SEC Company Response from SCHRODER SERIES TRUST (CIK 0000908802) — Feb 23, 2005
SCHRODER SERIES TRUST (CIK 0000908802)
Date: Feb. 23, 2005 · CIK: 0000908802 · Accession: 0000950136-05-000985
AI Filing Summary & Sentiment
File numbers found in text: 811-7840
Letter
February 23, 2005 Jessica T. O'Mary (617) 951-7819 jomary@ropesgray.com Securities and Exchange Commission Division of Investment Management 450 Fifth Street, N.W. Washington, D.C. 20549 Attn: Kim Browning, Esq.
Re: Post-Effective Amendment No. 23 to the Schroder Series Trust (the "Trust") Registration Statement on Form N-1A under the Securities Act of 1933 and Post-Effective Amendment No. 25 to the Trust's Registration Statement on Form N-1A under the Investment Company Act of 1940 (the "Registration Statement"), filed with the U.S. Securities and Exchange Commission (the "Commission") on December 22, 2004 (Securities Act of 1933 File No. 33-65632 and Investment Company Act of 1940 File No. 811-7840) --------------------------------------
Dear Ms. Browning:
This letter sets forth the Trust's responses to comments you provided to me telephonically on February 16, 2005 and February 17, 2005. For convenience of reference, I have summarized below the text of each comment in bold before each response; the Trust's responses follow in normal typeface. In addition, enclosed with this letter is a copy of each of the Prospectus and Statement of Additional Information, marked to reflect changes that will be made in response to the comments.
PROSPECTUS
(1) PLEASE MAKE THE REQUESTED "TANDY" LETTER STATEMENTS IN YOUR LETTER TO US.
On behalf of the Trust, we acknowledge that:
ROPES & GRAY LLP
-2- February 23, 2005
(a) the Trust is responsible for the adequacy and accuracy of the disclosure in the registration statement;
(b) Commission staff comments or changes to disclosure in response to Commission staff comments in the filings reviewed by the staff do not foreclose the Commission from taking any action with respect to a filing; and
(c) the Trust may not assert Commission staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
(2) WE BELIEVE YOUR SUMMARY OF THE FUNDS ON PAGE 1 IS REPETITIVE OF OTHER INFORMATION INCLUDED IN THE PROSPECTUS. PLEASE REVIEW THIS DISCLOSURE WITH A VIEW TO SUMMARIZING ONLY THE INFORMATION NOT PROVIDED LATER IN THE DOCUMENT. PLEASE TAKE THE SAME APPROACH WITH THE SUMMARY IMMEDIATELY AFTER THE TABLE OF CONTENTS.
The Trust believes the summary on the front cover page of the Prospectus is helpful and appropriate and consistent with Instruction 1 to Item 1(a) of Form N-1A. The paragraphs following the Table of Contents have been revised to address your comment.
(3) PLEASE CONFIRM THAT EACH OF THE RISKS DESCRIBED IN THE PRINCIPAL RISKS SECTION (ITEM 4) IS INCLUDED IN THE ITEM 2 DISCLOSURE.
We have reviewed the disclosures in question and believe that each of the risks described in the Principal Risks section (Item 4) is included in the Item 2 disclosure.
(4) YOU LIST INVESTMENTS IN INVESTMENT-GRADE QUALITY BONDS AS A PRINCIPAL STRATEGY BUT ALSO LIST JUNK BONDS IN PRINCIPAL RISKS. PLEASE DESCRIBE IN ITEM 2 IF THE FUNDS CAN GO BEYOND INVESTMENTS IN INVESTMENT-GRADE SECURITIES AS A PRINCIPAL STRATEGY.
Investments in junk bonds are not a principal strategy or risk of the Funds. The Prospectus has been revised to remove risks relating to those investments from the principal risks section.
(5) IN YOUR ITEM 4 DISCLOSURE, PLEASE CLARIFY WHAT THE FUNDS WILL DO IF THE CREDIT QUALITY OF A SECURITY DROPS BELOW THE RATING AT THE TIME OF PURCHASE (WILL THE FUND SELL)?
The requested disclosure has been added.
(6) PLEASE ADD THE FOLLOWING DISCLOSURE ABOUT THE TERMS OF THE BONDS: INTEREST RATE, PRINCIPAL PAYMENTS (FIXED VARIABLE OR BOTH), TYPE OF RESET TERMS IF ANY, AND DIVIDEND TERMS.
The requested disclosure has been added.
ROPES & GRAY LLP -3- February 23, 2005
(7) IN THE SUMMARY, YOU STATE THAT EACH FUND MAY "INVEST MORE THAN 25% OF ITS ASSETS" IN CERTAIN SECTORS. PLEASE DELETE THE TERM "INCLUDING" AND LIST ALL SECTORS. ALSO, PLEASE NOTE THAT YOU SHOULD IDENTIFY ACTUAL PROJECTS AND NOT GIVE EXAMPLES.
The list provided is illustrative of sectors in which the Funds may invest. The Trust believes it is helpful disclosure for investors because it identifies some of the most common sectors in which the Funds will invest, but it would not be feasible to list all possible sectors in which the Funds invest.
(8) IF THE FUNDS CAN INVEST MORE THAN 25% IN A PARTICULAR STATE PLEASE IDENTIFY THAT STATE IN THE SUMMARY.
The Funds do not currently intend to focus on any particular state but may at any point in time invest more than 25% in a particular state.
(9) PLEASE ADD MANAGEMENT RISK TO YOUR ITEM 2 DISCLOSURE.
The requested disclosure has been added.
(10) IF THE FUNDS CAN INVEST MORE THAN 25% IN A PARTICULAR INDUSTRY THEN ADD A CONCENTRATION RISK IN THE PRINCIPAL RISKS SECTION. IF YOU CAN INVEST MORE THAN 25% IN A PARTICULAR PROJECT THEN ADD SPECIFIC RISKS.
A discussion of concentration risk has been added.
(11) IN THE SUMMARY OF SCHRODER SHORT-TERM MUNICIPAL BOND FUND, YOU REFER TO THE "EFFECTIVE MATURITY." DOES THIS TEST APPLY ONLY TO ASSETS AND NOT TO THE PARAGRAPH ON DOLLAR WEIGHTED AVERAGE PORTFOLIO MATURITY? CAN YOU CLARIFY THE USE OF MATURITY AND CONFIRM THAT IT'S NOT A DOLLAR WEIGHTED AVERAGE EFFECTIVE MATURITY?
The Prospectus has been revised to clarify it is a dollar weighted average effective maturity and revised the disclosure accordingly.
(13) PLEASE APPLY COMMENTS NUMBER 8 AND 10 ON CLARIFYING INVESTMENTS IN STATES, CLARIFYING CONCENTRATION LEVELS, AND ADDRESSING ASSOCIATED RISKS IN THE "PRINCIPAL RISKS" SECTION.
The requested changes have been made.
(14) PLEASE CONFIRM THAT THE FEE WAIVER IS IN EFFECT FOR A FULL YEAR.
The fee waiver will be in effect until February 28, 2006.
(15) WE DO NOT BELIEVE THE FIVE AND TEN YEAR COST INFORMATION IS NECESSARY.
ROPES & GRAY LLP -4- February 23, 2005
The Funds began operating on December 31, 2003 so we believe this disclosure is appropriate because the Funds do not qualify as "New Funds" under Item 3, Instruction 5 of Form N-1A.
(16) PLEASE EXPLAIN THE BASIS FOR THE STATEMENT THAT MUNICIPAL BONDS ARE "INVESTMENTS OF ANY MATURITY."
The Funds can purchase investments of any maturity. The disclosure provides that the term "municipal bonds" may include investments of any maturity.
(17) IN THE FOURTH PARAGRAPH UNDER "MUNICIPAL BONDS" IN "PRINCIPAL RISKS", YOU STATE THAT THERE MAY BE FEDERAL AMT. PLEASE EXPLAIN THAT THE FUNDS CAN MAKE INVESTMENTS THAT ARE 100% SUBJECT TO AMT AND PROVIDE MORE DETAIL AS TO THE RELATED TAX CONSEQUENCES.
The requested disclosure has been added.
(18) IN THE FIFTH PARAGRAPH UNDER "MUNICIPAL BONDS" IN "PRINCIPAL RISKS", IT SEEMS AS IF YOU CONTEMPLATE BULK PURCHASES. PLEASE ELABORATE ON THE LIQUIDITY RISK AND ON THE VALUATION RISK IN PARTICULAR. HOW DO YOU FAIR VALUE IN THIS SITUATION?
We believe that these risks are covered generally by the disclosure in the last paragraph under "Municipal Bonds" in the "Principal Risks" section. Fair values of such securities should be determined generally in the same manner as the fair values of other securities held in a Fund's portfolio.
(19) PLEASE CONFIRM THE ACCURACY OF THE FUNDS' ABILITY TO INVEST IN "SECURITIES ISSUED TO FINANCE UNFUNDED PENSION LIABILITIES."
The Trust confirms that the Funds may make investments in such securities.
(20) IN THE "CREDIT RISK" SECTION, PLEASE DISCLOSE THE PERCENTAGE THAT CAN BE IN JUNK BONDS.
The Funds do not invest in junk bonds as a principal strategy so the "Principal Risks" disclosure regarding junk bonds has been deleted.
(21) IN THE "CONCENTRATION OF INVESTMENTS" SECTION, PLEASE REFER TO OUR PREVIOUS COMMENTS NUMBER 8 AND 10.
The requested changes have been made.
(22) IN THE "MANAGEMENT OF THE FUNDS" SECTION PLEASE REVIEW THE RECENT PROFESSIONAL EXPERIENCE AND CONFIRM THAT IT COVERS THE LAST FIVE YEARS.
ROPES & GRAY LLP -5- February 23, 2005
The requested changes have been made.
(23) IN "HOW THE FUNDS' SHARES ARE PRICED" WE ARE MAKING ANOTHER COMMENT ON THE REFERENCE TO "UP TO 15 MINUTES." PLEASE GIVE THE AUTHORITY FOR THIS STATEMENT. YOU COULD ALSO GIVE A FIXED TIME INSTEAD OF A FLUCTUATING TIME.
This language has been deleted.
(24) IN "HOW THE FUNDS' SHARES ARE PRICED" YOU STATE THE SECURITIES FOR WHICH MARKET QUOTATIONS ARE NOT READILY AVAILABLE "MAY BE VALUED." PLEASE CHANGE "MAY" TO "WILL" OR EXPLAIN THE EXCEPTIONS.
The requested change has been made.
(25) IF THERE IS A BANK WIRE FEE, DISCLOSE THIS FEE. IF NOT, PLEASE REPRESENT THIS SUPPLEMENTALLY.
There is no fee for bank wires.
(26) IN "HOW TO BUY SHARES" DOES THE FUND HAVE BREAKPOINTS IN REGARDS TO THE WAIVERS?
This language refers to specific categories of investors for which the investment minimum may be waived (such as employees of Schroders and their relatives). Breakpoints are not relevant to this disclosure.
(27) IF IN-KIND SECURITIES FROM ANOTHER FUND COMPLEX ARE ACCEPTED, ADD RISK DISCLOSURE AS TO ERRONEOUS VALUATION.
The requested risk disclosure has been added.
(28) THE FUNDS NEED REASONABLE VERIFICATION PROCEDURES FOR TELEPHONE REDEMPTIONS. PLEASE ADD THIS DISCLOSURE IN "HOW TO SELL SHARES."
We understand that telephone redemption is only available upon written request. In response to redemption requests via telephone, the Funds will only send redemption proceeds to addresses on file with the Funds for 30 days. The language in the Prospectus has been revised to describe these procedures.
(29) IN "FREQUENT PURCHASES AND REDEMPTIONS" PLEASE REPRESENT SUPPLEMENTALLY THAT THE FUNDS HAVE NO MARKET TIMING DEFINITION.
The Trust has not established a definition of market timing. The Trust retains the flexibility to terminate accounts through which potentially abusive trading might be occurring.
ROPES & GRAY LLP -6- February 23, 2005
(30) PLEASE MAKE THE SPECIFIC DISCLOSURES IN ITEM 6(E)(4)(I) (WHETHER THE FUND DISCOURAGES MARKET TIMING) AND (II) (WHETHER THE FUND ACCOMMODATES MARKET TIMERS).
The requested disclosure has been added.
(31) PLEASE DISCLOSE ANY POLICY OR PROCEDURE FOR MONITORING OMNIBUS ACCOUNTS AND THE SCHRODERS POLICIES AND PROCEDURES IF ANY PROBLEM IN SUCH ACCOUNTS IS DETECTED (FOR INSTANCE, WILL SCHRODERS TERMINATE THE RELATIONSHIP?).
The Trust expects that brokers, retirement plan administrators and fee-based program sponsors will provide accurate information to facilitate Schroders' monitoring of omnibus accounts. However, as stated in the Prospectus, Schroders' ability to monitor these accounts is limited if the information it receives is not accurate. Disclosure has been added to make clear that the Trust or Schroders may take any steps it considers appropriate in respect of frequent trading discovered in omnibus accounts, including potentially closing the omnibus account.
(32) PLEASE CONFIRM SUPPLEMENTALLY THAT THE FEE WAIVER BOTH PRE- AND POST-WAIVER IS THE SAME BETWEEN THE CLASSES.
The fee is applied equally to the Advisor and Investor Shares both pre- and post-waiver.
(33) OUR COMMENTS APPLY TO BOTH SHARE CLASSES.
Your comments have been applied to both share classes.
STATEMENT OF ADDITIONAL INFORMATION
(34) PLEASE REVIEW THE INSTRUMENTS LISTED UNDER "PRINCIPAL INVESTMENT STRATEGIES" AND CONFIRM THAT THEY ARE ALL PRINCIPAL STRATEGIES. IN PARTICULAR, CONFIRM THAT INVERSE FLOATERS ARE A PRINCIPAL STRATEGY AND EXPLAIN WHY THE FUNDS WOULD BUY INVERSE FLOATERS? IS IT FOR HEDGING PURPOSES? WOULD THIS LENGTHEN PORTFOLIO MATURITY?
The list of instruments has been revised to include only those instruments Schroders believes to be principal investment strategies.
(35) PLEASE CONSIDER WHETHER THE "YIELD" AND "ADDITIONAL RISKS" PARAGRAPHS ARE IN THE CORRECT LOCATION UNDER "MUNICIPAL BONDS."
The Trust has considered the paragraphs in question and believe their location is appropriate. They are intended as sub-categories under the "Municipal Bonds" heading.
ROPES & GRAY LLP -7- February 23, 2005
(36) PLEASE CONFIRM THAT DERIVATIVES ARE A PRINCIPAL STRATEGY. IF SO, PLEASE EXPLAIN THE EXTENT THEY ARE USED FOR NON-HEDGING PURPOSES.
The Trust confirms that derivatives are a principal strategy. The requested disclosure has been added.
(37) UNDER "INVESTMENT RESTRICTIONS," IF THE FUNDS CAN INVEST IN REVERSE REPURCHASE AGREEMENTS, ADD TOTAL PERCENTAGE DISCLOSURE (NOT MORE THAN ONE-THIRD).
The requested disclosure has been added to the Note under investment restriction number 2.
(38) CAN THE FUNDS PLEDGE ASSETS? ADD APPROPRIATE DISCLOSURE AND PROVIDE THE PERCENTAGE OF ASSETS.
The Funds can pledge assets and the requested disclosure has been added.
(39) IN "INVESTMENT RESTRICTION" NUMBER 5, IS THERE A LIMIT ON THE PERCENTAGE FOR REPURCHASE AGREEMENTS? PLEASE DISCLOSE TAXABILITY.
There is no limit on a Fund's ability to engage in repurchase agreements, except to the extent doing so may be inconsistent with a Fund's principal investment strategies set out in its prospectus. Tax disclosure has been added in the section entitled "Taxes."
(40) IN "DISCLOSURE OF PORTFOLIO HOLDINGS", PLEASE CLARIFY YOUR STATEMENT THAT RECIPIENTS OF INFORMATION "WHERE FEASIBLE" ARE SUBJECT TO AN INDEPENDENT DUTY NOT TO DISCLOSE OR TRADE AND EXPLAIN IF THERE ARE EXCEPTIONS.
The Funds will generally disclose portfolio holdings information only where there is an independent duty not to disclose and/or the recipient has entered into a confidentiality agreement. There may, however, be instances where the potential recipient refuses to enter into such an agreement and the Funds, considering the risk of abuse of portfolio holdings information to be remote, will nonetheless disclose such information.
(41) BEYOND STATING THAT THERE WILL BE AN INDEPENDENT DUTY OF CONFIDENTIALITY, WHAT ELSE DO YOU USE TO DETERMINE WHETHER DISCLOSURE IS APPROPRIATE? WHAT OTHER STEPS ARE TAKEN AND DO RECIPIENTS OF INFORMATION ENTER INTO A WRITTEN CONFIDENTIALITY AGREEMENT?
Please see the response to comment (40) above.
(42) PLEASE ADD ITEM 11(F)(1)(VI) DISCLOSURE.
The requested disclosure has been added.
ROPES & GRAY LLP -8- February 23, 2005
(43) PLEASE CLARIFY WHO IS AUTHORIZED TO RELEASE PORTFOLIO INFORMATION (FOR EXAMPLE, ARE ONLY THE PORTFOLIO MANAGERS AUTHORIZED)?
The requested disclosure has been added.
(45) IS THERE ANY PROCESS BEYOND AN
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ROPES ROPES & GRAY LLP
& GRAY ONE INTERNATIONAL PLACE BOSTON, MA 02110-2624 617-951-7050
BOSTON NEW YORK SAN FRANCISCO WASHINGTON
February 23, 2005 Jessica T. O'Mary
(617) 951-7819
jomary@ropesgray.com
Securities and Exchange Commission
Division of Investment Management
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Kim Browning, Esq.
Re: Post-Effective Amendment No. 23 to the Schroder Series Trust (the
"Trust") Registration Statement on Form N-1A under the Securities
Act of 1933 and Post-Effective Amendment No. 25 to the Trust's
Registration Statement on Form N-1A under the Investment Company
Act of 1940 (the "Registration Statement"), filed with the U.S.
Securities and Exchange Commission (the "Commission") on December
22, 2004 (Securities Act of 1933 File No. 33-65632 and Investment
Company Act of 1940 File No. 811-7840)
--------------------------------------
Dear Ms. Browning:
This letter sets forth the Trust's responses to comments you provided
to me telephonically on February 16, 2005 and February 17, 2005. For convenience
of reference, I have summarized below the text of each comment in bold before
each response; the Trust's responses follow in normal typeface. In addition,
enclosed with this letter is a copy of each of the Prospectus and Statement of
Additional Information, marked to reflect changes that will be made in response
to the comments.
PROSPECTUS
(1) PLEASE MAKE THE REQUESTED "TANDY" LETTER STATEMENTS IN YOUR LETTER
TO US.
On behalf of the Trust, we acknowledge that:
ROPES & GRAY LLP
-2- February 23, 2005
(a) the Trust is responsible for the adequacy and accuracy of the
disclosure in the registration statement;
(b) Commission staff comments or changes to disclosure in response to
Commission staff comments in the filings reviewed by the staff do not foreclose
the Commission from taking any action with respect to a filing; and
(c) the Trust may not assert Commission staff comments as a defense in
any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
(2) WE BELIEVE YOUR SUMMARY OF THE FUNDS ON PAGE 1 IS REPETITIVE OF
OTHER INFORMATION INCLUDED IN THE PROSPECTUS. PLEASE REVIEW THIS DISCLOSURE WITH
A VIEW TO SUMMARIZING ONLY THE INFORMATION NOT PROVIDED LATER IN THE DOCUMENT.
PLEASE TAKE THE SAME APPROACH WITH THE SUMMARY IMMEDIATELY AFTER THE TABLE OF
CONTENTS.
The Trust believes the summary on the front cover page of the
Prospectus is helpful and appropriate and consistent with Instruction 1 to Item
1(a) of Form N-1A. The paragraphs following the Table of Contents have been
revised to address your comment.
(3) PLEASE CONFIRM THAT EACH OF THE RISKS DESCRIBED IN THE PRINCIPAL
RISKS SECTION (ITEM 4) IS INCLUDED IN THE ITEM 2 DISCLOSURE.
We have reviewed the disclosures in question and believe that each of
the risks described in the Principal Risks section (Item 4) is included in the
Item 2 disclosure.
(4) YOU LIST INVESTMENTS IN INVESTMENT-GRADE QUALITY BONDS AS A
PRINCIPAL STRATEGY BUT ALSO LIST JUNK BONDS IN PRINCIPAL RISKS. PLEASE DESCRIBE
IN ITEM 2 IF THE FUNDS CAN GO BEYOND INVESTMENTS IN INVESTMENT-GRADE SECURITIES
AS A PRINCIPAL STRATEGY.
Investments in junk bonds are not a principal strategy or risk of the
Funds. The Prospectus has been revised to remove risks relating to those
investments from the principal risks section.
(5) IN YOUR ITEM 4 DISCLOSURE, PLEASE CLARIFY WHAT THE FUNDS WILL DO IF
THE CREDIT QUALITY OF A SECURITY DROPS BELOW THE RATING AT THE TIME OF PURCHASE
(WILL THE FUND SELL)?
The requested disclosure has been added.
(6) PLEASE ADD THE FOLLOWING DISCLOSURE ABOUT THE TERMS OF THE BONDS:
INTEREST RATE, PRINCIPAL PAYMENTS (FIXED VARIABLE OR BOTH), TYPE OF RESET TERMS
IF ANY, AND DIVIDEND TERMS.
The requested disclosure has been added.
ROPES & GRAY LLP
-3- February 23, 2005
(7) IN THE SUMMARY, YOU STATE THAT EACH FUND MAY "INVEST MORE THAN 25%
OF ITS ASSETS" IN CERTAIN SECTORS. PLEASE DELETE THE TERM "INCLUDING" AND LIST
ALL SECTORS. ALSO, PLEASE NOTE THAT YOU SHOULD IDENTIFY ACTUAL PROJECTS AND NOT
GIVE EXAMPLES.
The list provided is illustrative of sectors in which the Funds may
invest. The Trust believes it is helpful disclosure for investors because it
identifies some of the most common sectors in which the Funds will invest, but
it would not be feasible to list all possible sectors in which the Funds invest.
(8) IF THE FUNDS CAN INVEST MORE THAN 25% IN A PARTICULAR STATE PLEASE
IDENTIFY THAT STATE IN THE SUMMARY.
The Funds do not currently intend to focus on any particular state but
may at any point in time invest more than 25% in a particular state.
(9) PLEASE ADD MANAGEMENT RISK TO YOUR ITEM 2 DISCLOSURE.
The requested disclosure has been added.
(10) IF THE FUNDS CAN INVEST MORE THAN 25% IN A PARTICULAR INDUSTRY
THEN ADD A CONCENTRATION RISK IN THE PRINCIPAL RISKS SECTION. IF YOU CAN INVEST
MORE THAN 25% IN A PARTICULAR PROJECT THEN ADD SPECIFIC RISKS.
A discussion of concentration risk has been added.
(11) IN THE SUMMARY OF SCHRODER SHORT-TERM MUNICIPAL BOND FUND, YOU
REFER TO THE "EFFECTIVE MATURITY." DOES THIS TEST APPLY ONLY TO ASSETS AND NOT
TO THE PARAGRAPH ON DOLLAR WEIGHTED AVERAGE PORTFOLIO MATURITY? CAN YOU CLARIFY
THE USE OF MATURITY AND CONFIRM THAT IT'S NOT A DOLLAR WEIGHTED AVERAGE
EFFECTIVE MATURITY?
The Prospectus has been revised to clarify it is a dollar weighted
average effective maturity and revised the disclosure accordingly.
(13) PLEASE APPLY COMMENTS NUMBER 8 AND 10 ON CLARIFYING INVESTMENTS IN
STATES, CLARIFYING CONCENTRATION LEVELS, AND ADDRESSING ASSOCIATED RISKS IN THE
"PRINCIPAL RISKS" SECTION.
The requested changes have been made.
(14) PLEASE CONFIRM THAT THE FEE WAIVER IS IN EFFECT FOR A FULL YEAR.
The fee waiver will be in effect until February 28, 2006.
(15) WE DO NOT BELIEVE THE FIVE AND TEN YEAR COST INFORMATION IS
NECESSARY.
ROPES & GRAY LLP
-4- February 23, 2005
The Funds began operating on December 31, 2003 so we believe this
disclosure is appropriate because the Funds do not qualify as "New Funds" under
Item 3, Instruction 5 of Form N-1A.
(16) PLEASE EXPLAIN THE BASIS FOR THE STATEMENT THAT MUNICIPAL BONDS
ARE "INVESTMENTS OF ANY MATURITY."
The Funds can purchase investments of any maturity. The disclosure
provides that the term "municipal bonds" may include investments of any
maturity.
(17) IN THE FOURTH PARAGRAPH UNDER "MUNICIPAL BONDS" IN "PRINCIPAL
RISKS", YOU STATE THAT THERE MAY BE FEDERAL AMT. PLEASE EXPLAIN THAT THE FUNDS
CAN MAKE INVESTMENTS THAT ARE 100% SUBJECT TO AMT AND PROVIDE MORE DETAIL AS TO
THE RELATED TAX CONSEQUENCES.
The requested disclosure has been added.
(18) IN THE FIFTH PARAGRAPH UNDER "MUNICIPAL BONDS" IN "PRINCIPAL
RISKS", IT SEEMS AS IF YOU CONTEMPLATE BULK PURCHASES. PLEASE ELABORATE ON THE
LIQUIDITY RISK AND ON THE VALUATION RISK IN PARTICULAR. HOW DO YOU FAIR VALUE IN
THIS SITUATION?
We believe that these risks are covered generally by the disclosure in
the last paragraph under "Municipal Bonds" in the "Principal Risks" section.
Fair values of such securities should be determined generally in the same manner
as the fair values of other securities held in a Fund's portfolio.
(19) PLEASE CONFIRM THE ACCURACY OF THE FUNDS' ABILITY TO INVEST IN
"SECURITIES ISSUED TO FINANCE UNFUNDED PENSION LIABILITIES."
The Trust confirms that the Funds may make investments in such
securities.
(20) IN THE "CREDIT RISK" SECTION, PLEASE DISCLOSE THE PERCENTAGE THAT
CAN BE IN JUNK BONDS.
The Funds do not invest in junk bonds as a principal strategy so the
"Principal Risks" disclosure regarding junk bonds has been deleted.
(21) IN THE "CONCENTRATION OF INVESTMENTS" SECTION, PLEASE REFER TO OUR
PREVIOUS COMMENTS NUMBER 8 AND 10.
The requested changes have been made.
(22) IN THE "MANAGEMENT OF THE FUNDS" SECTION PLEASE REVIEW THE RECENT
PROFESSIONAL EXPERIENCE AND CONFIRM THAT IT COVERS THE LAST FIVE YEARS.
ROPES & GRAY LLP
-5- February 23, 2005
The requested changes have been made.
(23) IN "HOW THE FUNDS' SHARES ARE PRICED" WE ARE MAKING ANOTHER
COMMENT ON THE REFERENCE TO "UP TO 15 MINUTES." PLEASE GIVE THE AUTHORITY FOR
THIS STATEMENT. YOU COULD ALSO GIVE A FIXED TIME INSTEAD OF A FLUCTUATING TIME.
This language has been deleted.
(24) IN "HOW THE FUNDS' SHARES ARE PRICED" YOU STATE THE SECURITIES FOR
WHICH MARKET QUOTATIONS ARE NOT READILY AVAILABLE "MAY BE VALUED." PLEASE CHANGE
"MAY" TO "WILL" OR EXPLAIN THE EXCEPTIONS.
The requested change has been made.
(25) IF THERE IS A BANK WIRE FEE, DISCLOSE THIS FEE. IF NOT, PLEASE
REPRESENT THIS SUPPLEMENTALLY.
There is no fee for bank wires.
(26) IN "HOW TO BUY SHARES" DOES THE FUND HAVE BREAKPOINTS IN REGARDS
TO THE WAIVERS?
This language refers to specific categories of investors for which the
investment minimum may be waived (such as employees of Schroders and their
relatives). Breakpoints are not relevant to this disclosure.
(27) IF IN-KIND SECURITIES FROM ANOTHER FUND COMPLEX ARE ACCEPTED, ADD
RISK DISCLOSURE AS TO ERRONEOUS VALUATION.
The requested risk disclosure has been added.
(28) THE FUNDS NEED REASONABLE VERIFICATION PROCEDURES FOR TELEPHONE
REDEMPTIONS. PLEASE ADD THIS DISCLOSURE IN "HOW TO SELL SHARES."
We understand that telephone redemption is only available upon written
request. In response to redemption requests via telephone, the Funds will only
send redemption proceeds to addresses on file with the Funds for 30 days. The
language in the Prospectus has been revised to describe these procedures.
(29) IN "FREQUENT PURCHASES AND REDEMPTIONS" PLEASE REPRESENT
SUPPLEMENTALLY THAT THE FUNDS HAVE NO MARKET TIMING DEFINITION.
The Trust has not established a definition of market timing. The Trust
retains the flexibility to terminate accounts through which potentially abusive
trading might be occurring.
ROPES & GRAY LLP
-6- February 23, 2005
(30) PLEASE MAKE THE SPECIFIC DISCLOSURES IN ITEM 6(E)(4)(I) (WHETHER
THE FUND DISCOURAGES MARKET TIMING) AND (II) (WHETHER THE FUND ACCOMMODATES
MARKET TIMERS).
The requested disclosure has been added.
(31) PLEASE DISCLOSE ANY POLICY OR PROCEDURE FOR MONITORING OMNIBUS
ACCOUNTS AND THE SCHRODERS POLICIES AND PROCEDURES IF ANY PROBLEM IN SUCH
ACCOUNTS IS DETECTED (FOR INSTANCE, WILL SCHRODERS TERMINATE THE RELATIONSHIP?).
The Trust expects that brokers, retirement plan administrators and
fee-based program sponsors will provide accurate information to facilitate
Schroders' monitoring of omnibus accounts. However, as stated in the Prospectus,
Schroders' ability to monitor these accounts is limited if the information it
receives is not accurate. Disclosure has been added to make clear that the Trust
or Schroders may take any steps it considers appropriate in respect of frequent
trading discovered in omnibus accounts, including potentially closing the
omnibus account.
(32) PLEASE CONFIRM SUPPLEMENTALLY THAT THE FEE WAIVER BOTH PRE- AND
POST-WAIVER IS THE SAME BETWEEN THE CLASSES.
The fee is applied equally to the Advisor and Investor Shares both pre-
and post-waiver.
(33) OUR COMMENTS APPLY TO BOTH SHARE CLASSES.
Your comments have been applied to both share classes.
STATEMENT OF ADDITIONAL INFORMATION
(34) PLEASE REVIEW THE INSTRUMENTS LISTED UNDER "PRINCIPAL INVESTMENT
STRATEGIES" AND CONFIRM THAT THEY ARE ALL PRINCIPAL STRATEGIES. IN PARTICULAR,
CONFIRM THAT INVERSE FLOATERS ARE A PRINCIPAL STRATEGY AND EXPLAIN WHY THE FUNDS
WOULD BUY INVERSE FLOATERS? IS IT FOR HEDGING PURPOSES? WOULD THIS LENGTHEN
PORTFOLIO MATURITY?
The list of instruments has been revised to include only those
instruments Schroders believes to be principal investment strategies.
(35) PLEASE CONSIDER WHETHER THE "YIELD" AND "ADDITIONAL RISKS"
PARAGRAPHS ARE IN THE CORRECT LOCATION UNDER "MUNICIPAL BONDS."
The Trust has considered the paragraphs in question and believe their
location is appropriate. They are intended as sub-categories under the
"Municipal Bonds" heading.
ROPES & GRAY LLP
-7- February 23, 2005
(36) PLEASE CONFIRM THAT DERIVATIVES ARE A PRINCIPAL STRATEGY. IF SO,
PLEASE EXPLAIN THE EXTENT THEY ARE USED FOR NON-HEDGING PURPOSES.
The Trust confirms that derivatives are a principal strategy. The
requested disclosure has been added.
(37) UNDER "INVESTMENT RESTRICTIONS," IF THE FUNDS CAN INVEST IN
REVERSE REPURCHASE AGREEMENTS, ADD TOTAL PERCENTAGE DISCLOSURE (NOT MORE THAN
ONE-THIRD).
The requested disclosure has been added to the Note under investment
restriction number 2.
(38) CAN THE FUNDS PLEDGE ASSETS? ADD APPROPRIATE DISCLOSURE AND
PROVIDE THE PERCENTAGE OF ASSETS.
The Funds can pledge assets and the requested disclosure has been
added.
(39) IN "INVESTMENT RESTRICTION" NUMBER 5, IS THERE A LIMIT ON THE
PERCENTAGE FOR REPURCHASE AGREEMENTS? PLEASE DISCLOSE TAXABILITY.
There is no limit on a Fund's ability to engage in repurchase
agreements, except to the extent doing so may be inconsistent with a Fund's
principal investment strategies set out in its prospectus. Tax disclosure has
been added in the section entitled "Taxes."
(40) IN "DISCLOSURE OF PORTFOLIO HOLDINGS", PLEASE CLARIFY YOUR
STATEMENT THAT RECIPIENTS OF INFORMATION "WHERE FEASIBLE" ARE SUBJECT TO AN
INDEPENDENT DUTY NOT TO DISCLOSE OR TRADE AND EXPLAIN IF THERE ARE EXCEPTIONS.
The Funds will generally disclose portfolio holdings information only
where there is an independent duty not to disclose and/or the recipient has
entered into a confidentiality agreement. There may, however, be instances where
the potential recipient refuses to enter into such an agreement and the Funds,
considering the risk of abuse of portfolio holdings information to be remote,
will nonetheless disclose such information.
(41) BEYOND STATING THAT THERE WILL BE AN INDEPENDENT DUTY OF
CONFIDENTIALITY, WHAT ELSE DO YOU USE TO DETERMINE WHETHER DISCLOSURE IS
APPROPRIATE? WHAT OTHER STEPS ARE TAKEN AND DO RECIPIENTS OF INFORMATION ENTER
INTO A WRITTEN CONFIDENTIALITY AGREEMENT?
Please see the response to comment (40) above.
(42) PLEASE ADD ITEM 11(F)(1)(VI) DISCLOSURE.
The requested disclosure has been added.
ROPES & GRAY LLP
-8- February 23, 2005
(43) PLEASE CLARIFY WHO IS AUTHORIZED TO RELEASE PORTFOLIO INFORMATION
(FOR EXAMPLE, ARE ONLY THE PORTFOLIO MANAGERS AUTHORIZED)?
The requested disclosure has been added.
(45) IS THERE ANY PROCESS BEYOND AN