[ANNOTATED FORM N-CSR FOR SEMI-ANNUAL REPORTS]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21364
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SCHRODER GLOBAL SERIES TRUST
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(Exact name of registrant as specified in charter)
875 Third Avenue, 22nd Floor New York, NY 10022
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(Address of principal executive offices) (Zip code)
Carin F. Muhlbaum, 875 Third Avenue, 22nd Floor, New York, NY 10022
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(Name and address of agent for service)
Registrant's telephone number, including area code: 212-492-6000
-----------------------------
Date of fiscal year end: 4/30/2004
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Date of reporting period: 10/31/2003
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ITEM 1. REPORTS TO STOCKHOLDERS.
The Fund's semi-annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
SCHRODER NORTH AMERICAN EQUITY FUND
November 21, 2003
Dear Shareholder:
We are pleased to provide the semi-annual report to shareholders of the Schroder
North American Equity Fund, which covers the period from inception on September
17, 2003 to October 31, 2003. This report includes comments from the portfolio
manager, the schedule of investments and other relevant information regarding
the Fund. We encourage you to read the report and we thank you for making
Schroders part of your investment program.
The six months ending October 31 was marked by market volatility - equity and
fixed income, domestic and international, large cap and small cap all saw
fluctuations caused by a variety of factors. However, towards the end of the
timeframe, positive signs began to emerge allowing some degree of investor
optimism and driving markets up once again.
Perhaps the most significant event thus far in 2003 was the war in Iraq. As
talks to avert fighting took place, the uncertainty of the situation pushed
markets down. However, once the conflict began, markets rose. This occurred at
the same time companies began to report better than expected profit growth.
In the U.S., the federal tax cut helped drive more money into the market. In
addition, it encouraged consumers to spend, thus boosting overall returns and
company profits. However, it is unclear to what extent the new tax law will
impact long-term investment. The Federal Reserve continues to play a major role
in the recovery effort and has publicly stated that it is committed to keeping
interest rates low for extended periods to stimulate the economy.
Despite the recent strong economic activity in the U.S., there is still cause
for concern given that the economic recovery the U.S. experienced thus far has
not been accompanied by job growth. Business hiring, which is a critical
component to any recovery, has not seen the upswing that is typically required
for any sustainable momentum.
It is important to emphasize the necessity of taking a long-term outlook to your
portfolio and the need for diversifying among a range of domestic and
international equity and bond funds.
We thank you for making Schroders part of your investment goals and for your
continued confidence.
-s- Catherine A. Mazza
Catherine A. Mazza
President
The views expressed in the following report were those of the Fund's portfolio
manager as of the date specified, and may not reflect the views of the portfolio
manger on the date this semi-annual report is first published or any time
thereafter. These views are intended to assist shareholders of the Fund in
understanding their investment in the Fund 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 Fund and therefore no longer appear in the Schedule
of Investments as of October 31, 2003.
1
SCHRODER NORTH AMERICAN EQUITY FUND
MANAGEMENT DISCUSSION AND ANALYSIS (as of November 21, 2003)
PERFORMANCE
The Schroder North American Equity Fund had a total return of 2.80% for the
period from inception on September 17, 2003 to October 31, 2003. This compares
to the Fund's benchmark, the FTSE North American Index, which had a total return
of 2.78% for the same period. The Fund also outperformed the S&P 500 Index, a
measurement of large capitalization U.S. companies, which rose 2.61% for the
period.
Performance was positive across the short period under review, due primarily to
effective stock selection strategies in the financial and consumer staples
sectors.
MARKET BACKGROUND
Recently, U.S. markets recently have been through volatile times. While lower
interest rates and fiscal stimulus policies had a positive impact, investors
became concerned with the tensions in and subsequent war with Iraq, the SARS
outbreak and corporate profits. In this uncertain market environment, earnings
stability and visibility were both attractive and sought after characteristics.
This was highlighted by the premium placed on companies with more defensive
earnings profiles, and the underperformance of the technology, media and
telecommunications sectors.
Overall, during the six months ending October 31, U.S. markets rose. Although
the U.S. labor statistics remained weak, the rebound was partially attributable
to increased signs of a global economic recovery in the U.S., an improving
credit cycle and analyst upgrades of corporate earnings. Retail sales figures
also provided a nice surprise, as consumer spending remained strong due to both
mortgage refinancings and the federal tax cuts.
The Federal Reserve continued to play a major role with their efforts to
alleviate the threat of deflation and assist economic activity. The current Fed
rate is at its lowest level in 45 years. Finally, the U.S. dollar weakened over
the period, mainly due to the U.S. deficit and the government's benign attitude
toward the weaker dollar.
PORTFOLIO REVIEW
The Fund began investment operations in mid-September with a strategy based on
quantitative research techniques. The result is a highly diversified schedule of
investments where the majority of risk is taken via stock selection and the
modest over and underweight positions relative to the benchmark at the sector
level were intended to manage some of that risk.
At the end of October, the Fund held over 400 stocks. Of these holdings, there
was a slight bias towards the non-cyclical sectors versus cyclically geared
industries (for example overweight in pharmaceuticals versus underweight in
basic industries). In addition, holdings in mega-cap and small cap companies
outweighed those included in the benchmark, at the expense of mid-sized
companies.
2
SCHRODER NORTH AMERICAN EQUITY FUND
OUTLOOK
The economic outlook in North America presents a mixed picture for investors. We
believe that good corporate cash flow, primarily a result of cost cutting, along
with fiscal stimulus packages and monetary policies, should continue to support
economic activity. During the fourth quarter of 2003, we expect growth to
continue, benefiting mainly from the current inventory rebuilding. Although the
economy is growing faster than expected, excess capacity should prevent an
increase in inflation.
However, a major cause for concern is the fact that the recovery thus far is not
a by-product of an improving labor market. Therefore, it is possible that the
current growth is unsustainable and may slow in 2004. Two major causes of growth
in 2003 were the federal tax cuts and mortgage refinancings. Now that the impact
of both of these is fading, declines in the unemployment rate may be necessary
to support consumption. Accordingly, we believe it is unlikely that central
banks, including the U.S. Federal Reserve, will tighten monetary policy until a
more sustained growth pattern is established.
In this environment, the Fund is expected to diversify holdings across a wide
range of uncorrelated strategies that in aggregate give it broad exposure to
value, growth and quality characteristics, with the intention of adding value
through the market cycle.
PERFORMANCE INFORMATION
SINCE
INCEPTION*
----------
Schroder North American Equity Fund 2.80%
FTSE North American Index** 2.78
S&P 500 Index** 2.61
* The Fund commenced operations on September 17, 2003
** The FTSE North American Index is a market capitalization value weighted
composite index of over 700 U.S. and Canadian companies and reflects the
re-investment of dividends. The S&P 500 Index is a market capitalization
value weighted composite index of 500 large capitalization U.S. companies and
reflects the reinvestment of dividends.
"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 10 HOLDINGS
SECURITY % OF NET ASSETS
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General Electric 2.8%
Microsoft 2.7
Pfizer 2.5
Exxon Mobil 2.2
Citigroup 2.2
Intel 2.1
Wal-Mart Stores 1.9
American International Group 1.6
Johnson & Johnson 1.5
Cisco Systems 1.4
TOP 10 SECTORS
SECTOR % OF NET ASSETS
- --------------------------------------------------------------------------------
Diversified Financials 8.4%
Banks 8.3
Pharmaceuticals 8.3
Insurance 5.1
Media 4.4
Integrated Oil & Gas 4.3
Industrial Conglomerates 3.9
Systems Software 3.8
Semiconductors 3.6
Health Care Equipment & Services 3.5
3
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- ----------------------------------------------------------------------
COMMON STOCKS (99.7%)
BERMUDA (0.4%)
INSURANCE (0.3%)
21,392 ACE $ 770,112
14,598 Arch Capital Group (1) 532,827
7,501 IPC Holdings 280,912
14,326 PartnerRe Holdings 777,472
----------
2,361,323
----------
SEMICONDUCTOR EQUIPMENT (0.1%)
13,259 Marvell Technology
Group (1) 580,877
----------
Total Bermuda 2,942,200
----------
CANADA (3.8%)
AEROSPACE & DEFENSE (0.1%)
208,175 Bombardier 935,015
----------
BANKS (0.5%)
25,128 Bank of Montreal 940,453
25,869 Bank of Nova Scotia 1,284,962
40,850 Royal Bank of Canada 1,967,420
----------
4,192,835
----------
CHEMICALS (0.1%)
64,031 Methanex 632,999
----------
DIVERSIFIED FINANCIALS (0.1%)
30,302 Power of Canada 995,698
----------
DIVERSIFIED TELECOMMUNICATION
SERVICES (0.1%)
48,759 BCE 1,104,249
----------
FOOD RETAIL (0.1%)
16,800 Loblaw 813,839
----------
GENERAL MERCHANDISE STORES (0.1%)
19,217 Canadian Tire 595,442
----------
INSURANCE (0.5%)
25,382 Great West Lifeco 786,273
50,404 Manulife Financial 1,529,654
76,236 Sun Life Financial 1,885,005
----------
4,200,932
----------
INTEGRATED OIL & GAS (0.6%)
57,489 EnCana 1,974,528
30,800 Husky Energy 506,148
26,000 Imperial Oil 1,034,832
32,574 Petro-Canada 1,313,043
----------
4,828,551
----------
MEDIA (0.4%)
29,552 Quebecor World 504,473
45,178 Rogers Communications 711,235
58,900 Shaw Communications 824,479
25,916 Thomson 848,628
----------
2,888,815
----------
METALS & MINING (0.3%)
87,990 Barrick Gold 1,712,335
20,434 Dofasco 494,087
----------
2,206,422
----------
OIL & GAS EXPLORATION
& PRODUCTION (0.5%)
33,938 Baytex Energy Trust (1) 270,876
31,098 Canadian Natural Resources 1,321,025
11,312 Crew Energy (1) 29,609
32,773 Nexen 919,747
27,027 Talisman Energy 1,320,336
----------
3,861,593
----------
PAPER & FOREST PRODUCTS (0.1%)
66,738 Domtar 743,305
----------
The accompanying notes are an integral part of the financial statements.
4
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -----------------------------------------------------------
PHARMACEUTICALS (0.1%)
30,157 Biovail (1) $ 725,754
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RAILROADS (0.1%)
31,078 Canadian Pacific Railway 871,236
------------
REAL ESTATE INVESTMENT TRUSTS (0.0%)
26,166 RioCan Real Estate 288,450
------------
TELECOMMUNICATIONS EQUIPMENT (0.1%)
232,906 Nortel Networks (1) 1,039,025
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Total Canada 30,924,160
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SINGAPORE (0.1%)
ELECTRONIC EQUIPMENT
& INSTRUMENTS (0.1%)
37,719 Flextronics International (1) 528,066
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SWEDEN (0.1%)
AUTO COMPONENTS (0.1%)
12,913 Autoliv 427,679
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UNITED KINGDOM (0.1%)
TELECOMMUNICATIONS EQUIPMENT (0.1%)
38,750 Amdocs (1) 831,575
------------
UNITED STATES (95.2%)
AEROSPACE & DEFENSE (1.6%)
54,544 Boeing $ 2,099,399
12,235 General Dynamics 1,024,069
81,439 Honeywell International 2,492,848
22,400 L-3 Communications
Holdings (1) 1,046,976
26,717 Lockheed Martin 1,238,600
8,885 Northrop Grumman 794,319
51,031 Raytheon 1,351,301
26,847 Rockwell Collins 736,950
27,616 United Technologies 2,338,799
------------
13,123,261
------------
AIR FREIGHT & COURIERS (0.6%)
10,717 C.H. Robinson Worldwide 419,892
25,977 EGL (1) 423,685
14,162 FedEx 1,072,913
37,660 United Parcel Service 2,731,103
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4,647,593
------------
APPAREL RETAIL (0.4%)
13,978 Coach (1) 495,800
83,861 Gap 1,600,068
67,136 Limited Brands 1,181,593
------------
3,277,461
------------
APPLICATION SOFTWARE (0.5%)
54,255 BEA Systems (1) 754,145
18,240 Citrix Systems (1) 461,107
22,998 Intuit (1) 1,149,440
14,429 Macromedia (1) 275,738
17,758 Mercury Interactive (1) 824,682
7,252 Micros Systems (1) 293,633
------------
3,758,745
------------
AUTO COMPONENTS (0.1%)
80,336 Delphi 714,990
------------
AUTOMOBILES (0.9%)
171,411 Ford Motor 2,079,215
57,482 General Motors 2,452,757
34,007 Harley Davidson 1,612,272
10,979 Paccar 866,902
------------
7,011,146
------------
BANKS (7.8%)
55,006 Amsouth Bancorp 1,299,242
117,840 Bank of America 8,924,023
35,751 Bank of New York 1,115,074
68,922 Bank One 2,925,739
29,100 Banknorth Group 911,412
37,140 Charter One Financial 1,186,995
The accompanying notes are an integral part of the financial statements.
5
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -----------------------------------------------------------
17,100 City National $ 1,029,591
23,600 Comerica 1,214,928
25,024 Fifth Third Bancorp 1,450,391
24,968 First Tennessee National 1,132,549
93,657 FleetBoston Financial 3,782,806
24,055 Greater Bay Bancorp 648,523
22,700 Hudson United Bancorp 823,783
50,250 Huntington Bancshares 1,088,415
50,400 Keycorp 1,423,800
17,491 Mellon Financial 522,456
62,117 National City 2,028,741
25,627 Netbank 351,346
23,446 Old Republic International 842,649
40,234 PNC Financial
Services Group 2,155,335
15,506 Popular 697,770
12,028 Provident Financial Group 354,225
30,100 Regions Financial 1,106,175
10,471 South Financial Group 273,607
29,798 SunTrust Banks 1,998,552
182,003 U.S. Bancorp 4,954,122
125,245 Wachovia 5,744,988
93,867 Washington Mutual 4,106,681
138,401 Wells Fargo 7,794,744
16,100 Zions Bancorp 986,769
------------
62,875,431
------------
BEVERAGES (2.3%)
76,726 Anheuser Busch 3,779,523
208,692 Coca Cola 9,683,309
8,809 Coors (Adolph) - Class B 493,744
99,086 Pepsico 4,738,292
------------
18,694,868
------------
BIOTECHNOLOGY (1.3%)
103,479 Amgen (1) 6,390,863
22,284 Biogen (1) 901,834
10,510 Cambrex 248,457
8,996 Cephalon (1) 422,452
16,943 Chiron (1) 925,596
5,792 Genentech (1) 474,770
6,568 Genzyme (1) 301,471
18,212 Gilead Sciences (1) 994,011
------------
10,659,454
------------
BUILDING PRODUCTS (0.2%)
56,592 Masco 1,556,280
------------
CASINOS & GAMING (0.1%)
20,932 Alliance Gaming (1) 507,601
66,693 Park Place Entertainment (1) 640,253
------------
1,147,854
------------
CHEMICALS (1.1%)
7,263 Albemarle 194,794
46,006 Crompton 246,592
30,741 Dow Chemical 1,158,628
91,195 DuPont (E.I.) de Nemours 3,684,278
27,267 Eastman Chemcial 885,087
15,600 Ferro 320,268
17,100 Lubrizol 518,130
28,620 Schulman (A.) 543,494
17,391 Sigma Aldrich 912,158
------------
8,463,429
------------
COMMERCIAL SERVICES & SUPPLIES (1.9%)
13,845 Apollo Group - Class A (1) 879,573
37,468 Automatic Data Processing 1,414,042
16,771 Avery Dennison 881,819
110,093 Cendant (1) 2,249,200
75,207 Concord EFS (1) 803,963
23,659 Donnelley (R.R.) & Sons 615,134
18,610 Expeditors International
Washington 698,619
35,136 First Data 1,254,355
24,788 FISERV (1) 875,512
22,843 H&R Block 1,075,677
The accompanying notes are an integral part of the financial statements.
6
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -----------------------------------------------------------
46,325 IMS Health $ 1,090,027
18,365 Paychex 714,766
30,097 Pitney Bowes 1,236,987
20,393 SEI Investments 593,844
22,793 Waste Management 590,795
------------
14,974,313
------------
COMPUTER & ELECTRONICS RETAIL (0.3%)
17,430 Best Buy (1) 1,016,343
51,700 Circuit City Stores 493,218
28,620 Radioshack 858,314
------------
2,367,875
------------
COMPUTER HARDWARE (3.1%)
207,876 Dell Inc. (1) 7,508,689
262,207 Hewlett Packard 5,849,838
124,849 IBM 11,171,489
123,922 Sun Microsystems (1) 490,731
------------
25,020,747
------------
COMPUTER STORAGE & PERIPHERALS (0.7%)
199,082 EMC (1) 2,755,295
11,660 Factset Research Systems 508,843
15,520 Lexmark International (1) 1,142,427
42,241 Network Appliance (1) 1,042,508
29,492 Western Digital (1) 396,667
------------
5,845,740
------------
CONSTRUCTION & ENGINEERING (0.1%)
36,300 USG (1) 608,025
------------
CONTAINERS & PACKAGING (0.1%)
41,529 Owens-Illinois (1) 510,806
18,099 Sonoco Products 384,966
------------
895,772
------------
DEPARTMENT STORES (0.5%)
20,599 Kohl's (1) 1,154,986
49,337 May Department Stores 1,379,462
35,171 Sears Roebuck 1,851,050
------------
4,385,498
------------
DIVERSIFIED FINANCIALS (8.3%)
6,800 Affiliated Managers
Group (1) 493,000
17,335 Alliance Capital
Management L.P. 581,936
23,754 American Capital Strategies 641,358
115,779 American Express 5,433,508
56,676 BB&T Financial 2,191,661
13,233 Bear Stearns 1,009,016
8,911 Blackrock 457,580
13,535 Capital One Financial 822,928
64,969 Charles Schwab 880,980
375,708 Citigroup 17,808,559
15,524 Countrywide Financial 1,631,883
11,511 Doral Financial 581,306
57,432 Fannie Mae 4,117,300
25,700 Federated Investors 710,605
25,061 First American 717,998
24,770 Franklin Resources 1,174,593
66,166 Freddie Mac 3,713,898
23,131 Goldman Sachs Group 2,172,001
28,541 Green Point Financial 889,052
184,394 J.P. Morgan Chase 6,619,745
8,964 Lehman Brothers Holdings 645,408
91,549 MBNA 2,265,838
44,612 Merrill Lynch 2,641,030
69,412 Morgan Stanley 3,808,636
14,850 New Century Financial 550,638
44,682 SLM 1,749,747
37,254 State Street 1,950,619
3,505 Student Loan 453,968
------------
66,714,791
------------
DIVERSIFIED TELECOMMUNICATION
SERVICES (3.0%)
36,860 Alltel 1,742,372
The accompanying notes are an integral part of the financial statements.
7
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -------------------------------------------------------------------
41,125 AT&T $ 764,514
165,164 BellSouth 4,345,465
20,256 CenturyTel 724,152
18,695 Plantronics (1) 519,908
278,965 SBC Communications 6,689,581
93,521 Sprint - FON Group 1,496,336
11,366 Utstarcom (1) 358,029
226,376 Verizon Communications 7,606,233
-----------
24,246,590
-----------
DRUG RETAIL (0.4%)
45,532 CVS 1,601,816
52,277 Walgreen 1,820,285
-----------
3,422,101
-----------
ELECTRIC UTILITIES (2.3%)
30,354 Ameren 1,355,306
22,902 Cinergy 831,572
33,247 Dominion Resources 2,048,015
24,002 DTE Energy 885,194
97,524 Duke Energy 1,770,061
49,345 Edison International (1) 972,590
35,292 Exelon 2,239,277
9,693 FPL Group 617,832
17,171 Great Plains Energy 547,411
17,312 Idacorp 470,021
8,556 NSTAR 399,565
21,592 Pinnacle West Capital 789,404
27,010 PPL 1,078,239
36,768 Public Service
Enterprise Group 1,502,708
67,349 Southern 2,007,000
29,371 TECO Energy 385,641
12,991 WPS Resources 575,891
-----------
18,475,727
-----------
ELECTRICAL EQUIPMENT (0.4%)
42,368 American Power Conversion 857,105
22,123 Emerson Electric 1,255,480
33,584 Rockwell Automation 1,042,783
-----------
3,155,368
-----------
ELECTRONIC EQUIPMENT
& INSTRUMENTS (0.9%)
18,490 Agilent Technologies (1) 460,771
34,520 Avnet (1) 669,688
12,737 Energizer Holdings (1) 468,722
22,869 Gentex 893,034
16,280 Intersil 419,861
18,567 Invision Technologies (1) 504,465
24,540 Molex 770,311
32,386 PerkinElmer 583,272
23,970 Semtech (1) 532,134
12,404 Trimble Navigation (1) 342,971
26,584 Waters (1) 835,535
22,400 Zoran (1) 373,184
-----------
6,853,948
-----------
FOOD DISTRIBUTORS (0.2%)
12,266 Hershey Foods 945,709
24,200 Sysco 814,572
-----------
1,760,281
-----------
FOOD PRODUCTS (2.0%)
170,432 Altria Group 7,925,088
66,700 Archer Daniels Midland 957,145
14,478 Bunge 392,354
41,348 Kellogg 1,369,859
48,400 Kraft Foods 1,408,440
94,686 Sara Lee 1,887,092
15,897 Sensient Technologies 305,223
8,019 Tootsie Roll Industries 264,547
30,553 Tyson Foods 435,991
25,870 Wrigley (WM) Jr. 1,459,068
-----------
16,404,807
-----------
FOOD RETAIL (0.3%)
88,572 Kroger (1) 1,549,124
The accompanying notes are an integral part of the financial statements.
8
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -------------------------------------------------------------------
72,100 Winn-Dixie Stores $ 583,289
-----------
2,132,413
-----------
GAS UTILITIES (0.3%)
15,785 Kinder Morgan 845,287
13,062 Nicor 447,635
11,496 Northern Border Partners 458,116
7,836 Peoples Energy 316,966
9,213 UGI 283,760
-----------
2,351,764
-----------
GENERAL MERCHANDISE STORES (2.6%)
18,691 BJ'S Wholesale Club (1) 480,172
52,146 Costco Wholesale (1) 1,844,404
49,132 Dollar General 1,103,996
53,169 Target 2,112,936
257,480 Wal-Mart Stores 15,178,446
-----------
20,719,954
-----------
HEALTH CARE EQUIPMENT &
SERVICES (3.5%)
18,598 Amerisource Bergen 1,055,808
15,099 Anthem Insurance (1) 1,033,225
35,934 Applera - Applied Biosystems 829,357
22,885 Apria Healthcare Group (1) 663,665
16,200 Boston Scientific (1) 1,097,064
15,264 Cardinal Health 905,766
38,191 Caremark Rx (1) 956,684
22,713 Cigna 1,295,777
33,051 Guidant 1,685,931
18,464 Health Management
Associates 408,978
25,341 Laboratory of America (1) 898,338
36,500 McKesson 1,104,855
23,739 Medco Health Solutions (1) 788,135
107,930 Medtronic 4,918,370
7,872 Mid Atlantic
Medical Services (1) 459,725
28,200 Province Healthcare (1) 362,088
10,880 Renal Care Group (1) 408,109
12,905 Resmed (1) 539,042
23,121 St. Jude Medical (1) 1,344,717
18,020 Stryker 1,461,602
15,784 Sunrise Senior Living (1) 456,158
76,856 Tenet Healthcare (1) 1,060,613
22,925 Triad Hospitals (1) 704,485
16,200 Wellpoint Health
Networks (1) 1,440,180
29,483 Zimmer Holdings (1) 1,881,310
-----------
27,759,982
-----------
HOME IMPROVEMENT RETAIL (1.2%)
51,494 Lowes Cos 3,034,542
188,603 The Home Depot 6,991,513
-----------
10,026,055
-----------
HOTELS (0.1%)
16,636 Carnival 580,763
-----------
HOUSEHOLD DURABLES (0.3%)
12,882 Black & Decker 615,888
8,753 Lancaster Colony 347,582
26,419 Maytag 671,042
41,166 Newell Rubbermaid 938,585
-----------
2,573,097
-----------
HOUSEHOLD PRODUCTS (2.0%)
57,389 Colgate Palmolive 3,052,521
50,053 Kimberly Clark 2,643,299
109,232 Proctor & Gamble 10,736,413
-----------
16,432,233
-----------
INDUSTRIAL CONGLOMERATES (3.9%)
52,774 3M 4,162,285
777,364 General Electric 22,551,330
23,343 Textron 1,159,914
175,208 Tyco International 3,658,343
-----------
31,531,872
-----------
The accompanying notes are an integral part of the financial statements.
9
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -----------------------------------------------------------
INSURANCE (4.3%)
60,723 Aflac $ 2,215,175
33,631 Allstate 1,328,424
214,664 American
International Group 13,058,011
60,179 Aon 1,317,920
23,310 Berkley (WR) 799,300
36 Berkshire Hathaway (1) 2,801,160
5,437 Delphi Financial Group 273,862
31,217 Fidelity National Financial 965,230
22,571 Freemont General 375,356
10,493 Landamerica
Financial Group 524,755
54,675 Marsh & McClennan 2,337,356
18,691 MBIA 1,114,170
87,469 Metlife 2,746,527
18,103 MGIC Investment 928,865
54,023 Principal Financial Group 1,693,621
16,075 Prudential Financial 621,138
22,500 Torchmark 987,300
8,549 XL Capital 594,156
-----------
34,682,326
-----------
INTEGRATED OIL & GAS (3.7%)
74,160 ChevronTexaco 5,510,088
42,730 ConocoPhillips 2,442,020
491,432 Exxon Mobil 17,976,583
42,849 Marathon Oil 1,267,045
13,080 National Fuel & Natural Gas 292,338
43,009 Occidental Petroleum 1,516,497
19,495 Stone Energy (1) 704,549
-----------
29,709,120
-----------
INTERNET RETAIL (0.4%)
46,048 eBay (1) 2,575,925
13,022 InterActiveCorp (1) 478,038
-----------
3,053,963
-----------
INTERNET SOFTWARE & SERVICES (0.2%)
10,833 Getty Images (1) 484,235
25,260 Yahoo! (1) 1,103,862
-----------
1,588,097
-----------
INVESTMENT COMPANIES (1.0%)
76,281 SPDR Trust, Series 1 8,034,678
-----------
IT CONSULTING & SERVICES (0.3%)
29,124 Computer Sciences (1) 1,153,893
55,938 Electronic Data Systems 1,199,870
-----------
2,353,763
-----------
LEISURE FACILITIES (0.2%)
48,457 International
Game Technology 1,586,967
-----------
LEISURE PRODUCTS (0.1%)
28,184 Callaway Golf 457,990
-----------
MACHINERY (1.1%)
22,448 Caterpillar 1,644,990
14,673 Danaher 1,215,658
29,779 Illinois Tool Works 2,190,246
11,619 ITT Industries 789,976
11,836 John Deere 717,498
29,300 Pall 685,620
18,762 SPX (1) 902,827
8,590 Tecumseh Products 352,018
-----------
8,498,833
-----------
MEDIA (4.0%)
34,729 Cablevision Systems (1) 701,526
57,815 Clear Channel
Communications 2,360,008
59,534 Comcast (Non-Voting) (1) 1,941,999
81,721 Comcast - Class A (1) 2,771,976
31,610 COX Communications (1) 1,076,953
26,487 Fox Entertainment
Group (1) 733,690
15,662 Gannett 1,317,331
22,161 Interactive Data (1) 381,169
164,412 Liberty Media (1) 1,658,917
The accompanying notes are an integral part of the financial statements.
10
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -----------------------------------------------------------
21,834 McGraw-Hill $ 1,461,786
20,676 Omnicom Group 1,649,945
345,644 Time Warner (1) 5,284,897
26,678 Tribune 1,308,556
138,182 Viacom 5,509,316
189,069 Walt Disney 4,280,522
-----------
32,438,591
-----------
METALS & MINING (0.6%)
81,050 Alcoa 2,558,749
37,200 Newmont Mining 1,628,616
20,423 Steel Dynamics (1) 380,480
39,273 Worthington Industries 572,600
-----------
5,140,445
-----------
MULTI - UTILITIES (0.1%)
15,698 Questar 498,411
-----------
NETWORKING EQUIPMENT (1.7%)
12,341 Black Box 531,403
552,667 Cisco Systems (1) 11,594,954
17,116 Foundry Networks (1) 398,118
36,521 Juniper Networks (1) 657,013
18,683 Netscreen Technologies (1) 497,341
-----------
13,678,829
-----------
OFFICE ELECTRONICS (0.1%)
88,952 Xerox (1) 933,996
-----------
OIL & GAS DRILLING (0.3%)
24,958 Diamond Offshore Drilling 460,475
47,404 GlobalSantaFe 1,067,064
20,019 Noble (1) 687,252
-----------
2,214,791
-----------
OIL & GAS EQUIPMENT & SERVICES (0.6%)
24,167 BJ Services (1) 792,919
72,038 El Paso Energy 528,759
32,263 Hanover Compressor (1) 341,988
28,538 National-Oilwell (1) 544,220
19,819 Schlumberger 930,898
21,365 Spinnaker Exploration (1) 546,730
26,487 Tidewater 726,009
30,508 Varco International (1) 536,636
-----------
4,948,159
-----------
OIL & GAS EXPLORATION
& PRODUCTION (0.6%)
33,873 Anadarko Petroleum 1,477,540
33,557 Devon Energy 1,627,515
27,650 MDU Resources Group 625,708
41,225 Unocal 1,306,008
-----------
5,036,771
-----------
OIL & GAS REFINING & MARKETING (0.1%)
15,768 TEPPCO Partners L.P. 594,454
-----------
PAPER & FOREST PRODUCTS (0.5%)
40,453 Georgia Pacific 1,063,105
24,200 International Paper 952,270
31,400 Weyerhaeuser 1,891,222
-----------
3,906,597
-----------
PERSONAL PRODUCTS (0.6%)
5,100 Avon Products, Inc. 346,596
23,342 Estee Lauder, Inc 872,757
114,995 Gillette 3,668,341
-----------
4,887,694
-----------
PHARMACEUTICALS (8.2%)
93,879 Abbott Laboratories 4,001,123
183,252 Bristol-Myers Squibb 4,649,103
12,564 Delta & Pine Lands 287,213
99,469 Eli Lilly 6,626,625
16,376 Forest Laboratories (1) 818,964
241,746 Johnson & Johnson 12,167,076
190,497 Merck 8,429,492
623,008 Pfizer 19,687,053
16,106 Pharmaceutical Product
Development (1) 484,307
The accompanying notes are an integral part of the financial statements.
11
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -----------------------------------------------------------
142,268 Schering Plough $ 2,172,432
18,167 SICOR (1) 486,876
25,000 Watson Pharmaceuticals (1) 981,750
117,436 Wyeth 5,183,625
-----------
65,975,639
-----------
PHOTOGRAPHIC PRODUCTS (0.1%)
47,300 Eastman Kodak 1,155,539
-----------
RAILROADS (0.3%)
54,200 Norfolk Southern 1,092,130
27,400 Union Pacific 1,715,240
-----------
2,807,370
-----------
REAL ESTATE INVESTMENT TRUSTS (0.7%)
22,700 Annaly Mortgage Management 370,918
19,379 Boston Properties 857,521
11,729 Capital Automotive 364,889
24,839 Crescent Real Estate Equity 381,279
47,200 Equity Office Properties Trust 1,322,072
9,672 Heritage Property Investment Trust 272,750
13,837 Hospitality Properties Trust 507,403
8,654 Kilroy Realty 250,101
18,167 Kimco Realty 756,837
6,307 Novastar Financial 465,141
11,031 Regency Centers 409,029
-----------
5,957,940
-----------
RESTAURANTS (0.4%)
77,234 McDonald's 1,931,622
42,198 Yum! Brands (1) 1,440,640
-----------
3,372,262
-----------
SEMICONDUCTOR EQUIPMENT (0.5%)
82,096 Applied Material (1) 1,918,584
13,200 Integrated Circuit Systems (1) 443,124
34,930 Microchip Technology 1,142,560
24,079 Nvidia (1) 425,717
-----------
3,929,985
-----------
SEMICONDUCTORS (3.6%)
58,900 Altera (1) 1,191,547
12,887 Analog Devices (1) 571,281
515,791 Intel 17,046,892
42,465 Linear Technology 1,809,434
82,110 LSI Logic (1) 758,696
38,439 Maxim Integrated Products 1,910,803
10,371 QLogic (1) 581,295
128,222 Texas Instruments 3,708,180
41,246 Xilinx (1) 1,307,498
-----------
28,885,626
-----------
SPECIALTY STORES (0.4%)
13,046 Bed, Bath & Beyond (1) 551,063
43,250 Charming Shoppes (1) 283,288
24,581 Hollywood Entertainment (1) 373,631
18,381 Linens 'N Things (1) 542,607
11,474 Tiffany 544,441
49,595 Toys R Us (1) 644,735
-----------
2,939,765
-----------
SYSTEMS SOFTWARE (3.8%)
22,700 Adobe Systems 995,168
13,697 Imation 466,383
50,379 Micromuse (1) 405,551
830,436 Microsoft 21,715,901
450,447 Oracle (1) 5,387,346
49,037 Veritas Software (1) 1,772,688
-----------
30,743,037
-----------
TELECOMMUNICATIONS EQUIPMENT (0.7%)
56,964 Corning (1) 625,465
146,080 Lucent Technologies (1) 467,456
52,319 Motorola Inc. 707,876
The accompanying notes are an integral part of the financial statements.
12
SCHRODER NORTH AMERICAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 2003 (UNAUDITED)
SHARES VALUE
- -----------------------------------------------------------
74,003 Qualcomm $ 3,515,142
------------
5,315,939
------------
TEXTILES & APPAREL (0.1%)
5,675 Nike 362,632
23,347 Polo Ralph Lauren 709,749
------------
1,072,381
------------
WIRELESS TELECOMMUNICATION
SERVICES (0.6%)
146,712 AT&T Wireless (1) 1,063,662
32,454 Crown Castle International (1) 410,868
100,799 Nextel Communications (1) 2,439,336
123,055 Sprint - PCS Group (1) 535,289
32,400 Western Wireless (1) 628,560
------------
5,077,715
------------
Total United States 766,647,901
------------
TOTAL COMMON STOCKS
(Cost $783,396,480) 802,301,581
------------
PRINCIPAL
AMOUNT
- ----------
SHORT-TERM
INVESTMENT (0.2%)
$2,062,855 J.P. Morgan Chase
Time Deposit
0.52%, due 11/01/03
(Cost $2,062,855) 2,062,855
------------
TOTAL INVESTMENTS
(Cost $785,459,335)
(99.9%) 804,364,436
Other Assets
Less Liabilities (0.1%) 464,550
------------
TOTAL NET ASSETS
(100.0%) $804,828,986
============
- ------------
(1) -- Non-income producing security.
DISTRIBUTION OF EQUITY INVESTMENTS BY SECTOR
As a Percentage of Net Assets
Diversified Financials 8.4%
Banks 8.3
Pharmaceuticals 8.3
Insurance 5.1
Media 4.4
Integrated Oil & Gas 4.3
Industrial Conglomerates 3.9
Systems Software 3.8
Semiconductors 3.6
Health Care Equipment & Services 3.5
Diversified Telecommunication Services 3.2
Computer Hardware 3.1
General Merchandise Stores 2.7
Beverages 2.3
Electric Utilities 2.3
Food Products 2.0
Household Products 2.0
Commercial Services & Supplies 1.9
Aerospace & Defense 1.7
Networking Equipment 1.7
Biotechnology 1.3
Home Improvement Retail 1.2
Chemicals 1.1
Machinery 1.1
Oil & Gas Exploration & Production 1.1
Other 17.4
----
Total 99.7%
====
The accompanying notes are an integral part of the financial statements.
13
SCHRODER NORTH AMERICAN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2003 (UNAUDITED)
ASSETS:
Investments in securities, at value - Note 2 ......................................... $ 804,364,436
Foreign currency, at value ........................................................... 5,628
Dividends and tax reclaims receivable ................................................ 1,099,268
Prepaid expenses ..................................................................... 19,775
Interest receivable .................................................................. 4,767
-------------
TOTAL ASSETS ...................................................................... 805,493,874
-------------
LIABILITIES:
Payable for securities purchased ..................................................... (204,972)
Investment advisory fees ............................................................. (168,478)
Cash overdraft ....................................................................... (146,378)
Custody fee payable .................................................................. (7,649)
Administration fee payable ........................................................... (5,545)
Sub-administration fee payable ....................................................... (4,397)
Accrued expenses and other liabilities ............................................... (127,469)
-------------
TOTAL LIABILITIES ................................................................. (664,888)
-------------
NET ASSETS ........................................................................ $ 804,828,986
=============
NET ASSETS CONSIST OF:
Capital paid-in ...................................................................... $ 782,419,404
Undistributed net investment income (loss) ........................................... 1,141,421
Accumulated net realized gain (loss) on investments and foreign currency transactions. 2,363,205
Net unrealized appreciation (depreciation) on investments and foreign currency
translations ......................................................................... 18,904,956
-------------
NET ASSETS ........................................................................ $ 804,828,986
=============
Net asset value, offering and redemption price per share ............................. $ 10.28
Total shares outstanding at end of period ............................................ 78,261,930
Cost of securities ................................................................... $ 785,459,335
Cost of foreign currency ............................................................. $ 5,643
The accompanying notes are an integral part of the financial statements.
14
SCHRODER NORTH AMERICAN EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED OCTOBER 31, 2003* (UNAUDITED)
INVESTMENT INCOME:
Dividend income .................................... $ 1,560,766
Interest income .................................... 5,491
Less: Taxes withheld ............................... (6,055)
------------
TOTAL INCOME ..................................... 1,560,202
------------
EXPENSES:
Investment advisory fees - Note 3 .................. 237,122
Registration fees .................................. 63,102
Audit fees ......................................... 37,500
Insurance .......................................... 20,225
Printing expense ................................... 17,500
Administrative fees - Note 3 ....................... 7,712
Custodian fees ..................................... 7,648
Legal fees ......................................... 7,233
Sub-administrative fees - Note 3 ................... 6,213
Transfer agent fees ................................ 6,028
Trustees fees - Note 4 ............................. 3,616
Other .............................................. 4,882
------------
TOTAL EXPENSES ................................... 418,781
------------
NET INVESTMENT INCOME ............................ 1,141,421
------------
NET REALIZED GAIN (LOSS) ON:
Investments sold ................................... 2,361,993
Foreign currency transactions ...................... 1,212
------------
Net realized gain (loss) ......................... 2,363,205
------------
NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments ........................................ 18,905,101
Foreign currency ................................... (145)
------------
Net urealized appreciation (depreciation) ........ 18,904,956
------------
REALIZED AND UNREALIZED GAIN (LOSS) .............. 21,268,161
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................. $ 22,409,582
============
* The Fund commenced operations on September 17, 2003
The accompanying notes are an integral part of the financial statements.
15
SCHRODER NORTH AMERICAN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED OCTOBER 31, 2003* (UNAUDITED)
PERIOD ENDED
OCTOBER 31, 2003
----------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) ....................................................... $ 1,141,421
Net realized gain (loss) ........................................................... 2,363,205
Change in net unrealized appreciation (depreciation) ............................... 18,904,956
-------------
Net increase (decrease) in net assets from operations ............................ 22,409,582
-------------
CAPITAL SHARE TRANSACTIONS (1):
Proceeds from shares sold .......................................................... 786,555,365
Cost of shares redeemed ............................................................ (4,235,961)
-------------
Net increase (decrease) in net assets resulting from capital share transactions... 782,319,404
-------------
Total Increase (Decrease) in Net Assets .......................................... 804,728,986
Net Assets, Beginning of Period .................................................. 100,000
-------------
Net Assets, End of Period ........................................................ $ 804,828,986
=============
Net assets include undistributed net investment income (loss) .................... $ 1,141,421
=============
(1) SHARE TRANSACTIONS:
Shares sold ........................................................................ 78,665,141
Shares redeemed .................................................................... (413,211)
-------------
Net increase (decrease) in shares outstanding .................................... 78,251,930
=============
* The Fund commenced operations on September 17, 2003
The accompanying notes are an integral part of the financial statements.
16
SCHRODER NORTH AMERICAN EQUITY FUND
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING
THROUGHT THE PERIOD ENDED OCTOBER 31, 2003* (UNAUDITED)
NET ASSET VALUE, BEGINNING OF PERIOD ..................... $ 10.00
-----------
INVESTMENT OPERATIONS:
Net Investment Income (Loss) ............................. 0.25
Net Realized and Unrealized Gain (Loss) on Investments ... 0.03
-----------
Total from Investment Operations ....................... 0.28
-----------
Net Asset Value, End of Period ......................... $ 10.28
===========
Total Return (a) ....................................... 2.80%
===========
RATIOS AND SUPPLEMENTAL DATA:
Net Assets at End of Period (000's) ...................... $ 804,829
Ratio of Expenses to Average Net Assets .................. 0.43%(b)
Net investment income (loss) to Average Net Assets ....... 1.18%(b)
Portfolio Turnover Rate .................................. 11%(c)
- -----------------------
(a) Total return calculation is not annualized.
(b) Annualized.
(c) Not annualized.
* Fund commenced operations on September 17, 2003.
The accompanying notes are an integral part of the financial statements.
17
SCHRODER NORTH AMERICAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2003 (UNAUDITED)
NOTE 1 -- ORGANIZATION
Schroder Global Series Trust (the "Trust") is a Massachusetts business trust
organized under the laws of The Commonwealth of Massachusetts on May 27, 2003.
The Trust's Amended and Restated Agreement and Declaration of Trust (the
"Declaration of Trust"), which is governed by Massachusetts law, is on file with
the Secretary of State of The Commonwealth of Massachusetts. Schroder North
American Equity Fund (the "Fund") is the only series of shares currently
comprising the Trust and commenced operations on September 17, 2003.
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 Fund
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") or, if none, the last sale price on the
preceding trading day. 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.
Short-term investments, having a maturity of 60 days or less, are valued at
amortized cost, which approximates market value. Other securities and assets for
which market quotations are not readily available are valued at fair value as
determined in good faith using methods approved by the Fund's Board of Trustees
("Trustees").
REPURCHASE AGREEMENTS: When entering into repurchase agreements, it is the
Fund's policy that it take into 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.
18
SCHRODER NORTH AMERICAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
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 realized gains and unrealized appreciation.
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.
EXPENSES: Expenses are recorded on an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders from net investment
income and from net realized capital gains, if any, are declared and distributed
at least annually. 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 asked 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.
The Fund 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 Fund entering into offsetting commitments.
DERIVATIVE INSTRUMENTS: The Fund 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. The 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 the Fund uses certain types
of derivative
19
SCHRODER NORTH AMERICAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
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 the Fund will engage in these transactions when that would
be beneficial.
NOTE 3 -- INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
Under an Investment Advisory Agreement (the "Advisory Agreement") between the
Fund and Schroder Investment Management North America Inc. ("Schroder"), which
was approved by the Board of Trustees of the Trust and the shareholder of the
Fund in July 2003, Schroder, at its expense, provides the Fund with investment
advisory services. Schroder also manages the Fund's other affairs and business.
Schroder has retained its affiliate, Schroder Investment Management North
America Ltd. ("SIMNA Ltd."), to serve as sub-adviser responsible for day-to-day
investment decisions for the Fund.
Under the Advisory Agreement, Schroder is required to continuously furnish the
Fund investment programs consistent with the investment objective and policies
of the Fund, and to determine, for the Fund, what securities shall be purchased,
what securities shall be held or sold, and what portion of the Fund's assets
shall be held uninvested, subject always to the provisions of the Trust's
Declaration of Trust and By-laws, and of the Investment Company Act, and to the
Fund's investment objective, policies, and restrictions, and subject further to
such policies and instructions as the Trustees may from time to time establish.
As compensation for services provided to the Fund pursuant to the Advisory
Agreement, Schroder is entitled to receive from the Fund a fee, computed and
paid monthly, at the annual rate of 0.25% of the Fund's average daily net
assets. As compensation for SIMNA Ltd.'s services as sub-adviser to the Fund,
Schroder pays Schroder Ltd. 25% of the investment adviser fees Schroder receives
from the Fund.
On behalf of the Fund, the Trust has entered into an administration agreement
with Schroder Fund Advisors Inc., under which Schroder Fund Advisors Inc.
("Schroder Advisors") provides management and administrative services necessary
for the operation of the Fund, including: (1) preparation of shareholder reports
and communications; (2) regulatory compliance, such as reports to and filings
with the Securities and Exchange Commission ("SEC") and state securities
commissions; and (3) general supervision of the operation of the Fund, including
coordination of the services performed by its investment adviser, transfer
agent, custodian, independent accountants, legal counsel and others. Schroder
Advisors is a wholly owned subsidiary of Schroder and is a registered
broker-dealer organized to act as administrator and distributor of mutual funds.
The administration agreement is terminable with respect to the Fund without
penalty, at any time, by the Trustees upon 60 days' written notice to Schroder
Advisors or by Schroder Advisors upon 60 days' written notice to the Trust. For
its services, Schroder Advisors receives no compensation. J.P. Morgan Investor
Services Co. ("Morgan") serves as sub-administrator to the Fund and receives a
fee from the Fund for its services. Morgan is paid compensation by the Fund for
its services as sub-administrator as follows: For Fund Administration
20
SCHRODER NORTH AMERICAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2003 (UNAUDITED)
services, Morgan will be paid a monthly fee based on an annual rate of $24,000
plus 0.0035 of 1% of the Fund's first $1 billion in average daily net assets,
plus 0.0020 of 1% of the Fund's average daily net assets in excess of $1
billion. For Fund Accounting services, Morgan will be paid a monthly fee based
on an annual rate of $30,000 plus 0.0040 of 1% of the Fund's first $1 billion in
average daily net assets, plus 0.0030 of 1% of the Fund's average daily net
assets in excess of $1 billion.
NOTE 4 -- TRUSTEES' FEES:
The Fund pays no compensation to Trustees who are interested persons of the
Trust, 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 Fund, Schroder, SIMNA Ltd. 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. Payment of meeting fees will be allocated
only among those Funds to which the meeting relates.
NOTE 5 -- INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities, for the period ended October 31, 2003 were $865,902,948
and 84,868,461, respectively.
NOTE 6 -- FEDERAL INCOME TAXES
It is the policy of the Fund 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 Fund will not be subject to Federal
income taxes to the extent that, among other things, it distributes
substantially all of its taxable income, including realized capital gains, for
the fiscal year. In addition, as a result of distributing substantially all of
its net investment income during each calendar year, capital gains and certain
other amounts, if any, the Fund will 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 differences, which may result in
distribution reclassifications, are primarily due to differing treatments for
transactions in certain futures and options, foreign currency transactions,
non-taxable dividends, investments in passive foreign investment companies,
gains resulting from distributions in-kind and losses deferred due to wash
sales. The Fund 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.
21
SCHRODER NORTH AMERICAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
OCTOBER 31, 2003 (UNAUDITED)
At October 31, 2003, the identified cost for Federal income tax purposes of
investments owned by the Fund was $785,459,335, and its gross unrealized
appreciation and depreciation were $35,398,958 and $16,493,857, respectively.
NOTE 7 -- BENEFICIAL INTEREST
As of October 31, 2003, shareholders of the Fund with ownership of 5% or greater
included 3 shareholders, comprising ownership of 28.6% of the aggregate shares
outstanding.
22
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED.]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable -- required only for reporting periods ending after
January 1, 2004.
ITEM 10. 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 the registrant's commencement of
investment operations (September 17, 2003) through October 31, 2003 that have
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Not applicable for semi-annual reports.
(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.
(a)(3) Not applicable.
(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)), and Section 906 of the
Sarbanes Oxley Act of 2002 also accompany this filing as an Exhibit.
2
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 Global Series Trust
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By: /s/ Catherine A. Mazza
-----------------------------------------------------------------------------
Name: Catherine A. Mazza
Title: Principal Executive Officer
Date: 12/29/2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Catherine A. Mazza
-----------------------------------------------------------------------------
Name: Catherine A. Mazza
Title: Principal Executive Officer
Date: 12/29/2003
By: /s/ Alan M. Mandel
-----------------------------------------------------------------------------
Name: Alan M. Mandel
Title: Treasurer and Chief Financial Officer
Date: 12/29/2003
3