one can
accurately forecast interest rates over long-term periods or alter duration
based on an interest rate forecast. Excess return is generated by purchasing
higher-yielding, undervalued municipal securities. The Fund also attempts to
maintain a diversified maturity range, which helps limit the effect when any one
segment of the yield curve is hurt by rising rates, as happened in short- and
intermediate-term yields during the six-month period.
- --------------------------------------------------------------------------------
15
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
OUTLOOK
We expect short-term interest rates will continue to rise gradually as the
Federal Reserve increases the federal funds rate to counteract any perceived
threat of inflation and to bring short-term borrowing rates to a sustainable and
appropriate level for the U.S. economy. Long-term interest rates should stay
relatively stable as we believe that investors perceive that the U.S. economy is
performing well. Rising oil prices and other commodity costs, however, may
hamper longer-term U.S. growth.
In this environment, we will stick to our discipline, which seeks to add value
through bottom-up security selection and diversification. We will maintain a
neutral stance as to duration, with continued emphasis on what we believe are
higher-quality yet higher-yielding securities in the Fund's portfolio,
especially bonds collateralized by U.S. Treasury securities.
PERFORMANCE INFORMATION
One Year Ended Inception to
April 30, 2005 April 30, 2005
-------------- --------------
Schroder Short-Term Municipal Bond Fund --
Investor Shares ............................... 2.60% 1.79%(a)
Advisor Shares ................................ 2.34% 1.54%(a)
(a) From commencement of Fund operations on December 31, 2003.
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. THE VALUE OF AN
INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT BOTH WILL FLUCTUATE AND
REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S ORIGINAL COST.
CREDIT QUALITY
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Credit Rating % of Investments
AAA 43.1%
AA 15.0
A 24.3
BBB 12.0
Not Rated 5.6
SECTOR ALLOCATION
SECTOR % OF INVESTMENTS
- --------------------------------------------------------------------------------
Insured 27.1%
Escrowed to Maturity/Pre-Refunded 13.2
Housing 12.0
Corporate Obligations 7.8
Revenue Bond 7.6
Industrial Development 7.5
Corporate Supported 6.3
General Obligation 5.9
Special Assessment 3.4
Education 2.4
Health Care 2.4
Economic Development 1.4
Community Development 1.0
Special Obligation 0.4
Sanitation 0.2
Tax Increment Financings 0.2
Federal Agency 0.1
Short-Term Investment 1.1
- --------------------------------------------------------------------------------
16
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- --------------------------------------------------------------------------------
SCHRODER U.S. LARGE CAP EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2005 (UNAUDITED)
Shares Value $
--------- -------------
COMMON STOCK - 99.2%
BASIC INDUSTRIES - 2.8%
1,384 EI du Pont de Nemours 65,200
1,138 International Paper 39,022
2,137 Monsanto 125,271
-------------
229,493
CAPITAL GOODS - 13.2%
4,941 Cendant 98,375
5,719 General Electric 207,028
4,589 Honeywell International 164,103
1,133 Ingersoll-Rand Class A 87,094
2,436 Kennametal 110,351
1,924 Parker Hannifin 115,324
1,798 Textron 135,479
1,555 United Technologies 158,175
-------------
1,075,929
COMMUNICATIONS EQUIPMENT - 2.7%
12,958 Cisco Systems (1) 223,914
-------------
COMPUTER HARDWARE - 3.7%
2,389 International Business Machines 182,472
32,748 Sun Microsystems (1) 118,875
-------------
301,347
COMPUTER SOFTWARE - 4.3%
9,870 Microsoft 249,711
8,887 Oracle (1) 102,734
-------------
352,445
CONSUMER CYCLICALS - 7.9%
1,871 Federated Department Stores 107,582
4,019 Home Depot 142,152
4,539 Office Depot (1) 88,874
2,436 Target 113,055
4,095 Wal-Mart Stores 193,038
-------------
644,701
CONSUMER STAPLES - 9.3%
3,647 Altria Group 237,019
2,448 Colgate-Palmolive 121,886
3,719 PepsiCo 206,925
3,528 Procter & Gamble 191,041
-------------
756,871
ENERGY - 9.0%
526 ConocoPhillips 55,151
1,983 Cooper Cameron (1) 108,946
2,866 EOG Resources 136,278
1,772 Exxon Mobil 101,057
2,903 Halliburton 120,736
Shares Value $
--------- -------------
2,454 Quicksilver Resources (1) 125,964
1,710 Ultra Petroleum (1) 86,321
-------------
734,453
FINANCIAL SERVICES - 20.2%
6,147 Bank of America 276,861
3,544 Bank of New York 99,019
6,052 Citigroup 284,202
1,771 Federal National Mortgage
Association 95,545
2,462 Merrill Lynch 132,776
2,747 Prudential Financial 156,991
3,924 St. Paul Travelers 140,479
3,533 Wachovia 180,819
2,104 Wells Fargo 126,114
2,262 Willis Group Holdings 75,664
1,253 XL Capital Class A 88,086
-------------
1,656,556
HEALTH CARE - 14.3%
3,893 Abbott Laboratories 191,380
3,881 Baxter International 143,985
2,245 Boston Scientific (1) 66,407
1,245 Fisher Scientific International (1) 73,928
2,973 Johnson & Johnson 204,037
12,165 Pfizer 330,523
3,487 Wyeth 156,706
-------------
1,166,966
MEDIA - 4.9%
4,586 Clear Channel Communications 146,477
3,665 News Class B (1) 58,347
5,699 Viacom Class B 197,299
-------------
402,123
TECHNOLOGY-SEMICONDUCTORS - 2.6%
6,694 Intel 157,443
1,534 Maxim Integrated Products 57,372
-------------
214,815
TELECOMMUNICATIONS - 1.9%
1,516 Qualcomm 52,893
4,270 SBC Communications 101,626
-------------
154,519
UTILITIES - 2.4%
2,628 Dominion Resources 198,151
-------------
TOTAL COMMON STOCK
(Cost $7,168,111) 8,112,283
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
18
- --------------------------------------------------------------------------------
SCHRODER U.S. LARGE CAP EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
SHORT-TERM
INVESTMENTS - 0.6%
48 JPMorgan Chase
Time Deposit, 2.16% 48
Shares
------
53,000 SEI Daily Income Trust Money
Market Fund, 2.74% (2) 53,000
-------------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $53,048) 53,048
-------------
TOTAL
INVESTMENTS - 99.8%
(Cost $7,221,159) 8,165,331
-------------
OTHER ASSETS LESS
LIABILITIES - 0.2% 14,323
-------------
NET ASSETS - 100.0% $ 8,179,654
=============
(1) Denotes non-income producing security.
(2) Rate shown is 7-day yield as of April 30, 2005.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
19
- --------------------------------------------------------------------------------
SCHRODER U.S. OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2005 (UNAUDITED)
Shares Value $
------ -------------
COMMON STOCK - 91.5%
AUTOS & TRANSPORTATION - 2.9%
40,400 EGL (1) 788,204
23,500 JetBlue Airways (1) 471,175
50,600 Kansas City Southern (1) 957,352
16,600 Landstar System (1) 508,790
107,100 Northwest Airlines (1) 554,778
3,100 Republic Airways Holdings (1) 37,882
-------------
3,318,181
BUSINESS SERVICES - 1.5%
32,600 ABM Industries 592,342
17,600 FTI Consulting (1) 388,608
26,200 Navigant Consulting (1) 614,914
11,900 Pinnacle Entertainment (1) 180,404
-------------
1,776,268
CONSUMER DISCRETIONARY - 16.0%
20,400 BJ's Wholesale Club (1) 543,660
16,800 Carmike Cinemas 588,000
23,200 Centerplate 284,200
15,200 Central Garden & Pet (1) 632,168
31,400 CSK Auto (1) 487,014
61,800 Del Monte Foods (1) 644,574
133,100 DoubleClick (1) 1,070,124
35,800 Educate 429,600
21,750 Fossil (1) 505,905
13,000 Fresh Del Monte Produce 375,700
30,800 GameStop Class A (1) 757,988
39,100 Gevity HR 627,555
61,600 Goody's Family Clothing 508,200
30,100 McCormick & Schmick's
Seafood Restaurants (1) 451,500
32,200 Orient-Express Hotels Class A 845,894
60,400 PETCO Animal Supplies (1) 1,890,520
14,200 PF Chang's China Bistro (1) 788,384
6,500 Quiksilver (1) 179,075
34,100 Rare Hospitality
International (1) 948,662
24,600 Regis 878,958
82,700 Scientific Games Class A (1) 1,775,569
51,600 Spanish Broadcasting System
Class A (1) 430,860
30,300 Standard Parking (1) 479,649
102,300 Valueclick (1) 1,059,828
37,600 Waste Connections (1) 1,324,272
-------------
18,507,859
CONSUMER STAPLES - 0.4%
16,900 Schweitzer-Mauduit
International 493,818
-------------
Shares Value $
------ -------------
FINANCIAL SERVICES - 13.5%
57,135 Apollo Investment 906,161
39,000 Argonaut Group (1) 767,130
7,400 Bank of Hawaii 350,390
26,000 Boston Private Financial
Holdings 580,840
21,324 Brandywine Realty Trust 603,469
114,800 Conseco 2,208,752
30,943 Cullen/Frost Bankers 1,340,451
35,700 eFunds (1) 780,402
54,800 Encore Capital Group (1) 857,620
30,700 First Niagara Financial Group 384,978
5,200 Gabelli Asset Management 207,584
32,600 Gold Banc 450,858
14,708 Health Care REIT 492,718
45,600 MoneyGram International (1) 884,640
64,207 Platinum Underwriters Holdings 1,900,527
47,800 Reinsurance Group of America 2,137,616
35,963 United Dominion Realty Trust 796,581
-------------
15,650,717
HEALTH CARE - 13.4%
50,800 Able Laboratories (1) 1,211,072
42,451 Angiotech Pharmaceuticals (1) 576,909
35,300 Array Biopharma (1) 219,566
44,850 DaVita (1) 1,807,455
125,993 Diversa (1) 661,463
35,500 DJ Orthopedics (1) 892,825
49,500 Endo Pharmaceuticals
Holdings (1) 982,575
15,812 Immucor (1) 471,830
28,400 Inspire Pharmaceuticals (1) 200,504
70,900 Lexicon Genetics (1) 310,542
15,300 Nabi Biopharmaceuticals (1) 166,770
30,900 Nuvelo (1) 180,147
42,800 Perrigo 784,096
45,200 Renal Care Group (1) 1,724,380
19,200 Salix Pharmaceuticals (1) 274,560
39,000 Seattle Genetics (1) 156,000
39,000 Senomyx (1) 455,130
42,100 Serologicals (1) 906,413
22,400 Sybron Dental Specialties (1) 834,400
38,434 Symbion (1) 817,876
27,649 United Surgical Partners
International (1) 1,223,468
22,600 WellCare Health Plans (1) 666,700
-------------
15,524,681
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
20
- --------------------------------------------------------------------------------
SCHRODER U.S. OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Shares Value $
------ -------------
COMMON STOCK - (CONTINUED)
MATERIALS & PROCESSING - 7.6%
61,100 Agnico-Eagle Mines 803,465
26,200 Airgas 574,304
35,900 Albany International Class A 1,125,824
5,600 Carlisle 402,192
18,900 Cytec Industries 871,668
15,100 Delta and Pine Land 380,520
21,600 FMC (1) 1,058,400
93,668 Goldcorp 1,212,064
30,000 Hecla Mining (1) 139,800
39,700 Hexcel (1) 651,080
10,400 Nuco2 (1) 255,320
38,100 Olin 675,894
40,300 PolyOne (1) 311,116
32,300 Quanta Services (1) 257,754
-------------
8,719,401
OTHER - 1.0%
52,900 Laidlaw International (1) 1,184,431
-------------
OTHER ENERGY - 5.6%
38,194 Denbury Resources (1) 1,212,277
18,700 FMC Technologies (1) 567,171
21,100 Forest Oil (1) 812,983
13,300 Massey Energy 480,263
43,600 Ormat Technologies (1) 682,340
34,800 St. Mary Land & Exploration 755,160
68,600 Superior Energy Services (1) 1,020,768
53,074 Willbros Group (1) 910,750
-------------
6,441,712
PRODUCER DURABLES - 9.1%
21,000 Actuant Class A (1) 894,390
52,100 AGCO (1) 896,120
117,900 Andrew (1) 1,446,633
62,700 Crown Castle International (1) 1,011,351
21,700 DRS Technologies (1) 960,225
15,400 IDEX 573,650
18,600 Kennametal 842,580
12,200 Manitowoc 488,000
42,379 MTC Technologies (1) 1,284,931
21,900 Rofin-Sinar Technologies (1) 646,488
93,400 Ultratech (1) 1,486,928
-------------
10,531,296
Shares Value $
------ -------------
TECHNOLOGY - 16.5%
146,487 Aeroflex (1) 1,161,642
33,200 Avocent (1) 834,648
122,100 Concur Technologies (1) 1,017,093
64,963 Covansys (1) 655,477
62,000 CSG Systems International (1) 1,065,780
9,800 Digital Insight (1) 196,686
247,200 E.piphany (1) 758,904
37,500 Filenet (1) 993,750
52,586 II-VI (1) 747,247
113,800 Informatica (1) 879,674
145,500 Integrated Device Technology (1) 1,556,850
29,700 Mapinfo (1) 336,501
57,200 Methode Electronics 644,644
71,200 Microsemi (1) 1,204,704
99,300 MIPS Technologies (1) 695,100
69,600 Ness Technologies (1) 744,720
118,700 Perot Systems Class A (1) 1,499,181
60,600 RSA Security (1) 650,844
52,100 Sohu.com (1) 893,515
24,933 Technology Investment Capital 366,266
49,900 Volterra Semiconductor (1) 532,433
41,000 WebEx Communications (1) 894,620
150,700 Westell Technologies (1) 780,626
-------------
19,110,905
UTILITIES - 4.0%
26,600 AGL Resources 920,360
43,200 Centennial Communications (1) 496,800
35,400 Iowa Telecommunications
Services (1) 676,140
26,400 Itron (1) 952,248
37,150 PNM Resources 1,027,198
21,800 Westar Energy 499,220
-------------
4,571,966
-------------
TOTAL COMMON STOCK
(Cost $103,801,877) 105,831,235
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
21
- --------------------------------------------------------------------------------
SCHRODER U.S. OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
U.S. TREASURY
OBLIGATION - 5.2%
6,000,000 U.S. Treasury Bill (2)
2.738%, 7/14/05 5,966,484
-------------
TOTAL U.S. TREASURY
OBLIGATION
(Cost $5,966,454) 5,966,484
-------------
SHORT-TERM
INVESTMENTS - 3.5%
5,794 JPMorgan Chase Time
Deposit, 2.16% 5,794
Shares
------
4,101,407 SEI Daily Income Trust Money
Market Fund, 2.74% (3) 4,101,407
-------------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $4,107,201) 4,107,201
-------------
TOTAL
INVESTMENTS - 100.2%
(Cost $113,875,532) 115,904,920
-------------
OTHER ASSETS LESS
LIABILITIES - (0.2)% (278,680)
-------------
NET ASSETS - 100.0% $ 115,626,240
=============
(1) Denotes non-income producing security.
(2) The rate reported is the effective yield at time of purchase.
(3) Rate shown is 7-day yield as of April 30, 2005.
REIT -- Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
22
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2005 (UNAUDITED)
Shares Value $
------ -------------
COMMON STOCK - 96.7%
AUSTRALIA - 2.6%
50,902 Macquarie Infrastructure Group 144,253
-------------
FRANCE - 12.2%
1,206 Christian Dior 83,556
581 Ciments Francais (1) 54,830
3,463 France Telecom (1) 101,274
945 Groupe Danone (1) 88,027
1,247 Societe Generale (1) 123,378
4,351 Suez 118,118
640 Technip (1) 108,281
-------------
677,464
GERMANY - 4.3%
2,628 Schwarz Pharma (1) 117,497
1,682 Siemens (1) 122,551
-------------
240,048
HONG KONG - 1.0%
210,000 Peace Mark Holdings 56,589
-------------
INDONESIA - 1.4%
4,346 Telekomunikasi
Indonesia ADR (1) 78,315
-------------
IRELAND - 2.2%
6,186 Allied Irish Banks 125,353
-------------
JAPAN - 20.3%
19,000 Chiba Bank 117,244
4,000 Denso 95,184
21 East Japan Railway 109,356
2,800 Electric Power Development 84,654
62 Jupiter Telecommunications (1) 49,375
10,000 Mitsubishi Corp. 137,148
10,000 Mitsubishi Estate 107,869
8,000 Mitsui Chemicals 45,398
5,700 Omron 124,764
3,000 Ricoh 47,897
12,000 Sumitomo Electric Industries 125,436
1,700 T&D Holdings (1) 83,987
-------------
1,128,312
MEXICO - 1.5%
1,691 America Movil ADR Series L (1) 83,958
-------------
NETHERLANDS - 8.0%
3,907 ING Groep 106,065
2,238 Koninklijke Philips
Electronics (1) 55,054
3,330 Royal Dutch Petroleum (1) 193,783
3,430 TNT (1) 92,939
-------------
447,841
Shares Value $
------ -------------
RUSSIA - 1.0%
429 LUKOIL ADR (1) 58,430
-------------
SINGAPORE - 4.0%
11,000 Jardine Strategic Holdings 108,350
42,000 Singapore Press Holdings (1) 111,836
-------------
220,186
SOUTH KOREA - 4.1%
8,390 Hankook Tire 84,994
1,240 Hyundai Motor 67,037
164 Samsung Electronics 74,351
-------------
226,382
SPAIN - 2.2%
5,620 Banco Santander Central
Hispano 65,221
2,215 Iberdrola (1) 57,481
-------------
122,702
SWEDEN - 2.1%
2,537 Atlas Copco 114,627
-------------
SWITZERLAND - 3.1%
1,057 Adecco (1) 50,763
460 Nestle 120,465
-------------
171,228
TAIWAN - 1.5%
9,391 Fubon Financial
Holding GDR (1) 82,641
-------------
THAILAND - 1.3%
53,400 Kasikornbank 75,163
-------------
UNITED KINGDOM - 23.9%
2,168 AstraZeneca 94,301
19,778 BG Group 152,839
10,042 Brambles Industries 55,676
8,930 HBOS 131,547
7,900 Prudential 70,803
2,524 Rio Tinto (1) 76,094
4,348 Royal Bank of Scotland Group 130,504
52,698 Signet Group (1) 101,495
10,500 Smith & Nephew 107,621
5,376 Smiths Group 87,753
35,712 Tesco 209,746
43,867 Vodafone Group 113,973
-------------
1,332,352
-------------
TOTAL COMMON STOCK
(Cost $5,123,828) 5,385,844
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
23
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2005 (UNAUDITED)
Shares Value $
------ -------------
EQUITY-LINKED
WARRANTS (2) - 2.4%
INDIA - 2.4%
7,089 Oriental Bank of Commerce (1) 45,105
9,776 Satyam Computer Services (1) 90,792
-------------
TOTAL EQUITY-LINKED
WARRANTS
(Cost $151,684) 135,897
-------------
Principal
Amount $
---------
SHORT-TERM
INVESTMENTS - 0.8%
723 JPMorgan Chase Time
Deposit, 2.16% 723
Shares
------
44,000 SEI Daily Income Trust Money
Market Fund, 2.74% (3) 44,000
-------------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $44,723) 44,723
-------------
TOTAL
INVESTMENTS - 99.9%
(Cost $5,320,235) 5,566,464
-------------
OTHER ASSETS LESS
LIABILITIES - 0.1% 3,216
-------------
NET ASSETS - 100.0% $ 5,569,680
=============
(1) Denotes non-income producing security.
(2) Securities are not readily marketable.
(3) Rate shown is 7-day yield as of April 30, 2005.
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
24
- --------------------------------------------------------------------------------
SCHRODER ENHANCED INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- --------- -------------
COMMMERCIAL
PAPER - 29.5%
5,000,000 AIG Funding (1)
2.958%, 5/23/05 4,990,986
5,000,000 American General Finance (1)
2.930%, 5/26/05 4,989,861
5,000,000 Citicorp (1)
2.930%, 5/25/05 4,990,400
5,000,000 General Electric Capital (1)
2.986%, 5/23/05 4,990,895
4,900,000 Toyota Motor (1)
2.757%, 5/04/05 4,898,877
4,900,000 UBS Finance (1)
2.777%, 5/02/05 4,899,623
-------------
TOTAL COMMERCIAL
PAPER
(Cost $29,760,508) 29,760,642
-------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 27.7%
4,547,666 American Home Mortgage
Investment Trust, Series 2005-1,
Class 1A1 (2)
3.240%, 9/25/45 4,546,247
2,008,629 Bear Stearns Alternative Trust,
Series 2004-3, Class A1 (2)
3.340%, 4/25/34 2,008,551
1,069,533 Citigroup Mortgage Loan Trust,
Series 2003-AP3, Class A1
7.000%, 9/25/33 1,111,781
1,867,225 Citigroup Mortgage Loan Trust,
Series 2004-2, Class 1A23 (3)
9.250%, 8/25/33 1,995,597
1,005,000 Countrywide Alternative Loan
Trust, Series 2005-14,
Class 2A1 (2)
3.230%, 5/25/35 1,005,000
519,550 Countrywide Home Loans,
Series 2005-1, Class 2A1 (2)
3.310%, 3/25/35 519,550
1,261,008 Countrywide Home Loans,
Series 2005-11, Class 4A1 (2)
3.290%, 4/25/35 1,261,796
1,505,000 Financial Asset Securities Trust,
Series 2005-1A,
Class 2A1 (2) (3)
3.130%, 2/27/35 1,506,030
1,551,450 Impac CMB Trust,
Series 2004-1, Class A1 (2)
3.350%, 3/25/34 1,557,470
Principal
Amount $ Value $
--------- -------------
1,164,548 Impac CMB Trust, Series 2005-1,
Class 1A1 (2)
3.280%, 4/25/35 1,164,912
3,343,980 Impac CMB Trust,
Series 2005-3, Class A1 (2)
3.260%, 8/25/35 3,343,980
1,185,000 Impac CMB Trust, Series 2005-4,
Class 1A2 (2) (4)
3.430%, 6/25/35 1,185,000
1,288,011 People's Choice Home Loan
Securities Trust, Series 2005-1,
Class 1A1 (2)
3.180%, 10/25/26 1,288,872
2,015,000 People's Choice Home Loan
Securities Trust, Series 2005-2,
Class A1 (2)
3.150%, 9/25/24 2,015,000
1,118,500 Saco I Trust, Series 2005-1,
Class A1 (2) (3)
3.220%, 3/25/35 1,118,500
2,250,000 Saco I Trust, Series 2005-2,
Class A (2) (3)
3.264%, 4/25/35 2,250,000
-------------
TOTAL COLLATERALIZED
MORTGAGE OBLIGATIONS
(Cost $27,925,194) 27,878,286
-------------
ASSET-BACKED
SECURITIES - 25.6%
1,770,000 Aegis Asset Backed Securities
Trust, Series 2005-1,
Class IA2 (2)
3.270%, 3/25/35 1,771,501
2,825,000 Aegis Asset Backed Securities
Trust, Series 2005-2,
Class 1A1 (2)
3.020%, 6/25/24 2,825,000
275,000 Amortizing Residential Collateral
Trust, Series 2002-BC4,
Class M3 (2)
4.920%, 7/25/32 278,207
637,653 Aspen Funding I, Ltd.,
Series 2002-1A,
Class A1L (2) (3)
3.210%, 7/10/37 638,052
422,001 Bear Stearns Asset Backed
Securities, Series 2005-SD1,
Class 1A1 (2)
3.170%, 4/25/22 422,325
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
25
- --------------------------------------------------------------------------------
SCHRODER ENHANCED INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
ASSET-BACKED
SECURITIES - (CONTINUED)
2,030,000 Countrywide Asset-Backed
Certificates, Series 2004-11,
Class A2 (2)
3.400%, 3/25/33 2,040,282
1,144,625 Countrywide Home Equity Loan
Trust, Series 2003-C,
Class A (2)
3.210%, 5/15/29 1,147,375
815,362 Fieldstone Mortgage Investment,
Series 2005-1, Class 1A2 (2)
3.310%, 3/25/35 815,969
1,570,306 First Franklin Mortgage Loan
Asset Backed Certificate,
Series 2004-FF4, Class A2 (2)
3.310%, 6/25/34 1,571,214
1,830,000 Fremont Home Loan Trust,
Series 2005-B,
Class 2A1 (2) (4)
3.180%, 4/25/35 1,830,000
217,720 Fremont NIM Trust,
Series 2004-D, Class N1 (3)
4.500%, 11/25/34 217,618
784,085 GSAMP Trust, Series 2005-SD1,
Class A1 (2) (3)
3.360%, 12/25/34 787,266
219,775 GSAMP Trust, Series 2005-SD1,
Class N (3)
5.375%, 1/25/35 218,934
1,070,968 Morgan Stanley Asset-Backed
Securities Capital I,
Series 2005-WMC1,
Class A2A (2)
3.120%, 1/25/35 1,071,710
918,167 RAAC Series, Series 2005-RP1,
Class A (2) (3)
3.360%, 7/25/37 918,277
2,328,530 Residential Asset Mortgage
Products, Series 2005-RS3,
Class AIA1 (2)
2.950%, 3/25/35 2,329,934
722,423 Restructured Asset-Backed
Securities, Series 2003-3A,
Class A1 (2) (3)
3.540%, 1/29/22 725,132
162,820 Sail Net Interest Margin Notes,
Series 2004-4A, Class A
5.000%, 4/27/34 163,097
211,184 Sail Net Interest Margin Notes,
Series 2004-8A, Class A
5.000%, 9/27/34 210,327
Principal
Amount $ Value $
--------- -------------
2,044,501 Soundview Home Equity Loan
Trust, Series 2004-1,
Class A1 (2)
3.390%, 7/25/34 2,047,795
388,000 Structured Asset Investment Loan
Trust, Series 2003-BC11,
Class M4 (2)
6.020%, 10/25/33 389,162
280,000 Structured Asset Investment Loan
Trust, Series 2004-1,
Class M4 (2)
5.770%, 2/25/34 287,451
2,090,000 Structured Asset Securities,
Series 2005-GEL2, Class A (2)
3.344%, 4/25/35 2,090,000
1,040,000 Wachovia Loan Trust,
Series 2005-SD1,
Class A (2) (3)
3.380%, 5/25/35 1,040,000
-------------
TOTAL ASSET-BACKED
SECURITIES
(Cost $25,830,654) 25,836,628
-------------
MORTGAGE-BACKED
OBLIGATIONS - 23.8%
360,000 Aames Mortgage Trust,
Series 2002-2, Class B (5)
6.770%, 3/25/33 366,733
232,415 Aegis Asset Backed Securities
Trust, Series 2005-1N,
Class N1 (3)
4.250%, 3/25/35 232,124
825,000 Ameriquest Mortgage Securities,
Series 2002-1, Class M2 (2)
4.220%, 5/25/32 830,548
205,000 Ameriquest Mortgage Securities,
Series 2003-AR1, Class M3 (2)
6.020%, 1/25/33 208,748
1,770,000 Bayview Commercial Asset Trust
IO, Series 2005-1A, Class IO
0.775%, 4/25/35 143,812
1,020,000 Carrington Mortgage Loan Trust,
Series 2005-NC2,
Class A1 (2) (3) (4)
3.219%, 9/25/25 1,020,000
690,000 Carrington Mortgage Loan Trust,
Series 2005-NC2,
Class A1 (2) (4)
3.180%, 5/25/35 690,000
875,838 Centex Home Equity,
Series 1999-4, Class A7 (2)
3.370%, 2/25/31 878,309
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
26
- --------------------------------------------------------------------------------
SCHRODER ENHANCED INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
MORTGAGE-BACKED
OBLIGATIONS - (CONTINUED)
956,781 Centex Home Equity,
Series 2002-B, Class BV (2)
4.720%, 4/25/32 960,984
230,000 Countrywide Asset-Backed
Certificates, Series 2005-2N,
Class N (2) (3) (4)
4.500%, 8/25/36 228,271
1,355,000 Credit Suisse First Boston
Mortgage Securities,
Series 2005-1, Class A1 (2) (4)
3.230%, 2/25/32 1,355,000
255,564 FEP Receivables Participation
Funding LP, Series 2001-1,
Class A-2L (2)
4.100%, 11/18/08 255,405
1,971,297 Home Equity Mortgage Trust,
Series 2005-2, Class A1 (2)
3.030%, 7/25/35 1,972,439
44,868,000 Lehman Brothers Small Balance
Commercial IO,
Series 2005-1A, Class A
0.850%, 1/02/30 1,368,671
230,242 Long Beach Asset Holdings,
Series 2004-6, Class N1 (2) (3)
4.500%, 11/25/34 230,602
425,000 Long Beach Asset Holdings,
Series 2005-2, Class N1 (3)
4.150%, 4/25/35 423,597
2,020,663 Master Adjustable Rate
Mortgages Trust, Series 2004-9,
Class 2A1 (2)
3.400%, 11/25/34 2,026,030
1,325,000 Master Asset Backed Securities
Trust, Series 2005-HE1,
Class A1 (2)
3.164%, 5/25/35 1,325,000
1,015,950 Novastar Home Equity Loan,
Series 2004-3, Class A3A (2)
3.240%, 12/25/34 1,017,088
79,925 Opteum NIM Trust,
Series 2005-1 (3)
6.000%, 2/25/35 80,012
150,000 Option One Mortgage Loan
Trust, Series 2002-3,
Class M2 (2)
4.150%, 8/25/32 150,622
505,000 Option One Mortgage Loan
Trust, Series 2002-3,
Class M3 (2)
4.870%, 8/25/32 506,760
Principal
Amount $ Value $
--------- -------------
590,000 Option One Mortgage Loan
Trust, Series 2003-1,
Class M2 (2)
4.970%, 2/25/33 603,463
1,935,395 Ownit Mortgage Loan Asset
Backed Trust, Series 2005-1,
Class A1 (2)
3.150%, 9/25/35 1,936,864
1,226,737 Provident Bank Home Equity
Loan Trust, Series 1999-3,
Class A3 (2)
3.410%, 1/25/31 1,229,144
171,045 Renaissance NIM Trust,
Series 2005-1, Class N (3)
4.700%, 5/25/35 171,045
690,000 Residential Asset Mortgage
Products, Series 2005-RS4,
Class A1 (2) (4)
3.190%, 5/25/35 690,000
286,964 Residential Asset Securities,
Series 2002-KS2, Class MII3 (2)
4.820%, 4/25/32 288,569
205,136 Residential Asset Securities,
Series 2005-NT1 (3)
4.000%, 2/25/35 206,260
2,320,172 Terwin Mortgage Trust,
Series 2004-9HE, Class A2 (3)
3.180%, 9/25/34 2,320,172
305,000 Wachovia Bank Commercial
Mortgage Trust,
Series 2002-WHL,
Class L (2) (3)
5.950%, 3/15/15 305,405
-------------
TOTAL MORTGAGE-
BACKED OBLIGATIONS
(Cost $24,005,921) 24,021,677
-------------
U.S. TREASURY
OBLIGATION - 2.1%
2,100,000 U.S. Treasury Bill (1) (6)
2.533%, 5/12/05 2,098,494
-------------
TOTAL U.S. TREASURY
OBLIGATION
(Cost $2,098,377) 2,098,494
-------------
CORPORATE
OBLIGATION - 0.2%
200,000 Twin Reefs Pass-Through (3)
3.910%, 12/10/09 201,155
-------------
TOTAL CORPORATE
OBLIGATION
(Cost $200,428) 201,155
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
27
- --------------------------------------------------------------------------------
SCHRODER ENHANCED INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
SHORT-TERM
INVESTMENT - 6.5%
6,567,998 JPMorgan Chase Time
Deposit, 1.92% 6,567,998
-------------
TOTAL SHORT-TERM
INVESTMENT
(Cost $6,567,998) 6,567,998
-------------
TOTAL
INVESTMENTS - 115.4%
(Cost $116,389,080) 116,364,880
-------------
OTHER ASSETS LESS
LIABILITIES - (15.4)% (15,545,016)
-------------
NET ASSETS - 100.0% $ 100,819,864
=============
(1) The rate shown represents the security's effective yield at time of
purchase.
(2) Variable Rate Security -- Rate disclosed is as of April 30, 2005.
(3) Security exempt from registration under Rule 144A of the Securities Act of
1933. Such securities may be resold in transactions exempt from
registration normally to qualified institutions. On April 30, 2005, the
value of these securities amounted to $16,834,049, representing 16.7% of
the net assets of the Fund.
(4) Security purchased on a when-issued basis.
(5) Step Bond -- Coupon rate increases in increments to maturity. Rate
disclosed is as of April 30, 2005.
(6) All or a portion of this security has been pledged as collateral for open
future contracts.
IO -- Interest Only Security
LP -- Limited Partnership
Ltd -- Limited
The Fund had the following futures contracts outstanding at April 30, 2005:
NET
NUMBER UNREALIZED
OF EXPIRATION APPRECIATION
CONTRACTS VALUE DATE (DEPRECIATION)
- -----------------------------------------------------------------------
Long:
10 Year Note 37 $ 4,122,609 Jun-05 $ 99,037
U.S. Bond 22 2,526,563 Jun-05 92,213
-----------
191,250
-----------
Short:
90 Day Euro 10 2,398,500 Mar-06 2,750
2 Year Note 115 23,885,859 Jun-05 (125,111)
-----------
(122,361)
-----------
$ 68,889
===========
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
28
- --------------------------------------------------------------------------------
SCHRODER U.S. CORE FIXED INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 50.3%
2,545,000 FHLB (1)
2.706%, 5/11/05 2,543,092
1,545,000 FHLMC Gold TBA
5.500%, 5/15/35 1,561,899
1,000,000 FNMA TBA
5.000%, 5/25/35 990,312
-------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $5,066,060) 5,095,303
-------------
U.S. TREASURY
OBLIGATIONS - 20.5%
700,000 U.S. Treasury Bill (2)
2.563%, 5/12/05 699,498
635,000 U.S. Treasury Bond
5.375%, 2/15/31 717,401
U.S. Treasury Note
515,000 4.000%, 2/15/15 506,813
155,000 2.875%, 11/30/06 153,414
-------------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $2,034,029) 2,077,126
-------------
COMMERCIAL PAPER - 16.8%
400,000 AIG Funding (2)
2.958%, 5/23/05 399,279
500,000 General Electric Capital (2)
2.898%, 5/23/05 499,117
400,000 Toyota Motor (2)
2.757%, 5/04/05 399,908
400,000 UBS Finance (2)
2.777%, 5/02/05 399,969
-------------
TOTAL COMMERCIAL PAPER
(Cost $1,698,273) 1,698,273
-------------
CORPORATE
OBLIGATIONS - 16.6%
30,000 AES Gener
7.500%, 3/25/14 29,591
45,000 Amerada Hess
7.125%, 3/15/33 50,777
50,000 BAC Capital Trust VI
5.625%, 3/08/35 49,607
75,000 Cadbury Schweppes Finance (3)
5.125%, 10/01/13 75,659
25,000 CHC Helicopter (3)
7.375%, 5/01/14 24,500
100,000 Chuo Mitsui Trust & Banking (3)
5.506%, 12/15/49 95,774
45,000 Citigroup
5.000%, 9/15/14 45,381
Principal
Amount $ Value $
--------- -------------
25,000 Comcast
7.050%, 3/15/33 29,313
80,000 Cox Communications
7.125%, 10/01/12 89,022
85,000 Enterprise Products (3)
5.000%, 3/01/15 81,645
55,000 FirstEnergy, Series C
7.375%, 11/15/31 65,026
30,000 Fraser Papers (3)
8.750%, 3/15/15 28,050
95,000 GATX Financial
5.125%, 4/15/10 95,913
125,000 Goldman Sachs Group
5.125%, 1/15/15 125,071
20,000 Grant Prideco
9.000%, 12/15/09 21,900
60,000 Halliburton
8.750%, 2/15/21 80,148
25,000 Hanover Equipment Trust,
Series B
8.750%, 9/01/11 26,344
30,000 HVB Funding Trust III (3)
9.000%, 10/22/31 39,210
100,000 JPMorgan Chase
4.750%, 3/01/15 98,489
50,000 Liberty Mutual Group (3)
6.500%, 3/15/35 48,618
15,000 Meritage Homes (3)
6.250%, 3/15/15 13,875
15,000 Navistar International (3)
6.250%, 3/01/12 13,275
55,000 Odyssey Re Holdings
7.650%, 11/01/13 59,920
55,000 Packaging Corp of America
5.750%, 8/01/13 53,848
40,000 Pinnacle West Energy (3)
3.630%, 4/01/07 40,003
25,000 Royal Caribbean Cruises
7.500%, 10/15/27 26,250
60,000 Southern California Edison
5.000%, 1/15/16 60,104
40,000 Southwest Airlines
5.250%, 10/01/14 39,574
100,000 Telefonos de Mexico (3)
5.500%, 1/27/15 97,345
30,000 TXU (3)
6.550%, 11/15/34 29,636
45,000 XTO Energy
5.300%, 6/30/15 45,536
-------------
TOTAL CORPORATE
OBLIGATIONS
(Cost $1,697,091) 1,679,404
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
29
- --------------------------------------------------------------------------------
SCHRODER U.S. CORE FIXED INCOME FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
MORTGAGE-BACKED
OBLIGATIONS - 11.0%
225,000 Bear Stearns Commercial
Mortgage Securities,
Series 2004-PWR, Class A4
4.715%, 2/11/41 223,083
395,000 Bear Stearns Commercial
Mortgage Securities,
Series 2005-T18, Class A4
4.933%, 2/13/42 397,037
95,927 Home Equity Mortgage Trust,
Series 2005-2, Class A1
3.030%, 7/25/35 95,983
40,000 Long Beach Asset Holdings,
Series 2005-2, Class N1 (3)
4.150%, 4/25/35 39,868
90,372 Merrill Lynch Mortgage
Investors, Series 2005-SL1,
Class A
3.220%, 6/25/35 90,424
215,000 Morgan Stanley Capital I,
Series 2003-T11, Class A3
4.850%, 6/13/41 217,388
50,000 Option One Mortgage Loan
Trust, Series 2002-3,
Class M2 (4)
4.150%, 8/25/32 50,207
-------------
TOTAL MORTGAGE-
BACKED OBLIGATIONS
(Cost $1,109,698) 1,113,990
-------------
ASSET-BACKED
SECURITIES - 6.8%
43,081 GSAMP Trust, Series 2005-SD1,
Class A1 (3) (4)
3.360%, 12/25/34 43,256
324,032 Hedged Mutual Fund Fee Trust,
Series 2003-1A, Class 2 (3)
5.220%, 11/30/10 323,830
328,296 Hedged Mutual Fund Fee Trust,
Series 2003-2, Class 2 (3)
4.840%, 3/02/11 324,808
-------------
TOTAL ASSET-BACKED
SECURITIES
(Cost $695,360) 691,894
-------------
Principal
Amount $ Value $
--------- -------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.7%
199,678 American Home Mortgage
Investment Trust,
Series 2005-1, Class 1A1
3.240%, 9/25/45 199,616
48,106 Countrywide Home Loans,
Series 2005-1, Class 2A1 (4)
3.310%, 3/25/35 48,106
130,668 People's Choice Home Loan
Securities Trust, Series 2005-1,
Class 1A1 (4)
3.180%, 10/25/26 130,755
-------------
TOTAL COLLATERALIZED
MORTGAGE OBLIGATIONS
(Cost $378,452) 378,477
-------------
SHORT-TERM
INVESTMENT - 0.6%
57,488 JPMorgan Chase Time
Deposit, 1.92% 57,488
-------------
TOTAL SHORT-TERM
INVESTMENT
(Cost $57,488) 57,488
-------------
TOTAL
INVESTMENTS - 126.3%
(Cost $12,736,451) 12,791,955
-------------
OTHER ASSETS LESS
LIABILITIES - (26.3)% (2,663,784)
-------------
NET ASSETS - 100.0% $ 10,128,171
=============
(1) Zero Coupon Security -- Rate disclosed is the effective yield at time of
purchase.
(2) The rate shown represents the security's effective yield at time of
purchase.
(3) Security exempt from registration under Rule 144A of the Securities Act of
1933. Such securities may be resold in transactions exempt from
registration normally to qualified institutions. On April 30, 2005, the
value of these securities amounted to $1,319,352, representing 13.0% of
the net assets of the Fund.
(4) Variable Rate Security -- Rate disclosed is as of April 30, 2005.
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Association
FNMA -- Federal National Mortgage Association
TBA -- To Be Announced
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
30
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
MUNICIPAL BONDS - 88.8%
ALABAMA - 0.3%
250,000 Crenshaw County, Industrial
Development Board RB, Sister
Schuberts Project, AMT, (LOC:
Amsouth Bank of Alabama) (1)
5.600%, 3/01/13 259,562
-------------
ARIZONA - 2.8%
290,000 Phoenix, Industrial Development
Authority RB, Hacienda
Sunnyslope Project,
Series A, AMT, GNMA
4.350%, 7/20/15 293,085
55,000 Pima County GO, ETM
6.750%, 11/01/09 57,865
1,740,000 State Health Facilities Authority
RB, Phoenix Baptist Hospital
& Medical Center,
MBIA, ETM
6.250%, 9/01/11 1,816,630
-------------
2,167,580
ARKANSAS - 4.4%
100,000 Farmington, Sales & Use Tax RB
4.600%, 4/01/25 100,609
1,300,000 Little Rock, Library Construction
GO, Series A
4.250%, 3/01/23 1,290,523
250,000 Pine Bluff, Industrial
Development RB,
Weyerhaeuser Project
5.500%, 11/01/07 265,207
1,700,000 Springdale, Sales & Use Tax
RB, MBIA
4.000%, 7/01/16 1,730,192
-------------
3,386,531
CALIFORNIA - 8.4%
500,000 Benicia, Unified School District
GO, Series B, MBIA (6)
4.589%, 8/01/18 260,380
35,000 California State GO
3.625%, 5/01/07 35,019
25,000 California State GO,
Series BT, AMT
5.100%, 12/01/13 25,363
300,000 Delta County Home Mortgage
Finance RB, Single-Family
Mortgage Backed Securities,
Series A, AMT, MBIA,
GNMA, FNMA
5.350%, 6/01/24 300,399
Principal
Amount $ Value $
--------- -------------
720,000 Los Angeles, Multi-Family
Housing RB, Colorado
Terrace Project, Series H,
AMT, GNMA
4.350%, 11/20/12 726,826
4,395,000 Manteca, Financing Authority
Sewer RB, Series B, MBIA
5.000%, 12/01/33 4,459,826
65,000 Sacramento County, Sacramento
Main Detention Center COP,
MBIA, ETM
5.500%, 6/01/10 69,749
10,000 Sacramento County, Sanitation
Authority RB, ETM
5.125%, 12/01/10 10,122
110,000 San Bernardino County,
Transportation Authority RB,
Series A, FGIC, ETM
6.000%, 3/01/10 119,282
30,000 Southern California, Public
Power Authority RB
7.000%, 7/01/09 30,984
40,000 Southern California, Public
Power Authority RB,
Palo Verde Project,
Series A, ETM
5.000%, 7/01/17 40,077
245,000 State Public Works Board RB,
San Jose Facilities, Series A
7.750%, 8/01/06 252,580
215,000 Valley Center, Unified School
District GO,
Capital Appreciation,
Series A, MBIA (6)
4.521%, 9/01/17 113,748
-------------
6,444,355
COLORADO - 8.6%
1,155,000 Beacon Point, Metropolitan
District RB, Series B,
(LOC: Compass Bank)
4.375%, 12/01/15 1,156,421
100,000 Denver City & County COP,
Series A, MBIA
5.000%, 5/01/11 105,031
1,790,000 High Plains, Metropolitan
District RB, (LOC:
Compass Bank)
4.375%, 12/01/15 1,782,428
500,000 Interlocken Metropolitan
District GO, Series A,
RADIAN
5.750%, 12/15/11 548,385
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
31
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
MUNICIPAL BONDS - (CONTINUED)
COLORADO - (CONTINUED)
1,000,000 State Educational & Cultural
Facilities Authority RB, Charter
School, Peak to Peak, XLCA
3.000%, 8/15/09 989,320
365,000 State Educational & Cultural
Facilities Authority RB, Parker
Core Charter School, XLCA
3.500%, 11/01/14 354,824
Teller County, COP,
Assured Guaranty
400,000 6.000%, 12/01/24 409,160
120,000 5.600%, 12/01/18 122,929
310,000 5.550%, 12/01/17 317,852
300,000 5.500%, 12/01/16 307,944
150,000 5.200%, 12/01/13 154,209
190,000 4.700%, 12/01/09 192,430
180,000 4.250%, 12/01/07 181,183
-------------
6,622,116
CONNECTICUT - 1.5%
150,000 Connecticut State GO, Series A,
Pre-Refunded @ 100 (2)
6.500%, 3/15/06 154,984
50,000 Greenwich, New Public Housing
Authority RB
5.250%, 5/01/08 53,036
785,000 Stamford, Multi-Family Housing
RB, Fairfield Apartments
Project, AMT, Mandatory Put (3)
4.750%, 12/01/08 812,122
100,000 State Health & Educational
Facilities RB, Danbury
Hospital, ETM
7.875%, 7/01/09 109,177
-------------
1,129,319
DISTRICT OF COLUMBIA - 0.6%
Hospital RB, Medlantic
Healthcare Group, Series A,
MBIA, ETM
55,000 5.750%, 8/15/14 57,839
350,000 5.750%, 8/15/26 368,988
-------------
426,827
FLORIDA - 7.2%
50,000 Clearwater, Housing Authority
RB, Affordable Housing
Acquisition Program, FSA
4.950%, 6/01/07 51,650
899,124 Dade County, Single-Family
Housing Finance Authority RB,
Series B-1, AMT, GNMA, FNMA
6.100%, 4/01/27 915,677
Principal
Amount $ Value $
--------- -------------
Gulf Breeze, Local
Government RB, FGIC,
Mandatory Put (3) (4)
1,135,000 4.000%, 12/01/14 1,155,351
600,000 4.000%, 12/01/15 601,548
115,000 Jacksonville, Electric Authority
RB, ETM
5.375%, 7/01/12 122,704
15,000 Jacksonville, Electric Authority
RB, Third Installment, ETM
6.800%, 7/01/12 16,786
125,000 Jacksonville, Excise Taxes RB,
ETM
5.650%, 10/01/05 126,602
40,000 Orange County, Tourist Division
RB, AMBAC, ETM
6.000%, 10/01/16 40,861
70,000 Orange County, Tourist Division
RB, Orange County Convention,
AMBAC, ETM
9.250%, 9/01/07 75,503
1,010,000 Orange County, Tourist Division
RB, Series A, AMBAC, ETM
6.250%, 10/01/13 1,106,910
750,000 Pinellas County, Housing Finance
Authority RB, Multi-County
Program, Series A-3, AMT,
GNMA, FNMA
4.000%, 3/01/25 755,910
35,000 State GO, ETM
5.900%, 7/01/08 36,503
240,000 Tampa, Allegany Health System
RB, Saint Mary's, MBIA, ETM
5.125%, 12/01/23 243,456
275,000 Vero Beach, Electric RB, MBIA,
ETM
6.500%, 12/01/07 288,651
-------------
5,538,112
GEORGIA - 0.1%
40,000 Gwinnett County, Water & Sewer
RB, MBIA, ETM
6.100%, 3/01/08 43,432
-------------
IDAHO - 0.3%
225,000 State Housing & Finance
Association RB, Single-Family
Mortgage, Series D,
Class III, AMT
5.400%, 7/01/21 235,094
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
32
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
--------- -------------
MUNICIPAL BONDS - (CONTINUED)
ILLINOIS - 13.3%
2,000,000 Chicago, Kingsbury
Redevelopment Project TAN,
Series A
6.570%, 2/15/13 2,091,800
5,000,000 Pingree Grove, Special Services
Area, Cambridge Lakes Project,
Series 05-1
5.250%, 3/01/15 4,980,650
500,000 State Development Finance
Authority RB, Provena Health,
Series A, MBIA
5.250%, 5/15/12 532,015
1,465,000 State Health Facilities Authority
RB, Hinsdale Hospital,
Series A, ETM
6.950%, 11/15/13 1,654,469
275,000 State Health Facilities Authority
RB, Hospital of Sisters Services,
Series A, FSA, Optional Put
4.500%, 12/01/07 283,261
595,000 Will County, Community School
District GO, Alternative
Revenue Source Larway
5.625%, 12/01/23 621,251
-------------
10,163,446
INDIANA - 4.1%
Gary, Sanitation District, Special
Taxing District, RADIAN
250,000 5.000%, 2/01/12 268,792
270,000 5.000%, 2/01/13 290,501
95,000 Indianapolis, Industrial Utilities
District RB, ETM
7.000%, 6/01/08 99,781
Maconaquah, School District RB,
Energy Management Financing
Project
286,756 5.000%, 1/01/12 302,516
301,093 5.000%, 1/01/13 317,554
316,148 5.000%, 1/01/14 332,281
261,339 4.750%, 1/01/10 272,527
273,752 4.750%, 1/01/11 285,477
232,329 4.000%, 1/01/07 234,599
241,622 4.000%, 1/01/08 244,555
251,287 4.000%, 1/01/09 254,564
40,000 State Health Facility Financing
Authority RB, Methodist
Hospital Indiana, Series A,
AMBAC, ETM
5.750%, 9/01/11 40,912
Principal
Amount $ Value $
--------- -------------
205,000 Wells County, Hospital
Authority RB, ETM
7.250%, 4/01/09 216,937
-------------
3,160,996
KANSAS - 1.7%
240,000 Shawnee, Multi-Family Housing
RB, Thomasbrook Apartments,
Series A, AMT, FNMA
5.250%, 10/01/14 246,053
1,000,000 University of Kansas Hospital
Authority RB, Ku Health
Systems, Series A, AMBAC
5.400%, 9/01/13 1,077,490
-------------
1,323,543
KENTUCKY - 3.8%
1,935,000 Marshall County, Public Property
Corporation RB, Courthouse
Facility Project
5.250%, 3/01/23 2,095,760
690,000 State Area Development Districts
Financing GO, Henderson,
Series G1
5.750%, 12/01/20 731,497
50,000 State Turnpike Authority RB,
ETM
6.125%, 7/01/07 51,745
-------------
2,879,002
LOUISIANA - 0.5%
385,000 Calcasieu Parish, Public
Transportation Authority RB,
Single-Family Mortgage,
Series A, AMT, GNMA,
FNMA
5.850%, 10/01/32 401,105
-------------
MARYLAND - 1.2%
885,000 State Tax Exempt Municipal
Infrastructure Improvement
RB, Series 2004A, Class A,
(LOC: Compass Bank) (5)
3.800%, 5/01/08 890,222
-------------
MASSACHUSETTS - 3.0%
125,000 State Development Finance
Agency RB, Curry College,
Series A, ACA
3.875%, 3/01/15 122,579
1,000,000 State Health & Educational
Facilities Authority RB, Mass
General Hospital, Series F,
AMBAC
6.250%, 7/01/12 1,113,820
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
33
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
MASSACHUSETTS - (CONTINUED)
1,000,000 State Health & Educational
Facilities Authority RB, Nichols
College Issue, Series C
6.000%, 10/01/17 1,065,950
-------------
2,302,349
MICHIGAN - 0.2%
10,000 Kalamazoo, Hospital Finance
Authority RB, Borgess Medical
Center, Series A, AMBAC, ETM
5.625%, 6/01/14 10,454
10,000 State Hospital Finance Authority
RB, Charity Obligatory Group,
Series A, ETM
5.000%, 11/01/19 10,575
20,000 State Hospital Finance Authority
RB, Daughters of Charity
Hospital, ETM
5.250%, 11/01/10 20,409
State Hospital Finance Authority
RB, Saint John Hospital,
Series A, AMBAC, ETM
65,000 6.000%, 5/15/13 69,676
25,000 5.750%, 5/15/16 26,706
-------------
137,820
MINNESOTA - 0.1%
60,000 Coon Rapids, Hospital RB,
Health Central, ETM
7.625%, 8/01/08 64,050
-------------
MISSOURI - 3.6%
815,000 Boone County, Industrial
Development Authority RB,
Otscon Project, AMT,
Mandatory Put, (LOC: Boone
County National Bank) (3)
5.125%, 5/01/12 815,000
1,000,000 Brentwood, Tax Increment TA,
Brentwood Pointe Project
4.500%, 5/01/23 1,002,220
500,000 State Development Finance
Board Infrastructure Facility TA,
Triumph Foods Project, Series A
5.250%, 3/01/25 514,715
60,000 State Higher Education Loan
Authority RB, Student Loan
Sub Lien, AMT
6.500%, 2/15/06 60,659
Principal
Amount $ Value $
- ---------- -------------
355,000 State Housing Development
Community RB, Single-Family
Homeown Loan Program,
Series A-1, GNMA
5.000%, 3/01/17 364,446
-------------
2,757,040
MONTANA - 0.3%
State Board Investment RB,
Payroll Tax Workers
Compensation Project,
MBIA, ETM
105,000 6.875%, 6/01/11 115,126
115,000 6.700%, 6/01/06 118,871
-------------
233,997
NEBRASKA - 0.0%
20,000 Scotts Bluff County, Hospital
Authority No. 1 RB, Regional
West Medical Center
6.375%, 12/15/08 20,046
-------------
NEW JERSEY - 1.6%
35,000 Atlantic County, Improvement
Authority RB, Series A,
AMBAC, ETM
7.300%, 3/01/06 36,169
150,000 Burlington County, Bridge
Commission RB, County
Guaranteed Governmental
Leasing Program
5.250%, 8/15/15 164,235
170,000 Health Care Facilities RB,
Community Memorial
Hospital Toms River, ETM
6.750%, 7/01/09 182,417
95,000 Health Care Facilities RB,
Mercer Medical Center, ETM
7.000%, 7/01/08 100,651
750,000 State Economic Development
Authority RB, Wanaque
Convalescent Center Project,
Series A, (LOC: Sovereign Bank)
3.750%, 2/15/12 746,385
-------------
1,229,857
NEW MEXICO - 0.2%
110,000 State Mortgage Finance Authority
RB, Single-Family Mortgage,
Series B-2, AMT, GNMA,
FNMA, FHLMC
5.550%, 1/01/30 112,927
60,000 State Severance Tax RB
5.000%, 7/01/10 62,426
-------------
175,353
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
34
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
NEW YORK - 0.5%
150,000 Hempstead Town, Industrial
Development Agency RB,
Adelphi University Civic
Facilities
5.250%, 2/01/13 158,379
35,000 State Dormitory Authority RB,
Rochester General Hospital,
ETM
8.000%, 7/01/07 35,326
120,000 State Urban Development RB,
Capital Appreciation (6)
5.746%, 1/01/11 86,702
100,000 State Urban Development RB,
Capital Appreciation, FSA (6)
5.830%, 1/01/11 73,093
58,000 Suffolk County, Water Authority
RB, Waterworks, Series V, ETM
7.000%, 6/01/06 59,366
-------------
412,866
NORTH CAROLINA - 0.7%
355,000 Mecklenburg County,
Multi-Family Housing RB,
Little Rock Apartments, AMT,
FNMA
3.500%, 1/01/12 342,259
130,000 Pitt County, Memorial
Hospital RB, ETM
5.250%, 12/01/21 135,126
50,000 State Medical Care Community
Hospital RB, Saint Joseph
Hospital Project, AMBAC, ETM
5.100%, 10/01/14 51,064
-------------
528,449
NORTH DAKOTA - 0.6%
State Housing Finance Agency
RB, Housing Finance Program
Home Mortgage, Series B,
AMT, SPA-FHLB
250,000 4.125%, 7/01/11 250,422
210,000 4.000%, 7/01/10 209,488
-------------
459,910
Principal
Amount $ Value $
- ---------- -------------
OHIO - 0.3%
170,000 Columbus, Sewer Improvement
Bonds GO, ETM
6.750%, 9/15/07 172,385
50,000 State Building Authority RB,
State Facilities, Administration
Building Fund Projects, Series A
5.250%, 10/01/10 54,152
-------------
226,537
OKLAHOMA - 0.1%
80,000 Tulsa County, Home Finance
Authority RB, Single-Family
Mortgage, FGIC, ETM
6.900%, 8/01/10 88,895
-------------
OREGON - 1.7%
825,000 Portland, Housing Authority RB,
New Columbia Development,
Capital Funding Program, AMT
4.300%, 10/01/15 833,902
475,000 State Facilities Authority RB,
College Inn Student Housing,
Series B
6.250%, 7/01/11 476,634
-------------
1,310,536
PENNSYLVANIA - 3.8%
10,000 Berks County GO, Second Series,
MBIA
3.300%, 11/15/09 10,050
100,000 Dauphin County, General
Authority RB, AMBAC,
Mandatory Put (3)
4.550%, 6/01/08 103,579
80,000 Dauphin County, General
Authority RB, Hapsco-Western
Pennsylvania Hospital Project,
Series A-1, MBIA, ETM
5.500%, 7/01/13 88,336
130,000 Erie, Higher Education Building
Authority RB, Gannon
University Project,
AMBAC, ETM
7.375%, 6/01/08 138,371
35,000 Hempfield, School District GO,
ETM
7.200%, 10/15/09 39,145
400,000 Montgomery County, Industrial
Development Authority RB,
Adult Communities Total
Services, Series B
5.750%, 11/15/17 418,924
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
35
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
PENNSYLVANIA - (CONTINUED)
1,225,000 Philadelphia, Multi-Family
Housing Redevelopment
Authority RB, Pavilion
Apartments Project, Series A,
AMT, Hud Section 236
4.250%, 10/01/16 1,188,262
25,000 Pittsburgh GO, Series C, ETM
7.000%, 3/01/07 26,503
755,000 State Higher Educational
Facilities Authority RB,
Allegheny Delaware Valley
Obligation, Series A, MBIA
5.700%, 11/15/11 842,973
85,000 State Higher Educational
Facilities Authority RB,
Tenth Series, ETM
6.900%, 7/01/07 88,389
-------------
2,944,532
RHODE ISLAND - 1.7%
Woonsocket, Housing Authority
RB, Capital Funds
Housing Project
385,000 4.500%, 9/01/10 406,714
400,000 4.500%, 9/01/11 423,620
420,000 4.500%, 9/01/12 444,809
-------------
1,275,143
TENNESSEE - 1.3%
230,000 Nashville & Davidson Counties,
Metropolitan Government Cab
Converter RB, FGIC
7.700%, 1/01/12 277,233
500,000 Nashville & Davidson Counties,
Metropolitan Government
Health & Educational Facilities
Board RB, RADIAN
5.100%, 8/01/16 520,665
40,000 State School Board Authority
RB, Series B (7)
5.250%, 5/01/10 41,459
155,000 Wilson County, Health &
Educational Facilities Board
RB, University Medical
Center, ETM
8.375%, 8/01/08 168,192
-------------
1,007,549
Principal
Amount $ Value $
- ---------- -------------
TEXAS - 7.4%
1,000,000 Dallas, Airport RB, AMBAC
5.000%, 4/01/09 1,051,520
80,000 Denison, Hospital Authority RB,
Texoma Medical Center, ETM
7.125%, 7/01/08 85,125
Fort Bend County, Municipal
Utility District No. 23 GO,
FGIC
45,000 6.500%, 9/01/08 49,806
65,000 6.500%, 9/01/09 73,462
70,000 6.500%, 9/01/10 80,520
45,000 6.500%, 9/01/11 52,510
95,000 5.000%, 9/01/16 101,109
250,000 Greater Greenspoint,
Redevelopment Authority RB,
Tax Increment Contract,
RADIAN
5.250%, 9/01/10 269,772
80,000 Harris County, Health Facilities
Development RB, St. Lukes
Episcopal Hospital Project,
ETM
6.625%, 2/15/12 80,210
155,000 Houston, Airport System
RB, ETM
7.600%, 7/01/10 174,970
35,000 Houston, Sewer System RB,
FGIC, ETM
6.375%, 10/01/08 36,992
Retama, Development Corporate
Special Facilities RB, Retama
Racetrack, ETM
2,000,000 10.000%, 12/15/17 2,917,400
500,000 8.750%, 12/15/11 634,495
50,000 Sendero, Public Facilities RB,
Crown Meadows Project,
Series A, FHLMC
4.250%, 6/01/13 51,402
-------------
5,659,293
WASHINGTON - 0.8%
572,291 Nooksack, Indian Tribe RB
5.500%, 2/23/11 572,251
-------------
WEST VIRGINIA - 0.1%
100,000 State Economic Development
Authority, Industrial
Development RB, Central
Supply Project, AMT,
(LOC: BB&T)
5.500%, 5/15/10 104,603
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
36
- --------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
WISCONSIN - 2.0%
1,365,000 Oshkosh, Industrial Development
Authority RB, Don Evans
Project, AMT, Mandatory
Put, (LOC: Marshall & Ilslay) (3)
5.500%, 12/01/11 1,421,211
50,000 State Health & Educational
Facilities RB, ACA
6.000%, 5/15/16 52,299
10,000 State Transportation RB, Series A
5.500%, 7/01/11 11,183
60,000 Winnebago County, Promissary
Notes GO
4.375%, 4/01/12 62,560
-------------
1,547,253
-------------
TOTAL MUNICIPAL
BONDS
(Cost $67,926,092) 68,129,571
-------------
CORPORATE
OBLIGATIONS - 10.1%
2,026,000 BFL Funding VI (5)
5.000%, 4/01/08 2,024,176
1,137,248 IIS/Syska Holdings Energy (5)
3.900%, 8/15/08 1,094,942
250,000 Kidspeace National Centers of
Georgia, USDA (1) (4)
4.500%, 12/01/28 249,828
846,116 Landmark Leasing (5)
6.200%, 10/01/22 850,093
3,500,000 USDA Airtanker
8.000%, 2/01/08 3,508,400
-------------
TOTAL CORPORATE
OBLIGATIONS
(Cost $7,778,017) 7,727,439
-------------
Shares
- ------
SHORT-TERM
INVESTMENT - 0.9%
674,206 BlackRock Institutional Muni
Fund Portfolio, 2.60% (8) 674,206
-------------
TOTAL SHORT-TERM
INVESTMENT
(Cost $674,206) 674,206
-------------
Value $
-------------
TOTAL
INVESTMENTS - 99.8%
(Cost $76,378,315) 76,531,216
-------------
OTHER ASSETS LESS
LIABILITIES - 0.2% 166,434
-------------
NET ASSETS - 100.0% $ 76,697,650
=============
(1) Private Placement Security.
(2) Pre-Refunded Security -- The maturity date shown is the pre-refunded date.
(3) Mandatory Put Security -- The mandatory put date is shown as the maturity
date on the Schedule of Investments.
(4) Variable Rate Security -- Rate disclosed is as of April 30, 2005.
(5) Security exempt from registration under Rule 144A of the Securities Act of
1933. Such securities may be resold in transactions exempt from
registration normally to qualified institutions. On April 30, 2005, the
value of these securities amounted to $4,859,433, representing 6.3% of the
net assets of the Fund.
(6) Zero Coupon Security -- Rate disclosed is the effective yield at time of
purchase.
(7) Economically Defeased Security.
(8) Rate shown is 7-day yield as of April 30, 2005.
AMT -- Income from security may be subject to alternative minimum tax.
COP -- Certificate of Participation
ETM -- Escrowed to Maturity
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Association
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
GO -- General Obligation
LOC -- Letter of Credit
RB -- Revenue Bond
TA -- Tax Allocation
TAN -- Tax Anticipation Note
Guaranteed as to principal and interest by the organization identified below:
ACA -- American Capital Access
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Federal Guaranty Insurance Company
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
RADIAN -- RADIAN Guaranty
SPA -- SPA Guaranty
USDA -- USDA Guaranty
XLCA -- XL Capital Assurance
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
37
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - 90.6%
ALABAMA - 1.0%
975,000 Huntsville, Healthcare Authority
RB, Series B, MBIA,
Mandatory Put (1)
4.650%, 6/01/05 976,433
-------------
ARIZONA - 0.8%
65,000 Maricopa County, Hospital RB,
Intermediate Community-Sun
City, ETM
8.625%, 1/01/10 73,701
79,000 Maricopa County, Hospital RB,
St. Lukes Hospital Medical
Center Project, ETM
8.750%, 2/01/10 89,776
80,000 Oro Valley, Oracle Road
Improvement District GO
5.000%, 1/01/07 82,126
330,000 Pinal County, Industrial
Development Authority,
Correctional Facilities RB,
Florence West Prison,
Series A, ACA
3.875%, 10/01/09 330,515
250,000 University Medical Center RB
5.000%, 7/01/05 250,880
-------------
826,998
ARKANSAS - 4.1%
1,000,000 Little Rock, Library Construction
Improvement GO, Series A
4.350%, 3/01/24 990,650
200,000 Maumelle, Capital
Improvement GO, Series A
3.750%, 3/01/20 192,052
260,000 Maumelle, Capital
Improvement GO,
Series B, MBIA
3.600%, 9/01/20 259,163
265,000 Rogers, Sales & Use Tax RB,
Series A, FGIC
4.125%, 9/01/23 268,294
2,400,000 Springdale, Sales & Use Tax RB,
MBIA
4.000%, 7/01/16 2,442,624
-------------
4,152,783
CALIFORNIA - 8.0%
573,603 Cabazon Band Mission
Indians RB (7)
11.950%, 7/14/06 594,069
Principal
Amount $ Value $
- ---------- -------------
5,730,000 Manteca, Financing Authority
Sewer RB, Series B, MBIA
5.000%, 12/01/33 5,814,517
115,000 Montclair, Redevelopment
Agency TA, Redevelopment
Project No. IV, RADIAN
2.000%, 10/01/05 114,480
465,000 Placer County, Water Agency RB,
Middle Fork Project
3.750%, 7/01/12 464,893
15,000 State Public Works Board RB,
High Technology Facility Lease,
University of California,
San Diego Facility, Series A
7.375%, 4/01/06 15,549
1,000,000 Statewide Communities
Development Authority RB,
Daughters of Charity Health,
Series F
5.000%, 7/01/06 1,017,610
-------------
8,021,118
COLORADO - 2.3%
500,000 Central Colorado Water
Conservancy District GO, Well
Augmentation Sub-District
3.875%, 3/01/07 496,940
85,000 Denver City & County
Multi-Family Housing RB,
Buerger Brothers Project,
Series A, AMT, FHA
5.100%, 11/01/07 86,789
El Paso County, Academy Water
& Sanitation District GO
120,000 3.650%, 11/15/07 119,839
115,000 3.250%, 11/15/06 114,400
Milliken, Sales & Use Tax RB (6)
50,000 2.948%, 12/01/05 49,036
50,000 2.000%, 12/01/06 48,863
680,000 State Health Facilities Authority
RB, Longmont United Hospital
Project, ACA
2.150%, 12/01/05 675,546
285,000 State Housing & Finance
Authority RB, Single-Family
Program, Series C-2, AMT
8.400%, 10/01/21 297,335
435,000 State Housing & Finance
Authority RB, Single-Family
Project, Series D2, AMT
6.350%, 11/01/29 440,625
-------------
2,329,373
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
38
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
CONNECTICUT - 0.8%
750,000 Stamford, Multi-Family Housing
RB, Fairfield Apartments Project,
AMT, Mandatory Put (1)
4.750%, 12/01/08 775,913
-------------
DELAWARE - 2.7%
1,160,000 State Economic Development
Authority RB, Water
Development, Wilmington
Suburban, Series B
6.450%, 12/01/07 1,249,343
State Health Facilities Authority
RB, Beebe Medical Center
Project, Series A
255,000 5.000%, 6/01/05 255,418
560,000 5.000%, 6/01/06 570,002
455,000 5.000%, 6/01/07 468,923
225,000 State Housing Authority RB,
Single-Family Mortgage,
Series A-1, AMT, MBIA
5.300%, 7/01/11 229,446
-------------
2,773,132
DISTRICT OF COLUMBIA - 0.3%
335,000 Housing Finance Agency RB,
1330 7th Street Apartments,
Series A, AMT, FHA
3.000%, 12/01/09 326,783
-------------
FLORIDA - 1.9%
50,000 Broward County, Water & Sewer
Utilities Systems RB,
Pre-Refunded @ 100 (2)
6.875%, 9/01/06 52,050
20,000 Dunedin, Health Facilities
Authority RB, Mease Hospital,
ETM
7.600%, 10/01/08 21,511
110,000 Escambia County, Health Facilities
Authority RB, Health Facilities,
Baptist Hospital & Baptist Manor
5.000%, 10/01/05 110,734
105,000 Gainsville, Utilities Systems RB,
ETM
8.000%, 10/01/05 107,379
470,000 Jacksonville, Educational Facilities
RB, Edward Water College
Project, Mandatory Put, (LOC:
Wachovia Bank) (1)
3.600%, 10/01/06 469,911
Principal
Amount $ Value $
- ---------- -------------
500,000 Jacksonville, Electric Authority
RB, St. Johns River, Issue 2,
Series 11
5.375%, 10/01/15 503,475
10,000 Jacksonville, Electric Authority
RB, Third Installment, ETM
6.800%, 7/01/12 11,191
10,000 Jacksonville, Excise Taxes RB,
ETM
5.650%, 10/01/05 10,128
500,000 State Board of Education Capital
Outlay GO
8.400%, 6/01/07 529,090
50,000 State GO, ETM
5.900%, 7/01/08 52,146
-------------
1,867,615
GEORGIA - 0.8%
200,000 Columbus, Water & Sewer RB,
ETM
8.000%, 5/01/06 210,344
600,000 DeKalb County, School District
GO, ETM
5.200%, 7/01/05 602,736
-------------
813,080
IDAHO - 0.1%
65,000 State Housing & Finance
Association RB, Single-Family
Mortgage Program,
Sub-Series G-2, AMT
5.750%, 1/01/14 67,176
30,000 State Housing & Finance
Association RB, Single-Family
Mortgage Program,
Sub-Series H-2, AMT, FHA
5.850%, 1/01/14 30,474
-------------
97,650
ILLINOIS - 7.4%
135,000 Bedford Park, Tax Increment TA,
71st & Cicero Project
7.000%, 1/01/06 136,486
90,000 Chicago, Single-Family Mortgage
RB, Series B, AMT, GNMA,
FNMA, FHLMC
6.950%, 9/01/28 90,950
65,000 Chicago, Transportation Authority
RB, Capital Grant, Series A,
AMBAC
4.250%, 6/01/08 65,891
45,000 Dupage County, Water & Sewer
RB, ETM, MBIA
10.500%, 1/01/07 48,815
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
39
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
ILLINOIS - (CONTINUED)
2,500,000 Oak Park, Industrial Development
RB, Oak Park II, Prairie Court,
Mandatory Put (1)
5.500%, 12/01/06 2,591,925
180,000 Pekin, Single-Family Mortgage
RB, ETM
7.400%, 12/01/08 195,968
110,000 Peoria, New Public Housing RB
4.875%, 10/01/06 112,993
3,000,000 Pingree Grove, Special Services
Area, Cambridge Lakes Project,
Series 05-1
5.250%, 3/01/15 2,988,390
250,000 State Development Finance
Authority RB, Community
Rehabilitation Providers,
Series A
5.600%, 7/01/05 250,610
875,000 State Health Facilities Authority
RB, Hinsdale, Series A, ETM,
AMBAC
7.000%, 11/15/19 957,661
-------------
7,439,689
INDIANA - 0.8%
40,000 Fort Wayne, Sewer Works
Improvement RB, BIG
9.625%, 8/01/05 40,683
105,000 Howard County, Jail & Juvenile
Detention Center RB, AMBAC
6.250%, 7/15/05 105,817
100,000 Lawrence, Multi-Family Housing
RB, Pinnacle Apartments Project,
AMT, FNMA, Mandatory Put (1)
5.150%, 1/01/08 103,009
150,000 State Health Facilities Financing
Authority, Hospital RB, Sisters
of St. Francis Health, Series A,
MBIA
5.000%, 11/01/09 159,083
375,000 State Housing Finance Authority
RB, Single-Family Mortgage,
Series A-3, AMT, GNMA,
FNMA
5.375%, 1/01/23 386,036
-------------
794,628
IOWA - 0.3%
240,000 Polk County, Hospital Facility
RB, ETM
7.750%, 7/01/06 247,404
Principal
Amount $ Value $
- ---------- -------------
65,000 Sioux City, Hospital RB,
St. Lukes Medical Center
Project, ETM
6.375%, 9/01/06 66,682
-------------
314,086
KANSAS - 3.4%
2,995,000 Sedgwick & Shawnee Counties,
Single-Family Mortgage RB,
Series A, AMT, GNMA,
FNMA (4)
5.600%, 6/01/27 3,161,582
219,000 Wichita, Hospital RB, ETM
6.750%, 10/01/07 229,352
-------------
3,390,934
KENTUCKY - 1.7%
1,345,000 State Area Development Districts
Financing GO, Henderson,
Series G1
5.750%, 12/01/20 1,425,888
100,000 State Turnpike Authority RB,
ETM (3)
6.625%, 7/01/08 105,641
135,000 State Turnpike Authority Toll
Road RB, ETM
6.125%, 7/01/08 141,221
-------------
1,672,750
LOUISIANA - 0.5%
235,000 Calcasieu Parish, Public
Transportation Authority RB,
Single-Family Mortgage,
Series A, AMT, GNMA,
FNMA
5.850%, 10/01/32 244,830
75,000 Jefferson Parish, Hospital Service
District No. 1 RB, ETM
7.250%, 1/01/09 81,170
85,000 Monroe-West Monroe,
Single-Family Mortgage RB,
ETM
7.200%, 8/01/10 92,795
55,000 State Public Facilities Authority
Hospital RB, Pendleton
Memorial Methodist Hospital,
ETM
5.000%, 6/01/08 57,652
-------------
476,447
MARYLAND - 1.3%
1,215,000 State Health & Higher
Education RB, Howard County
General Hospital, ETM
5.500%, 7/01/13 1,271,303
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
40
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
MASSACHUSETTS - 1.2%
1,200,000 State Health & Educational
Facilities Authority RB,
Daughters of Charity-Carney,
Series D,
Pre-Refunded @ 100 (2)
6.100%, 7/01/06 1,218,252
-------------
MICHIGAN - 1.4%
700,000 Detroit/Wayne County, Stadium
Authority RB, FGIC
5.250%, 2/01/09 739,536
350,000 Kalamazoo, Hospital Finance
Authority RB, Bronson
Methodist, MBIA
5.500%, 5/15/08 365,893
285,000 Kalamazoo, Hospital Finance
Authority RB, Bronson
Methodist, Series A,
Pre-Refunded @ 100 (2)
6.375%, 5/15/05 285,482
65,000 State Strategic Funding RB,
Solid Waste Disposal, Waste
Management Project, AMT,
Mandatory Put (1)
4.200%, 12/01/05 65,221
-------------
1,456,132
MINNESOTA - 0.7%
660,000 Alexandria, Industrial
Development RB, Seluemed
Limited LLP Project, AMT,
(LOC: First Trust NA)
5.300%, 3/01/10 662,416
30,000 Columbia Heights, Capital
Appreciation GO (6)
1.508%, 9/01/08 24,029
15,000 St. Paul, Housing &
Redevelopment Authority TA,
Downtown & 7th Place Project,
AMBAC, ETM
5.300%, 9/01/06 15,080
-------------
701,525
MISSISSIPPI - 4.6%
1,235,000 Mississippi Business Finance RB,
TT&W Farm Products Project,
AMT, (LOC: National Bank)
6.900%, 7/01/10 1,297,738
Principal
Amount $ Value $
- ---------- -------------
130,000 Mississippi Development Bank
RB, Special Obligation,
Oktibbeha County Hospital
Revenue Project
5.550%, 7/01/05 130,579
260,000 Mississippi Development Bank
RB, Special Obligation, Three
Rivers Solid Waste Project
4.650%, 7/01/06 264,173
2,980,000 Mississippi Home Corporation
RB, Single-Family Mortgage,
Series A, AMT, FNMA,
GNMA, USDA
3.150%, 6/01/20 2,940,962
-------------
4,633,452
MISSOURI - 2.8%
1,150,000 Boone County, Industrial
Development Authority RB,
Otscon Project, AMT,
(LOC: Boone County
National Bank) (1)
5.125%, 5/01/05 1,150,000
Pacific, Industrial Development
Authority RB, Clayton Project,
AMT, (LOC: Commerce
Bank NA)
720,000 6.450%, 5/01/17 738,677
720,000 6.200%, 5/01/12 739,267
100,000 St. Charles County, Industrial
Development Authority RB,
Garden View Care Center
Project, AMT, (LOC: U.S.
Bank NA)
5.400%, 11/15/16 102,897
60,000 State Housing Development
Community RB, Multi-Family
Housing Project, Primm Place,
Series A, AMT, (LOC: Bank
of America)
5.600%, 12/01/07 61,138
-------------
2,791,979
NEBRASKA - 0.1%
100,000 Madison County, Hospital
Authority RB, Faith Regional
Healthcare Services Project,
RADIAN
4.850%, 7/01/09 105,281
-------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
41
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
NEVADA - 3.3%
530,000 Carson City, Hospital RB, Tahoe
Hospital Project, Series A,
RADIAN
2.300%, 9/01/07 516,416
Henderson, Local Improvement
Districts SA, Lake Las Vegas,
Sub-Series B-2
350,000 3.900%, 8/01/07 349,451
100,000 3.000%, 8/01/05 99,934
135,000 Las Vegas, Downtown
Redevelopment Agency RB,
Series A, BIG, ETM
7.100%, 6/01/06 138,233
1,000,000 State GO, Colorado River
Community
6.100%, 7/01/06 1,011,080
1,220,000 State GO, Municipal Bond Bank
Project No. 42
5.400%, 9/01/05 1,231,175
-------------
3,346,289
NEW JERSEY - 0.3%
30,000 Hudson County GO
5.125%, 8/01/08 31,078
100,000 Passaic County, Utilities
Authority RB, Solid Waste
Systems Project
4.200%, 3/01/06 100,906
125,000 State Health Care Facilities
Financing Authority RB,
Allegany Health, Our Lady of
Lourdes, ETM, MBIA
5.000%, 7/01/08 125,381
-------------
257,365
NEW MEXICO - 0.0%
25,000 Albuqerque, Municipal School
District No. 12 GO,
Pre-Refunded @ 100 (2)
4.800%, 8/01/05 25,143
-------------
NEW YORK - 1.7%
145,000 New York City, Housing
Development Corporation RB,
Multi-Family Housing,
Series E-1, AMT
2.750%, 11/01/07 143,211
100,000 New York City, New Public
Housing Authority RB
3.875%, 1/01/06 100,637
Principal
Amount $ Value $
- ---------- -------------
Saratoga County, Industrial
Development Agency RB,
Saratoga Hospital Project,
Series A
445,000 5.000%, 12/01/07 460,588
250,000 3.000%, 12/01/05 249,443
720,000 State Dormatory Authority RB,
Mental Health Project, Series B,
Partially Pre-Refunded @ 102 (2)
5.700%, 2/15/07 764,870
15,000 State Housing Finance Agency
RB, University Construction,
Series A, ETM
7.900%, 11/01/06 15,578
-------------
1,734,327
NORTH CAROLINA - 0.6%
100,000 Pasquotank County, Public
Schools Project COP, MBIA
5.000%, 6/01/15 103,961
95,000 State Medical Care Community
Hospital RB, Memorial Mission
Hosptal Project, ETM
7.625%, 10/01/08 102,718
175,000 State Medical Care Community
RB, North Carolina Housing
Foundation Project, ACA
6.000%, 8/15/10 185,703
250,000 State Medical Care Community
RB, Scotland Memorical
Hospital Project, RADIAN
4.750%, 10/01/05 251,907
-------------
644,289
NORTH DAKOTA - 0.3%
310,000 State Housing Finance Agency
RB, Home Mortgage Program,
Series A, AMT
5.200%, 7/01/19 313,714
-------------
OHIO - 1.3%
120,000 Cuyahoga County, Deaconess
Hospital Project RB, ETM
6.750%, 11/01/09 129,296
265,000 Franklin County, First Mortgage
RB, OCLC Project, ETM
7.500%, 6/01/09 283,526
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
42
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
OHIO - (CONTINUED)
130,000 Montgomery County, Hospital
RB, Kettering Medical Center
Project, ETM
6.875%, 4/01/06 134,376
635,000 State Building Authority RB,
State Correctional Facility,
Series C
9.750%, 10/01/05 653,320
150,000 State Economic Development
RB, Enterprise-Plastics Project,
Series 1, AMT
1.850%, 6/01/05 149,856
-------------
1,350,374
OKLAHOMA - 0.1%
45,000 Oklahoma City, New Public
Housing Authority RB
5.125%, 12/01/05 45,664
100,000 State Military Department COP
6.500%, 9/01/05 100,818
-------------
146,482
OREGON - 2.5%
780,000 State Housing & Community
Services Department RB,
Single-Family Mortgage
Program, Series F, AMT, MBIA
5.650%, 7/01/28 808,478
1,615,000 State Housing & Community
Services Department RB,
Single-Family Mortgage
Program, Series J, AMT, FNMA
5.750%, 7/01/29 1,664,273
-------------
2,472,751
PENNSYLVANIA - 10.4%
10,000 Berks County GO, Second
Series, MBIA
3.100%, 11/15/08 10,023
60,000 Carbon County, Hospital
Authority RB, Gnaden Huetten
Memorial Hospital Project,
AMBAC,
Pre-Refunded @ 100 (2)
10.000%, 7/01/05 60,754
1,000,000 Chester County, Health &
Education Facilities Authority
RB, Chester County Hospital,
MBIA
5.625%, 7/01/08 1,039,160
Principal
Amount $ Value $
- ---------- -------------
20,000 Delaware County, Industrial
Development Authority RB,
Martins Run Project
6.000%, 12/15/06 19,846
240,000 Lakeland, School District GO,
ETM
8.875%, 8/15/10 277,442
250,000 Leesport, Borough Authority
Sewer RB,
Pre-Refunded @ 100 (2)
5.250%, 11/15/06 255,323
2,000,000 Montgomery County, Industrial
Development Authority RB,
Adult Communities Total
Services, Series B
5.750%, 11/15/17 2,094,620
185,000 New Brighton, Area School
Authority RB, ETM, MBIA,
Pre-Refunded @ 100 (2)
5.900%, 5/15/05 185,281
2,000,000 Philadelphia, Authority for
Industrial Development RB,
PGH Development Corporation
5.500%, 7/01/10 2,078,400
145,000 Philadelphia, Hospitals Authority
RB, Thomas Jefferson
University Hospital, ETM
7.000%, 7/01/08 153,842
350,000 Pittsburgh GO, Series B, FGIC
5.000%, 3/01/08 352,877
210,000 Pittsburgh, Urban Redevelopment
Authority TA, Series B,
(LOC: PNC Bank)
5.750%, 3/15/06 214,992
1,830,000 State Higher Educational
Facilities Authority RB,
Saint Francis Independent
Colleges-Universities
5.000%, 11/01/11 1,864,569
825,000 State Higher Educational
Facilities Authority RB, Eastern
College, Series B,
Pre-Refunded @ 102 (2)
8.000%, 10/15/06 900,999
1,000,000 Washington County, Hospital
Authority RB, Washington
Hospital Project, AMBAC,
Mandatory Put (1)
2.250%, 7/01/05 998,860
-------------
10,506,988
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
43
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
RHODE ISLAND - 2.4%
2,035,000 State Housing & Mortgage
Financing RB, Rental Housing
Project, Series A, HUD
Section 8
5.650%, 10/01/07 2,072,464
65,000 State Turnpike & Bridge
Authority RB, Series A, ETM
4.500%, 2/01/06 65,564
332,000 Warwick GO, Series A, MBIA
6.600%, 11/15/06 333,046
-------------
2,471,074
SOUTH DAKOTA - 1.0%
820,000 State Health & Educational
Facilities RB, Rapid City
Regional Hospital, MBIA
5.000%, 9/01/06 842,017
165,000 State Lease Revenue Trust COP,
Series B, FSA
6.500%, 9/01/08 174,357
-------------
1,016,374
TENNESSEE - 0.4%
375,000 State Housing Development
Agency RB, Homeownership
Program, Series 1D
4.700%, 7/01/15 377,820
-------------
TEXAS - 5.0%
200,000 Dallas County GO, Series B
5.300%, 8/15/07 205,372
1,000,000 Dallas, Airport RB, AMBAC
5.000%, 4/01/09 1,051,520
515,000 Harris County, Municipal Utility
District No. 203 GO,
Waterworks & Sewer
System, MBIA,
Pre-Refunded @ 47.889 (2) (6)
0.877%, 9/01/05 244,517
2,885,000 Retama, Development Special
Facilities RB, Retama
Racetrack, ETM
8.750%, 12/15/10 3,582,218
-------------
5,083,627
UTAH - 0.3%
300,000 State Building Ownership
Authority RB, State Facilities
Master Lease Program, Series A
5.600%, 5/15/05 300,393
-------------
Principal
Amount $ Value $
- ---------- -------------
VIRGINIA - 2.7%
910,000 Fauquier County, Industrial
Development Authority RB,
RADIAN
5.000%, 10/01/05 918,163
110,000 Petersburg GO, FGIC
4.950%, 3/01/07 110,804
1,500,000 Poplar Hill, Community
Development Authority, COP,
Series A, USDA
5.500%, 9/01/34 1,481,535
250,000 Rivanna, Water & Sewer
Authority RB, Regional Water
& Sewer Treatment System
4.600%, 10/01/05 252,025
-------------
2,762,527
WASHINGTON - 0.2%
205,000 King County GO, Series B
4.500%, 1/01/13 205,146
-------------
WEST VIRGINIA - 0.1%
80,000 Cabell, Putnam, & Wayne
Counties, Single-Family
Residential Mortgage RB,
ETM, FGIC
7.375%, 4/01/10 87,757
-------------
WISCONSIN - 8.8%
3,405,000 Central Brown County, Water
Authority BAN
1.500%, 8/01/05 3,391,959
1,000,000 Fond Du Lac, Water Works RB,
BAN
4.000%, 3/01/10 1,013,740
300,000 Melrose-Mindoro School District
GO, FSA
4.500%, 3/01/07 304,392
900,000 Oshkosh, Industrial Development
Authority RB, Don Evans
Project, AMT, Mandatory Put,
(LOC: Marshall & Ilslay) (1)
5.500%, 12/01/11 937,062
1,500,000 State Health & Educational
Facilities RB, Aurora Health
Care, MBIA
5.000%, 8/15/09 1,587,480
1,585,000 State Housing & Economic
Development Authority RB,
AMT, Series E
5.800%, 9/01/17 1,613,562
-------------
8,848,195
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
44
- --------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2005 (UNAUDITED)
Principal
Amount $ Value $
- ---------- -------------
MUNICIPAL BONDS - (CONTINUED)
PUERTO RICO - 0.2%
195,000 Puerto Rico Commonwealth,
Aqueduct & Sewer Authority
RB, ETM
5.900%, 7/01/06 198,875
-------------
TOTAL MUNICIPAL BONDS
(Cost $91,560,265) 91,376,846
-------------
CORPORATE
OBLIGATIONS - 7.7%
2,666,846 IIS/Syska Holdings Energy (5)
3.900%, 8/15/08 2,567,639
250,000 Kidspeace National Centers of
Georgia, USDA (3) (7)
4.500%, 12/01/28 249,827
5,000,000 USDA Airtanker
8.000%, 2/01/08 5,012,000
-------------
TOTAL CORPORATE
OBLIGATIONS
(Cost $7,910,338) 7,829,466
-------------
Shares
- ------
SHORT-TERM
INVESTMENT - 1.1%
1,100,676 BlackRock Institutional Muni
Fund Portfolio, 2.60% (8) 1,100,676
-------------
TOTAL SHORT-TERM
INVESTMENT
(Cost $1,100,676) 1,100,676
-------------
TOTAL
INVESTMENTS - 99.4%
(Cost $100,571,279) 100,306,988
-------------
OTHER ASSETS LESS
LIABILITIES - 0.6% 584,361
-------------
NET ASSETS - 100.0% $ 100,891,349
=============
(1) Mandatory Put Security -- The mandatory put date is shown as the maturity
date on the Schedule of Investments.
(2) Pre-Refunded Security -- The maturity date shown is the pre-refunded
date.
(3) Variable Rate Security -- Rate disclosed is as of April 30, 2005.
(4) Step Bond -- Coupon rate increases in increments to maturity. Rate
disclosed is as of April 30, 2005.
(5) Security exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold in transactions exempt from
registration normally to qualified institutions. On April 30, 2005, the
value of these securities amounted to $2,567,639, representing 2.5% of the
net assets of the Fund.
(6) Zero Coupon Security -- Rate disclosed is the effective yield at time of
purchase.
(7) Private Placement Security.
(8) Rate shown is 7-day yield as of April 30, 2005.
AMT -- Income from security may be subject to alternative minimum tax.
BAN -- Bond Anticipation Note
COP -- Certificate of Participation
ETM -- Escrowed to Maturity
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Association
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
GO -- General Obligation
HUD -- Department of Housing and Urban Development
LLP -- Limited Liability Partnership
LOC -- Letter of Credit
NA -- National Association
RB -- Revenue Bond
SA -- Special Assessment
TA -- Tax Allocation
Guaranteed as to principal and interest by the organization identified below:
ACA -- American Capital Access
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- BIG Guaranty
FGIC -- Federal Guaranty Insurance Company
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
RADIAN -- RADIAN Guaranty
USDA -- USDA Guaranty
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
45
- --------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2005 (UNAUDITED)
U.S. LARGE U.S.
CAP EQUITY OPPORTUNITIES
FUND FUND
------------- -------------
ASSETS
Investments in securities, at value - Note 2 ........................... $ 8,165,331 $ 115,904,920
Dividends and tax reclaims receivable .................................. 7,716 37,985
Interest receivable .................................................... 159 14,084
Variation margin receivable ............................................ -- --
Receivable for securities sold ......................................... 103,962 1,024,840
Receivable for Fund shares sold ........................................ -- 210,208
Unrealized appreciation on foreign currency contracts .................. -- --
Prepaid expenses ....................................................... 24,902 38,446
Deferred offering costs - Note 2 ....................................... -- --
Due from Investment Advisor - Note 3 ................................... -- --
------------- -------------
TOTAL ASSETS .................................................. 8,302,070 117,230,483
LIABILITIES
Due to custodian ....................................................... -- --
Income distributions payable ........................................... -- --
Payable for securities purchased ....................................... 93,998 1,320,818
Payable for Fund shares redeemed ....................................... -- 90,685
Investment advisory fees payable - Note 3 .............................. 881 78,030
Administrative fees payable - Note 3 ................................... -- 24,265
Sub-administration fees payable - Note 3 ............................... 807 11,502
Distribution fees payable - Note 3 ..................................... -- --
Trustees' fees payable - Note 5 ........................................ 841 9,063
Accrued expenses and other liabilities.................................. 25,889 69,880
------------- -------------
TOTAL LIABILITIES ............................................. 122,416 1,604,243
------------- -------------
NET ASSETS ........................................................ $ 8,179,654 $ 115,626,240
============= =============
NET ASSETS
Capital paid-in ........................................................ $ 13,485,809 $ 108,298,452
Undistributed net investment income (Accumulated net investment loss) .. 2,869 (187,102)
Accumulated net realized gain (loss) on investments .................... (6,253,196) 5,485,502
Net unrealized appreciation (depreciation) on investments .............. 944,172 2,029,388
Net unrealized appreciation on futures ................................. -- --
Net unrealized appreciation on foreign currency translations ........... -- --
------------- -------------
NET ASSETS ........................................................ $ 8,179,654 $ 115,626,240
============= =============
Investor Shares:
Net assets ............................................................. $ 8,179,654 $ 115,626,240
Total shares outstanding at end of period .............................. 2,111,609 6,471,595
Net asset value, offering and redemption price per share
(net assets / shares outstanding) ................................... $ 3.87 $ 17.87
Advisor Shares:
Net assets ............................................................. $ -- $ --
Total shares outstanding at end of period .............................. -- --
Net asset value, offering and redemption price per share
(net assets / shares outstanding) ................................... $ -- $ --
Cost of securities ........................................................ $ 7,221,159 $ 113,875,532
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
46
ENHANCED
INTERNATIONAL INCOME
FUND FUND
------------- -------------
ASSETS
Investments in securities, at value - Note 2 ........................... $ 5,566,464 $ 116,364,880
Dividends and tax reclaims receivable .................................. 38,447 --
Interest receivable .................................................... 1,621 68,597
Variation margin receivable ............................................ -- 31,100
Receivable for securities sold ......................................... -- 5,637
Receivable for Fund shares sold ........................................ -- 228,586
Unrealized appreciation on foreign currency contracts .................. 109 --
Prepaid expenses ....................................................... 22,689 20,129
Deferred offering costs - Note 2 ....................................... -- 59,084
Due from Investment Advisor - Note 3 ................................... 18,647 1,566
------------- -------------
TOTAL ASSETS .................................................. 5,647,977 116,779,579
LIABILITIES
Due to custodian ....................................................... -- 4,990,066
Income distributions payable ........................................... -- 228,586
Payable for securities purchased ....................................... 43,110 10,693,071
Payable for Fund shares redeemed ....................................... -- --
Investment advisory fees payable - Note 3 .............................. -- --
Administrative fees payable - Note 3 ................................... 1,051 9,792
Sub-administration fees payable - Note 3 ............................... 554 --
Distribution fees payable - Note 3 ..................................... -- 209
Trustees' fees payable - Note 5 ........................................ 640 3,376
Accrued expenses and other liabilities.................................. 32,942 34,615
------------- -------------
TOTAL LIABILITIES ............................................. 78,297 15,959,715
------------- -------------
NET ASSETS ........................................................ $ 5,569,680 $ 100,819,864
============= =============
NET ASSETS
Capital paid-in ........................................................ $ 18,069,214 $ 100,801,050
Undistributed net investment income (Accumulated net investment loss) .. 29,259 31,390
Accumulated net realized gain (loss) on investments .................... (12,776,836) (57,265)
Net unrealized appreciation (depreciation) on investments .............. 246,229 (24,200)
Net unrealized appreciation on futures ................................. -- 68,889
Net unrealized appreciation on foreign currency translations ........... 1,814 --
------------- -------------
NET ASSETS ........................................................ $ 5,569,680 $ 100,819,864
============= =============
Investor Shares:
Net assets ............................................................. $ 5,569,680 $ 99,793,253
Total shares outstanding at end of period .............................. 744,050 9,981,461
Net asset value, offering and redemption price per share
(net assets / shares outstanding) ................................... $ 7.49 $ 10.00
Advisor Shares:
Net assets ............................................................. $ -- $ 1,026,611
Total shares outstanding at end of period .............................. -- 102,677
Net asset value, offering and redemption price per share
(net assets / shares outstanding) ................................... $ -- $ 10.00
Cost of securities ........................................................ $ 5,320,235 $ 116,389,080
SHORT-TERM
U.S. CORE MUNICIPAL MUNICIPAL
FIXED INCOME BOND BOND
FUND FUND FUND
------------- ------------- -------------
ASSETS
Investments in securities, at value - Note 2 ........................... $ 12,791,955 $ 76,531,216 $ 100,306,988
Dividends and tax reclaims receivable .................................. -- -- --
Interest receivable .................................................... 36,354 866,660 1,414,955
Variation margin receivable ............................................ -- -- --
Receivable for securities sold ......................................... 121,063 115,000 220,000
Receivable for Fund shares sold ........................................ 27,942 308,653 539,110
Unrealized appreciation on foreign currency contracts .................. -- -- --
Prepaid expenses ....................................................... 18,343 39,425 40,730
Deferred offering costs - Note 2 ....................................... 35,300 -- --
Due from Investment Advisor - Note 3 ................................... 19,996 8,645 625
------------- ------------- -------------
TOTAL ASSETS .................................................. 13,050,953 77,869,599 102,522,408
LIABILITIES
Due to custodian ....................................................... -- -- --
Income distributions payable ........................................... 27,942 221,124 250,306
Payable for securities purchased ....................................... 2,859,664 815,000 1,150,000
Payable for Fund shares redeemed ....................................... -- 57,976 130,021
Investment advisory fees payable - Note 3 .............................. -- -- --
Administrative fees payable - Note 3 ................................... 978 7,158 9,730
Sub-administration fees payable - Note 3 ............................... -- -- --
Distribution fees payable - Note 3 ..................................... 205 281 453
Trustees' fees payable - Note 5 ........................................ 1,601 4,840 7,111
Accrued expenses and other liabilities.................................. 32,392 65,570 83,438
------------- ------------- -------------
TOTAL LIABILITIES ............................................. 2,922,782 1,171,949 1,631,059
------------- ------------- -------------
NET ASSETS ........................................................ $ 10,128,171 $ 76,697,650 $ 100,891,349
============= ============= =============
NET ASSETS
Capital paid-in ........................................................ $ 10,098,555 $ 76,938,181 $ 101,312,454
Undistributed net investment income (Accumulated net investment loss) .. 465 40,173 19,136
Accumulated net realized gain (loss) on investments .................... (26,353) (433,605) (175,950)
Net unrealized appreciation (depreciation) on investments .............. 55,504 152,901 (264,291)
Net unrealized appreciation on futures ................................. -- -- --
Net unrealized appreciation on foreign currency translations ........... -- -- --
------------- ------------- -------------
NET ASSETS ........................................................ $ 10,128,171 $ 76,697,650 $ 100,891,349
============= ============= =============
Investor Shares:
Net assets ............................................................. $ 9,116,100 $ 75,234,697 $ 98,392,188
Total shares outstanding at end of period .............................. 908,946 7,484,010 9,884,308
Net asset value, offering and redemption price per share
(net assets / shares outstanding) ................................... $ 10.03 $ 10.05 $ 9.95
Advisor Shares:
Net assets ............................................................. $ 1,012,071 $ 1,462,953 $ 2,499,161
Total shares outstanding at end of period .............................. 100,911 145,604 251,161
Net asset value, offering and redemption price per share
(net assets / shares outstanding) ................................... $ 10.03 $ 10.05 $ 9.95
Cost of securities ........................................................ $ 12,736,451 $ 76,378,315 $ 100,571,279
- --------------------------------------------------------------------------------
47
- --------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OPERATIONS
FOR THE PERIOD ENDED APRIL 30, 2005 (UNAUDITED)
U.S. LARGE U.S.
CAP EQUITY OPPORTUNITIES
FUND FUND
------------- -------------
INVESTMENT INCOME
Dividend income ........................................................ $ 107,084 $ 322,528
Interest income ........................................................ 262 133,257
Foreign taxes withheld ................................................. -- (5,347)
------------- -------------
TOTAL INCOME ..................................................... 107,346 450,438
EXPENSES
Investment Advisory fees - Note 3 ...................................... 32,102 257,322
Sub-administration fees - Note 3 ....................................... 6,462 77,410
Administrative fees - Note 3 ........................................... -- 131,005
Distribution fees - Note 3 ............................................. -- --
Transfer agent fees .................................................... 32,779 41,994
Registration fees ...................................................... 11,209 23,590
Legal fees ............................................................. 8,677 16,752
Insurance .............................................................. 7,546 15,309
Trustees' fees - Note 5 ................................................ 5,205 21,141
Printing expenses ...................................................... 3,884 16,162
Audit fees ............................................................. 2,867 18,013
Custodian fees ......................................................... 1,829 15,093
Amortization of deferred offering costs ................................ -- --
Other .................................................................. 1,516 3,749
------------- -------------
TOTAL EXPENSES ................................................... 114,076 637,540
Expenses waived by Investment Advisor - Note 3 ......................... (28,456) --
Reimbursement from Investment Advisor - Note 3.......................... -- --
------------- -------------
NET EXPENSES ..................................................... 85,620 637,540
------------- -------------
NET INVESTMENT INCOME (LOSS) ..................................... 21,726 (187,102)
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on investments sold ........................... 333,969 6,247,224
Net realized gain on foreign currency transactions ..................... -- --
------------- -------------
Net realized gain (loss) on investments and
foreign currency transactions .............................. 333,969 6,247,224
------------- -------------
Change in unrealized appreciation (depreciation) on investments ........ (6,225) (7,313,825)
Change in unrealized appreciation on futures ........................... -- --
Change in unrealized depreciation on foreign currency translations ..... -- --
------------- -------------
Net change in unrealized appreciation (depreciation)
on investments, futures and foreign currency translations .. (6,225) (7,313,825)
------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ....................... 327,744 (1,066,601)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................................... $ 349,470 $ (1,253,703)
============= =============
* Fund commenced investment activities on December 31, 2004.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
48
ENHANCED
INTERNATIONAL INCOME
FUND FUND*
------------- -------------
INVESTMENT INCOME
Dividend income ........................................................ $ 68,687 $ --
Interest income ........................................................ 2,925 684,558
Foreign taxes withheld ................................................. (7,566) --
------------- -------------
TOTAL INCOME ..................................................... 64,046 684,558
EXPENSES
Investment Advisory fees - Note 3 ...................................... 14,149 55,206
Sub-administration fees - Note 3 ....................................... 4,251 --
Administrative fees - Note 3 ........................................... 6,367 28,862
Distribution fees - Note 3 ............................................. -- 830
Transfer agent fees .................................................... 30,810 33,465
Registration fees ...................................................... 10,383 2,362
Legal fees ............................................................. 8,363 10,416
Insurance .............................................................. 7,196 6,840
Trustees' fees - Note 5 ................................................ 4,518 6,333
Printing expenses ...................................................... 3,517 4,309
Audit fees ............................................................. 3,566 4,531
Custodian fees ......................................................... 6,407 3,931
Amortization of deferred offering costs ................................ -- 19,170
Other .................................................................. 6,386 4,913
------------- -------------
TOTAL EXPENSES ................................................... 105,913 181,168
Expenses waived by Investment Advisor - Note 3 ......................... (14,149) (55,206)
Reimbursement from Investment Advisor - Note 3.......................... (56,391) (36,734)
------------- -------------
NET EXPENSES ..................................................... 35,373 89,228
------------- -------------
NET INVESTMENT INCOME (LOSS) ..................................... 28,673 595,330
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on investments sold ........................... 802,815 (57,265)
Net realized gain on foreign currency transactions ..................... 1,686 --
------------- -------------
Net realized gain (loss) on investments and
foreign currency transactions .............................. 804,501 (57,265)
------------- -------------
Change in unrealized appreciation (depreciation) on investments ........ (456,427) (24,200)
Change in unrealized appreciation on futures ........................... -- 68,889
Change in unrealized depreciation on foreign currency translations ..... (315) --
------------- -------------
Net change in unrealized appreciation (depreciation)
on investments, futures and foreign currency translations .. (456,742) 44,689
------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ....................... 347,759 (12,576)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................................... $ 376,432 $ 582,754
============= =============
SHORT-TERM
U.S. CORE MUNICIPAL MUNICIPAL
FIXED INCOME BOND BOND
FUND* FUND FUND
------------- ------------- -------------
INVESTMENT INCOME
Dividend income ........................................................ $ -- $ 23,627 $ 34,265
Interest income ........................................................ 113,039 1,160,627 1,375,969
Foreign taxes withheld ................................................. -- -- --
------------- ------------- -------------
TOTAL INCOME ..................................................... 113,039 1,184,254 1,410,234
EXPENSES
Investment Advisory fees - Note 3 ...................................... 8,239 117,682 172,781
Sub-administration fees - Note 3 ....................................... -- -- --
Administrative fees - Note 3 ........................................... 4,566 43,254 63,945
Distribution fees - Note 3 ............................................. 824 2,420 2,179
Transfer agent fees .................................................... 32,271 62,781 65,064
Registration fees ...................................................... 1,578 19,332 23,200
Legal fees ............................................................. 8,538 10,173 13,002
Insurance .............................................................. 6,047 10,249 12,969
Trustees' fees - Note 5 ................................................ 4,195 13,884 19,458
Printing expenses ...................................................... 2,917 5,710 8,549
Audit fees ............................................................. 2,033 10,211 14,743
Custodian fees ......................................................... 3,881 4,272 5,565
Amortization of deferred offering costs ................................ 18,026 6,089 6,090
Other .................................................................. 4,657 10,463 12,768
------------- ------------- -------------
TOTAL EXPENSES ................................................... 97,772 316,520 420,313
Expenses waived by Investment Advisor - Note 3 ......................... (8,239) (117,682) (172,781)
Reimbursement from Investment Advisor - Note 3.......................... (75,514) (34,549) (7,824)
------------- ------------- -------------
NET EXPENSES ..................................................... 14,019 164,289 239,708
------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) ..................................... 99,020 1,019,965 1,170,526
------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on investments sold ........................... (26,353) (93,586) (79,711)
Net realized gain on foreign currency transactions ..................... -- -- --
------------- ------------- -------------
Net realized gain (loss) on investments and
foreign currency transactions .............................. (26,353) (93,586) (79,711)
------------- ------------- -------------
Change in unrealized appreciation (depreciation) on investments ........ 55,504 (223,939) (89,212)
Change in unrealized appreciation on futures ........................... -- -- --
Change in unrealized depreciation on foreign currency translations ..... -- -- --
------------- ------------- -------------
Net change in unrealized appreciation (depreciation)
on investments, futures and foreign currency translations .. 55,504 (223,939) (89,212)
------------- ------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ....................... 29,151 (317,525) (168,923)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ..................................................... $ 128,171 $ 702,440 $ 1,001,603
============= ============= =============
- --------------------------------------------------------------------------------
49
- --------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED APRIL 30, 2005 (UNAUDITED) AND THE YEAR ENDED OCTOBER 31,
2004
U.S. LARGE CAP U.S. OPPORTUNITIES
EQUITY FUND FUND
------------------------------ ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2005 2004 2005 2004
-------------- ------------- ------------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) ...................................... $ 21,726 $ (14,445) $ (187,102) $ (536,729)
Net realized gain (loss) on investments and .......................
foreign currency transactions .................................. 333,969 205,840 6,247,224 9,382,001
Change in unrealized appreciation (depreciation)
on investments, futures and foreign currency translations ...... (6,225) 494,235 (7,313,825) 2,353,816
-------------- ------------- ------------- ------------
Net increase (decrease) in net assets resulting from operations ... 349,470 685,630 (1,253,703) 11,199,088
-------------- ------------- ------------- ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Investor Shares ................................................... (18,857) -- -- --
Advisor Shares..................................................... -- -- -- --
From net realized gains
Investor Shares ................................................... -- -- (9,179,135) --
-------------- ------------- ------------- ------------
(18,857) -- (9,179,135) --
-------------- ------------- ------------- ------------
SHARE TRANSACTIONS:
INVESTOR SHARES:
Sales of shares ................................................... 92,155 507,288 58,210,634 56,177,111
Reinvestment of distributions ..................................... 11,203 -- 8,951,319 --
Redemption of shares .............................................. (688,330) (1,860,631) (14,805,506) (40,480,952)
Redemption fees ................................................... -- -- 23,866 693
-------------- ------------- ------------- ------------
Total increase (decrease) from Investor Share transactions ........ (584,972) (1,353,343) 52,380,313 15,696,852
-------------- ------------- ------------- ------------
ADVISOR SHARES:
Sales of shares ................................................... -- -- -- --
Reinvestment of distributions ..................................... -- -- -- --
Redemption of shares .............................................. -- -- -- --
-------------- ------------- ------------- ------------
Total increase from Advisor Share transactions .................... -- -- -- --
-------------- ------------- ------------- ------------
Net increase (decrease) in net assets from share transactions ..... (584,972) (1,353,343) 52,380,313 15,696,852
-------------- ------------- ------------- ------------
Total increase (decrease) in net assets ........................... (254,359) (667,713) 41,947,475 26,895,940
NET ASSETS
Beginning of Period ............................................... 8,434,013 9,101,726 73,678,765 46,782,825
-------------- ------------- ------------- ------------
End of Period ..................................................... $ 8,179,654 $ 8,434,013 $ 115,626,240 $ 73,678,765
============== ============= ============= ============
Undistributed net investment income (Accumulated net
investment loss)................................................ $ 2,869 $ -- $ (187,102) $ --
============== ============= ============= ============
CHANGES IN FUND SHARES
INVESTOR SHARES:
Sales of shares ................................................... 23,540 139,141 3,022,777 3,075,655
Reinvestment of distributions ..................................... 2,837 -- 477,404 --
Redemption of shares .............................................. (173,698) (502,928) (792,059) (2,203,598)
-------------- ------------- ------------- ------------
Net increase (decrease) in Investor Shares ........................ (147,321) (363,787) 2,708,122 872,057
============== ============= ============= ============
ADVISOR SHARES:
Sales of shares ................................................... -- -- -- --
Reinvestment of distributions ..................................... -- -- -- --
Redemption of shares .............................................. -- -- -- --
-------------- ------------- ------------- ------------
Net increase in Advisor Shares .................................... -- -- -- --
============== ============= ============= ============
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
50
INTERNATIONAL
FUND
------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
2005 2004
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) ...................................... $ 28,673 $ 68,104
Net realized gain (loss) on investments and .......................
foreign currency transactions .................................. 804,501 589,693
Change in unrealized appreciation (depreciation)
on investments, futures and foreign currency translations ...... (456,742) 112,740
-------------- -------------
Net increase (decrease) in net assets resulting from operations ... 376,432 770,537
-------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Investor Shares ................................................... (71,012) (121,800)
Advisor Shares..................................................... -- --
From net realized gains
Investor Shares ................................................... -- --
-------------- -------------
(71,012) (121,800)
-------------- -------------
SHARE TRANSACTIONS:
INVESTOR SHARES:
Sales of shares ................................................... 100,501 4,075,378
Reinvestment of distributions ..................................... 68,000 108,512
Redemption of shares .............................................. (137,174) (5,841,651)
Redemption fees ................................................... -- 5
-------------- -------------
Total increase (decrease) from Investor Share transactions ........ 31,327 (1,657,756)
-------------- -------------
ADVISOR SHARES:
Sales of shares ................................................... -- --
Reinvestment of distributions ..................................... -- --
Redemption of shares .............................................. -- --
-------------- -------------
Total increase from Advisor Share transactions .................... -- --
-------------- -------------
Net increase (decrease) in net assets from share transactions ..... 31,327 (1,657,756)
-------------- -------------
Total increase (decrease) in net assets ........................... (336,747) (1,009,019)
NET ASSETS
Beginning of Period ............................................... 5,232,933 6,241,952
-------------- -------------
End of Period ..................................................... $ 5,569,680 $ 5,232,933
============== =============
Undistributed net investment income (Accumulated net
investment loss)................................................ $ 29,259 $ 69,912
============== =============
CHANGES IN FUND SHARES
INVESTOR SHARES:
Sales of shares ................................................... 13,544 594,036
Reinvestment of distributions ..................................... 9,214 16,798
Redemption of shares .............................................. (17,830) (852,238)
-------------- -------------
Net increase (decrease) in Investor Shares ........................ 4,928 (241,404)
============== =============
ADVISOR SHARES:
Sales of shares ................................................... -- --
Reinvestment of distributions ..................................... -- --
Redemption of shares .............................................. -- --
-------------- -------------
Net increase in Advisor Shares .................................... -- --
============== =============
* Commencement of operations.
U.S. CORE
ENHANCED FIXED INCOME
INCOME FUND FUND
------------- ------------
DECEMBER 31, DECEMBER 31 ,
2004* 2004*
TO APRIL 30, TO APRIL 30,
2005 2005
------------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) ...................................... $ 595,330 $ 99,020
Net realized gain (loss) on investments and .......................
foreign currency transactions .................................. (57,265) (26,353)
Change in unrealized appreciation (depreciation)
on investments, futures and foreign currency translations ...... 44,689 55,504
------------- ------------
Net increase (decrease) in net assets resulting from operations ... 582,754 128,171
------------- ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Investor Shares ................................................... (556,672) (89,444)
Advisor Shares..................................................... (7,268) (9,111)
From net realized gains
Investor Shares ................................................... -- --
------------- ------------
(563,940) (98,555)
------------- ------------
SHARE TRANSACTIONS:
INVESTOR SHARES:
Sales of shares ................................................... 99,217,622 9,000,000
Reinvestment of distributions ..................................... 556,673 89,444
Redemption of shares .............................................. -- --
Redemption fees ................................................... -- --
------------- ------------
Total increase (decrease) from Investor Share transactions ........ 99,774,295 9,089,444
------------- ------------
ADVISOR SHARES:
Sales of shares ................................................... 1,019,500 1,000,000
Reinvestment of distributions ..................................... 7,268 9,111
Redemption of shares .............................................. (13) --
------------- ------------
Total increase from Advisor Share transactions .................... 1,026,755 1,009,111
------------- ------------
Net increase (decrease) in net assets from share transactions ..... 100,801,050 10,098,555
------------- ------------
Total increase (decrease) in net assets ........................... 100,819,864 10,128,171
NET ASSETS
Beginning of Period ............................................... -- --
------------- ------------
End of Period ..................................................... $ 100,819,864 $ 10,128,171
============= ============
Undistributed net investment income (Accumulated net
investment loss)................................................ $ 31,390 $ 465
============= ============
CHANGES IN FUND SHARES
INVESTOR SHARES:
Sales of shares ................................................... 9,925,766 900,000
Reinvestment of distributions ..................................... 55,695 8,946
Redemption of shares .............................................. -- --
------------- ------------
Net increase (decrease) in Investor Shares ........................ 9,981,461 908,946
============= ============
ADVISOR SHARES:
Sales of shares ................................................... 101,951 100,000
Reinvestment of distributions ..................................... 727 911
Redemption of shares .............................................. (1) --
------------- ------------
Net increase in Advisor Shares .................................... 102,677 100,911
============= ============
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51
- --------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED APRIL 30, 2005 (UNAUDITED) AND OCTOBER 31, 2004
MUNICIPAL SHORT-TERM MUNICIPAL
BOND FUND BOND FUND
---------------------------- -------------------------------
SIX MONTHS DECEMBER 31, SIX MONTHS DECEMBER 31,
ENDED 2003* TO ENDED 2003* TO
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2005 2004 2005 2004
------------- ------------ ------------- -------------
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ......................................... $ 1,019,965 $ 903,114 $ 1,170,526 $ 934,376
Net realized loss on investments............................... (93,586) (321,385) (79,711) (96,239)
Change in unrealized appreciation
(depreciation) on investments............................... (223,939) 376,840 (89,212) (175,079)
------------- ------------ ------------- -------------
Net increase in net assets resulting from operations .......... 702,440 958,569 1,001,603 663,058
------------- ------------ ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Investor Shares ............................................... (978,866) (873,555) (1,133,605) (915,570)
Advisor Shares................................................. (30,602) (18,517) (21,256) (15,335)
------------- ------------ ------------- -------------
(1,009,468) (892,072) (1,154,861) (930,905)
------------- ------------ ------------- -------------
SHARE TRANSACTIONS:
INVESTOR SHARES:
Sales of shares ............................................... 31,666,931 60,518,988 34,164,259 89,836,487
Reinvestment of distributions ................................. 928,541 771,353 1,093,095 839,770
Redemption of shares .......................................... (2,839,767) (15,549,336) (10,744,834) (16,379,473)
------------- ------------ ------------- -------------
Total increase from Investor Share transactions ............... 29,755,705 45,741,005 24,512,520 74,296,784
------------- ------------ ------------- -------------
ADVISOR SHARES:
Sales of shares ............................................... 1,674,297 2,880,710 1,344,210 2,498,894
Reinvestment of distributions ................................. 30,494 18,517 19,529 12,886
Redemption of shares .......................................... (2,124,935) (1,037,612) (183,119) (1,189,250)
------------- ------------ ------------- -------------
Total increase (decrease) from Advisor Share transactions ..... (420,144) 1,861,615 1,180,620 1,322,530
------------- ------------ ------------- -------------
Net increase in net assets from share transactions ............ 29,335,561 47,602,620 25,693,140 75,619,314
------------- ------------ ------------- -------------
Total increase in net assets .................................. 29,028,533 47,669,117 25,539,882 75,351,467
NET ASSETS
Beginning of Period ........................................... 47,669,117 -- 75,351,467 --
------------- ------------ ------------- -------------
End of Period ................................................. $ 76,697,650 $ 47,669,117 $ 100,891,349 $ 75,351,467
============= ============ ============= =============
Undistributed net investment income ........................... $ 40,173 $ 29,676 $ 19,136 $ 3,471
============= ============ ============= =============
CHANGES IN FUND SHARES
INVESTOR SHARES:
Sales of shares ............................................... 3,148,052 6,019,760 3,427,464 8,985,688
Reinvestment of distributions ................................. 92,441 77,107 109,781 84,356
Redemption of shares .......................................... (282,473) (1,570,877) (1,078,751) (1,644,230)
------------- ------------ ------------- -------------
Net increase in Investor Shares ............................... 2,958,020 4,525,990 2,458,494 7,425,814
============= ============ ============= =============
ADVISOR SHARES:
Sales of shares ............................................... 166,244 287,627 135,103 249,913
Reinvestment of distributions ................................. 3,034 1,844 1,962 1,295
Redemption of shares .......................................... (210,465) (102,680) (18,384) (118,728)
------------- ------------ ------------- -------------
Net increase (decrease) in Advisor Shares ..................... (41,187) 186,791 118,681 132,480
============= ============ ============= =============
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
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52
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SCHRODER MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR THE PERIOD ENDED APRIL 30, 2005 (UNAUDITED) AND THE PERIODS ENDED OCTOBER
31, (UNLESS OTHERWISE INDICATED) SELECTED PER SHARE DATA AND RATIOS FOR A SHARE
OUTSTANDING THROUGHOUT EACH PERIOD
NET REALIZED AND DISTRIBUTIONS
UNREALIZED GAINS FROM NET
(LOSSES) REALIZED GAIN
NET ASSET INVESTMENTS DIVIDENDS ON INVESTMENTS
VALUE, NET AND FOREIGN TOTAL FROM FROM NET AND FOREIGN DISTRIBUTIONS
BEGINNING INVESTMENT CURRENCY INVESTMENT INVESTMENT CURRENCY FROM RETURN
OF PERIOD INCOME (LOSS) TRANSACTIONS OPERATIONS INCOME TRANSACTIONS OF CAPITAL
--------- ------------- ------------ ---------- ---------- ------------ -------------
U.S. LARGE CAP EQUITY FUND
Investor Shares
2005* ....................... $ 3.73 $ 0.01 $ 0.14 $ 0.15 $ (0.01) $ -- $ --
2004 ........................ 3.47 --(b) 0.26 0.26 -- -- --
2003 ........................ 2.76 --(b) 0.71 0.71 -- -- --
2002 ........................ 3.55 (0.03) (0.75) (0.78) -- -- (0.01)
2001 ........................ 4.95 --(b) (1.40) (1.40) -- -- --
2000 ........................ 6.73 (0.02) 1.26 1.24 -- (2.68) (0.34)
U.S. OPPORTUNITIES FUND
Investor Shares
2005* ....................... $ 19.58 $ (0.03) $ 0.35** $ 0.32 $ -- $ (2.03) $ --
2004 ........................ 16.18 --(b) 3.40** 3.40 -- -- --
2003 ........................ 12.57 (0.16) 4.11 3.95 -- (0.34) --
2002 ........................ 15.17 (0.10) (1.15) (1.25) -- (1.35) --
2001 ........................ 18.01 (0.13) 0.59 0.46 -- (3.30) --
2000 ........................ 12.79 (0.08) 5.30 5.22 -- -- --
INTERNATIONAL FUND
Investor Shares
2005* ....................... $ 7.08 $ 0.03 $ 0.47 $ 0.50 $ (0.09) $ -- $ --
2004 ........................ 5.37 0.10 1.08 1.18 (0.12) (0.06) --
2002 ........................ 7.26 0.04 (1.13) (1.09) -- (0.80) --
2001 ........................ 16.74 0.09 (2.38) (2.29) (0.31) (6.88) --
2000 ........................ 17.02 0.15 1.24 1.39 (0.07) (1.60) --
ENHANCED INCOME FUND
Investor Shares
2005(d)* .................... $ 10.00 $ 0.08 $ -- $ 0.08 $ (0.08) $ -- $ --
Advisor Shares
2005(d)* .................... $ 10.00 $ 0.07 $ -- $ 0.07 $ (0.07) $ -- $ --
U.S. CORE FIXED INCOME FUND
Investor Shares
2005(d)* .................... $ 10.00 $ 0.10 $ 0.03 $ 0.13 $ (0.10) $ -- $ --
Advisor Shares
2005(d)* .................... $ 10.00 $ 0.09 $ 0.03 $ 0.12 $ (0.09) $ -- $ --
MUNICIPAL BOND FUND
Investor Shares
2005* ....................... $ 10.12 $ 0.17 $ (0.07) $ 0.10 $ (0.17) $ -- $ --
2004(e) ..................... 10.00 0.24 0.11 0.35 (0.23) -- --
Advisor Shares
2005* ....................... $ 10.11 $ 0.16 $ (0.06) $ 0.10 $ (0.16) $ -- $ --
2004(e) ..................... 10.00 0.21 0.11 0.32 (0.21) -- --
SHORT-TERM MUNICIPAL BOND FUND
Investor Shares
2005* ....................... $ 9.97 $ 0.13 $ (0.02) $ 0.11 $ (0.13) $ -- $ --
2004(e) ..................... 10.00 0.15 (0.03) 0.12 (0.15) -- --
Advisor Shares
2005* ....................... $ 9.97 $ 0.12 $ (0.02) $ 0.10 $ (0.12) $ -- $ --
2004(e) ..................... 10.00 0.13 (0.03) 0.10 (0.13) -- --
* For the six months or period ended April 30, 2005 (unaudited). All ratios
for the period have been annualized, except for the Portfolio Turnover
Rate.
** Includes redemption fees. Amount less than $0.01 per share.
(a) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (See Note 3). Total return
calculations for a period of less than one year are not annualized.
(b) Amount was less than $(0.01) per share.
(c) Net assets as of October 31, 2000 reflect the U.S. Large Cap Equity Fund's
acquisition of the net assets of Schroder Large Capitalization Equity Fund
as of September 11, 2000.
(d) Commenced operations on December 31, 2004.
(e) Commenced operations on December 31, 2003. All ratios for the period have
been annualized, except for the Portfolio Turnover Rate.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
54
RATIO OF RATIO OF
EXPENSES TO EXPENSES TO
AVERAGE NET ASSET AVERAGE NET ASSET
NET ASSET NET ASSET (INCLUDING WAIVERS (EXCLUDING WAIVERS
TOTAL VALUE, END TOTAL END OF REIMBURSEMENTS REIMBURSEMENTS
DISTRIBUTIONS OF PERIOD RETURN(A) PERIOD (000) AND OFFSETS) AND OFFSETS)
------------- ---------- --------- ------------ ------------- ---------------
U.S. LARGE CAP EQUITY FUND
Investor Shares
2005* ....................... $ (0.01) $ 3.87 3.97% $ 8,180 2.00% 2.66%
2004 ........................ -- 3.73 7.49 8,434 2.00 2.77
2003 ........................ -- 3.47 25.72 9,102 2.39 3.56
2002 ........................ (0.01) 2.76 (22.05) 9,475 2.01 2.22
2001 ........................ -- 3.55 (28.28) 19,447 1.50 1.76
2000 ........................ (3.02) 4.95 18.73 48,327(c) 1.40 1.55
U.S. OPPORTUNITIES FUND
Investor Shares
2005* ....................... $ (2.03) $ 17.87 1.13% $ 115,626 1.22% 1.22%
2004 ........................ -- 19.58 21.01 73,679 1.62 1.62
2003 ........................ (0.34) 16.18 32.13 46,783 1.93 2.25
2002 ........................ (1.35) 12.57 (9.91) 41,857 1.49 1.50
2001 ........................ (3.30) 15.17 3.25 28,096 1.49 1.83
2000 ........................ -- 18.01 40.81 63,637 1.18 1.18
INTERNATIONAL FUND
Investor Shares
2005* ....................... $ (0.09) $ 7.49 7.15% $ 5,570 1.25% 3.74%
2004 ........................ (0.18) 6.37 22.66 6,242 1.25 3.27
2002 ........................ (0.80) 5.37 (17.20) 6,427 1.14 1.94
2001 ........................ (7.19) 7.26 (24.96) 20,850 0.99 1.41
2000 ........................ (1.67) 16.74 8.02 105,363 0.99 1.14
ENHANCED INCOME FUND
Investor Shares
2005(d)* .................... $ (0.08) $ 10.00 0.80% $ 99,793 0.40% 0.81%
Advisor Shares
2005(d)* .................... $ (0.07) $ 10.00 0.72% $ 1,027 0.65% 1.19%
U.S. CORE FIXED INCOME FUND
Investor Shares
2005(d)* .................... $ (0.10) $ 10.03 1.30% $ 9,116 0.40% 2.94%
Advisor Shares
2005(d)* .................... $ (0.09) $ 10.03 1.21% $ 1,012 0.65% 3.19%
MUNICIPAL BOND FUND
Investor Shares
2005* ....................... $ (0.17) $ 10.05 1.01% $ 75,235 0.55% 1.06%
2004(e) ..................... (0.23) 10.12 3.53 45,781 0.55 1.41
Advisor Shares
2005* ....................... $ (0.16) $ 10.05 0.98% $ 1,463 0.80% 1.38%
2004(e) ..................... (0.21) 10.11 3.21 1,888 0.80 1.64
SHORT-TERM MUNICIPAL BOND FUND
Investor Shares
2005* ....................... $ (0.13) $ 9.95 1.12% $ 98,392 0.55% 0.97%
2004(e) ..................... (0.15) 9.97 1.26 74,031 0.55 1.30
Advisor Shares
2005* ....................... $ (0.12) $ 9.95 0.99% $ 2,499 0.80% 1.21%
2004(e) ..................... (0.13) 9.97 1.05 1,320 0.80 1.44
RATIO OF
NET INVESTMENT
INCOME (LOSS) TO
AVERAGE NET ASSET
(INCLUDING WAIVERS PORTFOLIO
REIMBURSEMENTS TURNOVER
AND OFFSETS) RATE
---------------- --------
U.S. LARGE CAP EQUITY FUND
Investor Shares
2005* ....................... 0.51% 21%
2004 ........................ (0.15) 50
2003 ........................ (0.13) 61
2002 ........................ (0.75) 57
2001 ........................ (0.08) 62
2000 ........................ (0.79) 195
U.S. OPPORTUNITIES FUND
Investor Shares
2005* ....................... (0.36)% 59%
2004 ........................ (0.83) 144
2003 ........................ (1.22) 162
2002 ........................ (0.75) 81
2001 ........................ (0.79) 105
2000 ........................ (0.55) 172
INTERNATIONAL FUND
Investor Shares
2005* ....................... 1.01% 74%
2004 ........................ 2.09 50
2002 ........................ 0.60 111
2001 ........................ 0.57 146
2000 ........................ 0.54 132
ENHANCED INCOME FUND
Investor Shares
2005(d)* .................... 2.70% 15%
Advisor Shares
2005(d)* .................... 2.28% 15%
U.S. CORE FIXED INCOME FUND
Investor Shares
2005(d)* .................... 3.03% 310%
Advisor Shares
2005(d)* .................... 2.78% 310%
MUNICIPAL BOND FUND
Investor Shares
2005* ....................... 3.47% 18%
2004(e) ..................... 2.82 46
Advisor Shares
2005* ....................... 3.20% 18%
2004(e) ..................... 2.49 46
SHORT-TERM MUNICIPAL BOND FUND
Investor Shares
2005* ....................... 2.71% 17%
2004(e) ..................... 1.95 17
Advisor Shares
2005* ....................... 2.48% 17%
2004(e) ..................... 1.68 17
- --------------------------------------------------------------------------------
55
- --------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2005 (UNAUDITED)
NOTE 1 -- ORGANIZATION
Schroder Capital Funds (Delaware) ("SCFD") is an open-end series management
investment company registered under the Investment Company Act of 1940, as
amended. SCFD was organized as a Maryland corporation on July 30, 1969;
reorganized as Schroder Capital Funds, Inc., a series company, on February 29,
1988; and reorganized on January 9, 1996, as a Delaware business trust. SCFD has
an unlimited number of authorized shares, which are divided into three separate
investment portfolios: Schroder U.S. Large Cap Equity Fund, Schroder U.S.
Opportunities Fund and Schroder International Fund (collectively, the "SCFD
Funds").
Schroder Series Trust ("SST") is an open-end series management investment
company registered under the Investment Company Act of 1940, as amended. SST was
organized as a business trust under the laws of The Commonwealth of
Massachusetts on May 6, 1993. SST has an unlimited number of authorized shares,
which are divided into four separate investment portfolios -- Schroder Enhanced
Income Fund, Schroder U.S. Core Fixed Income Fund, Schroder Municipal Bond Fund
and Schroder Short-Term Municipal Bond Fund (collectively, the "SST Funds" and,
together with the SCFD Funds, the "Funds").
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Funds which are in conformity with accounting principles generally accepted in
the United States of America.
VALUATION OF INVESTMENTS: Portfolio securities listed on recognized stock
exchanges are valued at the last reported sale price on the exchange on which
the securities are principally traded, except that NASDAQ official closing
prices for all NASDAQ National Market and NASDAQ Small Cap Market Securities are
used, where applicable. Listed securities traded on recognized stock exchanges
where last sale prices are not available are valued at the mean of the closing
bid and ask prices ("mid-market price"). Securities traded in over-the-counter
markets are valued at the most recent reported mid-market price. Prices used for
valuations generally are provided by independent pricing services. Options on
indices or exchange-traded fund (ETF) shares are valued at the closing
mid-market price. Except as noted below with regard to below investment grade
and emerging markets debt instruments, fixed income securities with remaining
maturities of more than 60 days are valued on the basis of valuations provided
by pricing services that determine valuations for normal institutional size
trading units of fixed income securities, or through obtaining independent
quotes from market makers. Below investment grade and emerging markets debt
instruments ("high yield debt") will ordinarily be valued at prices supplied by
a Fund's pricing service based on the mean of bid and asked prices supplied by
brokers or dealers. Short-term investments, having a maturity of 60 days or
less, are valued at amortized cost, a form of fair valuation, which approximates
market value pursuant to procedures adopted by the Funds' Board of Trustees
("Trustees"). Other securities and assets for which market quotations are not
readily available are valued in accordance with Fair Value Procedures
established by the Funds' Trustees. The Funds' Fair Value Procedures are
implemented through a Fair Value Committee (the "Committee") designated by the
Funds' Trustees. Some of the more common reasons that may necessitate that a
security be valued using Fair Value Procedures include: the security's trading
has been halted or suspended; the security has been de-listed from a national
exchange; the security's primary trading market is temporarily closed at a time
when under normal conditions it would be open; or the security's primary pricing
source is not able or willing to provide a price. When a security is valued in
accordance with the Fair Value Procedures, the Committee will determine the
value after taking into consideration relevant information reasonably available
to the Committee.
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular security's
last trade and the time at which a Fund calculates its net asset value. The
closing prices of such securities may no longer reflect their market value at
the time the Fund calculates its net asset value if an event that could
materially affect the value of those securities (a "Significant Event") has
occurred between the time of the security's last close and the time that the
Fund calculates its net asset value. A Significant Event may relate to a single
issuer or to an entire
- --------------------------------------------------------------------------------
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
market sector. If a Fund becomes aware of a Significant Event that has occurred
with respect to a security or group of securities after the closing of the
exchange or market on which the security or securities principally trade, but
before the time at which the Fund calculates its net asset value, a Committee
meeting may be called.
The Schroder International Fund uses FT-Interactive Data ("FT") as a third party
fair valuation vendor. FT provides a fair value for foreign securities held by
the Schroder International Fund based on certain factors and methodologies
applied by FT in the event that there is movement in the U.S. market that
exceeds a specific threshold established by the Committee in consultation with
the Trustees. Such methodologies generally involve tracking valuation
correlations between the U.S. market and each non-U.S. security. In consultation
with the Trustees, the Committee also determines a "confidence interval" which
will be used, when the threshold is exceeded, to determine the level of
correlation between the value of a foreign security and movements in the U.S.
market before a particular security will be fair valued. In the event that the
threshold established by the Committee is exceeded on a specific day, the
Schroder International Fund will typically value non-U.S. securities in its
portfolio that exceed the applicable confidence interval based upon the fair
values provided by FT.
REPURCHASE AGREEMENTS: When entering into repurchase agreements, it is each
Fund's policy that the Fund take into its possession, through its custodian, the
underlying collateral and monitor the collateral's value at the time the
agreement is entered into and on a daily basis during the term of the repurchase
agreement to ensure that it equals or exceeds the repurchase price. In the event
of default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
INVESTMENT TRANSACTIONS: Investment security transactions are recorded as of
trade date. Realized gains and losses on sales of investments are determined on
the basis of identified cost. Capital gain taxes on securities in certain
foreign countries are accrued on unrealized appreciation and due when realized.
INVESTMENT INCOME: Dividend income is recorded on the ex-dividend date. Dividend
income is recorded net of unrecoverable withholding tax. Interest income is
recorded on an accrual basis. Discounts and premiums on fixed income securities
are accreted and amortized on the effective interest method. Foreign dividend
and interest income amounts and realized capital gains or losses are converted
to U.S. dollar equivalents using foreign exchange rates in effect at the date of
the transactions. Distributions received on securities that represent a return
of capital or capital gain are recorded as a reduction of costs of investments
and/or as a realized gain. The Funds estimate the components of distributions
received that may be considered non-taxable distributions or capital gain
distributions.
EXPENSES: Expenses are recorded on an accrual basis. Most of the expenses of the
Funds can be directly attributable to a specific Fund. Expenses not directly
attributable to a specific Fund are allocated among the Funds based on relative
average net assets or another appropriate methodology. Class specific expenses
are borne by that class. Fund expenses are pro-rated to the respective classes
based on relative net assets.
CLASSES: Income, realized and unrealized gains and losses of a Fund are prorated
to the respective classes of shares based on relative net assets.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends and distributions to
shareholders from net investment income and from net realized capital gains, if
any, are declared and distributed at least annually for the Schroder U.S. Large
Cap Equity, Schroder U.S. Opportunities and Schroder International Funds.
Dividends to shareholders from net investment income are declared daily and
distributed monthly and distributions to shareholders from net realized capital
gains, if any, are declared and distributed at least annually for the Schroder
Enhanced Income, Schroder U.S. Core Fixed Income, Schroder Municipal Bond and
Schroder Short-Term Municipal Bond Funds. Distributions are recorded on the
ex-dividend date.
FOREIGN CURRENCY: Foreign currency amounts are translated into U.S. dollars at
the mean of the bid and ask prices of such currencies against U.S. dollars as
follows: (i) assets and liabilities at the rate of exchange at the end of the
respective period; and (ii) purchases and sales of securities and income and
expenses at the rate of exchange prevailing on the dates of such transactions.
The portion of the results of operations arising from changes in the exchange
rates and the portion due to fluctuations arising from changes in the market
prices of securities are not isolated. Such fluctuations are included with the
net realized and unrealized gain or loss on investments.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
Certain Funds may enter into forward foreign currency contracts to protect the
U.S. dollar value of the underlying portfolio of securities against the effect
of possible adverse movements in foreign exchange rates. Principal risks
associated with such transactions include the movement in value of the foreign
currency relative to the U.S. dollar and the ability of the counterparty to
perform. Fluctuations in the value of such forward foreign currency transactions
are recorded daily as unrealized gain or loss; realized gain or loss includes
net gain or loss on transactions that have terminated by settlement or by the
Funds entering into offsetting commitments.
WHEN-ISSUED SECURITIES: Each Fund may purchase securities on a when-issued,
delayed delivery, or forward commitment basis. These transactions involve a
commitment by the Fund to purchase a security for a predetermined price or
yield, with payments and delivery taking place more than seven days in the
future, or after a period longer than the customary settlement period for that
type of security. These transactions may increase the overall investment
exposure for a Fund and involve a risk of loss if the value of the securities
declines prior to the settlement date.
DERIVATIVE INSTRUMENTS: Certain Funds may purchase and sell a variety of
"derivative" instruments (for example options or futures) in order to gain
exposure to particular securities or markets, in connection with hedging
transactions, and to increase total return. A Fund's use of derivative
instruments involves the risk the instrument may not work as intended due to
unanticipated developments in market conditions or other causes. Derivatives
often involve the risk that the other party to the transaction will be unable to
close out the position at any particular time or at an acceptable price. When a
Fund uses certain types of derivative instruments for investment purposes, it
could lose more than the original cost of the investment and its potential loss
could be unlimited. Also, suitable derivative transactions may not be available
in all circumstances, and there can be no assurance that a Fund will engage in
these transactions when that would be beneficial.
FUTURES: Financial futures contracts (secured by cash and/or securities
deposited with brokers as "initial margin") are valued based upon their quoted
daily settlement prices; changes in initial settlement value (represented by
cash paid to or received from brokers as "variation margin") are accounted for
as unrealized appreciation (depreciation). When futures contracts are closed,
the difference between the opening value at the date of purchase and the value
at closing is recorded as realized gain or loss in the Statements of Operations.
Futures contracts may be used in order to hedge against unfavorable changes in
the value of securities or to attempt to realize profits from the value of the
related securities. Futures contracts involve market risk that may exceed the
amounts recognized in the Statements of Assets and Liabilities. Risks arise from
the possible movements in the prices of securities relating to these
instruments. The change in value of futures contracts primarily corresponds with
the value of their related securities, but may not precisely correlate with the
change in value of such securities. In addition, there is the risk that a Fund
may not be able to enter into a closing transaction because of an illiquid
secondary market.
EQUITY-LINKED WARRANTS: The Schroder International Fund may invest in
equity-linked warrants. The Fund purchases the equity-linked warrants from a
broker, who in turn is expected to purchase shares in the local market and issue
a call warrant hedged on the underlying holding. If the Fund exercises its call
and closes its position, the shares are expected to be sold and the warrant
redeemed with the proceeds. Each warrant represents one share of the underlying
stock. Therefore, the price, performance and liquidity of the warrant are all
directly linked to the underlying stock, less transaction costs. Equity-linked
warrants are valued at the closing price of the underlying security, then
adjusted for stock dividends declared by the underlying security. In addition to
the market risk related to the underlying holdings, the Fund bears additional
counterparty risk with respect to the issuing broker. Moreover, there is
currently no active trading market for equity-linked warrants.
OFFERING COSTS: Offering costs, which include typesetting and prospectus
printing and the preparation of the initial registration statement of the
Schroder Enhanced Income Fund, Schroder U.S. Core Fixed Income Fund, Schroder
Municipal Bond Fund and Schroder Short-Term Municipal Bond Fund are being
amortized over a twelve-month period from each Fund's inception.
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SCHRODER MUTUAL FUNDS
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
NOTE 3 -- INVESTMENT ADVISORY FEES, ADMINISTRATION AGREEMENTS AND
DISTRIBUTIONS PLANS
The Funds have entered into investment advisory agreements with Schroder
Investment Management North America, Inc., ("SIMNA"). Under these agreements,
SIMNA provides investment management services and is entitled to receive for its
services compensation, payable monthly, at the following annual rates based on
average daily net assets of each Fund taken separately: 0.75% of the first $100
million, and 0.50% in excess of $100 million for Schroder U.S. Large Cap Equity
Fund; 0.50% up to $100 million, 0.40% of the next $150 million, and 0.35% in
excess of $250 million for each of Schroder U.S. Opportunities Fund and Schroder
International Fund; 0.25% for each of Schroder Enhanced Income Fund and Schroder
U.S. Core Fixed Income Fund; and 0.40% for each of Schroder Municipal Bond Fund
and Schroder Short-Term Municipal Bond Fund. SIMNA contractually agreed to limit
the investment advisory fees payable to it by Schroder International Fund
through April 30, 2005 to the annual rate of 0.45% of that Fund's average daily
net assets. This contractual limitation has been extended through February 28,
2006.
Effective February 10, 2004, SIMNA retained its affiliate, Schroder Investment
Management North America Limited ("SIMNA Ltd.") to serve as sub-adviser
responsible for the portfolio management of Schroder International Fund. For its
services, SIMNA pays SIMNA Ltd. 25% of the investment advisory fees SIMNA
receives from the Fund.
The administrator of each series of SCFD (other than Schroder U.S. Large Cap
Equity Fund) is Schroder Fund Advisors, Inc. ("Schroder Advisors"), a wholly
owned subsidiary of SIMNA. For its services, Schroder Advisors is entitled to
receive compensation at an annual rate payable monthly of: 0.25% of the average
daily net assets of Schroder U.S. Opportunities Fund; and 0.225% of the average
daily net assets of Schroder International Fund.
Effective November 5, 2001, SCFD entered into a sub-administration and
accounting agreement with SEI Investments Global Funds Services ("SEI") and
Schroder Advisors. On January 4, 2004, SST entered into an amended
administration and accounting agreement with SEI. Effective November 1, 2004,
under the agreements with SEI, the Funds pay fees to SEI based on the combined
average daily net assets of all the Funds according to the following annual
rates: 0.115% on the first $600 million of such assets, 0.11% on the next $400
million of such assets, 0.09% on the next $1 billion of such assets and 0.07% on
assets in excess of $2 billion. Prior to November 1, 2004, the Funds paid fees
to SEI based on the combined average daily net assets of all the Funds according
to the following annual rates: 0.15% on the first $300 million of such assets
and 0.12% on such assets in excess of $300 million, subject to certain minimum
charges. Each Fund pays its pro rata portion of such expenses.
In order to limit the Funds' expenses, SIMNA and Schroder Advisors were
contractually obligated to reduce their compensation (and, if necessary, to pay
certain expenses of each of the Funds) for the six months ended April 30, 2005,
to the extent a Fund's Investor Shares' total operating expenses exceeded the
following annual rates (based on average net assets of each Fund's Investor
Shares taken separately): Schroder U.S. Large Cap Equity Fund: 2.00%; Schroder
U.S. Opportunities Fund: 2.00%; Schroder International Fund: 1.25%; Schroder
Enhanced Income Fund: 0.40%; Schroder U.S. Core Fixed Income Fund: 0.40%;
Schroder Municipal Bond Fund: 0.55%; and Schroder Short-Term Municipal Bond
Fund: 0.55%. These contractual expense limitations have been extended through
December 31, 2005 for the Schroder Enhanced Income Fund and the Schroder U.S.
Core Fixed Income Fund, and through February 28, 2006 for the Schroder U.S.
Large Cap Equity Fund, Schroder U.S. Opportunities Fund, Schroder International
Fund, Schroder Municipal Bond Fund and the Schroder Short-Term Municipal Bond
Fund. For the period ended April 30, 2005, SIMNA and Schroder Advisors were
contractually obligated to reduce their compensation (and, if necessary to pay
certain expenses of each of the Funds), to the extent a Fund's Advisor Shares'
total operating expenses exceeded the following annual rates (based on average
net assets of each Fund's Advisor Shares taken separately): Schroder Enhanced
Income Fund: 0.65%; Schroder U.S. Core Fixed Income Fund: 0.65%; Schroder
Municipal Bond Fund: 0.80%; and Schroder Short-Term Municipal Bond Fund: 0.80%.
These contractual expense limitations have been extended through December 31,
2005 for the Schroder Enhanced Income Fund and the Schroder U.S. Core Fixed
Income Fund, and through February 28, 2006 for the Schroder Municipal Bond Fund
and the Schroder Short-Term Municipal Bond Fund.
The Schroder Enhanced Income, Schroder U.S. Core Fixed Income, Schroder
Municipal Bond and Short-Term Municipal Bond Funds have adopted a Distribution
Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
amended, that allows each Fund to pay distribution and other fees with respect
to its Advisor Shares. Under the Plan, a Fund may make payments at an annual
rate of up to 0.25% of the daily net assets attributable to its Advisor Shares
to compensate Schroder Fund Advisors Inc. (the "Distributor") for distribution
services and certain shareholder services with respect to the Fund's Advisor
Shares.
NOTE 4 -- REDEMPTION FEE
The Schroder U.S. Large Cap Equity, Schroder U.S. Opportunities and Schroder
International Funds impose a 2.00% redemption fee on shares redeemed (including
in connection with an exchange) two months or less from their date of purchase.
Prior to July 1, 2003, Schroder International Fund imposed a 2.00% redemption
fee on shares redeemed three months or less from their date of purchase. These
charges are intended principally to cover transaction costs and other costs and
expenses that each Fund incurs (directly and indirectly) in connection with
these redemptions. These fees, which are not sales charges, are retained by the
Funds and not paid to Schroder Advisors or any other entity. The redemption fees
are included in the Statements of Changes in Net Assets under "Redemption fees",
and are included as part of Capital paid-in on the Statements of Assets and
Liabilities. The redemption fee applies only to Fund shares purchased on or
after May 1, 2004, with respect to Schroder U.S. Large Cap Equity Fund and
Schroder U.S. Opportunities Fund, and only to Fund shares purchased on or after
November 1, 2000, with respect to Schroder International Fund. The redemption
fees paid to the Schroder U.S. Large Cap Equity, Schroder U.S. Opportunities and
Schroder International Funds for the six months ended April 30, 2005 totaled $0,
$23,866 and $0, respectively.
NOTE 5 -- TRANSACTIONS WITH AFFILIATES
TRUSTEES' FEES: The Funds pay no compensation to Trustees who are interested
persons of the Trusts, SIMNA or Schroder Advisors. For their services as
Trustees of all open-end investment companies distributed by Schroder Advisors,
Trustees who are not interested persons of the Funds, SIMNA or Schroder Advisors
receive an annual retainer of $11,000 and $1,250 per meeting attended in person
or $500 per meeting attended by telephone. Members of an Audit Committee for one
or more of such Funds receive an additional $1,000 per year. Trustees' fees are
allocated among the various Funds based on their relative net assets. Payment of
meeting fees will be allocated only among those Funds to which the meeting
relates.
Certain officers of the Funds are also officers of SIMNA and Schroder Advisors.
Such officers are paid no fees by the Funds for serving as officers of the
Funds.
NOTE 6 -- INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for each Fund, for the six months ended April 30, 2005
were as follows:
SALES AND
PURCHASES MATURITIES
------------ -----------
Schroder U.S. Large Cap Equity Fund ................................... $ 1,769,777 $ 2,713,246
Schroder U.S. Opportunities Fund ...................................... 94,136,374 54,558,461
Schroder International Fund ........................................... 4,124,574 4,077,359
Schroder Enhanced Income Fund ......................................... 34,711,822 2,732,103
Schroder U.S. Core Fixed Income Fund .................................. 5,871,642 2,712,077
Schroder Municipal Bond Fund .......................................... 39,389,473 10,255,648
Schroder Short-Term Municipal Bond Fund ............................... 36,624,533 12,657,252
Purchases and proceeds from sales and maturities of U.S. Government securities
for the six months ended April 30, 2005 were as follows:
SALES AND
PURCHASES MATURITIES
------------ -----------
Schroder Enhanced Income Fund ......................................... $ 1,360,811 $ --
Schroder U.S. Core Fixed Income Fund .................................. 23,479,505 19,402,628
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
NOTE 7 -- FEDERAL INCOME TAXES
It is the intention of the Funds for each Fund to continue to qualify as a
"regulated investment company" by complying with the requirements of Subchapter
M of the Internal Revenue Code of 1986, as amended. By so qualifying, the Funds
would not be subject to Federal income taxes to the extent that, among other
things, they distribute substantially all of their taxable income, including
realized capital gains, for the fiscal year. In addition, as a result of
distributing substantially all of their net investment income during each
calendar year, capital gains and certain other amounts, if any, the Funds would
not be subject to a Federal excise tax.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from accounting principles generally accepted
in the United States of America. These book/tax differences are either temporary
or permanent in nature. Any permanent differences, which may result in
distribution reclassifications, are primarily due to differing treatments for
net operating losses and foreign currency transactions. The Funds may also
utilize earnings and profits distributed to shareholders on redemption of shares
as a part of the dividends paid deduction for income tax purposes. Distributions
from short term gains and from gains on foreign currency transactions are
treated as distributions from ordinary income for tax purposes.
The tax character of dividends and distributions declared during the years or
periods ended October 31, 2004 and October 31, 2003 were as follows:
ORDINARY TAX-EXEMPT LONG-TERM
INCOME INCOME CAPITAL GAIN TOTAL
-------- -------- ---------- ----------
Schroder U.S. Opportunities Fund
2004 ............................................. $ -- $ -- $ -- $ --
2003 ............................................. -- -- 1,118,816 1,118,816
Schroder International Fund
2004 ............................................. 121,800 -- -- 121,800
2003 ............................................. 197,572 -- -- 197,572
Schroder Municipal Bond Fund
2004* ............................................ 60,062 832,010 -- 892,072
Schroder Short-Term Municipal Bond Fund
2004* ............................................ 62,985 867,920 -- 930,905
* Fund commenced investment activities on December 31, 2003.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2005 (UNAUDITED)
As of October 31, 2004, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
TOTAL
DISTRIBUTABLE
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED CAPITAL UNREALIZED OTHER EARNINGS
ORDINARY TAX-EXEMPT LONG-TERM LOSS APPRECIATION TEMPORARY (ACCUMULATED
INCOME INCOME CAPITAL GAIN CARRYFORWARD (DEPRECIATION) DIFFERENCES LOSSES)
------------ ------------ ------------- -------------- -------------- ------------- -------------
Schroder U.S. .
Large Cap
Equity Fund . $ -- $ -- $ -- $ (6,547,421) $ 910,653 $ -- $ (5,636,768)
Schroder U.S. .
Opportunities
Fund ........ 1,951,100 -- 7,227,455 -- 8,582,066 5 17,760,626
Schroder
International
Fund ........ 69,911 -- -- (13,526,652) 651,787 -- (12,804,954)
Schroder
Municipal
Bond Fund ... 18,966 32,429 -- (338,378) 377,838 (24,358) 66,497
Schroder
Short-Term
Municipal
Bond Fund ... 1,883 25,946 -- (96,239) ( 175,079) (24,358) (267,847)
As of October 31, 2004, the Funds listed below had net tax basis capital loss
carryforwards, for Federal income tax purposes, that may be applied against
future taxable gains until their expiration date as follows:
EXPIRATION
DATES
AMOUNT OCTOBER 31,
---------- -----------
Schroder U.S. Large Cap Equity Fund ............... $3,282,767 2009
2,512,657 2010
751,997 2011
Schroder International Fund ....................... 9,172,530 2009
3,440,360 2010
913,762 2011
Schroder Municipal Bond Fund ...................... 338,378 2012
Schroder Short-Term Municipal Bond Fund ........... 96,239 2012
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NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
APRIL 30, 2005 (UNAUDITED)
During the year ended October 31, 2004, capital loss carryforwards that were
utilized to offset gains were as follows:
AMOUNT
--------
Schroder U.S. Large Cap Equity Fund .............................. $106,596
Schroder U.S. Opportunities Fund ................................. 392,336
Schroder International Fund ...................................... 447,836
At April 30, 2005, the identified cost for Federal income tax purposes of
investments owned by each Fund and their respective gross unrealized
appreciation and depreciation were as follows:
GROSS UNREALIZED NET UNREALIZED
IDENTIFIED ---------------- APPRECIATION
TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------- ------------ ------------- --------------
Schroder U.S. Large Cap Equity Fund ......... $ 7,238,907 $ 1,211,325 $ (284,901) $ 926,424
Schroder U.S. Opportunities Fund ............ 114,402,641 8,477,766 (6,975,487) 1,502,279
Schroder International Fund ................. 5,320,235 447,581 (201,352) 246,229
Schroder Enhanced Income Fund ............... 116,389,080 170,710 (194,910) (24,200)
Schroder U.S. Core Fixed Income Fund ........ 12,736,451 87,464 (31,960) 55,504
Schroder Municipal Bond Fund ................ 76,367,666 479,605 (316,055) 163,550
Schroder Short-Term Municipal Bond Fund ..... 100,557,967 329,076 (580,055) (250,979)
NOTE 8 -- PORTFOLIO INVESTMENT RISKS
Schroder International Fund has a relatively large portion of its assets
invested in companies domiciled in particular foreign countries, including Japan
and the United Kingdom. The Fund may be more susceptible to political, social
and economic events adversely affecting those countries and such issuers.
NOTE 9 -- BENEFICIAL INTEREST
The following table shows the number of shareholders each owning beneficially or
of record 5% or more of shares of a Fund outstanding as of April 30, 2005 and
the total percentage of shares of the Fund held by such shareholders. The table
includes omnibus accounts that hold shares on behalf of several shareholders.
5% OR GREATER SHAREHOLDERS
--------------------------
NUMBER % OF FUND HELD
------- --------------
Schroder U.S. Large Cap Equity Fund........... 2 31.08%
Schroder U.S. Opportunities Fund.............. 4 71.74
Schroder International Fund................... 2 84.44
Schroder Enhanced Income Fund ................ 1 98.76
Schroder U.S. Core Fixed Income Fund ......... 1 100.00
Schroder Municipal Bond Fund.................. 3 82.06
Schroder Short-Term Municipal Bond Fund....... 2 84.64
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PROXY VOTING
A description of the Funds' proxy voting policies and procedures and information
regarding how the Funds voted proxies related to portfolio securities during the
most recent 12-month period ended June 30 is available, without charge, upon
request, by visiting the SEC's website at http://www.sec.gov, or by calling
1-800-464-3108 and requesting a copy of the Funds' Statement of Additional
Information.
FORM N-Q
The Funds file their complete schedules of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms
N-Q are available on the SEC's website at http://www.sec.gov, and may be
reviewed and copied at the SEC's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330. The Funds' Form N-Q are also available at
www.schroderfunds.com.
INFORMATION REGARDING REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT
The Funds' Advisory Agreement is subject to annual approval by (i) the vote of
the Trustees or of a majority of the outstanding voting securities (as defined
in the 1940 Act) of each affected Fund, and (ii) the vote of a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust or Schroder. The Advisory Agreement is terminable with respect to a Fund
by Schroder, the Trust, or a vote of a majority of the outstanding voting
securities of the affected Fund, without penalty, on 60 days prior written
notice and will terminate automatically in the event of its assignment.
The Trustees meet over the course of the year with investment advisory personnel
from Schroder and regularly review detailed information regarding the investment
program and performance of each Fund. The Trustees met in May 2005 to consider
the continuation of the Advisory Agreement in respect of each of the Funds for
the following year. In connection with this meeting, the Trustees received
materials to assist them with their review. These materials included, among
other things, (i) information on the investment performance of the Funds and the
performance of other funds in the Funds' peer groups and certain benchmarks;
(ii) information on the Funds' advisory and sub-advisory fees and other
expenses, including information comparing the Funds' expenses to other funds in
their peer group and information about any applicable fee waiver and expense
reimbursements and fee "breakpoints"; and (iii) information about the
profitability of the Advisory Agreement to the Funds' advisers and sub-advisors.
In considering whether to approve the continuation of the Advisory Agreement,
the Trustees did not identify any single factor as determinative. Matters
considered by the Trustees included the factors described below.
The Trustees considered the fees charged by Schroder to the Funds under the
Advisory Agreement. Fees, for this purpose, were considered to include the
sub-advisory fee paid by Schroder to SIMNA Ltd. for its services, as well as any
administration or sub-administration fees paid by the Funds to Schroder. As
compensation for SIMNA Ltd.'s services as sub-adviser to Schroder International
Fund, Schroder pays SIMNA Ltd. 25% of the investment advisory fees Schroder
receives from the Fund. Schroder furnished information to the Trustees compiled
by the independent Lipper organization showing a comparison of Schroder's fee
rate for each Fund compared to peer mutual funds having similar objectives,
strategies, and asset sizes. The data showed that SIMNA charges fees within the
range of comparable mutual funds, with more than half the Funds below the median
for their respective peer groups (after giving effect to expense limitations
currently in effect and expected to be in effect for the coming year). Those
Funds with advisory fees above the median were not within the top quartile after
giving effect to the expense limitations currently in effect.
The Trustees considered information provided by Schroder as to the fees charged
by Schroder to clients other than the Funds, including institutional separate
accounts and offshore funds. The Trustees generally found the fees paid by the
Funds to be less than those paid by other clients of Schroder. In some cases,
the fee rate charged by Schroder to institutional separate accounts are lower
than that of the comparable Fund. Representatives of Schroder reviewed with the
Trustees the reasons for the differences between the fees charged to the Funds
and to those accounts. They explained that compliance, reporting, and other
legal burdens of providing investment advice to mutual funds greatly exceed
those required to provide advisory services to non-mutual fund clients such as
retirement or pension plans. In addition, they pointed out that there is
substantially greater legal and other risk to Schroder in managing public mutual
funds than in managing private
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accounts. In addition, management of the Funds requires the use of resources
necessary to conduct daily valuation to satisfy liquidity requirements, which is
not the case with respect to institutional separate account clients. In some
asset classes, the fees charged by Schroder to its separate account clients
exceed those charged to the Funds. Representatives of Schroder explained that in
these cases, where it can be difficult and time-consuming to manage smaller
accounts within the framework of their existing investment models, Schroder
charges institutional clients a premium for offering the customized services and
reporting of a separate account. Representatives of Schroder further explained
that when Schroder charges an advisory fee at the fund level to offshore pooled
vehicles that it advises, they are at least the same as, but in most cases are
higher than, the fees charged to the Funds, and that these fees are determined
in the context of the market in which such pooled vehicles are offered. Schroder
noted that sub-advisory fees charged by it to other mutual funds are generally
lower than the fees it charges to the comparable Funds. Representatives of
Schroder noted that the services and resources required by Schroder when it
sub-advises mutual funds sponsored by other firms are substantially less than
those required with respect to the Funds, since many of the compliance and
regulatory responsibilities are retained by the primary adviser in such
circumstances.
Schroder furnished a detailed profitability analysis with respect to each Fund
for the years ended December 31, 2003 and December 31, 2004. This information
showed the substantial costs of providing services to the Funds, and indicated
that Schroder had a net loss with respect to all of the Funds for the year ended
December 31, 2003 and for most of the Funds for the calendar year ended December
31, 2004. The data showed that Schroder anticipated that it would earn a
substantial profit in respect of the U.S. Opportunities Fund (which will be
increased if the proposed fee increase for that Fund is approved by
shareholders), but the Trustees did not consider that profit excessive or
unreasonable in light of the investment Schroder had made in past years in
sponsoring the Fund and the quality of the service provided by Schroder to the
Fund.
The Trustees considered whether economies of scale would likely be realized as
the Funds grow and whether a reduction in the advisory fees paid by the Funds by
means of breakpoints would be appropriate. Schroder noted that the increased
profit realized by the firm as the Funds grow enables it to devote greater
resources to the management of the Funds, as well as to provide financial
incentives for the portfolio managers, analysts, and other personnel who in many
cases have alternative employment and business opportunities available to them.
In addition, Schroder noted that most of the Funds were small and they believed
competitively priced, and that Schroder's profit with respect to those Funds
that were profitable was not excessive or unreasonable.
Schroder noted that certain investment styles, such as a small-cap strategy, do
not benefit from economies of scale to the same extent as many other investment
styles, because of the limited ability to increase the size of a Fund's
investments in certain portfolio holdings. Instead, larger Funds in those styles
must often generate and monitor a greater number of potential and actual
investments, requiring Schroder to increase investment resources dedicated to
those Funds. Representatives of Schroder explained that they had recently hired
an additional analyst to focus on the small- and mid-cap strategies.
The Trustees reviewed detailed performance information for each Fund for various
periods. That review included an examination of comparisons of the performance
of the Funds to relevant securities indexes and various peer groups of mutual
funds prepared by the independent Lipper organization with respect to various
periods. That information includes the relative rankings of the Funds compared
to peer funds during various periods. None of the Funds was shown in that data
to have substantially lagged all peer mutual funds and indexes for all relevant
periods. A number of the Funds enjoyed favorable absolute and comparative
performance for various periods.
In the case of Schroder International Fund, the Trustees noted that the Fund's
performance in recent periods had been relatively unfavorable. They discussed
with Schroder management steps Schroder was taking to improve performance,
including the recent hiring of Virginie Maisonneuve as head of international
equity investing and the leader of the portfolio management team with respect to
this Fund.
The Trustees considered the nature, extent, and quality of the services provided
by Schroder. In this regard, the Trustees took into account the experience of
the Funds' portfolio management teams and of Schroder's senior management, and
the time and attention devoted by each to the Funds. The Trustees considered the
performance of each Fund over the life of the Fund and in recent periods. They
also considered the non-advisory services provided by affiliates of Schroder,
including the administrative services provided to most of the Funds by Schroder
Fund Advisors Inc.
After considering all of the information described above, the Trustees at the
meeting unanimously voted to approve the continuation of the Advisory Agreement,
including the advisory fees proposed in connection with that continuation.
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65
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SCHRODER MUTUAL FUNDS
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DISCLOSURE OF FUND EXPENSES (UNAUDITED)
We believe it is important for you to understand the impact of fees regarding
your investment. All mutual funds have operating expenses. As a shareholder of
the fund, you incur ongoing costs, which include costs for portfolio management,
administrative services, and shareholder reports (like this one), and in the
case of Advisor Shares, distribution (12b-1) fees, among others. Operating
expenses, which are deducted from a fund's gross income, directly reduce the
investment return of the fund. A fund's expenses are expressed as a percentage
of its average net assets. This figure is known as the expense ratio. The
following examples are intended to help you understand the ongoing costs (in
dollars) of investing in your fund and to compare these costs with those of
other mutual funds. The examples are based on an investment of $1,000 made at
the beginning of the period shown and held for the entire period.
The table on the following page illustrates your fund's costs in two ways.
o ACTUAL EXPENSES. This section helps you to estimate the actual expenses
after fee waivers that you paid over the period. The "Ending Account
Value" shown is derived from the fund's actual return, and the fourth
column shows the dollar amount that would have been paid by an investor
who started with $1,000 in the fund. You may use the information here,
together with the amount you invested, to estimate the expenses that you
paid over the period.
To do so, simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by
the number given for your fund under the heading "Expenses Paid During
Period."
o HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. This section is intended to
help you compare your fund's costs with those of other mutual funds. It
assumes that the fund had a return of 5% before expenses during the year,
and that it incurred expenses at the rate of which it in the past did
incur expenses. In this case, because the return used is not the fund's
actual return, the results may not be used to estimate the actual ending
balance of an account in the fund over the period or expenses you actually
paid. The example is useful in making comparisons because the Securities
and Exchange Commission requires all mutual funds to calculate expenses in
this table based on a 5% return. You can assess your fund's costs by
comparing this hypothetical example with the hypothetical examples that
appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight and help
you compare ongoing costs only and do not reflect any transactional costs such
as redemption fees, which are described in the Prospectus. If this fee were
applied to your account, your costs would be higher.
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66
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SCHRODER MUTUAL FUNDS
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DISCLOSURE OF FUND EXPENSES (UNAUDITED)
Beginning Ending Net Expenses
Account Account Annualized Paid
Value Value Expense During
10/31/04 4/30/05 Ratios Period*
- ------------------------------------------------------------------------------------------
SCHRODER U.S. LARGE CAP EQUITY FUND
- ------------------------------------------------------------------------------------------
Actual Expenses $ 1,000.00 $ 1,039.70 2.00% $10.11
Hypothetical Example for
Comparison Purposes 1,000.00 1,014.88 2.00 9.99
- ------------------------------------------------------------------------------------------
SCHRODER U.S. OPPORTUNITIES FUND
- ------------------------------------------------------------------------------------------
Actual Expenses $ 1,000.00 $ 1,011.30 1.22% $ 6.08
Hypothetical Example for
Comparison Purposes 1,000.00 1,018.74 1.22 6.11
- ------------------------------------------------------------------------------------------
SCHRODER INTERNATIONAL FUND
- ------------------------------------------------------------------------------------------
Actual Expenses $ 1,000.00 $ 1,071.50 1.25% $ 6.42
Hypothetical Example for
Comparison Purposes 1,000.00 1,018.60 1.25 6.26
- ------------------------------------------------------------------------------------------
SCHRODER ENHANCED INCOME FUND**
- ------------------------------------------------------------------------------------------
Actual Expenses
Investor Shares $ 1,000.00 $ 1,008.00 0.40% $ 1.32
Advisor Shares 1,000.00 1,007.20 0.65 2.14
Hypothetical Example for
Comparison Purposes
Investor Shares $ 1,000.00 $ 1,015.12 0.40% $ 1.33
Advisor Shares 1,000.00 1,014.30 0.65 2.15
- ------------------------------------------------------------------------------------------
SCHRODER U.S. CORE FIXED INCOME FUND**
- ------------------------------------------------------------------------------------------
Actual Expenses
Investor Shares $ 1,000.00 $ 1,013.00 0.40% $ 1.32
Advisor Shares 1,000.00 1,012.10 0.65 2.15
Hypothetical Example for
Comparison Purposes
Investor Shares $ 1,000.00 $ 1,015.12 0.40% $ 1.33
Advisor Shares 1,000.00 1,014.30 0.65 2.15
- ------------------------------------------------------------------------------------------
SCHRODER MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------
Actual Expenses
Investor Shares $ 1,000.00 $ 1,010.10 0.55% $ 2.74
Advisor Shares 1,000.00 1,009.80 0.80 3.99
Hypothetical Example for
Comparison Purposes
Investor Shares $ 1,000.00 $ 1,022.07 0.55% $ 2.76
Advisor Shares 1,000.00 1,020.83 0.80 4.01
- ------------------------------------------------------------------------------------------
SCHRODER SHORT-TERM MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------------------
Actual Expenses
Investor Shares $ 1,000.00 $ 1,011.20 0.55% $ 2.74
Advisor Shares 1,000.00 1,009.90 0.80 3.99
Hypothetical Example for
Comparison Purposes
Investor Shares $ 1,000.00 $ 1,022.07 0.55% $ 2.76
Advisor Shares 1,000.00 1,020.83 0.80 4.01
- ------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 181/365 (to
reflect the one-half year period).
** Fund commenced operations on December 31, 2004. Expenses are equal to the
Fund's annualized expense ratio multiplied by the average account value
over the period, multiplied by 120/365.
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67
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NOTES
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- --------------------------------------------------------------------------------
PRIVACY STATEMENT
- --------------------------------------------------------------------------------
In the course of doing business with Schroders and the Schroder Mutual Funds,
you share nonpublic personal and financial information ("nonpublic personal
information") with us. Schroders respects your right to privacy. We understand
that you have entrusted us with this private information and we recognize the
importance of protecting unnecessary or unauthorized access to it.
I. INFORMATION THAT WE COLLECT
We may collect nonpublic personal information about you when you communicate or
transact business with us or with our service providers in writing,
electronically, or by telephone. For example, we collect nonpublic personal
information (such as name, address, account and other investment information)
about you from the following sources:
o Applications or forms completed by you; and
o Your transactions and account positions with us, our affiliates, or others
(including, for example, your own broker or custodian).
II. INFORMATION THAT WE DISCLOSE
We do not sell or rent your nonpublic personal information to any third parties.
We may disclose your nonpublic personal information to third parties in the
following limited circumstances:
o We may disclose some or all of your nonpublic personal information to
companies that help us maintain, process or service your transactions or
account(s) or financial products or services effected by or through us,
including companies that perform administrative, accounting, transfer
agency, custodial, brokerage or proxy solicitation services for us.
o We may disclose some or all of your nonpublic personal information, such
as account and transaction data, to companies which assist us in marketing
or client servicing. These companies will use this information only for
the services for which we hired them, are not permitted to use or share
this information for any other purpose and are required to protect the
confidentiality and security of this information.
o We may disclose or report some or all of your nonpublic personal
information if you request or authorize us to do so, for institutional
risk control, or in other circumstances where we believe in good faith
that disclosure is required or permitted under law.
III. OUR SECURITY PROCEDURES
We maintain physical, electronic, and procedural safeguards that comply with
federal standards to protect your nonpublic personal information. Within
Schroders, access to such information is limited to those employees who need it
to perform their jobs, such as servicing your accounts, resolving problems, or
informing you of new products or services. Finally, our Code of Ethics, which
applies to all employees, restricts the use of customer information and requires
that it be held in strict confidence.
We observe these policies with respect to current and former Schroders customers
and shareholders of the Schroder Mutual Funds.
If you identify any inaccuracy in your personal information or you need to make
a change to that information, please contact us in writing so that we may
promptly update our records.
This Privacy Policy applies to the Schroder Mutual Funds, Schroder Fund
Advisors Inc. and Schroder Investment Management North America Inc.
- --------------------------------------------------------------------------------
[LOGO] SCHRODERS
INVESTMENT ADVISOR Schroder Investment Management North America Inc.
875 Third Avenue, 22nd Floor
New York, NY 10022
TRUSTEES Peter L. Clark (CHAIRMAN)
David N. Dinkins
Peter E. Guernsey
John I. Howell
Peter S. Knight
William L. Means
Clarence F. Michalis
Hermann C. Schwab
James D. Vaughn
DISTRIBUTOR Schroder Fund Advisors Inc.
875 Third Avenue, 22nd Floor
New York, NY 10022
TRANSFER & SHAREHOLDER Boston Financial Data Services, Inc.
SERVICING AGENT
CUSTODIAN JP Morgan Chase Bank
COUNSEL Ropes & Gray LLP
INDEPENDENT REGISTERED PUBLIC PricewaterhouseCoopers LLP
ACCOUNTING FIRM
The information contained in this report is
intended for the general information of the
shareholders of the Trusts. This report is not
authorized for distribution to prospective
investors unless preceded or accompanied by a
current prospectus which contains important
information concerning the Trusts.
SCHRODER CAPITAL FUNDS (DELAWARE)
SCHRODER SERIES TRUST
P.O. BOX 8507
BOSTON, MA 02266
(800) 464-3108
43165
[LOGO] SCHRODERS
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded, based on their evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing date of this
report on Form N-CSR, that the design and operation of such procedures are
effective to provide reasonable assurance that information required to be
disclosed by the investment company on Form N-CSR is recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and forms.
(b) There have been no changes in the registrant's internal control over
financial reporting during the period from February 1, 2005 through April 30,
2005 that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable for semi-annual report.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schroder Series Trust
By (Signature and Title)* /s/ Mark A. Hemenetz
--------------------------------------
Mark A. Hemenetz,
Principal Executive Officer
Date June 27, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Mark A. Hemenetz
-------------------------------------
Mark A. Hemenetz,
Principal Executive Officer
Date June 27, 2005
By (Signature and Title)* /s/ Alan M. Mandel
-------------------------------------
Alan M. Mandel,
Treasurer and Chief Financial Officer
Date June 27, 2005
* Print the name and title of each signing officer under his or her signature.