INFORMATION REQUIRED IN PROXY STATEMENT
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Standish, Ayer & Wood Investment Trust
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Standish, Ayer & Wood Investment Trust
One Financial Center
Boston, MA 02111
(800) 221-4795
November 15, 1999
Re: Standish Small Capitalization Equity Fund II
Dear Shareholder:
I am writing to ask for your vote on a proposal to authorize your fund (Standish
Small Capitalization Equity Fund II) to approve a new investment advisory
agreement between Standish Small Capitalization Equity Portfolio (the
"Portfolio") and Standish, Ayer & Wood, Inc. ("Standish"), the portfolio's
investment adviser, increasing the rate at which management fees are payable to
Standish from 0.60% to 0.80% of the fund's average daily net assets. Your fund
is a feeder fund in the "master-feeder" structure and, accordingly, invests all
its assets in the Portfolio, the master fund. The actual management of your
fund's assets occurs at the Portfolio level.
The increased fee rate is proposed only after a great deal of thought and
analysis on the part of Standish and your fund's Board of Trustees. Standish and
the Board of Trustees have carefully examined the investment advisory fees,
investment performance and expense ratios of your fund compared with those of
similar funds. Your fund has had above average performance for both its most
recent one-year and since-inception periods. Nevertheless, the investment
advisory fee rate payable to Standish is significantly lower than that payable
by the majority of similar funds.
The importance of updating the Portfolio's investment advisory fee rate is
underscored by the increased complexity in recent years of the domestic small
capitalization equity market, and increased competition among small cap
institutional funds. In this environment, Standish must be able to attract and
retain quality investment personnel and to capitalize on advances in technology
and research. Standish believes that the fee rate increase is necessary in order
for your fund to maintain and enhance the resources needed to permit the fund to
compete effectively with other funds in its peer group. Standish and your fund's
Board of Trustees recommend that you vote in favor of this proposal.
The enclosed proxy statement therefore solicits your vote in favor of the new
investment advisory fee rate, which Standish and your fund's Board of Trustees
believe is fair and reasonable compared to the fees paid by similar funds to
high quality fund managers. In fact, if you approve the proposed investment
advisory agreement, the investment advisory fee rate payable to Standish (0.80%
of average daily net assets) would still be lower than the median fee rate
payable to the mutual funds included in the Lipper Small Cap Institutional Funds
universe (0.83% of average daily net assets). In addition, because Standish
voluntarily waives its advisory fee and/or reimburses other expenses to the
extent the fund's total expense ratio would exceed 1.00%, the proposed advisory
fee increase would not result in higher advisory fees paid by the Portfolio or
borne by the fund for as long as the current expense cap remains in place.
We urge you to read carefully the more detailed explanation of this proposal in
the enclosed proxy statement. In addition, we would be happy to talk with you
about the proposal. Please call your investment manager at Standish or Michael
Fechter, Executive Vice President of Client Service, or Lavinia Chase, Director
of Client Service for the Standish Mutual Funds, at (800) 221-4795.
Your vote is important to us. In order for us to obtain a quorum at the meeting,
it is important that your shares be represented. Therefore, I urge you to cast
your vote on the proposal contained in the Proxy Statement and return our
completed proxy card promptly in the enclosed self-addressed return envelope.
Sincerely,
Richard S. Wood
President
Standish, Ayer & Wood Investment Trust
Standish, Ayer & Wood Investment Trust
One Financial Center
Boston, MA 02111
(800) 221-4795
November 15, 1999
Re: Standish Small Capitalization Equity Fund II
Dear Shareholder:
I am writing to ask for your vote on a proposal to authorize your fund (Standish
Small Capitalization Equity Fund II) to approve a new investment advisory
agreement between Standish Small Capitalization Equity Portfolio (the
"Portfolio") and Standish, Ayer & Wood, Inc. ("Standish"), the portfolio's
investment adviser, increasing the rate at which management fees are payable to
Standish from 0.60% to 0.80% of the fund's average daily net assets. Your fund
is a feeder fund in the "master-feeder" structure and, accordingly, invests all
its assets in the Portfolio, the master fund. The actual management of your
fund's assets occurs at the Portfolio level.
The increased fee rate is proposed only after a great deal of thought and
analysis on the part of Standish and your fund's Board of Trustees. Standish and
the Board of Trustees have carefully examined the investment advisory fees,
investment performance and expense ratios of your fund compared with those of
similar funds. Your fund has had above average performance for both its most
recent one-year and since-inception periods. Nevertheless, the investment
advisory fee rate payable to Standish is significantly lower than that payable
by the majority of similar funds.
The importance of updating the Portfolio's investment advisory fee rate is
underscored by the increased complexity in recent years of the domestic small
capitalization equity market, and increased competition among small cap
institutional funds. In this environment, Standish must be able to attract and
retain quality investment personnel and to capitalize on advances in technology
and research. Standish believes that the fee rate increase is necessary in order
for your fund to maintain and enhance the resources needed to permit the fund to
compete effectively with other funds in its peer group. Standish and your fund's
Board of Trustees recommend that you vote in favor of this proposal.
The enclosed proxy statement therefore solicits your vote in favor of the new
investment advisory fee rate, which Standish and your fund's Board of Trustees
believe is fair and reasonable compared to the fees paid by similar funds to
high quality fund managers. In fact, if you approve the proposed investment
advisory agreement, the investment advisory fee rate payable to Standish (0.80%
of average daily net assets) would still be lower than the median fee rate
payable to the mutual funds included in the Lipper Small Cap Institutional Funds
universe (0.83% of average daily net assets). In addition, because Standish
voluntarily waives its advisory fee and/or reimburses other expenses to the
extent the fund's total expense ratio would exceed 1.00%, the proposed advisory
fee increase would not result in higher advisory fees paid by the Portfolio or
borne by the fund for as long as the current expense cap remains in place.
We urge you to read carefully the more detailed explanation of these proposals
in the enclosed proxy statement. In addition, we encourage you to discuss this
proxy with your investment advisor and/or call us directly with any questions.
Standish representatives may be reached at (800) 221-4795.
Your vote is important to us. In order for us to obtain a quorum at the meeting,
it is important that your shares be represented. Therefore, I urge you to cast
your vote on the proposal contained in the Proxy Statement and return our
completed proxy card promptly in the enclosed self-addressed return envelope.
Sincerely,
Richard S. Wood
President
Standish, Ayer & Wood Investment Trust
STANDISH SMALL CAPITALIZATION EQUITY FUND II
a series of
Standish Ayer & Wood Investment Trust
One Financial Center
Boston, Massachusetts 02111
1-800-221-4795
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR DECEMBER 20, 1999
This is the formal agenda for your fund's shareholder meeting. It tells
you the matters that you will be asked to vote on and the time and place of the
meeting, in case you want to attend in person.
Your fund invests all of its investible assets in the Standish Small
Capitalization Equity Portfolio II which has the identical investment objective
as your fund. Because your fund operates in the master-feeder structure, you
will be asked to vote your shares of the fund to approve the first proposal with
regard to the Portfolio's investment advisory agreement.
To the shareholders of Standish Small Capitalization Equity Fund II:
A meeting of shareholders of your fund will be held at the offices of
Standish, Ayer & Wood, Inc., One Financial Center, 26th Floor, Boston,
Massachusetts 02111, on December 20, 1999, at 2:00 p.m. EST, to consider the
following:
1. A proposal to authorize the fund to approve a new investment advisory
agreement between Standish, Ayer & Wood Master Portfolio, on behalf of its
series, Standish Small Capitalization Equity Portfolio II (the "Portfolio"), and
Standish, Ayer & Wood, Inc., the Portfolio's investment adviser ("Standish"),
increasing the rate at which investment advisory fees are payable to Standish;
and
2. Any other business that may properly come before the meeting.
Shareholders of record as of the close of business on October 18, 1999 are
entitled to vote at the meeting and any related follow-up meetings.
By order of the Board of Trustees,
Anne P. Herrmann, Secretary
Boston, Massachusetts
November 15, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY CARD.
PROXY STATEMENT
OF
STANDISH SMALL CAPITALIZATION EQUITY FUND II
a series of
Standish Ayer & Wood Investment Trust
One Financial Center
Boston, Massachusetts 02111
1-800-221-4795
SPECIAL MEETING OF SHAREHOLDERS
This proxy statement contains the information that you should have before
voting on the proposals as summarized below.
INTRODUCTION
This proxy statement is being used by the board of trustees of Standish,
Ayer & Wood Investment Trust (the "Trust") to solicit proxies to be voted at a
special meeting of shareholders of your fund (Standish Small Capitalization
Equity Fund II). This meeting will be held at the offices of Standish, Ayer &
Wood, Inc., One Financial Center, 26th Floor, Boston, Massachusetts 02111, at
2:00 p.m. EST, on Monday, December 20, 1999, and at any adjournments of the
meeting to a later date. The purposes of this meeting are to consider:
1. A proposal to authorize the fund to approve a new investment advisory
agreement between the Standish Small Capitalization Equity Portfolio II (the
"Portfolio") and Standish, Ayer & Wood, Inc., the portfolio's investment adviser
("Standish"), increasing the rate at which investment advisory fees are payable
to Standish; and
2. Any other business that may properly come before the meeting.
This proxy statement and enclosed proxy are being mailed to shareholders
on or about November 15, 1999. The fund's annual report for the fiscal year
ended September 30, 1998 and semi-annual report for the six month period ended
March 31, 1999 were previously mailed to shareholders. The fund will furnish
without charge an additional copy of its annual report or semiannual report to
any shareholder upon request. Shareholders who want to obtain a copy of these
reports should direct all written requests to the attention of the fund, at the
address listed above, or should call 1-800-221-4795.
Who is eligible to vote?
Shareholders of record of the fund as of the close of business on October
18, 1999 (the "record date") are entitled to vote on all of the fund's business
at the meeting or any adjournments thereof. Each share is entitled to one vote
and each fractional share is entitled to a corresponding fractional vote. Shares
represented by properly executed proxies, unless revoked before or at the
meeting, will be voted according to shareholders' instructions. If you sign a
proxy, but do not fill in a vote, your shares will be voted to approve the
proposals. If any other business comes before the meeting, your shares will be
voted at the discretion of the persons named as proxies.
How does voting in the master-feeder structure work?
Your fund is a feeder fund in the "master-feeder" structure. This means
that your fund invests all of its investible assets in the Portfolio. The
Portfolio is a series of the Standish, Ayer & Wood Master Portfolio (the
"Portfolio Trust") and has the same investment objective as your fund. In the
master-feeder structure, it is the master fund that invests the assets of the
feeder funds (that are invested in the master fund) by buying and selling
securities. Because your fund's assets are invested in securities at the
Portfolio level, the investment advisory agreement is between Standish and the
Portfolio rather than between Standish and the fund. The fund has previously
agreed with the Portfolio that, in connection with any proposal to be considered
at a meeting of holders of interests in the Portfolio, the fund generally would
call a meeting of its shareholders on the same proposals and would vote its
interest in the Portfolio in proportion
1
with the votes received from its own shareholders. Accordingly, when you vote on
this proposal, you are in effect voting to tell your fund how to vote as an
interestholder of the Portfolio. At a separate meeting of the Portfolio to be
held immediately following the fund shareholders' meeting, your fund will vote
its shares for or against the Portfolio proposal in direct proportion to the
vote it receives from all of its shareholders. Because your fund owns nearly
100% of the Portfolio, the fund's vote will necessarily determine whether the
proposal is approved at the Portfolio level.
PROPOSAL 1
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
Summary
Standish, Ayer & Wood, Inc. ("Standish"), One Financial Center, Boston,
Massachusetts 02111, has served as investment adviser to the Portfolio since its
inception on December 23, 1996 pursuant to an investment advisory agreement of
that date (the "existing contract"). Standish is a Massachusetts corporation
incorporated in 1933 and is registered as an investment adviser under the
Investment Advisers Act of 1940.
Standish provides fully discretionary management services and counseling
and advisory services to a broad range of clients throughout the United States,
including mutual funds, pension plans, endowments, foundations, and high net
worth individuals. Together with its affiliate, Standish International
Management Company, L.P., Standish has over $45 billion in assets under
management for clients. Standish is independently owned and operated by
twenty-three investment and other professionals employed by the firm. See the
Appendix to this proxy statement for more information concerning the ownership
and control of Standish.
At a meeting of the combined board of trustees of the Trust and the
Portfolio Trust held on October 12, 1999, the trustees, including all of the
trustees who are not "interested persons" of the fund, the Portfolio or
Standish, unanimously approved and voted to recommend that the shareholders of
the fund and the interestholders of the Portfolio approve a proposal to adopt a
new investment advisory agreement between Standish and the Portfolio (the
"proposed contract"). Under the proposed contract, there would be an increase in
the rate of investment advisory fees paid by the Portfolio to Standish. Because
all of the expenses of the Portfolio are allocated pro rata to its
interestholders, the fund's expense ratio would increase to match the increase
in the investment advisory fee rates. Specifically, the fee payable to Standish
would be increased from 0.60% to 0.80% of the Portfolio's average daily net
assets or 20 cents per $100 invested in the Portfolio.
Standish believes the proposed investment advisory fee is appropriate for
the following reasons:
o the fund has significantly outperformed both its benchmark and the
median comparable mutual fund since its inception;
o the Portfolio's existing advisory fee of 0.60% of the Portfolio's
average daily net assets is well below the 0.83% median fee paid by
comparable mutual funds;
o the proposed fee of 0.80% would also be lower than the median fee of
comparable mutual funds;
o there has been a significant increase in the complexity,
competitiveness and costs involved in managing a mutual fund
focusing on domestic small capitalization stocks; and
o the proposed fee will provide Standish with the resources necessary
to better enable Standish to attract and retain high quality
investment professionals and to invest in the advanced technology
and systems needed to maintain and enhance the present level of
service to the fund's shareholders.
2
Discussion:
Rationale for the Increase in Investment Advisory Fee
Strong Performance. Standish believes the proposed increase in investment
advisory fee is justified in part by the fund's strong historical performance.
The following table compares the total return of the fund for the periods ended
September 30, 1999 to the total return during the same periods for the Russell
2000 Growth Index, the fund's benchmark, and for the mutual funds in the Lipper
Institutional Small Cap Funds universe, which consists of funds that have a
small capitalization growth orientation similar to that of the fund. As
indicated below the fund has significantly outperformed both its benchmark and
the median fund in its competitive universe.
Standish Small
Capitalization Russell 2000
Equity Fund II* Growth Index Lipper Universe
--------------- ------------ ---------------
One year 72.14% 32.64% 27.17%
Since Inception (12/23/96) 29.06% 8.38% 9.09%
----------
*The Adviser voluntarily did not impose all or a portion of its fee and
reimbursed the fund for a portion of its expenses for various periods
since the fund's inception. Had the Adviser not taken these actions, the
fund' performance would be lower.
Increased Complexity, Competition and Costs. Standish also believes the
proposed increase is necessary in light of the increased complexity, competition
and costs involved in managing a mutual fund focusing on domestic small cap
stocks.
The complexity arises in part from the growth in the number of issues in
the small cap sector, including a significant growth trend in the number of
initial public offerings. This complexity is heightened by the need for Standish
to search continually for new investment opportunities as many such companies
appreciate beyond the small cap sector. Finally, the small capitalization sector
is increasingly dominated by companies offering technologically complex products
and services. Investing successfully in this sector requires a strong
understanding of the industries in which these companies compete, and the often
highly technical factors relating to product or service design and supply and
demand which make some companies more likely to outperform their competitors.
The growth of the small cap sector has in turn led to a significant
increase in the number of funds focusing on this market. To continue to grow,
the fund effectively must compete for assets by seeking to outperform an ever
increasing number of funds.
These factors have in turn resulted in increased costs to Standish of
managing the Portfolio. Standish must increasingly invest in technology and
personnel to analyze individual companies and industry trends in this growing
and rapidly changing high-technology oriented market. The growth in the number
of funds has also placed upward pressure on compensation levels for qualified
portfolio managers and analysts in this area. To continue to retain and attract
high quality professionals, Standish must remain competitive in its compensation
and benefits structure. Partly as a result of these cost related pressures,
Standish has incurred a net loss (advisory fee revenues less operations
expenses) in managing the fund and the Portfolio since their inception. Standish
receives no revenues from the fund other than the advisory fee paid by the
Portfolio. Accordingly, the advisory fee alone compensates Standish for
providing the personnel, equipment, office space necessary for the management of
the fund's investments, compliance with regulatory requirements, and a variety
of administrative functions. (See "Portfolio Transactions" below for a
discussion of the Adviser's receipt of soft dollar benefits.)
Standish does not believe the existing fee will over time provide for the
appropriate resources to enable it to attract and retain the quality personnel
and to provide the advanced technology and systems necessary to maintain and
3
enhance the present level of service and performance to the fund's shareholders.
Standish believes the proposed increase in fee would provide the resources
necessary to better enable Standish to address these challenges.
Below Average Advisory Fee. Standish also believes the proposed fee
increase is reasonable and appropriate in light of the fees incurred by other
funds. The Portfolio pays Standish an advisory fee that is significantly lower
than the median fee paid by similar funds. During the 12 months ended September
30, 1999, the Portfolio paid Standish an investment advisory fee at an annual
rate of 0.60% of average daily net assets. The median investment advisory fee
for mutual funds in the Lipper Small Cap Institutional Funds group universe is
0.83% of average daily net assets. If the proposed increase in the Portfolio's
investment advisory fee is approved, the Portfolio would pay Standish a fee of
0.80% annually of average daily net assets. Consequently, the Portfolio
currently pays at a rate that is substantially below the median for its peer
group and, if the proposed contract is approved, the Portfolio would pay
Standish a fee that is still below the median fee for the fund's peer group.
Because the fund is still quite young and has a relatively small asset
base, the fund's total expense ratio, without any subsidization by Standish,
would currently be above the median expense ratio of comparable funds in the
Lipper universe. The reason the fund's total expense ratio would be above the
median while the investment advisory fee rate is lower than the median is that
the fund has not yet been able to grow to a sufficient size to be able to take
advantage of economies of scale to spread certain of the fund's other expenses,
such as accounting and custodial fees and expenses, some of which are fixed
amounts, over a much larger asset base. Standish believes that as the fund grows
through new investments and asset appreciation, its ratio of other expenses
without reflecting Standish's subsidization will continue to fall until it is in
line with the expenses ratios of comparable funds. For that reason, Standish has
voluntarily decided to maintain its existing cap on the fund's total expense
ratio at 1.00%, which is in line with the median fund. This cap is voluntary and
may be modified or removed at any time. Standish understands that with the cap
in place, the proposed fee increase would not translate into higher investment
advisory fees for the fund. Standish is seeking your approval for a fee increase
at this time, however, because Standish believes that it will be important to be
able to draw upon the increased fees in the future as the fund's other expenses
decline in order to respond to the increased complexity, competition and costs
involved in managing a small cap equity fund as discussed above.
The fee increase is proposed and recommended for your approval only after
careful consideration by Standish and your board of trustees. Standish and your
fund's board of trustees, including the trustees who are not interested persons
of the fund, the Portfolio or Standish, have determined that the proposed fee
increase is fair and reasonable. (For a discussion of the deliberations of the
board, see "Factors Considered by the Trustees" below.) Standish and your board
recommend that you vote in favor of this proposal.
Terms of existing and proposed contracts
Except for the different advisory fee rates, effective dates and renewal
dates, the terms of the existing and proposed contracts are substantially
identical. The form of the proposed contract is attached to this proxy statement
as Exhibit A. The following summary of the terms of the proposed contract is
qualified in its entirety by reference to the attached form of the proposed
contract.
Advisory Services. Under the terms of both the existing and proposed
contracts Standish is responsible for providing continuously an investment
program for the Portfolio, consistent with the Portfolio's investment objective,
policies and restrictions and subject to the supervision and approval of the
trustees. Specifically, Standish is required to determine what investments shall
be purchased, held, sold or exchanged by the Portfolio and what portion, if any,
of the Portfolio's assets will be held uninvested and to make changes in the
Portfolio's investments. Standish also manages, supervises and conducts the
other affairs and business of the Portfolio.
The Portfolio's portfolio managers are Nicholas S. Battelle, who has been
primarily responsible for the day-to-day management of the Portfolio's portfolio
since the Portfolio's inception in December 1996, and Andrew J. Beja, who has
assisted Mr. Battelle in managing the Portfolio's portfolio since March 1996.
Whether or not the proposed contract is approved, it is intended that Messrs.
Battelle and Beja would continue to serve as the portfolio managers. During the
past five years, Mr. Battelle has served as a Director of Standish and Mr. Beja
has served as a vice president and senior analyst of Standish and, prior to
1996, he was an analyst at Advest, Inc.
4
Standard of care. Under each contract, Standish is not liable for any loss
incurred in connection with the performance of its duties, or action taken or
omitted under the contract or for any losses which may be sustained in the
acquisition, holding or disposition of any security or other investment unless
resulting from Standish's willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under the contract.
Expenses. Under the terms of both the existing and proposed contract, the
Portfolio bears the expenses of its operations, including among other things,
legal and auditing services, taxes and governmental fees, certain insurance
premiums, costs of notices and reports to interest holders, preparation and
filing of registration and financial statements, bookkeeping and share pricing
expenses, fees and disbursements of the Portfolio's custodian, and interest and
other like expenses properly payable by the Portfolio. The Portfolio in turn
allocates its expenses to its interestholders, including the fund. Standish may
from time to time voluntarily agree not to impose all or a portion of its fee or
otherwise take action to reduce expenses of the Portfolio and/or the fund. Any
such voluntary fee limitation or expense reduction may be discontinued or
modified by Standish at any time.
Standish has temporarily and voluntarily agreed to limit the fund's
expenses to 1.00% of the fund's average daily net assets.
Advisory Fees: Existing contract. As noted above, as compensation for its
services and the assumption of certain expenses which Standish incurs on behalf
of the Portfolio, the Portfolio pays Standish an annual investment advisory fee
under the existing contract equal to 0.60% of the Portfolio's average daily net
assets. This fee is computed daily and paid monthly. As an interestholder in the
Portfolio, the fund indirectly bears its pro rata share of the investment
advisory fee paid by the Portfolio to Standish.
Advisory Fees: Proposed contract. Under the proposed contract, as
compensation for its services and the assumption of certain expenses which
Standish incurs on behalf of the Portfolio, the Portfolio would pay Standish an
annual investment advisory fee equal to 0.80% of the Portfolio's average daily
net assets. The fee would be computed daily and paid monthly. As an
interestholder in the Portfolio, the fund indirectly bears its pro rata share of
the investment advisory fee paid by the Portfolio to Standish. Accordingly, this
fee represents an increase in the investment advisory fee rate payable to
Standish of 0.20% annually over the rate under the existing contract. For
information on investment advisory fees paid by other funds managed by Standish
with similar objectives, see the Appendix to this proxy statement.
The effective date of the proposed contract is expected to be January 31,
2000 (the "effective date"). Accordingly, the new fee will take effect on the
effective date if the proposed contract is approved at the meeting of
shareholders.
Effect of the new investment advisory fee
Set forth below is a table showing the dollar amount of actual investment
advisory fees paid by the Portfolio and thus, indirectly by the fund, during the
fiscal year ended September 30, 1999 under the existing contract and the dollar
amount of fees that would have been paid under the proposed contract. The table
also shows the differences (expressed as a percentage of the existing fee and in
dollar terms) between the amount that would have been paid under the proposed
contract and the amount actually paid under the existing contract. Also set
forth below is a comparative fee table showing the amount of fees and expenses
borne directly by the fund as a percentage of average daily net assets during
the fiscal year ended September 30, 1999 and the amount of fees and expenses
shareholders would have paid if the proposed contract had been in effect. The
figures shown for the new fee represent the amounts that actually would have
been paid under the proposed contract during the 12 months ended September 30,
1999. At September 30, 1999, the fund had net assets of approximately $44
million.
5
DOLLAR AMOUNT OF INVESTMENT ADVISORY FEES PAID
(fiscal year ended September 30, 1999)
Difference from Amount Paid under
Existing Contract
---------------------------------
Existing Proposed as a percentage of
Contract Contract the existing fee in dollars
-------- -------- ------------------ ----------
Amount of Fees Paid or that Would Have Been Paid $173,628 $231,504 +33.3% +$57,876
Amount of Fees Paid or that Would Have Been Paid
(After waiver or reimbursement)* $121,138 $121,138 0 +$0
- ----------
* Because Standish voluntarily capped operating expenses during the fiscal year
ended September 30, 1999, Standish reduced its advisory fee payable by the
Portfolio and reimbursed certain of the fund's other expenses.
The increase in expenses resulting from the increase in the investment advisory
fee, prior to imposition of the expense cap, would amount to 20 cents on each
$100 invested in the fund.
COMPARATIVE FEE TABLE
INSTITUTIONAL CLASS*
(fiscal year ended September 30, 1999)
Annual Fund Operating Expenses
(as a percentage of average net assets)
Existing Proposed
Contract Contract
-------- --------
Management Fee 0.60% 0.80%
Distribution and Service (12b-1) Fee 0.00% 0.00%
Other Expenses 0.58% 0.58%
-------- --------
Total Annual Fund Operating Expenses 1.18% 1.38%
Because Standish has agreed to cap the fund's
operating expenses at 1.00%, the fund's actual
expenses were or would have been:
Management fee 0.60% 0.80%
Other expenses 0.40% 0.20%
6
Total annual fund operation expenses 1.00% 1.00%
-------- --------
This cap may be changed or eliminated at any time.
Examples
The following examples help you compare the costs of investing in the fund
currently under the existing contract and after giving effect to the fee
increase reflected in the proposed contract with the cost of investing in other
mutual funds. They assumes that: a) you invest $10,000 in the fund for the time
periods shown, b) you reinvest all dividends and distributions, c) your
investment has a 5% return each year and d) the fund's operating expenses remain
the same and does not give effect to the voluntary expense cap by Standish.
Number of years you
own your shares Existing Contract Proposed Contract
1 year $120 $140
3 years $336 $355
5 years $568 $586
10 years $1,232 $1,240
The following examples show the same information but give effect to the
voluntary expense cap by Standish.
Number of years you
own your shares Existing Contract Proposed Contract
1 year $102 $102
3 years $318 $318
5 years $552 $552
10 years $1,225 $1,225
Other provisions of the existing and proposed contracts
Miscellaneous
The existing contract was first approved by the Portfolio's board on
October 5, 1996 and was approved by the fund, as the Portfolio's sole initial
shareholder on October 5, 1996 in connection with the Portfolio's and fund's
organization. Its renewal was most recently approved by the board at a meeting
held October 12, 1999 with such renewal to expire on the earlier of one year or,
if the proposal is approved by shareholders, the effective date of the proposed
contract. The existing contract is renewable annually by the vote of a majority
of the Portfolio Trust's board, including a majority of the trustees who are not
"interested persons" (as defined in the 1940 Act), the Portfolio or Standish,
cast in person at a meeting called for the purpose of voting on such renewal.
If approved, the proposed contract will become effective on January 31,
2000 (or if approved after that date, on the first day of the first month
following the approval date) and will continue in effect until January 31, 2002
and thereafter will continue from year to year subject to annual approval by the
board of trustees in the same manner as the existing contract. The existing
contract and the proposed contract terminate if assigned (as defined in the 1940
Act) and may be terminated without penalty by either party (by vote of the
Portfolio's board or by a vote of a majority of the outstanding voting
securities of the Portfolio), upon 60 days' written notice.
Additional information pertaining to Standish
For additional information concerning the management, ownership structure,
affiliations, brokerage policies and certain other matters pertaining to
Standish, see the Appendix to this proxy statement.
Factors considered by the trustees
7
The trustees of the fund and the Portfolio Trust determined that the terms
of the proposed contract are fair and reasonable and that approval of the
proposed contract is in the best interests of the Portfolio and its
interestholders and the fund and its shareholders. The boards of trustees of the
Trust and Portfolio are identical. In their discussions, the trustees who are
not "interested" persons of the fund, the Portfolio or Standish were advised by
their own legal counsel. Prior to approving the proposed contract, the trustees
who are not "interested" persons of the fund, the Portfolio or Standish first
met privately with their counsel on September 21, 1999. These trustees again met
privately with their counsel in the course of the October 12, 1999 meetings of
the full boards of trustees.
In connection with their deliberations, the trustees requested and were
furnished with substantial information to assist in their evaluation. This
information included a comparison of the Portfolio's present and proposed
investment management fees and expense ratios and the fund's present and
proposed expense ratios, in each with those of other mutual funds in its peer
group. This information indicated that the present fee was well below the median
among mutual funds in the fund's competitive universe and that, with the
proposed fee increase, the investment advisory fee would still be somewhat below
the median. Standish also provided information comparing the fund's investment
performance with the fund's benchmark, the Russell 2000 Growth Index, and with
competitive funds which indicated that the fund had generally outperformed the
benchmark and the median fund in its competitive universe. The trustees also
considered the fund's total expense ratio, the fact that the ratio without
regard to Standish's voluntary expense cap would be above that of the median
fund in the competitive universe and how the cap affects the actual advisory
fees paid by the Portfolio, and thus the fund, relative to the median fund.
In addition, Standish provided information indicating that it is incurring
losses in managing the fund and the Portfolio at the current fee level and that
the current domestic small capitalization equity market is marked by various
factors which tend to increase Standish's costs. These factors include: (i)
growing complexity (both in the increasing number of issuers Standish must
follow, including significant growth in the number of initial public offerings,
and the highly technical nature of products and services most of these companies
provide); (ii) a high level of competition among a growing number of funds in
this category for assets, top performance rankings and quality investment
personnel; and (iii) steeply rising costs related to the employment of
additional quality investment consultants, investments in information technology
and the effect of competition on compensation packages necessary to attract and
retain quality personnel.
As a result of their deliberations, and taking in consideration the
information provided, the trustees determined that Standish's request for a fee
increase was reasonable.
Trustees' recommendation
At the meetings on October 12, 1999, the trustees of the fund and the
Portfolio Trust, including all of the trustees who are not "interested persons"
of the fund, the Portfolio or Standish, unanimously concluded that the fee was
fair and reasonable and in the best interests of the Portfolio's interestholders
and the fund's shareholders, and by a vote cast at the meeting, unanimously
approved and voted to recommend to the interestholders of the Portfolio and
shareholders of the fund that they approve the proposal to adopt the proposed
contract.
Required vote
Adoption of this Proposal requires the approval of a majority of the
outstanding voting securities of the fund, which under the 1940 Act, means the
affirmative vote of the lesser of (i) 67% or more of the shares of the fund
represented at the meeting, if at least 50% of all outstanding shares of the
fund are represented at the meeting, or (ii) 50% or more of the outstanding
shares of the fund entitled to vote at the meeting (a "1940 Act majority vote").
If this Proposal is not approved by the shareholders of the fund (and
subsequently by interestholders in the Portfolio), the existing contract will
continue in effect.
For the reasons set forth above, the trustees of your fund recommend that
shareholders vote in favor of the proposed contract.
INFORMATION CONCERNING THE MEETING
8
Outstanding shares and quorum
As of October 18, 1999, there were 1,179,192.219 shares of beneficial
interest of the fund outstanding. Only shareholders of record on October 18,
1999 are entitled to notice of and to vote at the meeting. A majority of the
outstanding shares of the fund that are entitled to vote will constitute a
quorum for the transaction of business.
Ownership of shares of the fund
To the knowledge of the fund, as of October 18, 1999, the following
persons owned of record or beneficially 5% or more of the outstanding shares of
the fund.
Number of shares owned and
Shareholder percentage of total shares outstanding
- ----------- --------------------------------------
Kenyon College Balanced Fund 224,781.199 19%
Wentworth Institute of Technology 127,534.130 11%
Charles Schwab & Co. 104,253.273 9%
Stephen Phillips Memorial Charitable Trust 69,946.171 6%
As of October 18, 1999, the Fund owned [99.99%] of the outstanding shares
of the Portfolio. The trustees and officers of the Trust and the Portolio Trust
owned as a group less than 1% of the shares of the fund as of October 18, 1999.
Shareholder proposals
Neither your fund nor the Portfolio is required to hold annual meetings of
shareholders and neither currently intends to hold a meeting of shareholders in
2000. A shareholder proposal intended to be presented at a future annual meeting
must be received by the fund or Portfolio a reasonable time before the fund
prepares proxy materials relating to such a meeting.
Proxies, quorum and voting at the meeting
Any shareholder who has given his or her proxy to someone has the power to
revoke that proxy at any time prior to its exercise by executing a superceding
proxy or by submitting a notice of revocation to the secretary of the Trust. In
addition, although mere attendance at the meeting will not revoke a proxy, a
shareholder present at the meeting may vote in person and, by voting in person,
shall be deemed to have revoked any previously granted proxy. All properly
executed and unrevoked proxies received in time for the meeting will be voted in
accordance with the instructions contained in the proxies. If no instruction is
given, the persons named as proxies will vote the shares represented thereby in
favor of the proposal described above and will use their best judgment in
connection with the transaction of such other business as may properly come
before the meeting or any adjournment thereof.
In the event that at the time any session of the meeting is called to
order a quorum is not present in person or by proxy, the persons named as
proxies may vote those proxies which have been received to adjourn the meeting
to a later date. In the event that a quorum is present but sufficient votes in
favor of any of the proposal have not been received, the persons named as
proxies may propose one or more adjournments of the meeting to permit further
solicitation of proxies with respect to the proposal. Any such adjournment will
require the affirmative vote of more than one half of the shares of the fund
present in person or by proxy at the session of the meeting to be adjourned. The
persons named as proxies will vote those proxies which they are entitled to vote
in favor of any such proposal in favor of such an adjournment and will vote
those proxies required to be voted against any such proposal against any such
adjournment. A shareholder vote may be taken on one or more of the proposals in
the proxy statement prior to such adjournment if sufficient votes for its
9
approval have been received and it is otherwise appropriate. Such vote will be
considered final regardless of whether the meeting is adjourned to permit
additional solicitation with respect to any other proposal.
Shares of your fund represented in person or by proxy, including shares
which abstain or do not vote with respect to a proposal, will be counted for
purposes of determining whether there is a quorum at the meeting. Accordingly,
an abstention from voting has the same effect as a vote against a proposal.
However, if a broker or nominee holding shares in "street name" indicates
on the proxy card that it does not have discretionary authority to vote on a
proposal, those shares will not be considered present and entitled to vote on
that proposal. Thus, a "broker non-vote" has no effect on the voting in
determining whether a proposal has been adopted in accordance with a vote that
may be approved by less than a majority of the outstanding share of the fund, if
more than 50% of the outstanding shares (excluding the "broker non-votes") are
present or represented at the meeting. However, for purposes of determining
whether a proposal has been adopted in accordance with a vote that requires
approval by holders of at least a majority of the outstanding shares of the
fund, a "broker non-vote" has the same effect as a vote against that proposal
because shares represented by a "broker non-vote" are considered to be
outstanding shares.
Other business
While the meeting has been called to transact any business that may
properly come before it, the only matters that the trustees intend to present is
the investment advisory agreement proposal stated in the attached notice of
special meeting of shareholders and described in this proxy statement. However,
if any additional matters properly come before the meeting, and on all matters
incidental to the conduct of the meeting, it is the intention of the persons
named in the enclosed proxy to vote the proxy in accordance with their judgment
on such matters unless instructed to the contrary.
Method of solicitation and expenses
The cost of preparing, assembling and mailing this proxy statement, the
attached notice and the accompanying proxy card will be borne by Standish. In
addition to soliciting proxies by mail, Standish may, at Standish's expense,
have one or more of the Trust's officers, representatives or compensated
third-party agents, aid in the solicitation of proxies by personal interview or
telephone and telegraph and may request brokerage houses and other custodians,
nominees and fiduciaries to forward proxy soliciting material to the beneficial
owners of the shares held of record by such persons.
Persons holding shares as nominees will be reimbursed by Standish, upon
request, for the reasonable expenses of mailing soliciting materials to the
principals of the accounts.
10
APPENDIX
Additional information pertaining to Standish
Ownership and Control of Standish. Edward H. Ladd is the Chairman of the
Board of Directors and Managing Director of Standish. George W. Noyes is the
President, Chief Executive Officer and a Managing Director of Standish. Paul W.
Martins is the Vice President-Finance and Treasurer of Standish. The following,
constituting all of the Directors and all of the shareholders of Standish, are
Standish's controlling persons: Caleb F. Aldrich, Nicholas S. Battelle, David H.
Cameron, Karen K. Chandor, D. Barr Clayson, W. Charles Cook, Joseph M. Corrado,
Richard C. Doll, Dolores S. Driscoll, Maria D. Furman, James E. Hollis III,
Raymond J. Kubiak, Edward H. Ladd, Laurence A. Manchester, George W. Noyes,
Arthur H. Parker, Howard B. Rubin, Austin C. Smith, Thomas P. Sorbo, David C.
Stuehr, Ralph S. Tate, Michael W. Thompson and Richard S. Wood.
The trustees and officers of the Trust who are also directors, officers or
employees of Standish are listed below. The address of each such person, and of
each person who is an officer or director of Standish, is c/o Standish, Ayer &
Wood, Inc., One Financial Center, Boston, Massachusetts 02111.
Directors, officers and employees of Standish who are also trustees and officers
of the Trust:
Name Position held With the Trust Position with Standish
- ---------------------- ---------------------------- ------------------------
D. Barr Clayson Vice President and Trustee Vice President and
Managing Director
Edward H. Ladd Vice President and Trustee Chairman of the Board
and Managing Director
Richard S. Wood President, Chief Vice President,
Executive Officer and Secretary and Managing
Trustee Director
James E. Hollis III Executive Vice President Vice President and
Director
Paul G. Martins Vice President, Treasurer Vice President - Finance
and Chief Financial and Treasurer
Officer
Beverly E. Banfield Vice President Associate Director, Vice
President and Chief
Compliance Officer
Lavinia B. Chase Vice President Vice President and
Associate Director
Anne P. Herrmann Vice President and Assistant Vice President
Secretary and Senior Fund
Administration Manager
Denise B. Kneeland Vice President Vice President and
Manger, Mutual Fund
Operations
Tami M. Pester Vice President Assistant Compliance
Manager and Compliance
Officer
Rosalind J. Lillo Vice President Broker/Dealer
Administrator
Deborah Rafferty-Maple Vice President Financial Planner and
Registered Investment
Networks Marketing
Manager
The principal occupation of each principal executive officer and director of
Standish is as an employee of Standish.
11
Administrative services provided to the fund by Standish
Standish also serves as the administrator to the fund pursuant to a
written administration agreement between Standish and the Trust on behalf of the
fund. As administrator, Standish manages the affairs of the fund and provides
all necessary office space and the services of executive personnel in order to
administer the affairs of the fund. Standish does not currently receive any
additional compensation for these services.
Services provided to the fund by affiliates of Standish
Standish Funds Distributor, L.P. ("SFD") serves as the fund's principal
underwriter. SFD receives no compensation for these services. The address of SFD
is One Financial Center, Boston, Massachusetts 02111.
Similar funds advised by Standish
Standish serves as the investment adviser to the following funds with
investment objectives similar to your fund's objective:
Name of fund
(net assets as of 9/30/99) Assets Annual Advisory Fee Fee After Waivers
- ----------------------------------- ------------ ------------------- -----------------
Small Cap Equity Portfolio $147,434,306 0.60% 0.54%
Small Cap Tax-Sensitive Equity Fund $143,074,655 0.60%* 0.59%
- ----------
*On October 12, 1999 the board of trustees of the Trust also approved, and
recommended to the shareholders of Small Cap Tax-Sensitive Equity Fund that they
approve, an increase in this fee from 0.60% to 0.80%.
Portfolio Transactions. All orders for the purchase or sale of portfolio
securities are placed on behalf of the Portfolio by Standish pursuant to
authority contained in the existing contract. In selecting brokers or dealers,
Standish considers factors relating to execution on the best overall terms
available, including, but not limited to, the size and type of the transaction;
the nature and character of the markets of the security to be purchased or sold;
the execution efficiency, settlement capability and financial condition of the
dealer; the dealer's execution services rendered on a continuing basis; and the
reasonableness of any dealer spreads.
Standish may select broker-dealers which provide brokerage and/or research
services to the Portfolio and/or other investment companies or institutional or
other accounts managed by Standish. Such research services must provide lawful
and appropriate assistance to Standish in the performance of its investment
decision-making responsibilities and could include advice concerning the value
of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or the purchasers or sellers of
securities; providing stock quotation services, credit rating service
information and comparative fund statistics; furnishing analysis, electronic
information services, manuals and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and performance of
accounts and particular investment decisions; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement).
If Standish determines in good faith that the amount of commissions
charged by a broker-dealer is reasonable in relation to the value of the
brokerage and research services provided by such broker-dealer, the Portfolio
may pay commissions to such broker-dealer in an amount greater than the amount
another firm may charge. This information might be useful to Standish in
providing services to the Portfolio as well as to other investment companies or
accounts advised by Standish, although not all of such research may be useful to
the Portfolio. Conversely, such information provided to Standish by brokers and
dealers through whom other clients of Standish effect securities transactions
might be useful to Standish in providing services to the Portfolio. The receipt
of such research is not expected to reduce Standish's normal independent
research activities; however, it enables Standish to avoid the additional
expense which might otherwise be incurred if it were to attempt to develop
comparable information through its own staff.
12
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 31st day of January, 2000, between Standish,
Ayer & Wood Master Portfolio, an unincorporated business trust organized under
the laws of the State of New York (the "Trust"), and Standish, Ayer & Wood,
Inc., a Massachusetts corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the assets held by the Trustees of the Trust may be divided into
separate funds, each with its own separate investment portfolio, investment
objectives, policies and purposes; and
WHEREAS, the Adviser is engaged in the business of rendering investment
advisory and management services, and is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory services to Standish Small Capitalization Equity Portfolio II (the
"Portfolio"), a separate series of the Trust, and the Adviser is willing to
furnish such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as follows:
1. Appointment of the Adviser. The Trust hereby appoints the Adviser to
act as investment adviser of the Portfolio for the period and on the terms
herein set forth. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided. The Adviser
shall for all purposes herein be deemed an independent contractor and shall,
unless expressly otherwise provided, have no authority to act for or represent
the Portfolio in any way nor shall otherwise be deemed an agent of the
Portfolio.
2. Duties of the Adviser.
(a) The Adviser, at its expense, will furnish continuously an
investment program for the Portfolio, will determine, subject to the overall
supervision and review of the Trustees of the Trust, what investments shall be
purchased, held, sold or exchanged by the Portfolio and what portion, if any, of
the assets of the Portfolio will be held uninvested, and shall, on behalf of the
Trust, make changes in the investments of the Portfolio. Subject always to the
supervision of the Trustees of the Trust and to the provisions of the Trust's
Agreement and Declaration of Trust and Bylaws and of the 1940 Act, the Adviser
will also manage, supervise and conduct the other affairs and business of the
Portfolio and matters incidental thereto. Notwithstanding the foregoing, the
Adviser shall not be required to perform any such non-investment advisory
services that may, in the opinion of counsel to the Trust, cause the Portfolio
to be engaged in a "trade or business within the United States", as such term is
used in Section 864 of the Internal Revenue Code of 1986, or any successor
statute. The Adviser, and any affiliates thereof, shall be free to render
similar services to other investment companies and other clients and to engage
in other activities, so long as the services rendered hereunder are not
impaired.
(b) The Portfolio shall bear the expenses of its operations,
including legal and auditing services, taxes and governmental fees, certain
insurance premiums, costs of notices and reports to interestholders, typesetting
and printing of registration and financial statements for regulatory purposes
and for distribution to existing and prospective interestholders, bookkeeping
and interest pricing expenses, fees and disbursements of the Trust's custodian,
administrator, transfer and dividend disbursing agent or registrar, or interest
and other like expenses properly payable by the Trust.
A-1
3. Compensation of the Adviser.
(a) As full compensation for the services and facilities furnished
by the Adviser under this Agreement, the Trust agrees to pay to the Adviser a
fee equal at the annual rate to 0.80% of the Portfolio's average daily net
assets. Such fees shall be accrued when computed and payable monthly. For
purposes of calculating such fees, the Portfolio's average daily net asset value
shall be determined by taking the average of all determinations of net asset
value made in the manner provided in the Portfolio's current registration
statement.
(b) The compensation payable to the Adviser hereunder for any period
less than a full month during which this Agreement is in effect shall be
prorated according to the proportion which such period bears to a full month.
4. Limitation of Liability of the Adviser. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Portfolio in connection with any investment policy or the purchase, sale or
retention of any securities on the recommendation of the Adviser; provided,
however, that nothing herein contained shall be construed to protect the Adviser
against any liability to the Portfolio by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties under this Agreement.
5. Term and Termination.
(a) This Agreement shall become effective on the date hereof. Unless
terminated as herein provided, this Agreement shall remain in full force and
effect for two years from the date hereof and shall continue in full force and
effect for successive periods of one year thereafter, but only so long as each
such continuance is approved annually (i) by either the Trustees of the Trust or
by vote of a majority of the outstanding voting securities (as defined in the
1940 Act) of the Portfolio, and, in either event, (ii) by vote of a majority of
the Trustees of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated at any time without the payment
of any penalty by vote of the Trustees of the Trust or by vote of a majority of
the outstanding voting securities (as defined in the 1940 Act) of the Portfolio
or by the Adviser, on sixty days' written notice to the other parties.
(c) This Agreement shall automatically and immediately terminate in
the event of its assignment as defined in the 1940 Act.
6. Limitation of Liability. The term "Standish, Ayer & Wood Master
Portfolio" means and refers to the Trustees from time to time serving under the
Agreement and Declaration of Trust of the Trust dated January 18, 1996, as the
same may subsequently thereto have been, or subsequently hereto be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, interestholders, nominees, officers, agents or
employees of the Trust, personally, but shall bind only the trust property of
the Trust as provided in the Agreement and Declaration of Trust of the Trust.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Trust and interestholders of the Portfolio and this Agreement
has been signed by an authorized officer of the Trust, acting as such, and
neither such authorization by such Trustees and interestholders nor such
execution and delivery by such officer shall be deemed to have been made by any
of them, but shall bind only the trust property of the Trust as provided in the
Agreement and Declaration of Trust.
A-2
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed as of the date first written above.
STANDISH, AYER & WOOD MASTER PORTFOLIO
on behalf of Standish Small Captialization
Equity Portfolio II
Attest:
By:
- -------------------------- -------------------------------------
Its:
-------------------------------------
STANDISH, AYER & WOOD, INC.
Attest:
By:
- -------------------------- -------------------------------------
Its:
-------------------------------------
A-3
PROXY BALLOT
STANDISH SMALL CAPITALIZATION EQUITY FUND II
a series of
STANDISH, AYER & WOOD INVESTMENT TRUST
PROXY PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking all prior proxies, hereby appoints Beverly E.
Banfield, Edward H. Ladd and Richard S. Wood, or any of them individually, as
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Standish Small Capitalization Equity Fund II
(the "Fund"), a series of Standish, Ayer & Wood Investment Trust (the "Trust"),
to be held at the offices of Standish, Ayer & Wood, Inc., One Financial Center,
26th Floor, Boston, Massachusetts 02111, on December 20, 1999, at 2:00 p.m.,
Boston time, or at any adjournment thereof, notice of which meeting and the
Proxy Statement accompanying the same have been received by the undersigned,
upon the following matters as described in the Notice of Special Meeting and
accompanying Proxy Statement:
(a) TO CONSIDER AND ACT UPON A PROPOSAL TO AUTHORIZE THE FUND TO
APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN STANDISH, AYER & WOOD MASTER
PORTFOLIO, ON BEHALF OF ITS SERIES, STANDISH SMALL CAPITALIZATION EQUITY
PORTFOLIO II, AND STANDISH, AYER & WOOD, INC. INCREASING THE RATE AT WHICH FEES
ARE PAID TO STANDISH.
|_| FOR |_| AGAINST |_| ABSTAIN
(b) TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
Said proxies will vote this proxy as directed, or if no direction is indicated,
for the proposal unless authority to do so is specifically withheld in the
manner provided.
Dated:___________________, 1999
Note: The undersigned hereby
acknowledges receipt of the
Notice of Meeting and proxy
statement and revokes any proxy
given previously with respect to
the votes covered by this proxy.
--------------------------------
[Label identifying shareholder account] --------------------------------
--------------------------------
Signature(s)
--------------------------------
Print name, title
In signing, please write name(s) exactly as your account is registered.
When signing as attorney, executor, administrator or other fiduciary, please
give your full title as such. Joint owners should each sign personally.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES AND SHOULD BE
RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED