Schroder Capital Funds (Delaware), et al. – ‘485BPOS’ on 2/28/97

On:  Friday, 2/28/97, at 3:07pm ET   ·   Effective:  2/28/97   ·   Accession #:  1005477-97-636   ·   File #s:  2-34215, 811-01911, 811-07483   ·   Correction:  This Filing’s “Filed as of” Date was Corrected and “Changed as of” 4/22/97 by the SEC on 4/1/04. ®

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Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Registrationstatement                                409   1.31M 
 2: EX-11       Consentofindependent Accountants                       2      7K 

485BPOS   —   Registrationstatement
Document Table of Contents

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 As filed with the Securities and Exchange Commission on February 28, 1997

                                                                File No. 2-34215
                                                               File No. 811-1911
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM N-1A

 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 Post-Effective Amendment No. 60

 and

 REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 41

--------------------------------------------------------------------------------
 SCHRODER CAPITAL FUNDS (DELAWARE)
 (formerly Schroder Capital Funds, Inc.)
(Exact Name of Registrant as Specified in Charter)

Two Portland Square, Portland, Maine 04101
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including Area Code: 207-879-1900

--------------------------------------------------------------------------------
 Catherine S. Wooledge, Esq.
Forum Financial Services, Inc.
Two Portland Square, Portland, Maine 04101
 (Name and Address of Agent for Service)

Copies of Communications to:
Scott M. Shepard, Esq.
 Jacobs Persinger & Parker
 77 Water Street, New York, New York 10005

 Alexandra Poe, Esq.
Schroder Capital Management International Inc.
787 seventh Avenue, 34th Floor
New York, New York 10019

It is proposed that this filing will become effective:                          

X    immediately upon filing pursuant to Rule 485, paragraph (b)              
---                                                                             
___   on [ ] pursuant to Rule 485, paragraph (b)                                
___   60 days after filing pursuant to Rule 485, paragraph (a)(i)               
___   on _________ pursuant to Rule 485, paragraph (a)(i)                       
___   75 days after filing pursuant to Rule 485, paragraph (a)(ii)              
___   on [ ] pursuant to Rule 485, paragraph (a)(ii)                            
___   this post-effective amendment designates a new effective date for a       
previously filed post-effective amendment.                          

The Registrant has registered an indefinite number of shares of beneficial      
interest under the Securities Act of 1933 pursuant to Rule 24f-2 under the      
Investment Company Act of 1940. Accordingly, no fee is payable herewith.        
Registrant filed a Rule 24f-2 Notice for its various portfolios with a October  
31 fiscal year end on December 27, 1996. Schroder International Fund, Schroder  
Emerging Markets Fund Institutional Portfolio, Schroder U.S. Smaller Companies  
Fund and Schroder International Smaller Companies Fund of Registrant are        
structured as master-feeder funds. This amendment includes a manually executed  
signature page for the master funds.                                            

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 CROSS REFERENCE SHEET
(as required by Rule 404(c))

PART A
(Prospectuses offering Advisor Shares and Investor Shares of Schroder 
International Fund, Schroder Emerging Markets Fund Institutional
Portfolio, Schroder U.S. Smaller Companies Fund and Schroder
U.S. Equity Fund) 

Form N-1A                                          Location in Prospectus       
Item No.            (Caption)                     (Caption)                   
---------            ---------                     ----------------------       

1.            Cover Page                           Cover Page                   

2.            Synopsis                             Prospectus Summary           

3.            Condensed Financial Information      Not Applicable               

4.            General Description of               Investment Objective and     
     Registrant                           Policies; Additional
                                                  Investment Policies and Risk
                                    Considerations

5.            Management of the Fund               Management of the Fund -     
                                                   Board of Trustees; Investment
                                           Adviser and Portfolio
                                             Manager; Administrative
                                                   Services; Distribution Plan &
                                                Shareholder Services Plan;
                                         Expenses; Portfolio
                                  Transactions

5A.           Management's Discussion of`          Not Applicable               
Fund Performance                                    

6.            Capital Stock and Other Securities   Other Information -          
                                                Capitalization and Voting;
                                            Shareholder Inquiries;
                                      Dividends, Other
                                             Distributions and Taxes

7.            Purchase of Securities               Investment in the Fund -     
                                         Purchase of Shares;
                                                  Retirement Plans; Individual
                                              Retirement Accounts; Net
                                 Asset Value

8.            Redemption or Repurchase             Investment in the Fund -     
                                               Redemption of Shares; Net
                                 Asset Value

9.            Pending Legal Proceedings            Not Applicable               

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 CROSS REFERENCE SHEET
(as required by Rule 404(c))

PART A
(All other Prospectuses)

 Not Applicable in this Filing

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 CROSS REFERENCE SHEET
(as required by Rule 404(c))

PART B

(Statements of Additional Information offering Advisor Shares and Investor
Shares of Schroder International Fund, Schroder Emerging Markets Fund 
Institutional Portfolio, Schroder U.S. Smaller Companies Fund and 
Schroder U.S. Equity Fund)

                                              Location in Statement of
Form N-1A                                          Additional Information       
Item No.            (Caption)                     (Caption)                   
---------            ---------                     ------------------------     

10.           Cover Page                           Cover Page                   

11.           Table of Contents                    Table of Contents            

12.           General Information and History      Other Information -          
                                  Organization

13.           Investment Objectives and Policies   Investment Policies;         
                                             Investment Restrictions

14.           Management of the Fund               Management - Officers and    
                               Directors

15.           Control Persons and Principal        Not Applicable               
Holders of Securities                               

16.           Investment Advisory and              Management - Investment Other
                                                Services Adviser; Officers
                                                  and Trustees; Administrative
                                               Services; Distribution of
                                          Fund Shares; Service
                                              Organizations; Portfolio
                                          Accounting; Fees and
                                         Expenses; Portfolio
                                               Transactions - Investment
                                              Decisions; Brokerage and
                                              Research Services; Other
                                            Information Custodian;
                                                 Transfer Agent and Dividend
                                             Disbursing Agent; Legal
                                          Counsel; Independent
                                 Accountants

17.           Brokerage Allocation and             Portfolio Transactions       
Other Practices                                     

18.           Capital Stock and Other Securities   Other Information -          
                                               Capitalization and Voting

19.           Purchase, Redemption and Pricing of  Determination of Net Asset   
Securities Being Offered             Value Per Share

20.           Tax Status                           Taxation                     

21.           Underwriters                         Management - Distribution of 
                                           Fund Shares; Fees and
                              Expenses

22.           Calculation of Performance Data      Other Information -          
                                             Performance Information

23.           Financial Statements                 Not Applicable               

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 CROSS REFERENCE SHEET
(as required by Rule 404(c))

PART B
(All other SAIs)

 Not Applicable in this Filing

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SCHRODER INTERNATIONAL FUND                                                     

Investor Shares                                                                 

This fund seeks long-term capital appreciation by investing primarily in        
securities markets outside the United States. It is intended for long-term      
investors seeking international diversification and willing to accept the risks 
of foreign investing.                                                           

Schroders                                                       

[GRAPHIC OMITTED]                                                     

Your Window On The World                                                        

Schroder International Fund (the "Fund"), a series of Schroder Capital Funds    
(Delaware) (the "Trust"), seeks to achieve its investment objective by investing
substantially all of its assets in Schroder International Equity Fund (the      
"Portfolio"), which invests primarily in equity securities of non-U.S.          
companies. The Portfolio is a separately managed, diversified series of Schroder
Capital Funds ("Schroder Core"), an open-end, management investment company. The
Portfolio has an identical investment objective and substantially similar       
investment policies as the Fund (see "Other Information - Fund Structure").     
Accordingly, the Fund's investment experience will correspond directly with the 
Portfolio's investment experience.                                              

This prospectus sets forth concisely the information you should know before     
investing and should be retained for future reference. To learn more about the  
Fund, you may obtain a copy of the Fund's current Statement of Additional       
Information (the "SAI") which is incorporated by reference into this Prospectus.
The SAI dated March 1, 1997, as amended from time to time, has been filed with  
the Securities and Exchange Commission ("SEC") and is available along with other
related materials for reference on their Internet Web Site (http://www.sec.gov) 
or may be obtained without charge from the Trust by writing to Two Portland     
Square, Portland, Maine 04101 or by calling 1-800-290-9826. The Fund has not    
authorized anyone to provide you with information that is different from what is
contained in this prospectus or in other documents to which this prospectus     
refers you.                                                                     

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MUTUAL FUND SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE    
FDIC, THE FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENT AGENCY. THE SHARES ALSO
ARE NOT OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY 
BANK OR ITS AFFILIATES. MUTUAL FUND INVESTMENTS ARE SUBJECT TO INVESTMENT RISK, 
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.                                       

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

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PROSPECTUS                                                                      
MARCH 1, 1997                                                                   

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PROSPECTUS SUMMARY                                                              

This prospectus offers Investor Class shares ("Investor Shares" or  
"Shares") of the Fund. The Fund is a separately managed, diversified series of  
the Trust, an open-end, management investment company registered under the      
Investment Company Act of 1940 (the "1940 Act"). The following summary is       
qualified in its entirety by the more detailed information contained in this    
Prospectus.                                                                     

      Objective. Long-term capital appreciation through investment in securities
markets outside the United States.                                              

   Strategy. Invests primarily in equity securities of companies domiciled
outside the United States.                                                      

      Investment Adviser. The Portfolio's investment adviser is Schroder Capital
Management International Inc. ("SCMI"), 787 Seventh Avenue, New York, New York  
10019. The Fund (and indirectly its shareholders) bears a pro rata portion of   
the investment advisory fee the Portfolio pays to SCMI. See "Management of the  
Fund - Investment Adviser and Portfolio Managers."                              

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      Administrative Services. Schroder Fund Advisors Inc. ("Schroder Advisors")
serves as administrator and distributor of the Fund, and Forum Administrative   
Services, Limited Liability Company ("Forum") serves as the Fund's              
sub-administrator.                                                              

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    Purchases and Redemptions of Shares. Shares may be purchased or redeemed
by mail, by bank-wire and through your broker-dealer or other financial         
institution. The minimum initial investment is $10,000, except that the minimum 
for an Individual Retirement Account ("IRA") is $2,000. The minimum subsequent  
investment is $2,500. See "Investment in the Fund -- Purchase of Shares" and "--
Redemption of Shares."                                                          

     Dividends and Other Distributions. The Fund annually declares and pays as
a dividend substantially all of its net investment income and at least annually 
distributes any net realized long-term capital gain and gains from foreign      
currency transactions. Dividends and long-term capital gain distributions are   
reinvested automatically in additional Investor Shares of the Fund at net asset 
value unless you elect in your Account Application, or otherwise in writing, to 
receive dividends and other distributions in cash. See "Dividends, Distributions
and Taxes."                                                                     

      Risk Considerations. Alone, the Fund is not a balanced investment plan. It
is intended for long-term investors seeking international diversification who   
are willing to accept the risks of foreign investing. Investments in foreign    
securities involve certain risks not associated with domestic investing,        
including uncertain political and economic developments, the possible imposition
of exchange controls or other changes in foreign governmental laws or           
restrictions. Of course, as with any mutual fund, there is no assurance that the
Fund or Portfolio will achieve its investment objective.                        

     The Fund's net asset value ("NAV") varies because the market value of the
Portfolio's investments will change with changes in the value of the securities 
in which the Portfolio invests and with changes in market conditions, interest  
rates, currency rates, or political or economic situations. When you sell your  
shares, they may be worth more or less than what you paid for them. For further 
information, see "Risk Considerations".                                         

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 FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
Please call for complete information and to obtain a prospectus.
 Please read the prospectus carefully before you invest.

Schroder Capital Funds (Delaware) (1-800-290-9826)                              
Schroder International Fund                                                     
Schroder Emerging Markets Fund--                                                
Institutional Portfolio                                                   
Schroder International Smaller Companies Fund                                   
Schroder U.S. Smaller Companies Fund                                            
Schroder U.S. Equity Fund                                                       
Schroder Series Trust (1-800-464-3108)                                          
Schroder Equity Value Fund                                                      
Schroder Small Capitalization Value Fund                                        
Schroder High Yield Income Fund                                                 
Schroder Investment Grade Income Fund                                           
Schroder Short-Term Investment Fund                                             

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EXPENSES OF INVESTING IN THE FUND                                               

Fee Table                                                                       

   The table below is intended to assist you in understanding the expenses
that an investor in Investor Shares of the Fund would incur. There are no       
transaction expenses associated with purchases or redemptions of Investor       
Shares.                                                                         

Annual Fund Operating Expenses (as a percentage of average net assets)(1)       
    Management Fees (after fee waivers)(2)(3)........................... 0.65%
    12b-1 Fees .........................................................  None
    Other Expenses (after expense reimbursements)(3).................... 0.34%
    Total Fund Operating Expenses (3)................................... 0.99%

  (1) Based on the Fund's expenses for the fiscal year ended October 31,
        1996. The Fund's expenses include the Fund's pro rata portion of all
operating expenses of the Portfolio.                        

   (2) Management Fees reflect the fees paid by the Portfolio and the Fund
for investment advisory and administrative services.        

 (3) SCMI and Schroder Advisors have voluntarily undertaken to waive a
        portion of their fees and assume certain expenses of the Fund during
       the current fiscal year in order to limit the Fund's total expenses
     to 0.99% of the Fund's average daily net assets. This undertaking
      cannot be withdrawn except by a majority vote of the Trust's Board
     of Trustees. See "Management of the Fund --Expenses." Without fee
        waivers and expenses reimbursements, Management Fees, Other Expenses
  and Total Operating Expenses would be 0.68%, 0.36%, and 1.04%,
respectively.                                               

Example                                                                         

   The table below indicates how much you would pay in total expenses on a
$1,000 investment in the Fund, assuming (1) a 5% annual return and (2)          
redemption at the end of each time period. The example is based on the expenses 
listed above and assumes the reinvestment of all dividends and other            

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distributions. The example should not be considered a representation of past or 
future expenses or returns; actual expenses or returns may vary from those      
shown. The 5% annual return is not a prediction of the Fund's return, but is the
percentage required by the SEC for use in this example.                         

 1 YEAR ...........................  $10
 3 YEARS ..........................  $32
 5 YEARS ..........................  $55
10 YEARS .......................... $122

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FINANCIAL HIGHLIGHTS                                                            

The financial highlights are presented below to assist you in evaluating per    
share performance of the Fund's Investor Shares for the periods shown.          
Information for periods prior to August 1, 1989 pertains to the Fund's          
predecessor-in-interest. Information for all periods after the year ended       
September 30, 1988 has been audited by Coopers & Lybrand L.L.P., independent    
accountants to the Fund. The Fund's financial statements for the year ended     
October 31, 1996, and the related independent accountants' report are contained 
in the Fund's Annual Report to Shareholders and are incorporated by reference   
into the SAI. Further information about the performance of the Fund is contained
in the Annual Report, which may be obtained without charge by writing the Fund  
at Two Portland Square, Portland, Maine 04101 or by calling 1-800-290-9826.     

                                                        [Enlarge/Download Table]


                                                                                                                Year       Year  
                          Year       Year      Year      Year     Year     Year     Year    Month    Year      ended      ended  
                         ended      ended     ended     ended    ended    ended    ended    ended    ended    9/30/88    9/30/87 
                      10/31/96(a) 10/31/95  10/31/94 10/31/93  10/31/92 10/31/91 10/31/90 10/31/89  9/30/89  Unaudited  Unaudited
                                                                                                                                 
Net Asset Value,                                                                                                                 
  Beginning of period     20.91      23.17    20.38    15.15     16.22    17.70    18.20    18.95     14.40    18.02      14.07  
                         ------     ------   ------   ------    ------   ------   ------   ------    ------   ------     ------  
Investment Operations:                                                                                                           


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                                                        [Enlarge/Download Table]

                                                                                                                                   

   Net Investment                                                                                                                  
    Income                 0.15(b)    0.46     0.18     0.08      0.25     0.25     0.15     0.03        0.20     0.05     (0.07)  
                         ------     ------   ------   ------    ------   ------   ------   ------      ------   ------    ------   
  Net Realized                                                                                                                     
    Gain (Loss)            1.74      (0.18)    2.69     5.27     (1.04)   (0.25)   (0.12)   (0.78)       4.44    (2.34)     4.71   
                         ------     ------   ------   ------    ------   ------   ------   ------      ------   ------    ------   
Total From Investment                                                                                                              
  Operations               1.89       0.28     2.87     5.35     (0.79)    0.00     0.03    (0.75)       4.64    (2.29)     4.64   
                         ------     ------   ------   ------    ------   ------   ------   ------      ------   ------    ------   
Distributions                                                                                                                      
  from Net                                                                                                                         
  Investment Income       (0.47)      --      (0.08)   (0.12)    (0.23)   (0.25)   (0.16)    0.00       (0.04)    0.00     (0.02)  
                         ------     ------   ------   ------    ------   ------   ------   ------      ------   ------    ------   
Distributions                                                                                                                      
  from Realized                                                                                                                    
  Capital Gain            (2.32)     (2.54)    --       --       (0.05)   (1.23)   (0.37)    0.00       (0.05)   (1.33)    (0.67)  
                         ------     ------   ------   ------    ------   ------   ------   ------      ------   ------    ------   

Total  Distributions      (2.79)     (2.54)   (0.08)   (0.12)    (0.28)   (1.48)   (0.53)    0.00       (0.09)   (1.33)    (0.69)  
                         ------     ------   ------   ------    ------   ------   ------   ------      ------   ------    ------   
Net Asset Value,                                                                                                                   
  End of Period           20.01      20.91    23.17    20.38     15.15    16.22    17.70    18.20       18.95    14.40     18.02   
                         ------     ------   ------   ------    ------   ------   ------   ------      ------   ------    ------   

Total Return              10.05%      2.08%   14.10%   35.54%    (4.93%)   0.45%   (0.07%)  (4.01%)      32.2%   (0.12%)    34.8%  
                         ======     ======   ======   ======    ======   ======   ======   ======      ======   ======    ======   

Ratio/Supplementary Data:                                                                                                          
 Net Assets, End                                                                                                                   
   of Period (Thousand)  202,735    212,330  500,504  320,550   159,556  108,398  62,438   49,740      48,655   29,917    32,553   

 Ratio of Expenses to                                                                                                              
   Average Net Assets                                                                                                              
   after waivers            0.99(b)    0.91%    0.90%    0.91%     0.93%    1.07%    1.12%    1.12%(d)    1.12%    1.30%     1.64% 

 Ratio of Net Investment                                                                                                           
   Income to Average                                                                                                               
   Average Net Assets                                                                                                              
   after waivers            0.86%(b)   0.99%    0.94%    0.87%     1.62%    1.59%    0.83%    2.29%(d)    1.27%    0.38%    (0.42%)

 Ratio of expenses to                                                                                                              
   average net assets                                                                                                              
   before waivers           1.04%(b)    N/A      N/A      N/A       N/A      N/A      N/A      N/A         N/A      N/A       N/A  

 Ratio of Net Investment                                                                                                           
   Income to Average                                                                                                               
   Net Assets                                                                                                                      
   before waivers           0.81%(b)    N/A      N/A      N/A       N/A      N/A      N/A      N/A         N/A      N/A       N/A  

 Portfolio Turnover                                                                                                                
   Rate (c)                56.20%     61.26%   25.17%   56.05%    49.42%   50.58%   55.91%   21.98%(d)   72.25%   86.19%    84.97% 

 Average Brokerage                                                                                                                 
   Commissions (e)         $0.0256       N/A      N/A      N/A       N/A      N/A      N/A      N/A         N/A      N/A       N/A 

(a) On May 16, 1996, the Fund began offering two classes of shares, Investor    
Shares and Advisor Shares, and all then outstanding shares of the Fund  
were converted to Investor Shares.                                      

(b) Includes the Fund's proportionate share of income and expenses of the       
Portfolio.                                                              

(c) Portfolio turnover represents the rate of portfolio activity. The rate for  
 the year ended October 31, 1996 represents the portfolio turnover rate of
the Portfolio.                                                          

(d) Annualized.                                                                 

(e) Amount represents the average commission per share paid to brokers on the   
purchase and sale of the Portfolio's investment portfolio securities.   

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INVESTMENT OBJECTIVE                                                            

  The investment objective of the Fund is long-term capital appreciation
through investment in securities markets outside the United States.             

The Fund is designed for U.S. investors who seek international      
diversification of their investments by participating in foreign securities     
markets. The Fund is not a complete investment program and investments in the   
securities of foreign issuers generally involve risks in addition to the risks  
associated with investments in the securities of U.S. issuers. (See "Risk       
Considerations.") The Fund currently seeks to achieve its investment objective  
by investing all of its investable assets in the Portfolio, which has           
substantially the same investment objective and substantially similar policies  
as the Fund. There can be no assurance that the Fund or Portfolio will achieve  
its investment objective.                                                       

INVESTMENT POLICIES                                                             

   Although the following information describes the investment policies of
the Portfolio and the responsibilities of Schroder Core's Board of Trustees (the
"Schroder Core Board"), it applies equally to the Fund and the Trust's Board of 
Trustees (the "Trust Board"). Additional information concerning the investment  
policies of the Fund and the Portfolio is contained in the SAI.                 

  The investment objective, and the investment policies of the Portfolio
that are designated as fundamental, may not be changed without approval of the  
holders of a majority of the outstanding voting securities of the Portfolio. A  
majority of outstanding voting securities means the lesser of (i) 67% of the    
shares present or represented at a shareholder meeting at which the holders of  
more than 50% of the outstanding shares are present or represented, or (ii) more
than 50% of outstanding shares. Non-fundamental investment policies of the      
Portfolio may be changed by the Schroder Core Board without approval of the     
investors in the Portfolio.                                                     

     Under normal market conditions, the Portfolio will invest at least 65% of
its total assets in equity securities of companies domiciled outside the U.S.   
Investments by the Portfolio are selected on the basis of their potential for   
capital appreciation without regard for current income. The Portfolio may also  
invest in debt securities of foreign governments, international organizations   
and foreign corporations and in the securities of closed-end investment         
companies investing primarily in foreign securities. The Portfolio may invest up
to 5% of its net assets in debt securities with relatively high risk and high   
yields (as compared to other debt securities meeting the Portfolio's investment 
criteria). The debt securities in which the Portfolio invests may be unrated,   
but will not be in default at the time of purchase. See "Debt Securities" and   
"Risk Considerations".                                                          

    Countries in which the Portfolio may invest include, but are not limited
to, countries listed in the Morgan Stanley EAFE(R) Index, which is a market     

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capitalization index of companies in developed market countries in Europe,      
Australia and the Far East. The Portfolio invests in the securities of foreign  
issuers domiciled in at least three foreign countries. The Portfolio may invest 
more than 25% of its total assets in issuers located in any one country. See    
"Risk Considerations--Geographic Concentration." The Portfolio also may invest  
in securities of issuers located in countries considered by some to be emerging 
market countries. See "Risk Considerations Emerging Markets."                   

The Portfolio may purchase preferred stock and convertible debt     
securities, including warrants and convertible preferred stock, and may purchase
American Depository Receipts, European Depository Receipts or other similar     
securities of foreign issuers. The Portfolio also may enter into foreign        
exchange contracts, including forward contracts to purchase or sell foreign     
currencies, in anticipation of its currency requirements and to protect against 
possible adverse movements in foreign exchange rates. Although such contracts   
may reduce the risk of loss to the Portfolio from adverse movements in currency 
values, the contracts also limit possible gains from favorable movements. For   
temporary defensive purposes, the Portfolio may invest without limitation in (or
enter into repurchase agreements maturing in seven days or less with U.S. banks 
and broker-dealers with respect to) short-term debt securities, including U.S.  
Government securities, certificates of deposit and bankers' acceptances of U.S. 
banks. The Portfolio may also hold cash (U.S. dollars, foreign currencies or    
multinational currency units) and time deposits in U.S. and foreign banks. See  
"Risk Considerations" below and "Investment Policies" in the SAI for further    
information about these types of investments.                                   

      The following specific policies and limitations are considered at the time
of any purchase; SCMI may not buy these instruments or use these techniques     
unless it believes that they are consistent with the Portfolio's objective.     

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Common and Preferred Stock and Warrants. The Portfolio may invest in
common and preferred stock. Common stockholders are the owners of the company   
issuing the stock and, accordingly, vote on various corporate governance matters
such as mergers. They are not creditors of the company, but rather, upon        
liquidation of the company, are entitled to their pro rata share of the         
company's assets after creditors (including fixed income security holders) and  
preferred stockholders, if any, are paid. Preferred stock is a class of stock   
having a preference over common stock as to dividends and, generally, as to the 
recovery of investment. A preferred stockholder is also a shareholder and not a 
creditor of the company. Equity securities owned by the Portfolio may be traded 
in the over-the-counter market or on a securities exchange, but may not be      
traded every day or in the volume typical of securities traded on a major U.S.  
national securities exchange. As a result, disposition by the Portfolio of a    
security to meet withdrawals by interest holders or otherwise may require the   
Portfolio to sell these securities at a discount from market prices, to sell    
during periods when disposition is not desirable, or to make many small sales   
over a lengthy period of time. The market value of all securities, including    
equity securities, is based upon the market's perception of value and not       
necessarily the "book value" of an issuer or other objective measure of a       
company's worth.                                                                

    The Portfolio may also invest in warrants, which are options to purchase
an equity security at a specified price (usually representing a premium over the
applicable market value of the underlying equity security at the time of the    
warrant's issuance) and usually during a specified period of time.              

  Foreign Exchange Contracts. Changes in foreign currency exchange rates
will affect the U.S. dollar values of securities denominated in currencies other
than the U.S. dollar. The rate of exchange between the U.S. dollar and other    
currencies fluctuates in response to forces of supply and demand in the foreign 
exchange markets. These forces are affected by the international balance of     
payments, other economic and financial conditions, government intervention,     
speculation, and other factors, many of which may be difficult if not impossible
to predict. When investing in foreign securities, the Portfolio usually effects 
currency exchange transactions on a spot (i.e., cash) basis at the spot rate    
prevailing in the foreign exchange market. The Portfolio incurs foreign exchange
expenses in converting assets from one currency to another.                     

   The Portfolio may enter into foreign currency forward contracts for the
purchase or sale of foreign currency to "lock in" the U.S. dollar price of the  
securities denominated in a foreign currency or the U.S. dollar value of        
interest and dividends to be paid on such securities; or to hedge against the   
possibility that the currency of a foreign country in which the Portfolio has   
investments may suffer a decline against the U.S. dollar. A forward currency    
contract is an obligation to purchase or sell a specific currency at a future   
date, which may be any fixed number of days from the date of the contract agreed
upon by the parties, at                                                         

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a price set at the time of the contract. This method of attempting to hedge the 
value of portfolio securities against a decline in the value of a currency does 
not eliminate fluctuations in the underlying prices of the securities and may   
expose the Portfolio to the risk that the counterparty is unable to perform.    
Although the strategy of engaging in foreign currency transactions could reduce 
the risk of loss due to a decline in the value of the hedged currency, it could 
also limit the potential gain from an increase in the value of the currency. The
Portfolio does not intend to maintain a net exposure to such contracts where the
fulfillment of obligations under such contracts would obligate it to deliver an 
amount of foreign currency in excess of the value of its portfolio securities or
other assets denominated in the currency. The Portfolio will not enter into     
these contracts for speculative purposes and will not enter into non-hedging    
currency contracts. These contracts involve a risk of loss if SCMI fails to     
predict currency values correctly. The Portfolio has no present intention to    
enter into currency futures or options contracts, but may do so in the future.  
See "Risk Considerations--Currency Fluctuations."                               

Debt Securities. The Portfolio may seek capital appreciation through
investment in convertible or non-convertible debt securities. Capital           
appreciation in debt securities may arise as a result of a favorable change in  
relative foreign exchange rates, in relative interest rate levels, or in the    
creditworthiness of issuers. The receipt of income from such debt securities is 
incidental to the Portfolio's objective of long-term capital appreciation. Such 
income can be used, however, to offset the operating expenses of the Portfolio. 
In accordance with its investment objective, the Portfolio will not seek to     
benefit from anticipated short-term fluctuations in currency exchange rates. The
Portfolio also may invest to a certain extent in debt securities in order to    
participate in debt-to-equity conversion programs incident to corporate         
reorganizations.                                                                

     Debt securities are generally subject to two kinds of risk -- credit risk
and market risk. Credit risk refers to the ability of the debtor, and any other 
obligor, to pay principal and interest on the debt as it becomes due. The       
Portfolio may, from time to time, invest in debt securities with high risk and  
high yields (as compared to other debt securities meeting the Portfolio's       
investment criteria). The debt securities in which the Portfolio invests may be 
unrated, but will not be in default at the time of purchase. Market risk refers 
to the tendency of the value of debt securities to vary inversely with interest 
rate changes. Certain debt instruments may also be subject to extension risk,   
which refers to change in total return on a debt instrument resulting from      
extension or abbreviation of the instrument's maturity.                         

The Portfolio may invest in debt securities issued or guaranteed by 
foreign governments (including countries, provinces and municipalities) or their
agencies and instrumentalities; debt securities issued or guaranteed by         
international organizations designated or supported by multiple foreign         
governmental entities (which are not obligations of foreign governments) to     
promote economic reconstruction or development; and debt securities issued by   
corporations or financial institutions.                                         

RISK CONSIDERATIONS                                                             

      Foreign Investments. All investments, domestic and foreign, involve risks.
Investment in the securities of foreign issuers may involve risks in addition to
those normally associated with investments in securities of U.S. issuers. While 
the Portfolio will generally invest only in securities of companies and         
governments in countries that SCMI, in its judgment, considers both politically 
and economically stable, all foreign investments are subject to risks of foreign
political and economic instability, adverse movements in foreign exchange rates,
the imposition or tightening of exchange controls or other limitations on       

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repatriation of foreign capital. Foreign investments are subject to the risk of 
changes in foreign governmental attitudes towards private investment that could 
lead to nationalization, increased taxation or confiscation of Portfolio assets.

   Moreover, (i) dividends payable on foreign securities may be subject to
foreign withholding taxes, thereby reducing the income earned by the Portfolio; 
(ii) commission rates payable on foreign portfolio transactions are generally   
higher than in the United States; (iii) accounting, auditing and financial      
reporting standards differ from those in the United States, which means that    
less information about foreign companies may be available than is generally     
available about issuers of comparable securities in the United States; (iv)     
foreign securities often trade less frequently and with lower volume than United
States securities and consequently may exhibit greater price volatility; and (v)
foreign securities trading practices, including those involving securities      
settlement, may expose the Portfolio to increased risk in the event of a failed 
trade or the insolvency of a foreign broker-dealer or registrar.                

Emerging Markets. Investing in emerging market countries generally  
presents greater risk than does other foreign investing. In any emerging market 
country, there is the increased possibility of expropriation of assets,         
confiscatory taxation, nationalization of companies or industries, foreign      
exchange controls, foreign investment controls on daily stock market movements, 
default in foreign government securities, political or social instability, or   
diplomatic developments that could affect investments in those countries. In the
event of expropriation, nationalization or other confiscation, the Portfolio    
could lose its entire investment in the country involved. The economies of      
developing countries are more likely to be adversely affected by trade barriers,
exchange controls, managed adjustments in relative currency values and other    
projectionist measures imposed or negotiated by the countries with which they   
trade. There may also be less monitoring and regulation of emerging markets and 
the activities of brokers there. Investing may require that the Portfolio adopt 
special procedures, seek local government approvals or take other actions that  
may incur costs for the Portfolio.                                              

Certain emerging market countries may restrict investment by foreign
investors. These restrictions or controls may at times limit or preclude        
investment in certain securities and may increase the costs and expenses of the 
Portfolio.                                                                      

Several emerging market countries have experienced high, and in some
periods extremely high, rates of inflation in recent years. Inflation and rapid 
fluctuations in inflation rates may have adversely affect these countries'      
economies and securities markets. Further, inflation accounting rules in some   
emerging market countries may indirectly generate losses or profits for certain 
emerging market companies.                                                      

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     Currency Fluctuations and Devaluations. Because the Portfolio will invest
heavily in non-U.S. currency-denominated securities, changes in foreign currency
exchange rates will affect the value of the Portfolio's investments. A decline  
against the dollar in the value of currencies in which the Portfolio's          
investments are denominated will result in a corresponding decline in the dollar
value of the Portfolio's assets. This risk is heightened in some emerging market
countries.                                                                      

  The Fund is required to distribute substantially all of its investment
income in U.S. dollars. Because most of the Portfolio's income is received and  
realized in foreign currencies, a decline in the value of a particular foreign  
currency against the U.S. dollar that occurs after the Portfolio's income has   
been earned may require the Portfolio to liquidate some portfolio securities to 
acquire sufficient U.S. dollars to make such distributions. Similarly, if the   
exchange rate declines between the time the Portfolio incurs expenses in U.S.   
dollars and the time such expenses are paid, the Portfolio may be required to   
liquidate additional foreign securities to purchase the U.S. dollars required to
meet its expenses.                                                              

   Geographic Concentration. The Portfolio may invest more than 25% of its
total assets in issuers located in any one country and to the extent that it    
does so, is susceptible to a range of factors that could adversely affect that  
country, including the political and economic developments and foreign exchange 
rate fluctuations discussed above. As a result of investing substantially in one
country, the value of the Portfolio's assets may fluctuate more widely than the 
value of shares of a comparable fund with a lesser degree of geographic         
concentration.                                                                  

MANAGEMENT OF THE FUND                                                          

X Schroder Group Assets Under Management Worldwide
As of December 31, 1996 -- Over $130 Billion

 [GRAPHIC OMITTED]

THE SCHRODER INVESTMENT MANAGEMENT GROUP INVESTMENT AND REPRESENTATIVE OFFICES
WORLDWIDE INCLUDE NEW YORK, LONDON, BOSTON, ZURICH, WARSAW, TOKYO, HONG KONG, 
BEIJING, SHANGHAI, TAIPEI, SEOUL, BANGKOK, KUALA LUMPUR, SINGAPORE, JAKARTA,
SYDNEY, BUENOS AIRES, SAO PAULO, BOGOTA AND CARACAS.

 TOGETHER, SCHRODER CAPITAL MANAGEMENT INTERNATIONAL AND
SCHRODER CAPITAL MANAGEMENT MANAGE OVER $24 BILLION.

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Boards of Trustees                                                              

The business and affairs of the Fund are managed under the direction of the     
Trust Board. The business and affairs of the Portfolio are managed under the    
direction of the Schroder Core Board. Information regarding the trustees and    
executive officers of the Trust, as well as Schroder Core's trustees and        
executive officers, may be found in the SAI under the heading "Management,      
Trustees and Officers."                                                         

Investment Adviser and Portfolio Managers                                       

  As investment adviser to the Portfolio, SCMI manages the Portfolio and
continuously reviews, supervises and administers its investments. In this       
regard, SCMI is responsible for making decisions relating to the Portfolio's    
investments and placing purchase and sale orders regarding investments with     
brokers or dealers selected by it in its discretion. For its services with      
respect to the Portfolio, the Investment Advisory Agreement between SCMI and    
Schroder Core provides that SCMI receives a monthly advisory fee at the annual  
rate of 0.45% of the Portfolio's average daily net assets, which the Fund       
indirectly bears through its investment in the Portfolio.                       

 SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is 
the holding company parent of a large world-wide group of banks and financial   
services companies (referred to as the "Schroder Group") with associated        
companies and branch and representative offices in eighteen countries. The      
Schroder Group specializes in providing investment management services.         

    The investment management team of Mark J. Smith, a Trustee and President
of the Trust and of Schroder Core, and Michael Perelstein, Vice President of the
Trust and of Schroder Core (with the assistance of an SCMI investment           
committee), is primarily responsible for the day-to-day management of the       
Portfolio's investment portfolio. Mr. Smith, who has managed the Fund's         
portfolio since October 1989 and the Portfolio's investments since its          
inception, has been a First Vice President of SCMI since April 1990 and a       
Director thereof since April 1993. He has been employed by various Schroder     
Group companies in the investment research and portfolio management areas since 
1983. Mr. Perelstein has been a Senior Vice President of SCMI since January 2,  
1997. Prior thereto, Mr. Perelstein was a Managing Director at MacKay Shields.  
Mr. Perelstein has more than twelve years of international and global investment
experience.                                                                     

      The Fund began pursuing its investment objective through investment in the
Portfolio on November 1, 1995. The Fund may withdraw its investment from the    
Portfolio at any time if the Board determines that it is in the best interests  
of the Fund and its shareholders to do so. (See "Other Information @ Fund       
Structure.") Accordingly, the Fund has retained SCMI as its investment adviser  
to manage the Fund's assets in the event the Fund withdraws                     

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its investment. SCMI does not receive an investment advisory fee with respect to
the Fund so long as the Fund remains completely invested in the Portfolio (or   
any other investment company). If the Fund resumes directly investing in        
portfolio securities, the Fund will pay SCMI a monthly advisory fee at the      
annual rate of 0.50% of the first $100 million of the Fund's average daily net  
assets; 0.40% of the next $150 million of average daily net assets; and 0.35% of
average daily net assets in excess of $250 million. The investment advisory     
agreement between SCMI and the Trust with respect to the Fund is the same in all
material respects as the investment advisory contract between SCMI and Schroder 
Core with respect to the Portfolio (except as to the parties, the fees payable  
thereunder, the circumstances under which fees will be paid and the jurisdiction
whose laws govern the agreement).                                               

Administrative Services                                                         

On behalf of the Fund, the Trust has entered into an administrative 
services contract with Schroder Advisors, 787 Seventh Avenue, New York, New York
10019. On behalf of the Portfolio, the Trust has also entered into a            
sub-administration agreement with Forum, Two Portland Square, Portland, Maine   
04101. Pursuant to these agreements, Schroder Advisors and Forum provide certain
management and administrative services necessary for the Fund's operations.     
Schroder Advisors is compensated at the annual rate of 0.10% of the Portfolio's 
average daily net assets. Forum is compensated at the annual rate of 0.075% of  
the Portfolio's average daily net assets.                                       

      Schroder Advisors and Forum provide similar services to the Portfolio, for
which the Portfolio pays Schroder Advisors at an annual rate of 0.10% of the    
Fund's average daily net assets and pays Forum a monthly fee at the annual rate 
of 0.075% of the Fund's average daily net assets.                               

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Expenses                                                                        

     SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
of their fees or assume certain expenses of the Fund in order to limit total    
Fund expenses (excluding taxes, interest, brokerage commissions and other       
portfolio transaction expenses and extraordinary expenses) chargeable to        
Investor Shares to 0.99% of the average daily net assets of the Fund            
attributable to those shares. This expense limitation cannot be modified or     
withdrawn except by a majority vote of the Trustees of the Trust who are not    
interested persons (as defined in the 1940 Act) of the Trust. If expense        
reimbursements are required, they will be made on a monthly basis; SCMI will    
reimburse the Fund for four-fifths of the amount required and Schroder Advisors 
will reimburse the Fund for the remaining one-fifth. Forum may voluntarily waive
all or a portion of their fees, from time to time.                              

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Portfolio Transactions                                                          

SCMI places orders for the purchase and sale of the Portfolio's     
investments with brokers and dealers selected by SCMI and seeks "best execution"
of such portfolio transactions. The Portfolio may pay higher than the lowest    
available commission rates when SCMI believes it is reasonable to do so in light
of the value of the brokerage and research services provided. Commission rates  
for brokerage transactions are fixed on many foreign securities exchanges, and  
in many cases are higher than commission rates for comparable transactions      
effected on U.S. securities exchanges.                                          

    Subject to the Portfolio's policy of obtaining the best price consistent
with quality of execution on transactions, SCMI may employ Schroder Securities  
Limited and its affiliates (collectively, "Schroder Securities"), affiliates of 
SCMI, to effect transactions of the Portfolio on certain foreign securities     
exchanges. Because of the affiliation between SCMI and Schroder Securities, the 
Portfolio's payment of commissions to Schroder Securities is subject to         
procedures adopted by the Schroder Core Board designed to ensure that the       
commissions will not exceed the usual and customary brokers' commissions. No    
specific portion of the Portfolio's brokerage will be directed to Schroder      
Securities and in no event will Schroder Securities receive any brokerage in    
recognition of research services.                                               

Consistent with the Conduct Rules of the National Association of    
Securities Dealers, Inc., and subject to seeking the most favorable price and   
execution available and such other policies as the Schroder Core Board may      
determine, SCMI may consider sales of shares of the Fund or any other entity    
that invests in the Portfolio as a factor in the selection of broker-dealers to 
execute portfolio transactions for the Portfolio.                               

  Although the Portfolio does not currently engage in directed brokerage
arrangements to pay expenses, it may do so in the future. These arrangements    
(whereby brokers executing the Portfolio's portfolio transactions would agree to
pay designated expenses of the Portfolio if brokerage commissions generated by  
the Portfolio reached certain levels) might reduce the Portfolio's expenses     
(and, indirectly, the Fund's expenses). These arrangements would not be expected
to increase materially the brokerage commissions paid by the Portfolio.         

Code of Ethics                                                                  

The Trust, Schroder Core, SCMI, Schroder Advisors, and Schroders    
Incorporated have each adopted a code of ethics that contains a policy on       
personal securities transactions by "access persons," including portfolio       
managers and investment analysts. That policy complies in all material respects 
with the recommendations set forth in the Report of the Advisory Group on       
Personal Investing of the Investment Company Institute, of which the Trust is a 
member.                                                                         

INVESTMENT IN THE FUND                                                          

Purchase of Shares                                                              

Investors may purchase Investor Shares directly from the Trust.     
Prospectuses, sales material and Account Applications can be obtained from the  
Trust or through Forum Financial Corp., the Fund's transfer agent (the          

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"Transfer Agent"). See "Other Information -- Shareholder Inquiries". Investments
may also be made through financial institutions and other service organizations 
that assist their customers in purchasing shares of the Fund ("Service          
Organizations"). Service Organizations may charge their customers a service fee 
for processing orders to purchase or sell shares of the Fund. Investors wishing 
to purchase shares through their accounts at a Service Organization should      
contact that organization directly for appropriate instructions.                

 Shares of the Fund are offered at the net asset value next determined
after receipt of a completed Account Application (at the address set forth      
below). The minimum initial investment is $10,000, except that the minimum for  
an IRA is $2,000. The minimum subsequent investment is $2,500. All purchase     
payments are invested in full and fractional shares. The Fund is authorized to  
reject any purchase order.                                                      

  Purchases may be made by mailing a check (in U.S. dollars), payable to
Schroder International Fund, to:                                                

    Schroder International Fund--Investor Shares
P.O. Box 446                            
Portland, Maine 04112                   

For initial purchases, the check must be accompanied by a completed 
Account Application in proper form. Further documentation may be requested from 
corporations, administrators, executors, personal representatives, directors or 
custodians to evidence the authority of the person or entity making the         
subscription request.                                                           

  Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as 
follows:                                                                        

Chase Manhattan Bank                    
New York, NY                            
ABA No.: 021000021                      
For Credit To: Forum Financial Corp.    
Account No.: 910-2-718187               
         Ref.: Schroder International Fund Investor Shares
Account of: (shareholder name)          
    Account Number: (shareholder account number)

      The wire order must specify the name of the Fund, the shares' class (i.e.,
Investor Shares), the account name and number, address, confirmation number,    
amount to be wired, name of the wiring bank, and name and telephone number of   
the person to be contacted in connection with the order. If the initial         
investment is by wire, an account number will be assigned and an Account        
Application must be completed and mailed to the Fund before any account becomes 
active. Wire orders received prior to 4:00 p.m. (Eastern Time) on each day that 
the New York Stock Exchange is open for trading (a "Fund Business Day") will be 
processed at the net asset value determined as of that day. Wire orders received
after 4:00 p.m. (Eastern Time) will be processed at the net asset value         
determined as of the next Fund Business Day. See "Net Asset Value" below.       

   The Fund's Transfer Agent establishes for each shareholder of record an
open account to which all shares purchased and all reinvested dividends and     
other distributions are credited. Although most shareholders elect not to       
receive share certificates, certificates for full shares can be obtained by     
specific written request to the Fund's Transfer Agent. No certificates are      
issued for fractional shares.                                                   

  The Transfer Agent will deem an account lost if six months have passed
since correspondence to the shareholder's address of record is returned, unless 
the Transfer Agent determines the shareholder's new address. When an account is 
deemed lost, dividends and other distributions will automatically be            

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reinvested. In addition, the amount of any outstanding checks for dividends and 
capital gains that have been returned to the Transfer Agent will be reinvested  
and the checks will be canceled.                                                

Retirement Plans and Individual Retirement Accounts                             

     Shares of the Fund are offered in connection with tax-deferred retirement
plans. Application forms and further information about these plans, including   
applicable fees, are available upon request. Before investing in the Fund       
through one of these plans, investors should consult their tax advisors.        

The Fund may be used as an investment vehicle for an IRA including  
SEP-IRA. An IRA naming The First National Bank of Boston as custodian is        
available from the Trust or the Transfer Agent. The minimum initial investment  
for an IRA is $2,000; the minimum subsequent investment is $250. Under certain  
circumstances contributions to an IRA may be tax deductible. IRAs are available 
to individuals (and their spouses) who receive compensation or earned income    
whether or not they are active participants in a tax-qualified or               
government-approved retirement plan. An IRA contribution by an individual or    
spouse who participates in a tax-qualified or government-approved retirement    
plan may not be deductible, depending upon the individual's income. Individuals 
also may establish an IRA to receive a "rollover" contribution of distributions 
from another IRA or a qualified plan. Tax advice should be obtained before      
effecting a rollover.                                                           

Statement of Intention                                                          

 Investor Share investors also may meet the minimum initial investment
requirement based on cumulative purchases by means of a written Statement of    
Intention, expressing the investor's intention to invest $10,000 or more in     
Investor Shares of the Fund within a period of 13 months.                       

   Investors wishing to enter into a Statement of Intention in conjunction
with their initial investment in shares of the Fund should complete the         
appropriate portion to the account application form. Current Fund shareholders  
can obtain a Statement of Intention form by contacting the Transfer Agent.      

      The Fund reserves the right to redeem Shares in any account if, at the end
of the Statement of Intention period, the account does not have a value of at   
least the minimum investment amount.                                            

Exchanges                                                                       

Shareholders may exchange Shares of the Fund for shares of any other
series of the Trust so long as they meet the initial investment minimum of the  
fund being purchased and maintain the respective minimum account balance in each
fund in which they own shares. Exchanges between each Fund are at net asset     
value.                                                                          

     For federal income tax purposes an exchange is considered to be a sale of
shares on which a shareholder may realize a capital gain or loss. An exchange   
may be made by calling the Transfer Agent at (800) 344-8332 or by mailing       
written instructions to Schroder Capital Funds (Delaware), P.O. Box 446,        
Portland, Maine 04112. Exchange privileges may be exercised only in those states
where shares of the other series of the Trust may legally be sold. Exchange     
privileges may be amended or terminated at any time upon sixty (60) days'       
notice.                                                                         

Redemption of Shares                                                            

    Shares of the Fund are redeemed at their next determined net asset value
after receipt by the Fund (at the address set forth above under "Purchase of    
Shares") of a redemption request in proper form. Redemption requests may be made
between 9:00 a.m. and 6:00 p.m.                                                 

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(Eastern Time) on each Fund Business Day. Redemption requests that are received 
prior to 4:00 p.m. (Eastern Time) will be processed at the net asset value      
determined as of that day. Redemption requests that are received after 4:00 p.m.
(Eastern Time) will be processed at the net asset value determined the next Fund
Business Day. See "Net Asset Value" below.                                      

     By Telephone. Redemption requests may be made by telephoning the Transfer
Agent at the telephone number on the cover page of this Prospectus. A           
shareholder must provide the Transfer Agent with the class of Shares, the dollar
amount or number of shares to be redeemed, shareholder account number, and some 
additional form of identification such as a password. A redemption by telephone 
may be made only if the telephone redemption privilege option has been elected  
on the Account Application or otherwise in writing. In an effort to prevent     
unauthorized or fraudulent redemption requests by telephone, reasonable         
procedures will be followed by the Transfer Agent to confirm that telephone     
instructions are genuine. The Transfer Agent and the Trust generally will not be
liable for any losses due to unauthorized or fraudulent redemption requests, but
may be liable if they do not follow these procedures. Shares for which          
certificates have been issued may not be redeemed by telephone. In times of     
drastic economic or market changes, it may be difficult to make redemptions by  
telephone. If a shareholder cannot reach the Transfer Agent by telephone,       
redemption requests may be mailed or hand-delivered to the Transfer Agent.      

      Written Requests. Redemptions may be made by letter to the Fund specifying
the class of shares, the dollar amount or number of Shares to be redeemed, and  
the shareholder account number. The letter must also be signed in exactly the   
same way the account is registered (if there is more than one owner of the      
Shares, all must sign) and, in certain cases, signatures must be guaranteed by  
an institution that is acceptable to the Transfer Agent. Such institutions      
include certain banks, brokers, dealers (including municipal and government     
securities brokers and dealers), credit unions and savings associations.        
Notaries public are not acceptable. Further documentation may be requested to   
evidence the authority of the person or entity making the redemption request.   
Questions concerning the need for signature guarantees or documentation of      
authority should be directed to the Fund at the above address or by calling the 
telephone number appearing on the cover of this Prospectus.                     

   If Shares to be redeemed are held in certificate form, the certificates
must be enclosed with the redemption request and the assignment form on the back
of the certificates, (or an assignment separate from the certificates (but      
accompanied by the certificates), must be signed by all owners in exactly the   
same way the owners' names are written on the face of the certificates.         
Requirements for signature guarantees and/or documentation of authority as      
described above could also apply. For your protection, the Fund suggests that   
certificates be sent by registered mail.                                        

  Additional Redemption Information. Checks for redemption proceeds will
normally be mailed within seven days. No redemption proceeds will be mailed     
until checks in payment for the purchase of the Shares to be redeemed have been 
cleared, which may take up to 15 calendar days from the purchase date. Unless   
other instructions are given in proper form, a check for the proceeds of a      
redemption will be sent to the shareholder's address of record.                 

   The Fund may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that exchange is closed,
(ii) the SEC has by order permitted such suspension, or (iii) an emergency, (as 
defined by rules of the SEC,) exists making disposal of portfolio investments or
determination of the Fund's net asset value not reasonably practicable.         

  If the Trust Board determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment wholly or    
partly in cash, the Fund may redeem Shares in whole or in part by a distribution
in kind of portfolio securities (from the investment portfolio of the Portfolio 
or of the Fund),                                                                

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in lieu of cash. The Fund will, however, redeem Shares solely in cash up to the 
lesser of $250,000 or 1% of net assets during any 90-day period for any one     
shareholder. In the event that payment for redeemed Shares is made wholly or    
partly in portfolio securities, the shareholder may be subject to additional    
risks and costs in converting the securities to cash. See "Additional Purchase  
and Redemption Information" in the SAI.                                         

     The proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal income tax
purposes.                                                                       

     Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem Shares in any account (other than an IRA) if at any
time the account does not have a value of at least $2,000, unless the value of  
the account falls below that amount solely as a result of market activity.      
Shareholders will be notified that the value of the account is less than $2,000 
and be allowed at least 30 days to make an additional investment to increase the
account balance to at least $2,000.                                             

Net Asset Value                                                                 

  The net asset value per share of the Fund is calculated separately for
each class of Shares of the Fund at 4:00 p.m. (Eastern Time), Monday through    
Friday, each Fund Business Day, which excludes the following U.S. holidays: New 
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor 
Day, Thanksgiving Day and Christmas Day. Net asset value per Share is calculated
by dividing the aggregate value of the Fund's assets less all Fund liabilities, 
if any, by the number of Shares of the Fund outstanding.                        

   Generally, securities that are listed on recognized stock exchanges are
valued at the last reported sale price, on the day when the securities are      
valued (the "Valuation Day"), on the primary exchange on which the securities   
are principally traded. Listed securities traded on recognized stock exchanges  
for which there were no sales on the Valuation Day are valued at the last sale  
price on the preceding trading day or at closing mid-market prices. Securities  
traded in over-the-counter markets are valued at the most recent reported       
mid-market price. 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 Schroder Core Board.                                    

    Trading in securities on non-U.S. exchanges and over-the-counter markets
may not take place on every day that the New York Stock Exchange is open for    
trading. Furthermore, trading takes place in various foreign markets on days on 
which the Fund's net asset value is not calculated. If events materially        
affecting the value of foreign securities occur between the time when their     
price is determined and the time when net asset value is calculated, such       
securities will be valued at fair value as determined in good faith by using    
methods approved by the Schroder Core Board.                                    

All assets and liabilities of the Portfolio denominated in foreign  
currencies are valued in U.S. dollars based on the exchange rate last quoted by 
a major bank prior to the time when the net asset value of the Fund is          
calculated.                                                                     

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              

The Fund                                                                        

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The Fund intends to comply with the provisions of the Internal Revenue Code of  
1986, as amended, applicable to regulated investment companies. By complying    
therewith, the Fund will not have to pay federal income tax on that part of its 
income or net realized capital gain that is distributed to shareholders. The    
Fund intends to distribute substantially all of its income and net realized     
capital gain and, therefore, intends not to be subject to federal income tax.   

      Dividends and capital gain distributions on Investor Shares are reinvested
automatically in additional Investor Shares at net asset value unless the       
shareholder has elected in the Account Application or otherwise in writing, to  
receive dividends and other distributions in cash.                              

      After every dividend and other distribution, the value of a Share declines
by the amount of the distribution. Purchases made shortly before a dividend or  
other distribution include in the purchase price the amount of the distribution,
which will be returned to the investor in the form of a taxable distribution.   

   Dividends and other distributions paid by the Fund with respect to both
classes of its shares will be calculated in the same manner and at the same     
time. The per share dividends on Advisor Shares are expected to be lower than   
the per share dividends on Investor Shares as a result of compensation payable  
to Service Organizations for shareholder servicing for the Advisor Shares.      

      Dividends from the Fund's income generally will be taxable to shareholders
as ordinary income, whether dividends are invested in additional Shares or      
received in cash. Distributions by the Fund of any net capital gain will be     
taxable to a shareholder as long-term capital gain regardless of how long the   
shareholder has held the Shares. Each year the Trust will notify shareholders of
the tax status of dividends and other distributions.                            

      A redemption of Shares may result in taxable gain or loss to the redeeming
shareholder, depending on whether the redemption proceeds are more or less than 
the shareholder's basis in the redeemed Shares. If Shares are redeemed at a loss
after being held for six months or less, the loss will be treated as a          
long-term, rather than a short-term, capital loss to the extent of any capital  
gain distributions received on those Shares.                                    

The Fund must withhold 31% from dividends, capital gain distributions and       
redemption proceeds payable to any individuals and certain other noncorporate   
shareholders who do not furnish the Fund with a correct taxpayer identification 
number. Withholding at that rate also is required from dividends and capital    
gain                                                                            

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distributions payable to such shareholders who otherwise are subject to backup  
withholding. Depending on the residence of a shareholder for tax purposes,      
distributions from the Fund may also be subject to state and local taxes,       
including withholding taxes.                                                    

The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the SAI   
for further information. Shareholders should consult their own tax advisors as  
to the tax consequences of their ownership of Shares.                           

    In an effort to adhere to certain tax requirements, the Fund may have to
limit its investment activity in some types of instruments.                     

   If the Fund's dividends exceed its taxable income in any year, all or a
portion of the Fund's dividends may be treated as a return of capital to        
shareholders for tax purposes. Any return of capital will reduce the cost basis 
of your shares, which will result in a higher reported capital gain or a lower  
reported capital loss when you sell your shares. Shareholders will be notified  
by the Trust if a distribution included a return of capital.                    

Effect of Foreign Taxes. Foreign governments may impose taxes on the
Portfolio and its investments, which generally reduce the Fund's income.        
However, an offsetting tax credit or deduction may be available to you. If so,  
your tax statement will show more taxable income or capital gain than was       
actually distributed by the Fund but will also show the amount of the available 
offsetting credit or deduction.                                                 

If the Fund is eligible to do so, it intends to elect to permit its 
shareholders to take a credit (or a deduction) for the Fund's share of foreign  
income taxes paid by the Portfolio. If the Fund does make such an election, its 
shareholders would include as gross income in their Federal income tax returns  
both (i) distributions received from the Fund and (ii) the amount that the Fund 
advises is their pro rata portion of foreign income taxes paid with respect to  
or withheld from dividends and interest paid to the Portfolio from its foreign  
investments. Shareholders then would be entitled, subject to certain            
limitations, to take a foreign tax credit against their Federal income tax      
liability for the amount of such foreign taxes or else to deduct such foreign   
taxes as an itemized deduction from gross income.                               

The Portfolio                                                                   

 The Portfolio is not required to pay federal income tax because it is
classified as a partnership for federal income tax purposes. All interest,      
dividends, gains and losses of the Portfolio will be deemed to have been "passed
through" to the Fund in proportion to the Fund's holdings in the Portfolio,     
regardless of whether such interest, dividends or gains have been distributed by
the Portfolio.                                                                  

    The Portfolio intends to conduct its operations so as to enable the Fund
to qualify as a regulated investment company.                                   

OTHER INFORMATION                                                               

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Capitalization and Voting                                                       

     The Trust was organized as a Maryland corporation called Schroder Capital
Funds, Inc. on July 30, 1969, and was reorganized as a Delaware business trust  
on January 9, 1996. The Trust has authority to issue an unlimited number of     
shares of beneficial interest. The Trust Board may, without shareholder         
approval, divide the authorized shares into an unlimited number of separate     
portfolios or series (such as the Fund) and may divide such portfolios or series
into classes of shares (such as the Investor Shares), and the costs of doing so 
will be borne by the Trust. The Trust currently consists of eight separate      
portfolios, each of which has separate investment objectives and policies.      

   The Fund currently consists of two classes of shares. Each share of the
Fund is entitled to participate equally in dividends and other distributions and
the proceeds of any liquidation except that, due to the differing expenses borne
by the classes, dividends and liquidation proceeds for each class will likely   
differ.                                                                         

    Shares are fully paid and non-assessable, and have no preemptive rights.
Shareholders have non-cumulative voting rights, which means that the holders of 
more than 50% of the shares voting for the election of Trustees can elect 100%  
of the Trustees if they choose to do so. A shareholder is entitled to one vote  
for each full share held (and a fractional vote for each fractional share held).
Each share of the Fund has equal voting rights, except that if a matter affects 
only the shareholders of a particular class only shareholders of that class     
shall have a right to vote. On Trust matters requiring shareholder approval,    
shareholders of the Trust are entitled to vote only with respect to matters that
affect the interests of the Fund or the class of shares they hold, except as    
otherwise required by applicable law.                                           

There will normally be no meetings of shareholders to elect Trustees
unless and until such time as less than a majority of the Trustees holding      
office have been elected by shareholders. However, the holders of not less than 
a majority of the outstanding shares of the Trust may remove any person serving 
as a Trustee and the Trust Board will call a special meeting of shareholders to 
consider removal of one or more Trustees if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust.            

     From time to time, certain shareholders may own a large percentage of the
shares of the Fund. Accordingly, those shareholders may be able to greatly      
affect (if not determine) the outcome of a shareholder vote.                    

Reports                                                                         

     The Trust sends each Fund shareholder a semi-annual report and an audited
annual report containing the Fund's financial statements.                       

Performance                                                                     

The Fund may include quotations of its average annual total return, 
cumulative total return and other performance measures in advertisements or     
reports to shareholders or prospective investors. Average annual total return of
a class of shares is based upon the overall dollar or percentage change in value
of a hypothetical investment each year over specified periods. Average annual   
total returns reflect the deduction of a proportional share of a Fund's expenses
(on an annual basis) and assumes investment and reinvestment of all dividends   
and distributions at NAV. Cumulative total returns are calculated similarly     
except that the total return is aggregated over the relevant period instead of  
annualized.                                                                     

Performance quotations are calculated separately for each class of  

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shares of the Fund. The Fund may also be compared to various unmanaged          
securities indices, groups of mutual funds tracked by mutual fund ratings       
services, or other general economic indicators. Unmanaged indices may assume the
reinvestment of dividends but do not reflect deductions for administrative and  
management costs and expenses.                                                  

 Performance information represents only past performance and does not
necessarily indicate future results. For a description of the methods used to   
determine total return and other performance measures for the Fund, see the SAI.

Custodian and Transfer Agent                                                    

The Chase Manhattan Bank, N.A. is custodian of the Fund's and of the
Portfolio's assets. Forum Financial Corp. serves as the Fund's transfer and     
dividend disbursing agent.                                                      

Shareholder Inquiries                                                           

Inquiries about the Fund, including its past performance, should be 
directed to:                                                                    

Schroder International Fund                 
P.O. Box 446                                
Portland, Maine 04112                       

    Information about specific shareholder accounts may be obtained from the
Transfer Agent by calling (800) 344-8332.                                       

Service Organizations                                                           

    The Glass-Steagall Act and other applicable laws and regulations provide
that banks may not engage in the business of underwriting, selling or           
distributing securities. There is currently no precedent prohibiting banks from 
performing administrative and shareholder servicing functions as Service        
Organizations. However, judicial or administrative decisions or interpretations 
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,    
could prevent a bank Service Organization from continuing to perform all or part
of its servicing activities. If a bank were prohibited from so acting, its      
shareholder clients would be permitted to remain shareholders of the Fund and   
alternative means for continuing the servicing of such shareholders would be    
sought. It is not expected that shareholders would suffer any adverse financial 
consequences as a result of any of these occurrences.                           

Fund Structure                                                                  

      Classes of Shares. The Fund has two classes of shares, Investor Shares and
Advisor Shares. Advisor Shares are offered by a separate prospectus to          
individual investors, in most cases through Service Organizations. Advisor      
Shares incur more expenses than Investor Shares. Except for certain differences,
each share of each class represents an undivided, proportionate interest in the 
Fund. Each share of the Fund is entitled to participate equally in dividends and
other distributions and the proceeds of any liquidation of the Fund except that,
due to the differing expenses borne by the two classes, the amount of dividends 
and other distributions will differ between the classes. Information about      
Advisor Shares is available from the Fund by calling                            

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Schroder Advisors at (800) 730-2932.                                            

The Portfolio. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio, which has the same     
investment objective and substantially similar policies as the Fund.            
Accordingly, the Portfolio directly acquires its own securities and the Fund    
acquires an indirect interest in those securities. The Portfolio is a separate  
series of Schroder Capital Funds ("Schroder Core"), a business trust organized  
under the laws of the State of Delaware in September 1995. Schroder Core is     
registered under the 1940 Act as an open-end, management investment company and 
currently has four separate series. The assets of the Portfolio, a diversified  
portfolio, belong only to, and the liabilities of the Portfolio are borne solely
by, the Portfolio and no other portfolio of Schroder Core.                      

The Fund's investment in the Portfolio is in the form of a          
non-transferable beneficial interest. As of March 1, 1997, the Fund is the only 
institutional investor in the Portfolio. The Portfolio may permit other         
investment companies or institutional investors to invest in it. All other      
investors in the Portfolio will invest on the same terms and conditions as the  
Fund and will pay a proportionate share of the Portfolio's expenses.            

The Portfolio normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in the Portfolio will be entitled to    
vote in proportion to its relative beneficial interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other    
applicable law, the Fund will solicit proxies from its shareholders and will    
vote its interest in the Portfolio in proportion to the votes cast by its       
shareholders. If there are other investors in the Portfolio, there can be no    
assurance that any issue that receives a majority of the votes cast by Fund     
shareholders will receive a majority of votes cast by all investors in the      
Portfolio; indeed, if other investors hold a majority interest in the Portfolio,
they could have voting control of the Portfolio.                                

     The Portfolio will not sell its shares directly to members of the general
public. Another investor in the Portfolio, such as an investment company, that  
might sell its shares to members of the general public would not be required to 
sell its shares at the same public offering price as the Fund and could have    
different advisory and other fees and expenses than the Fund. Therefore, Fund   
shareholders may have different returns than shareholders in another investment 
company that invests exclusively in the Portfolio. There is currently no such   
other investment company that offers its shares to members of the general       
public. Information regarding any such funds in the future will be available    
from Schroder Core by calling (800) 730-2932.                                   

Under federal securities law, any person or entity that signs a     
registration statement may be liable for a misstatement or omission of a        
material fact in the registration statement. Schroder Core, its Trustees and    
certain of its officers are required to sign the registration statement of the  
Trust and may be required to sign the registration statements of certain other  
investors in the Portfolio. In addition, under federal securities law, Schroder 
Core may be liable for misstatements or omissions of a material fact in any     
proxy soliciting material of an investor in Schroder Core, including the Fund.  
Each investor in the Portfolio, including the Trust, will indemnify Schroder    
Core and its Trustees and officers ("Schroder Core Indemnitees") against certain
claims.                                                                         

  Indemnified claims are those brought against Schroder Core Indemnitees
based on a misstatement or omission of a material fact in the investor's        
registration statement or proxy materials. No indemnification need be made,     
however, if such alleged misstatement or omission relates to information about  
Schroder Core                                                                   

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and was supplied to the investor by Schroder Core. Similarly, Schroder Core will
indemnify each investor in the Portfolio, including the Fund, for any claims    
brought against the investor with respect to the investor's registration        
statement or proxy materials, to the extent the claim is based on a misstatement
or omission of a material fact relating to information about Schroder Core that 
is supplied to the investor by Schroder Core. In addition, each registered      
investment company investor in the Portfolio will indemnify each Schroder Core  
Indemnitee against any claim based on a misstatement or omission of a material  
fact relating to information about a series of the registered investment company
that did not invest in the Schroder Core. The principal purpose of these        
cross-indemnity provisions is to limit the liability of Schroder Core to        
information that it knows or should know and can control. With respect to other 
prospectuses and other offering documents and proxy materials of investors in   
Schroder Core, its liability is similarly limited to information about and      
supplied by it.                                                                 

     Certain Risks of Investing in the Portfolio. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the        
Portfolio, if any. For example, if the Portfolio had a large investor other than
the Fund that redeemed its interest in the Portfolio, the Portfolio's remaining 
investors (including the Fund) might, as a result, experience higher pro rata   
operating expenses, thereby producing lower returns.                            

 The Fund may withdraw its entire investment from the Portfolio at any
time, if the Trust Board determines that it is in the best interests of the Fund
and its shareholders to do so. The Fund might withdraw, for example, if there   
were other investors in the Portfolio with power to, and who did by a vote of   
the shareholders of all investors (including the Fund), change the investment   
objective or policies of the Portfolio in a manner not acceptable to the Trust  
Board. A withdrawal could result in a distribution in kind of portfolio         
securities (as opposed to a cash distribution) by the Portfolio. That           
distribution could result in a less diversified portfolio of investments for the
Fund and could affect adversely the liquidity of the Fund's portfolio. If the   
Fund decided to convert those securities to cash, it would likely incur         
brokerage fees or other transaction costs. If the Fund withdrew its investment  
from the Portfolio, the Trust Board would consider appropriate alternatives,    
including the management of the Fund's assets in accordance with its investment 
objective and policies by SCMI, or the investment of all of the Fund's          
investable assets in another pooled investment entity having substantially the  
same investment objective as the Fund. The inability of the Fund to find a      
suitable replacement investment, if the Board decided not to permit SCMI to     
manage the Fund's assets, could have a significant impact on shareholders of the
Fund.                                                                           

     Each investor in the Portfolio, including the Fund, may be liable for all
obligations of the Portfolio. The risk to an investor in the Portfolio of       
incurring financial loss on account of such liability, however, is limited to   
circumstances in which the Portfolio is unable to meet its obligations, the     
occurrence of which SCMI considers to be quite remote. Upon liquidation of the  
Portfolio, investors would be entitled to share pro rata in the net assets of   
the Portfolio available for distribution to investors.                          

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Investment Adviser                                                              
Schroder Capital Management International Inc.                                  
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Administrator & Distributor                                                     
Schroder Fund Advisors Inc.                                                     
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company                        
Two Portland Square                                                             
Portland, Maine  04101                                                          

Custodian                                                                       
The Chase Manhattan Bank, N.A.                                                  
Global Custody Division                                                         
Woolgate House, Coleman Street                                                  
London EC2P 2HD, United Kingdom                                                 

Transfer and Dividend Disbursing Agent                                          
Forum Financial Corp.                                                           
P.O. Box 446                                                                    
Portland, Maine 04112                                                           

Independent Accountants                                                         
Coopers & Lybrand, L.L.P.                                                       
One Post Office Square                                                          
Boston, Massachusetts 02109                                                     

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Table of Contents                                                               

PROSPECTUS SUMMARY..........................................................    
EXPENSES OF INVESTING                                                           
IN THE FUND.............................................................
Fee Table...................................................................    
Example.....................................................................    
FINANCIAL HIGHLIGHTS........................................................    
INVESTMENT OBJECTIVE........................................................    
INVESTMENT POLICIES ........................................................    
RISK CONSIDERATIONS.........................................................    
MANAGEMENT OF THE FUND......................................................    
Boards of Trustees..........................................................    
Investment Adviser and Portfolio Managers...................................    
Administrative Services.....................................................    
Expenses....................................................................    
Portfolio Transactions......................................................    
Code of Ethics..............................................................    
INVESTMENT IN THE FUND......................................................    
Purchase of Shares..........................................................    
Retirement Plans and Individual                                                 
Retirement Accounts.......................................................  
Statement of Intention......................................................    
Exchanges...................................................................    
Redemption of Shares........................................................    
Net Asset Value.............................................................    
DIVIDENDS, DISTRIBUTIONS                                                        
AND TAXES.................................................................  
The Fund....................................................................    
The Portfolio...............................................................    
OTHER INFORMATION...........................................................    
Capitalization and Voting...................................................    
Reports.....................................................................    
Performance.................................................................    
Custodian and Transfer Agent................................................    
Shareholder Inquiries.......................................................    
Service Organizations.......................................................    
Fund Structure..............................................................    

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SCHRODER INTERNATIONAL FUND                                                     

Advisor Shares                                                                  

This fund seeks long-term capital appreciation by investing in securities       
markets outside the United States. It is intended for long-term investors       
seeking international diversification and willing to accept the risks of foreign
investing.                                                                      

Schroders                                                     

[GRAPHIC OMITTED]                                                     

Your Window On The World                                                        

Schroder International Fund (the "Fund"), a series of Schroder Capital Funds    
(Delaware) (the "Trust"), seeks to achieve its investment objective by investing
substantially all of its assets in Schroder International Equity Fund (the      
"Portfolio"), which invests primarily in equity securities. The Portfolio is a  
separately managed, diversified series of Schroder Capital Funds ("Schroder     
Core"), an open-end, management investment company. The Portfolio has an        
identical investment objective and substantially similar investment policies as 
the Fund (see "Other Information - Fund Structure"). Accordingly, the Fund's    
investment experience will correspond directly with the Portfolio's investment  
experience.                                                                     

This prospectus sets forth concisely the information you should know before     
investing and should be retained for future reference. To learn more about the  
Fund, you may obtain a copy of the Fund's current Statement of Additional       
Information (the "SAI") which is incorporated by reference into this Prospectus.
The SAI dated March 1, 1997, as amended from time to time, has been filed with  
the Securities and Exchange Commission ("SEC") and is available along with other
related materials for reference on their Internet Web Site (http://www.sec.gov) 
or may be obtained without charge from the Trust by writing to Two Portland     
Square, Portland, Maine 04101 or by calling 1-800-290-9826. The Fund has not    
authorized anyone to provide you with information that is different from what is
contained in this prospectus or in other documents to which this prospectus     
refers you.                                                                     

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MUTUAL FUND SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE    
FDIC, THE FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENT AGENCY AND ALSO ARE NOT
OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY BANK OR 
ITS AFFILIATES. MUTUAL FUND INVESTMENTS ARE SUBJECT TO INVESTMENT RISK,         
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.                                       

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

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PROSPECTUS                                                                      
MARCH 1, 1997                                                                   

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PROSPECTUS SUMMARY                                                              

      This prospectus offers Advisor Class shares ("Advisor Shares" or "Shares")
of the Fund. The Fund is a separately managed, diversified series of the Trust, 
an open-end, management investment company registered under the Investment      
Company Act of 1940 (the "1940 Act"). The following summary is qualified in its 
entirety by the more detailed information contained in this Prospectus.         

      Objective. Long-term capital appreciation through investment in securities
markets outside the United States.                                              

   Strategy. Invests primarily in equity securities of companies domiciled
outside the United States.                                                      

      Investment Adviser. The Portfolio's investment adviser is Schroder Capital
Management International Inc. ("SCMI"), 787 Seventh Avenue, New York, New York  
10019. The Fund (and indirectly its shareholders) bears a pro rata portion of   
the investment advisory fee the Portfolio pays to SCMI. See "Management of the  
Fund - Investment Adviser and Portfolio Managers."                              

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      Administrative Services. Schroder Fund Advisors Inc. ("Schroder Advisors")
serves as administrator and distributor of the Fund, and Forum Administrative   
Services, Limited Liability Company ("Forum") serves as the Fund's              
sub-administrator.                                                              

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    Purchases and Redemptions of Shares. Shares may be purchased or redeemed
by mail, by bank-wire and through your broker-dealer or other financial         
institution. The minimum initial investment is $2,500, except that the minimum  
for an Individual Retirement Account ("IRA") is $250. The minimum subsequent    
investment is $250. See "Investment in the Fund -- Purchase of Shares" and "--  
Redemption of Shares."                                                          

     Dividends and Other Distributions. The Fund annually declares and pays as
a dividend substantially all of its net investment income and at least annually 
distributes any net realized long-term capital gain and gains from foreign      
currency transactions. Dividends and long-term capital gain distributions are   
reinvested automatically in additional Advisor Shares of the Fund at net asset  
value unless you elect in your Account Application, or otherwise in writing, to 
receive dividends and other distributions in cash. See "Dividends, Distributions
and Taxes."                                                                     

      Risk Considerations. Alone, the Fund is not a balanced investment plan. It
is intended for long-term investors seeking international diversification who   
are willing to accept the risks of foreign investing. Investments in foreign    
securities involve certain risks not associated with domestic investing,        
including uncertain political and economic developments, the possible imposition
of exchange controls or other changes in foreign governmental laws or           
restrictions. Of course, as with any mutual fund, there is no assurance that the
Fund or Portfolio will achieve its investment objective.                        

     The Fund's net asset value ("NAV") varies because the market value of the
Portfolio's investments will change with changes in the value of the securities 
in which the Portfolio invests and with changes in market conditions, interest  
rates, currency rates, or political or economic situations. When you sell your  
shares, they may be worth more or less than what you paid for them. For further 
information, see "Risk Considerations".                                         

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 FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
Please call for complete information and to obtain a prospectus.
 Please read the prospectus carefully before you invest.

Schroder Capital Funds (Delaware) (1-800-290-9826)                              
Schroder International Fund                                                     
Schroder Emerging Markets Fund--                                                
Institutional Portfolio                         
Schroder International Smaller Companies Fund                                   
Schroder U.S. Smaller Companies Fund                                            
Schroder U.S. Equity Fund                                                       
Schroder Series Trust (1-800-464-3108)                                          
Schroder Equity Value Fund                                                      
Schroder Small Capitalization Value Fund                                        
Schroder High Yield Income Fund                                                 
Schroder Investment Grade Income Fund                                           
Schroder Short-Term Investment Fund                                             

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EXPENSES OF INVESTING IN THE FUND                                               

Fee Table                                                                       

   The table below is intended to assist you in understanding the expenses
that an investor in Advisor Shares of the Fund would incur. There are no        
transaction expenses associated with purchases or redemptions of Advisor Shares.

Annual Fund Operating Expenses (as a percentage of average net assets) (1)      
    Management Fees (after fee waivers) (2)(3).......................... 0.65%
     12b-1 Fees (4)......................................................   None
    Other Expenses (after expense reimbursement) (3).................... 0.59%
    Total Fund Operating Expenses (3)................................... 1.24%

 (1) Based on the Fund's expenses for the year ended October 31, 1996.
  The Fund's expenses include the Fund's pro rata portion of all
operating expenses of the Portfolio.                        
   (2) Management Fees reflect the fees paid by the Portfolio and the Fund
for investment advisory and administrative services.        
 (3) SCMI and Schroder Advisors have voluntarily undertaken to waive a
        portion of their fees and assume certain expenses of the Fund during
       the current fiscal year in order to limit the Fund's total expenses
     to 1.24% of the Fund's average daily net assets. This undertaking
      cannot be withdrawn except by a majority vote of the Trust's Board
     of Trustees. See "Management of the Fund --Expenses." Without fee
        waivers and expenses reimbursements, Management Fees, Other Expenses
  and Total Operating Expenses would be 0.68%, 0.61%, and 1.29%,
respectively.                                               

   (3) Subject to the approval of the Trust's Board of trustees 12b-1 fees
may be imposed at an annual rate of up to 0.50%.            

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Example                                                                         

   The table below indicates how much you would pay in total expenses on a
$1,000 investment in the Fund, assuming (1) a 5% annual return and (2)          
redemption at the end of each period. The example is based on the expenses      
listed above and assumes reinvestment of all dividends and other distributions. 
The example should not be considered a representation of past or future expenses
or returns; actual expenses or returns may vary from those shown. The 5% annual 
return is not a prediction of the Fund's return, but is the percentage required 
by the SEC for use in this example.                                             

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       1 YEAR ..........................   $13
       3 YEARS .........................   $39
       5 YEARS .........................   $68
      10 YEARS .........................  $150

FINANCIAL HIGHLIGHTS                                                            

The financial highlights are presented below to assist you in evaluating per    
share performance of the Fund. Information presented is for Investor Shares as  
Advisor Shares were not issued for the periods shown. Information for periods   
prior to August 1, 1989 pertains to the Fund's predecessor-in-interest.         
Information for all periods after the year ended September 30, 1988 has been    
audited by Coopers & Lybrand L.L.P., independent accountants to the Fund. The   
Fund's financial statements for the year ended October 31, 1996, and the related
independent accountants' report are contained in the Fund's Annual Report to    
Shareholders and are incorporated by reference into the SAI. Further information
about the performance of the Fund is also contained in the Annual Report, which 
may be obtained without charge by writing the Fund at Two Portland Square,      
Portland, Maine 04101 or by calling 1-800-290-9826.                             

                                                        [Enlarge/Download Table]

                           Year       Year      Year      Year     Year     Year     Year    Month      Year                        
                          ended      ended     ended     ended    ended    ended    ended    ended      ended     ended      ended  
                       10/31/96(a) 10/31/95  10/31/94 10/31/93  10/31/92 10/31/91 10/31/90 10/31/89    9/30/89   9/30/88    9/30/87 
                       --------------------  -----------------  -------- -------- -------- --------    -------   -------    ------- 
                                                                                                                Unaudited  Unaudited
                                                                                                                                    
Net Asset Value,                                                                                                                    
  Beginning of                                                                                                                      
  period                  20.91       23.17     20.38    15.15    16.22    17.70    18.20    18.95      14.40      18.02     14.07  
                         ------      ------    ------   ------   ------   ------   ------   ------     ------     ------    ------  
Investment                                                                                                                          
  Operations:                                                                                                                       
   Net Investment                                                                                                                   
   Income                  0.15(b)     0.46      0.18     0.08     0.25     0.25     0.15     0.03       0.20       0.05     (0.07) 
                         ------      ------    ------   ------   ------   ------   ------   ------     ------     ------    ------  
  Net Realized                                                                                                                      
   Gain (Loss)             1.74       (0.18)     2.69     5.27    (1.04)   (0.25)   (0.12)   (0.78)      4.44      (2.34)     4.71  
                         ------      ------    ------   ------   ------   ------   ------   ------     ------     ------    ------  
Total From                                                                                                                          
  Investment                                                                                                                        
  Operations               1.89        0.28      2.87     5.35    (0.79)    0.00     0.03    (0.75)      4.64      (2.29)     4.64  
                         ------      ------    ------   ------   ------   ------   ------   ------     ------     ------    ------  
Distributions from                                                                                                                  
  Net Investment                                                                                                                    
  Income                  (0.47)       --       (0.08)   (0.12)   (0.23)   (0.25)   (0.16)    0.00      (0.04)      0.00     (0.02) 
                         ------      ------    ------   ------   ------   ------   ------   ------     ------     ------    ------  
Distributions from                                                                                                                  
  Realized Capital                                                                                                                  
  Gain                    (2.32)      (2.54)     --       --      (0.05)   (1.23)   (0.37)    0.00      (0.05)     (1.33)    (0.67) 
                         ------      ------    ------   ------   ------   ------   ------   ------     ------     ------    ------  
Total Distributions       (2.79)      (2.54)    (0.08)   (0.12)   (0.28)   (1.48)   (0.53)    0.00      (0.09)     (1.33)    (0.69) 
                         ------      ------    ------   ------   ------   ------   ------   ------     ------     ------    ------  
Net Asset Value,                                                                                                                    
  End of Period           20.01       20.91     23.17    20.38    15.15    16.22    17.70    18.20      18.95      14.40     18.02  
                         ------      ------    ------   ------   ------   ------   ------   ------     ------     ------    ------  
Total Return              10.05%       2.08%    14.10%   35.54%   (4.93%)   0.45%   (0.07%)  (4.01%)     32.2%     (0.12%)    34.8% 
                         ======      ======    ======   ======   ======   ======   ======   ======     ======     ======    ======  
Ratio/Supplementary                                                                                                                 
  Data:                                                                                                                             
  Net Assets, End of                                                                                                                
  Period (Thousands)     202,735     212,330   500,504  320,550  159,556  108,398  62,438   49,740     48,655     29,917    32,553  
  Ratio of Expenses to                                                                                                              
   Average Net Assets                                                                                                               
   after waivers           0.99%(b)    0.91%     0.90%    0.91%    0.93%    1.07%    1.12%    1.12%(d)   1.12%      1.30%     1.64% 
  Ratio of Net                                                                                                                      
   Investment Income to                                                                                                             


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                                                        [Enlarge/Download Table]


                                                                                                                    
 Average Net Assets                                                                                                 
 after waivers          0.86%(b)   0.99%   0.94%   0.87%   1.62%   1.59%   0.83%   2.29%(d)   1.27%   0.38%  (0.42%)
Ratio of                                                                                                            
 expenses to                                                                                                        
 average net assets                                                                                                 
 before waivers         1.04%(b)    N/A     N/A     N/A     N/A     N/A     N/A     N/A        N/A     N/A     N/A  
Ratio of Net                                                                                                        
 Investment Income to                                                                                               
 Average Net Assets                                                                                                 
 before waivers         0.81%(b)    N/A     N/A     N/A     N/A     N/A     N/A     N/A        N/A     N/A     N/A  
Portfolio                                                                                                           
 Turnover Rate (c)     56.20%     61.26%  25.17%  56.05%  49.42%  50.58%  55.91%  21.98%(d)  72.25%  86.19%  84.97% 
Average Brokerage                                                                                                   
 Commissions (e)       $0.0256       N/A     N/A     N/A     N/A     N/A     N/A     N/A        N/A     N/A     N/A 


(a) On May 16, 1996, the Fund began offering two classes of shares, Investor    
Shares and Advisor Shares, and all then outstanding shares of the Fund  
were converted to Investor Shares.                                      
(b) Includes the Fund's proportionate share of income and expenses of the       
Portfolio.                                                              
(c) Portfolio turnover rate represents the rate of portfolio activity. The      
rate for year ended October 31, 1996, represents the portfolio turnover 
rate of the Portfolio.                                                  
(d) Annualized.                                                                 
(e) Amount represents the average commission per share paid to brokers on the   
purchase and sale of the Portfolio's investment portfolio securities.   

INVESTMENT OBJECTIVE                                                            

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  The investment objective of the Fund is long-term capital appreciation
through investment in securities markets outside the United States.             

The Fund is designed for U.S. investors who seek international      
diversification of their investments by participating in foreign securities     
markets. The Fund is not a complete investment program and investments in the   
securities of foreign issuers generally involve risks in addition to the risks  
associated with investments in the securities of U.S. issuers. (See "Risk       
Considerations.") The Fund currently seeks to achieve its investment objective  
by investing all of its investable assets in the Portfolio, which has           
substantially the same investment objective and substantially similar policies  
as the Fund. There can be no assurance that the Fund or Portfolio will achieve  
its investment objective.                                                       

INVESTMENT POLICIES                                                             

   Although the following information describes the investment policies of
the Portfolio and the responsibilities of Schroder Core's Board of Trustees (the
"Schroder Core Board"), it applies equally to the Fund and the Trust's Board of 
Trustees (the "Trust Board"). Additional information concerning the investment  
policies of the Fund is contained in the SAI.                                   

  The investment objective, and the investment policies of the Portfolio
that are designated as fundamental, may not be changed without approval of the  
holders of a majority of the outstanding voting securities of the Portfolio. A  
majority of outstanding voting securities means the lesser of (i) 67% of the    
shares present or represented at a shareholder meeting at which the holders of  
more than 50% of the outstanding shares are present or represented, or (ii) more
than 50% of outstanding shares. Non-fundamental investment policies of the      
Portfolio may be changed by the Schroder Core Board without approval of the     
investors in the Portfolio.                                                     

     Under normal market conditions, the Portfolio will invest at least 65% of
its total assets in equity securities of companies domiciled outside the U.S.   
Investments by the Portfolio are selected on the basis of their potential for   
capital appreciation without regard for current income. The Portfolio may also  
invest in debt securities of foreign governments, international organizations   
and foreign corporations and in the securities of closed-end investment         
companies investing primarily in foreign securities. The Portfolio may invest up
to 5% of its net assets in debt securities with relatively high risk and high   
yields (as compared to other debt securities meeting the Portfolio's investment 
criteria). The debt securities in which the Portfolio invests may be unrated,   
but will not be in default at the time of purchase. See "Debt Securities" and   
"Risk Considerations".                                                          

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    Countries in which the Portfolio may invest include, but are not limited
to, countries listed in the Morgan Stanley Capital International EAFE(R)        
Index, which is a market capitalization index of companies in developed market  
countries in Europe, Australia and the Far East. The Portfolio invests in the   
securities of foreign issuers domiciled in at least three foreign countries. The
Portfolio may invest more than 25% of its total assets in issuers located in any
one country. See "Risk Considerations @ Geographic Concentration." The          
Portfolio also may invest in securities of issuers located in countries         
considered by some to be emerging market countries. See "Risk Considerations    
@ Emerging Markets."                                                            

The Portfolio may purchase preferred stock and convertible debt     
securities, including warrants and convertible preferred stock, and may purchase
American Depository Receipts, European Depository Receipts or other similar     
securities of foreign issuers. The Portfolio also may enter into foreign        
exchange contracts, including forward contracts to purchase or sell foreign     
currencies, in anticipation of its currency requirements and to protect against 
possible adverse movements in foreign exchange rates. Although these contracts  
may reduce the risk of loss to the Portfolio from adverse movements in currency 
values, the contracts also limit possible gains from favorable movements. For   
temporary defensive purposes, the Portfolio may invest without limitation in (or
enter into repurchase agreements maturing in seven days or less with U.S. banks 
and broker-dealers with respect to) short-term debt securities, including U.S.  
Government securities, certificates of deposit and bankers' acceptances of U.S. 
banks. The Portfolio may also hold cash (U.S. dollars, foreign currencies or    
multinational currency units) and time deposits in U.S. and foreign banks. See  
"Risk Considerations" below and "Investment Policies" in the SAI.               

       The following specific policies and limitations are considered at the
time of any purchase; SCMI may not buy these instruments or use these techniques
unless it believes that they are consistent with the Portfolio's objective.     

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Common and Preferred Stock and Warrants. The Portfolio may invest in
common and preferred stock. Common stockholders are the owners of the company   
issuing the stock and, accordingly, vote on various corporate governance matters
such as mergers. They are not creditors of the company, but rather, upon        
liquidation of the company, are entitled to their pro rata share of the         
company's assets after creditors (including fixed income security holders) and  
preferred stockholders, if any, are paid. Preferred stock is a class of stock   
having a preference over common stock as to dividends and, generally, as to the 
recovery of investment. A preferred stockholder is also a shareholder and not a 
creditor of the company. Equity securities owned by the Portfolio may be traded 
in the over-the counter market or on a securities exchange, but may not be      
traded every day or in the volume typical of securities traded on a major U.S.  
national securities exchange. As a result, disposition by the Portfolio of a    
security to meet withdrawals by interest holders or otherwise may require the   
Portfolio to sell these securities at a discount from market prices, to sell    
during periods when disposition is not desirable, or to make many small sales   
over a lengthy period of time. The market value of all securities, including    
equity securities, is based upon the market's perception of value and not       
necessarily the "book value" of an issuer or other objective measure of a       
company's worth.                                                                

    The Portfolio may also invest in warrants, which are options to purchase
an equity security at a specified price (usually representing a premium over the
applicable market value of the underlying equity security at the time of the    
warrant's issuance) and usually during a specified period of time.              

  Foreign Exchange Contracts. Changes in foreign currency exchange rates
will affect the U.S. dollar values of securities denominated in currencies other
than the U.S. dollar. The rate of exchange between the U.S. dollar and other    
currencies fluctuates in response to forces of supply and demand in the foreign 
exchange markets.                                                               

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These forces are affected by the international balance of payments, other       
economic and financial conditions, government intervention, speculation, and    
other factors, many of which may be difficult if not impossible to predict. When
investing in foreign securities, the Portfolio usually effects currency exchange
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the    
foreign exchange market. The Portfolio incurs foreign exchange expenses in      
converting assets from one currency to another.                                 

   The Portfolio may enter into foreign currency forward contracts for the
purchase or sale of foreign currency to "lock in" the U.S. dollar price of the  
securities denominated in a foreign currency or the U.S. dollar value of        
interest and dividends to be paid on such securities; or to hedge against the   
possibility that the currency of a foreign country in which the Portfolio has   
investments may suffer a decline against the U.S. dollar. A forward currency    
contract is an obligation to purchase or sell a specific currency at a future   
date, which may be any fixed number of days from the date of the contract agreed
upon by the parties, at a price set at the time of the contract. This method of 
attempting to hedge the value of portfolio securities against a decline in the  
value of a currency does not eliminate fluctuations in the underlying prices of 
the securities and may expose the Portfolio to the risk that the counterparty is
unable to perform. Although the strategy of engaging in foreign currency        
transactions could reduce the risk of loss due to a decline in the value of the 
hedged currency, it could also limit the potential gain from an increase in the 
value of the currency. The Portfolio does not intend to maintain a net exposure 
to such contracts where the fulfillment of obligations under such contracts     
would obligate it to deliver an amount of foreign currency in excess of the     
value of its portfolio securities or other assets denominated in the currency.  
The Portfolio will not enter into these contracts for speculative purposes and  
will not enter into non-hedging currency contracts. These contracts involve a   
risk of loss if SCMI fails to predict currency values correctly. The Portfolio  
has no present intention to enter into currency futures or options contracts,   
but may do so in the future. See "Risk Considerations--Currency Fluctuations and
Devaluations."                                                                  

Debt Securities. The Portfolio may seek capital appreciation through
investment in convertible or non-convertible debt securities. Capital           
appreciation in debt securities may arise as a result of a favorable change in  
relative foreign exchange rates, in relative interest rate levels, or in the    
creditworthiness of issuers. The receipt of income from such debt securities is 
incidental to the Portfolio's objective of long-term capital appreciation. Such 
income can be used, however, to offset the operating expenses of the Portfolio. 
In accordance with its investment objective, the Portfolio will not seek to     
benefit from anticipated short-term fluctuations in currency exchange rates. The
Portfolio also may invest to a certain extent in debt securities in order to    
participate in debt-to-equity conversion programs incident to corporate         
reorganizations.                                                                

     Debt securities are generally subject to two kinds of risk -- credit risk
and market risk. Credit risk refers to the ability of the debtor, and any other 
obligor, to pay principal and interest on the debt as it becomes due. The       
Portfolio may, from time to time, invest in debt securities with high risk and  
high yields (as compared to other debt securities meeting the Portfolio's       
investment criteria). The debt securities in which the Portfolio invests may be 
unrated, but will not be in default at the time of purchase. Market risk refers 
to the tendency of the value of debt securities to vary inversely with interest 
rate changes. Certain debt instruments may also be subject to extension risk,   
which refers to change in total return on a debt instrument resulting from      
extension or abbreviation of the instrument's maturity.                         

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The Portfolio may invest in debt securities issued or guaranteed by 
foreign governments (including countries, provinces and municipalities) or their
agencies and instrumentalities; debt securities issued or guaranteed by         
international organizations designated or supported by multiple foreign         
governmental entities (which are not obligations of foreign governments) to     
promote economic reconstruction or development; and debt securities issued by   
corporations or financial institutions.                                         

RISK CONSIDERATIONS                                                             

      Foreign Investments. All investments, domestic and foreign, involve risks.
Investment in the securities of foreign issuers may involve risks in addition to
those normally associated with investments in the securities of U.S. issuers.   
While the Portfolio will generally invest only in securities of companies and   
governments in countries that SCMI, in its judgment, considers both politically 
and economically stable, all foreign investments are subject to risks of foreign
political and economic instability, adverse movements in foreign exchange rates,
the imposition or tightening of exchange controls or other limitations on       
repatriation of foreign capital. Foreign investments are subject to the risk of 
changes in foreign governmental attitudes towards private investment that could 
lead to nationalization, increased taxation or confiscation of Portfolio assets.

   Moreover, (i) dividends payable on foreign securities may be subject to
foreign withholding taxes, thereby reducing the income earned by the Portfolio; 
(ii) commission rates payable on foreign portfolio transactions are generally   
higher than in the United States; (iii) accounting, auditing and financial      
reporting standards differ from those in the United States, which means that    
less information about foreign companies may be available than is generally     
available about issuers of comparable securities in the United States; (iv)     
foreign securities often trade less frequently and with lower volume than United
States securities and consequently may exhibit greater price volatility; and (v)
foreign securities trading practices, including those involving securities      
settlement, may expose the Portfolio to increased risk in the event of a failed 
trade or the insolvency of a foreign broker-dealer or registrar.                

Emerging Markets. Investing in emerging market countries generally  
presents greater risk than does other foreign investing. In any emerging market 
country, there is the increased possibility of expropriation of assets,         
confiscatory taxation, nationalization of companies or industries, foreign      
exchange controls, foreign investment controls on daily stock market movements, 
default in foreign government securities, political or social instability, or   
diplomatic developments that could affect investments in those countries. In the
event of expropriation, nationalization or other confiscation, the Portfolio    
could lose its entire investment in the country involved. The economies of      
developing countries are more likely to be adversely affected by trade barriers,
exchange controls, managed adjustments in relative currency values and other    
projectionist measures imposed or negotiated by the countries with which they   
trade.                                                                          

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There may also be less monitoring and regulation of emerging markets and the    
activities of brokers there. Investing may require that the Portfolio adopt     
special procedures, seek local government approvals or take other actions that  
may incur costs for the Portfolio.                                              

    Certain emerging market countries may restrict investment by foreign
investors. These restrictions or controls may at times limit or preclude        
investment in certain securities and may increase the costs and expenses of the 
Portfolio.                                                                      

Several emerging market countries have experienced high, and in some
periods extremely high, rates of inflation in recent years. Inflation and rapid 
fluctuations in inflation rates may adversely affect these countries' economies 
and securities markets. Further, inflation accounting rules in some emerging    
market countries may indirectly generate losses or profits for certain emerging 
market companies.                                                               

     Currency Fluctuations and Devaluations. Because the Portfolio will invest
heavily in non-U.S. currency-denominated securities, changes in foreign currency
exchange rates will affect the value of the Portfolio's investments. A decline  
against the dollar in the value of currencies in which the Portfolio's          
investments are denominated will result in a corresponding decline in the dollar
value of the Portfolio's assets. This risk is heightened in some emerging market
countries.                                                                      

  The Fund is required to distribute substantially all of its investment
income in U.S. dollars. Because most of the Portfolio's income is received and  
realized in foreign currencies, a decline in the value of a particular foreign  
currency against the U.S. dollar that occurs after the Portfolio's income has   
been earned may require the Portfolio to                                        

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liquidate some portfolio securities to acquire sufficient U.S. dollars to make  
such distributions. Similarly, if the exchange rate declines between the time   
the Portfolio incurs expenses in U.S. dollars and the time such expenses are    
paid, the Portfolio may be required to liquidate additional foreign securities  
to purchase the U.S. dollars required to meet its expenses.                     

   Geographic Concentration. The Portfolio may invest more than 25% of its
total assets in issuers located in any one country and to the extent that it    
does so, is susceptible to a range of factors that could adversely affect that  
country, including the political and economic developments and foreign exchange 
rate fluctuations discussed above. As a result of investing substantially in one
country, the value of the Portfolio's assets may fluctuate more widely than the 
value of shares of a comparable fund with a lesser degree of geographic         
concentration.                                                                  

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MANAGEMENT OF THE FUND                                                          

X Schroder Group Assets Under Management Worldwide
As of December 31, 1996 -- Over $130 Billion

 [GRAPHIC OMITTED]

THE SCHRODER INVESTMENT MANAGEMENT GROUP INVESTMENT AND REPRESENTATIVE OFFICES
WORLDWIDE INCLUDE NEW YORK, LONDON, BOSTON, ZURICH, WARSAW, TOKYO, HONG KONG, 
BEIJING, SHANGHAI, TAIPEI, SEOUL, BANGKOK, KUALA LUMPUR, SINGAPORE, JAKARTA,
SYDNEY, BUENOS AIRES, SAO PAULO, BOGOTA AND CARACAS.

 TOGETHER, SCHRODER CAPITAL MANAGEMENT INTERNATIONAL AND
SCHRODER CAPITAL MANAGEMENT MANAGE OVER $24 BILLION.

Boards of Trustees                                                              

   The business and affairs of the Fund are managed under the direction of
the Trust Board. The business and affairs of the Portfolio are managed under the
direction of the Schroder Core Board. Information regarding the trustees and    
executive officers of the Trust, as well as Schroder Core's trustees and        
executive officers, may be found in the SAI.                                    

Investment Adviser and Portfolio Managers                                       

  As investment adviser to the Portfolio, SCMI manages the Portfolio and
continuously reviews, supervises and administers its investments. In this       
regard, SCMI is responsible for making decisions relating to the Portfolio's    
investments and placing purchase and sale orders regarding investments with     
brokers or dealers selected by it in its discretion. For its services with      
respect to the Portfolio, the Investment Advisory Agreement between SCMI and    
Schroder Core provides that SCMI receives a monthly advisory fee at the annual  
rate of 0.45% of the Portfolio's average daily net assets, which the Fund       
indirectly bears through its investment in the Portfolio.                       

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 SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is 
the holding company parent of a large world-wide group of banks and financial   
services companies (referred to as the "Schroder Group") with associated        
companies and branch and representative offices in eighteen countries. The      
Schroder Group specializes in providing investment management services.         

    The investment management team of Mark J. Smith, a Trustee and President
of the Trust and of Schroder Core, and Michael Perelstein, Vice President of the
Trust and of Schroder Core (with the assistance of an SCMI investment           
committee), is primarily responsible for the day-to-day management of the       
Portfolio's investment portfolio. Mr. Smith, who has managed the Fund's         
portfolio since October 1989 and the Portfolio's investments since its          
inception, has been a First Vice President of SCMI since April 1990 and a       
Director thereof since April 1993. He has been employed by various Schroder     
Group companies in the investment research and portfolio management areas since 
1983. Mr. Perelstein has been a Senior Vice President of SCMI since January 2,  
1997. Prior thereto, Mr. Perelstein was a Managing Director at MacKay Shields.  
Mr. Perelstein has more than twelve years of international and global investment
experience.                                                                     

      The Fund began pursuing its investment objective through investment in the
Portfolio on November 1, 1995. The Fund may withdraw its investment from the    
Portfolio at any time if the Board determines that it is in the best interests  
of the Fund and its shareholders to do so. (See "Other Information Fund         
Structure.") Accordingly, the Fund has retained SCMI as its investment adviser  
to manage the Fund's assets in the event the Fund withdraws its investment. SCMI
does not receive an investment advisory fee with respect to the Fund so long as 
the Fund remains completely invested in the Portfolio (or any other investment  
company). If the Fund resumes directly investing in portfolio securities, the   
Fund will pay SCMI a monthly advisory fee at the annual rate of 0.50% of the    
first $100 million of the Fund's average daily net assets; 0.40% of the next    
$150 million of average daily net assets; and 0.35% of average daily net assets 
in excess of $250 million. The investment advisory contract between SCMI and the
Trust with respect to the Fund is the same in all material respects as the      
investment advisory agreement between SCMI and Schroder Core with respect to the
Portfolio (except as to the parties, the fees payable thereunder, the           
circumstances under which fees will be paid and the jurisdiction whose laws     
govern the agreement).                                                          

Administrative Services                                                         

On behalf of the Fund, the Trust has entered into an administrative 
services contract with Schroder Advisors, 787 Seventh Avenue, New York, New York
10019. On behalf of the Portfolio, the Trust has also entered into a            
sub-administration agreement with Forum, Two Portland Square, Portland, Maine   
04101. Pursuant to these agreements, Schroder Advisors and Forum provide certain
management and administrative services necessary for the Fund's operations.     

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Schroder Advisors is compensated at the annual rate of 0.20% of the Fund's      
average daily net assets. Forum is compensated at the annual rate of 0.075% of  
the Fund's average daily net assets.                                            

      Schroder Advisors and Forum provide similar services to the Portfolio, for
which the Portfolio pays Schroder Advisors at an annual rate of 0.15% of the    
Portfolio's average daily net assets and pays Forum a monthly fee at the annual 
rate of 0.075% of the Portfolio's average daily net assets.                     

Distribution Plan and Shareholder Services Plan                                 

Schroder Advisors acts as distributor of the Fund's shares. Schroder
Advisors was organized in 1989 and registered as a broker-dealer to serve as an 
administrator and distributor for the Fund and other mutual funds. The Trust may
compensate Schroder Advisors under a distribution plan, adopted pursuant to Rule
12b-1 under the 1940 Act (the "Distribution Plan") by the Trust on behalf of the
Advisor Shares of the Fund. Schroder Advisors, in turn, may use these payments  
to compensate others for services provided, or to reimburse othrs for expenses  
incurred in connection with the distribution of Advisor Shares. Payments under  
the Distribution Plan would be made monthly at an annual rate of up to 0.50% of 
the Fund's average daily net assets attributable to Advisor Shares. The maximum 
annual amount payable under the Distribution Plan is currently 0.25%, but no    
payments will be made under the Distribution Plan until the Board so authorizes.

   Payments under the Distribution Plan may be for various types of costs,
including: (i) advertising expenses, (ii) costs of printing prospectuses and    
other materials to be given or sent to prospective investors, (iii) expenses of 
sales employees or agents of Schroder Advisors, including salary, commissions,  
travel and related expenses in connection with the distribution of Advisor      
Shares, (iv) payments to broker-dealers who advise shareholders regarding the   
purchase, sale, or retention of Advisor Shares, and (v) payments to banks, trust
companies, broker-dealers (other than Schroder Advisors) or other financial     
organizations (collectively, "Service Organizations"). Payments to a particular 
Service Organization under the Distribution Plan will be calculated by reference
to the average daily net assets of Advisor Shares owned beneficially by         
investors who have a brokerage or other service relationship with the Service   
Organization. The Fund will not be liable for distribution expenditures made by 
Schroder Advisors in any given year in excess of the maximum amount payable     
under the Distribution Plan in that year. Costs or expenses in excess of the    
annual limit may not be carried forward to future years. Salary expenses of     
sales personnel who are responsible for marketing various shares of portfolios  
of the Trust may be allocated to those portfolios, including the Advisor Shares 
of the Fund, that have adopted a plan similar to that of the Fund on the basis  
of average daily net assets. Travel expenses may be allocated to, or divided    
among, the particular portfolios of the Trust for which they are incurred.      

     The Trust, on behalf of the Fund, has also adopted a shareholder services
plan (the "Shareholder Service Plan"), pursuant to which Schroder Advisors is   
authorized to pay Service Organizations a servicing fee. Payments under the     
Shareholder Service Plan may be for various types of services, including: (i)   
answering customer inquiries regarding the manner in which purchases, exchanges 
and redemptions of shares of the Fund may be effected and other matters         
pertaining to the Fund's services, (ii) providing necessary personnel and       
facilities to establish and maintain shareholder                                

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accounts and records, (iii) assisting shareholders in arranging for processing  
purchase, exchange and redemption transactions, (iv) arranging for the wiring of
funds, (v) guaranteeing shareholder signatures in connection with redemption    
orders and transfers and changes in shareholder-designated accounts, (vi)       
integrating periodic statements with other customer transactions and (vii)      
providing such other related services as the shareholder may request.           

The maximum amount payable under the Shareholder Service Plan to Schroder       
Advisors is 0.25% of the Fund's average daily net assets attributable to Advisor
Shares.                                                                         

Payments to a particular Service Organization under the Shareholder Service Plan
are calculated by reference to the average daily net assets of Advisor Shares   
owned beneficially by investors who have a service relationship with the Service
Organization. Some Service Organizations may impose additional or different     
conditions on their clients, such as requiring their clients to invest more than
the minimum or subsequent investments specified by the Fund or charging a direct
fee for servicing. If imposed, these fees would be in addition to any amounts   
which might be paid to the Service Organization by Schroder Advisors. Each      
Service Organization has agreed to transmit to its clients a schedule of any    
such fees. Shareholders using Service Organizations are urged to consult them   
regarding any such fees or conditions.                                          

Expenses                                                                        

     SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
of their fees or assume certain expenses of the Fund in order to limit total    
Fund expenses (excluding taxes, interest, brokerage commissions and other       
portfolio transaction expenses and extraordinary expenses) chargeable to Advisor
Shares to 1.24% of the average daily net assets of the Fund attributable to     
those shares. This expense limitation cannot be modified or withdrawn except by 
a majority vote of the Trustees of the Trust who are not interested persons (as 
defined in the 1940 Act) of the Trust. If expense reimbursements are required,  
they will be made on a monthly basis; SCMI will reimburse the Fund for          
four-fifths of the amount required and Schroder Advisors will reimburse the Fund
for the remaining one-fifth. Forum voluntarily may waive all or a portion of    
their fees, from time to time.                                                  

Portfolio Transactions                                                          

SCMI places orders for the purchase and sale of the Portfolio's     
investments with brokers and dealers selected by SCMI and seeks "best execution"
of such portfolio transactions. The Portfolio may pay higher than the lowest    
available commission rates when SCMI believes it is reasonable to do so in light
of the value of the brokerage and research services provided. Commission rates  
for brokerage transactions are fixed on many foreign securities exchanges, and  
in many cases are higher than commission rates for comparable transactions      
effected on U.S. securities exchanges.                                          

    Subject to the Portfolio's policy of obtaining the best price consistent
with quality of execution on transactions, SCMI may employ Schroder Securities  
Limited and its affiliates (collectively, "Schroder Securities"), affiliates of 
SCMI, to effect transactions of the Portfolio on certain foreign securities     
exchanges. Because of the affiliation between SCMI and Schroder Securities, the 
Portfolio's payment of commissions to Schroder Securities is subject to         
procedures adopted by the Schroder Core Board designed to ensure that the       
commissions will not exceed the usual and customary brokers' commissions. No    
specific portion of the Portfolio's brokerage will be                           

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directed to Schroder Securities and in no event will Schroder Securities receive
any brokerage in recognition of research services.                              

Consistent with the Conduct Rules of the National Association of    
Securities Dealers, Inc., and subject to seeking the most favorable price and   
execution available and such other policies as the Schroder Core Board may      
determine, SCMI may consider sales of shares of the Fund or any other entity    
that invests in the Portfolio as a factor in the selection of broker-dealers to 
execute portfolio transactions for the Portfolio.                               

  Although the Portfolio does not currently engage in directed brokerage
arrangements to pay expenses, it may do so in the future. These arrangements    
(whereby brokers executing the Portfolio's portfolio transactions would agree to
pay designated expenses of the Portfolio if brokerage commissions generated by  
the Portfolio reached certain levels) might reduce the Portfolio's expenses     
(and, indirectly, the Fund's expenses). These arrangements would not be expected
to increase materially the brokerage commissions paid by the Portfolio.         

Code of Ethics                                                                  

The Trust, Schroder Core, SCMI, Schroder Advisors, and Schroders    
Incorporated have each adopted a code of ethics that contains a policy on       
personal securities transactions by "access persons," including portfolio       
managers and investment analysts. That policy complies in all material respects 
with the recommendations set forth in the Report of the Advisory Group on       
Personal Investing of the Investment Company Institute, of which the Trust is a 
member.                                                                         

INVESTMENT IN THE FUND                                                          

Purchase of Shares                                                              

Investors may purchase Advisor Shares directly from the Trust.      
Prospectuses, sales material and Account Applications can be obtained from the  
Trust or through Forum Financial Corp., the Fund's transfer agent (the "Transfer
Agent"). See "Other Information -- Shareholder Inquiries". Investments may also 
be made through Service Organizations that assist their customers in purchasing 
shares of the Fund. Service Organizations may charge their customers a service  
fee for processing orders to purchase or sell shares of the Fund. Investors     
wishing to purchase shares through their accounts at a Service Organization     
should contact that organization directly for appropriate instructions.         

 Shares of the Fund are offered at the net asset value next determined
after receipt of a completed Account Application (at the address set forth      
below). The minimum initial investment is $2,500, except that the minimum for an
IRA is $250. The minimum subsequent investment is $250. All purchase payments   
are invested in full and fractional shares. The Fund is authorized to reject any
purchase order.                                                                 

  Purchases may be made by mailing a check (in U.S. dollars), payable to
Schroder International Fund, to:                                                

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Schroder International Fund--Advisor Shares 
P.O. Box 446                                
Portland, Maine 04112                       

For initial purchases, the check must be accompanied by a completed 
Account Application in proper form. Further documentation may be requested from 
corporations, administrators, executors, personal representatives, directors or 
custodians to evidence the authority of the person or entity making the         
subscription request.                                                           

  Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as 
follows:                                                                        

Chase Manhattan Bank                        
New York, NY                                
ABA No.: 021000021                          
For Credit To: Forum Financial Corp.        
Account. No.: 910-2-718187                  
    Ref.: Schroder International Fund Advisor Shares
Account of: (shareholder name)              
Account Number: (shareholder account number)

      The wire order must specify the name of the Fund, the shares' class (i.e.,
Advisor Shares), the account name and number, address, confirmation number,     
amount to be wired, name of the wiring bank, and name and telephone number of   
the person to be contacted in connection with the order. If the initial         
investment is by wire, an account number will be assigned and an Account        
Application must be completed and mailed to the Fund before any account becomes 
active. Wire orders received prior to 4:00 p.m. (Eastern Time) on each day that 
the New York Stock Exchange is open for trading (a "Fund Business Day") will be 
processed at the net asset value determined as of that day. Wire orders received
after 4:00 p.m. (Eastern Time) will be processed at the net asset value         
determined as of the next Fund Business Day. See "Net Asset Value" below.       

   The Fund's Transfer Agent establishes for each shareholder of record an
open account to which all shares purchased and all reinvested dividends and     
other distributions are credited. Although most shareholders elect not to       
receive share certificates, certificates for full shares can be obtained by     
specific written request to the Fund's Transfer Agent. No certificates are      
issued for fractional shares.                                                   

  The Transfer Agent will deem an account lost if six months have passed
since correspondence to the shareholder's address of record is returned, unless 
the Transfer Agent determines the shareholder's new address. When an account is 
deemed lost, dividends and other distributions will automatically be reinvested.
In addition, the amount of any outstanding checks for dividends and other       
distributions that have been returned to the Transfer Agent will be reinvested  
and the checks will be canceled.                                                

Retirement Plans and Individual Retirement Accounts                             

     Shares of the Fund are offered in connection with tax-deferred retirement
plans. Application forms and further information about these plans, including   
applicable fees, are available upon request. Before investing in the Fund       
through one of these plans, investors should consult their tax advisors.        

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The Fund may be used as an investment vehicle for an IRA including  
SEP-IRA. An IRA naming The First National Bank of Boston as custodian is        
available from the Trust or the Transfer Agent. The minimum initial investment  
for an IRA is $250; the minimum subsequent investment is $250. Under certain    
circumstances contributions to an IRA may be tax deductible. IRAs are available 
to individuals (and their spouses) who receive compensation or earned income    
whether or not they are active participants in a tax-qualified or               
government-approved retirement plan. An IRA contribution by an individual or    
spouse who participates in a tax-qualified or government-approved retirement    
plan may not be deductible, depending upon the individual's income. Individuals 
also may establish an IRA to receive a "rollover" contribution of distributions 
from another IRA or a qualified plan. Tax advice should be obtained before      
effecting a rollover.                                                           

Exchanges                                                                       

Shareholders may exchange Shares of the Fund for shares of any other
series of the Trust so long as they maintain the respective minimum account     
balance in each Fund in which they own shares. Exchanges between each Fund are  
at net asset value.                                                             

     For federal income tax purposes an exchange is considered to be a sale of
shares on which a shareholder may realize a capital gain or loss. An exchange   
may be made by calling the Transfer Agent at (800) 344-8332 or by mailing       
written instructions to Schroder Capital Funds (Delaware), P.O. Box 446,        
Portland, Maine 04112. Exchange privileges may be exercised only in those states
where shares of the other series of the Trust may legally be sold. Exchange     
privileges may be amended or terminated at any time upon sixty (60) days'       
notice.                                                                         

Redemption of Shares                                                            

    Shares of the Fund are redeemed at their next determined net asset value
after receipt by the Fund (at the address set forth above under "Purchase of    
Shares") of a redemption request in proper form. Redemption requests may be made
between 9:00 a.m. and 6:00 p.m. (Eastern Time) on each Fund Business Day.       
Redemption requests that are received prior to 4:00 p.m. (Eastern Time) will be 
processed at the net asset value determined as of that day. Redemption requests 
that are received after 4:00 p.m. (Eastern Time) will be processed at the net   
asset value determined the next Fund Business Day. See "Net Asset Value" below. 

     By Telephone. Redemption requests may be made by telephoning the Transfer
Agent at the telephone number on the cover page of this Prospectus. A           
shareholder must provide the Transfer Agent with the class of Shares, the dollar
amount or number of shares to be redeemed, shareholder account number, and some 
additional form of identification such as a password. A redemption by telephone 
may be made only if the telephone redemption privilege option has been elected  
on the Account Application or otherwise in writing. In an effort to prevent     
unauthorized or fraudulent redemption requests by telephone, reasonable         
procedures will be followed by the Transfer Agent to confirm that telephone     
instructions are genuine. The Transfer Agent and the Trust generally will not be
liable for any losses due to unauthorized or fraudulent redemption requests, but
may be liable if they do not follow these procedures. Shares for which          
certificates have been issued may not be redeemed by telephone. In times of     
drastic economic or market changes, it may be difficult to make redemptions by  
telephone. If a shareholder cannot reach the Transfer Agent by telephone,       
redemption requests may be mailed or hand-delivered to the Transfer Agent.      

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      Written Requests. Redemptions may be made by letter to the Fund specifying
the class of shares, the dollar amount or number of Shares to be redeemed, and  
the shareholder account number. The letter must also be signed in exactly the   
same way the account is registered (if there is more than one owner of the      
Shares, all must sign) and, in certain cases, signatures must be guaranteed by  
an institution that is acceptable to the Transfer Agent. Such institutions      
include certain banks, brokers, dealers (including municipal and government     
securities brokers and dealers), credit unions and savings associations.        
Notaries public are not acceptable. Further documentation may be requested to   
evidence the authority of the person or entity making the redemption request.   
Questions concerning the need for signature guarantees or documentation of      
authority should be directed to the Fund at the above address or by calling the 
telephone number appearing on the cover of this Prospectus.                     

   If Shares to be redeemed are held in certificate form, the certificates
must be enclosed with the redemption request and the assignment form on the back
of the certificates, (or an assignment separate from the certificates but       
accompanied by the certificates), must be signed by all owners in exactly the   
same way the owners' names are written on the face of the certificates.         
Requirements for signature guarantees and/or documentation of authority as      
described above could also apply. For your protection, the Fund suggests that   
certificates be sent by registered mail.                                        

  Additional Redemption Information. Checks for redemption proceeds will
normally be mailed within seven days. No redemption proceeds will be mailed     
until checks in payment for the purchase of the Shares to be redeemed have been 
cleared, which may take up to 15 calendar days from the purchase date. Unless   
other instructions are given in proper form, a check for the proceeds of a      
redemption will be sent to the shareholder's address of record.                 

   The Fund may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that exchange is closed,
(ii) the SEC has by order permitted such suspension, or (iii) an emergency, (as 
defined by rules of the SEC,) exists making disposal of portfolio investments or
determination of the Fund's net asset value not reasonably practicable.         

  If the Trust Board determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment wholly or    
partly in cash, the Fund may redeem Shares in whole or in part by a distribution
in kind of portfolio securities (from the investment portfolio of the Portfolio 
or of the Fund), in lieu of cash. The Fund will, however, redeem Shares solely  
in cash up to the lesser of $250,000 or 1% of net assets during any 90-day      
period for any one shareholder. In the event that payment for redeemed Shares is
made wholly or partly in portfolio securities, the shareholder may be subject to
additional risks and costs in converting the securities to cash. See "Additional
Purchase and Redemption Information -- Redemption in Kind" in the SAI.          

     The proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal income tax
purposes.                                                                       

     Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem Shares in any account (other than an IRA) if at any
time the account does not have a value of at least $2,000, unless the value of  
the account falls below that amount solely as a result of market activity.      
Shareholders will be notified that the value of the account is less than $2,000 
and be allowed at least 30 days to make an additional investment to increase the
account balance to at least $2,000.                                             

Net Asset Value                                                                 

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  The net asset value per share of the Fund is calculated separately for
each class of Shares of the Fund at 4:00 p.m. (Eastern Time), Monday through    
Friday, each Fund Business Day, which excludes the following U.S. holidays: New 
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor 
Day, Thanksgiving Day and Christmas Day. Net asset value per Share is calculated
by dividing the aggregate value of the Fund's assets less all Fund liabilities, 
if any, by the number of Shares of the Fund outstanding.                        

   Generally, securities that are listed on recognized stock exchanges are
valued at the last reported sale price, on the day when the securities are      
valued (the "Valuation Day"), on the primary exchange on which the securities   
are principally traded. Listed securities traded on recognized stock exchanges  
for which there were no sales on the Valuation Day are valued at the last sale  
price on the preceding trading day or at closing mid-market prices. Securities  
traded in over-the-counter markets are valued at the most recent reported       
mid-market price. 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 Schroder Core Board.                                    

    Trading in securities on non-U.S. exchanges and over-the-counter markets
may not take place on every day that the New York Stock Exchange is open for    
trading. Furthermore, trading takes place in various foreign markets on days on 
which the Fund's net asset value is not calculated. If events materially        
affecting the value of foreign securities occur between the time when their     
price is determined and the time when net asset value is calculated, such       
securities will be valued at fair value as determined in good faith by using    
methods approved by the Schroder Core Board.                                    

All assets and liabilities of the Portfolio denominated in foreign  
currencies are valued in U.S. dollars based on the exchange rate last quoted by 
a major bank prior to the time when the net asset value of the Fund is          
calculated.                                                                     

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              

The Fund                                                                        

  The Fund intends to comply with the provisions of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies. By      
complying therewith, the Fund will not have to pay federal income tax on that   
part of its income that is distributed to shareholders. The Fund intends to     
distribute substantially all of its income and therefore, intends not to be     
subject to federal income tax. Dividends and capital gain distributions on      
Advisor Shares are reinvested automatically in additional Advisor Shares at net 
asset value unless the shareholder has elected in the Account Application or    
otherwise in writing, to receive dividends and other distributions in cash.     

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      After every dividend and other distribution, the value of a Share declines
by the amount of the distribution. Purchases made shortly before a dividend or  
other distribution include in the purchase price the amount of the distribution,
which will be returned to the investor in the form of a taxable distribution.   

   Dividends and other distributions paid by the Fund with respect to both
classes of its shares will be calculated in the same manner and at the same     
time. The per share dividends on Advisor Shares are expected to be lower than   
the per share dividends on Investor Shares as a result of 12b-1 fees and other  
compensation payable to Service Organizations for distribution assistance and   
shareholder servicing for the Advisor Shares.                                   

      Dividends from the Fund's income generally will be taxable to shareholders
as ordinary income, whether dividends are invested in additional Shares or      
received in cash. Distributions by the Fund of any net capital gain will be     
taxable to a shareholder as long-term capital gain regardless of how long the   
shareholder has held the Shares. Each year the Trust will notify shareholders of
the tax status of dividends and other distributions.                            

A redemption of Shares may result in taxable gain or loss to the redeeming      
shareholder, depending on whether the redemption proceeds are more or less than 
the shareholder's basis in the redeemed Shares. If Shares are redeemed at a loss
after being held for six months or less, the loss will be treated as a          
long-term, rather than a short-term, capital loss to the extent of any capital  
gain distributions received on those Shares.                                    

     The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate   
shareholders who do not furnish the Fund with a correct taxpayer identification 
number. Withholding at that rate also is required from dividends and capital    
gain distributions payable to such shareholders who otherwise are subject to    
backup withholding. Depending on the residence of a shareholder for tax         
purposes, distributions from the Fund may also be subject to state and local    
taxes, including withholding taxes. Shareholders should consult their own tax   
advisors as to the tax consequences of their ownership of Shares.               

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The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the SAI   
for further information.                                                        

    In an effort to adhere to certain tax requirements, the Fund may have to
limit its investment activity in some types of instruments.                     

   If the Fund's dividends exceed its taxable income in any year, all or a
portion of the Fund's dividends may be treated as a return of capital to        
shareholders for tax purposes. Any return of capital will reduce the cost basis 
of your shares, which will result in a higher reported capital gain or a lower  
reported capital loss when you sell your shares. Shareholders will be notified  
by the Trust if a distribution included a return of capital.                    

Effect of Foreign Taxes. Foreign governments may impose taxes on the
Portfolio and its investments, which generally reduce the Fund's income.        
However, an offsetting tax credit or deduction may be available to you. If so,  
your tax statement will show more taxable income or capital gain than was       
actually distributed by the Fund but will also show the amount of the available 
offsetting credit or deduction.                                                 

If the Fund is eligible to do so, it intends to elect to permit its 
shareholders to take a credit (or a deduction) for the Fund's share of foreign  
income taxes paid by the Portfolio. If the Fund does make such an election, its 
shareholders would include as gross income in their Federal income tax returns  
both (i) distributions received from the Fund and (ii) the amount that the Fund 
advises is their pro rata portion of foreign income taxes paid with respect to  
or withheld from dividends and interest paid to the Portfolio from its foreign  
investments. Shareholders then would be entitled, subject to certain            
limitations, to take a foreign tax credit against their Federal income tax      
liability for the amount of such foreign taxes or else to deduct such foreign   
taxes as an itemized deduction from gross income.                               

The Portfolio                                                                   

 The Portfolio is not required to pay federal income tax because it is
classified as a partnership for Federal income tax purposes. All interest,      
dividends, gains and losses of the Portfolio will be deemed to have been "passed
through" to the Fund in proportion to the Fund's holdings in the Portfolio,     
regardless of whether such interest, dividends or gains have been distributed by
the Portfolio.                                                                  

    The Portfolio intends to conduct its operations so as to enable the Fund
to qualify as a regulated investment company.                                   

OTHER INFORMATION                                                               

Capitalization and Voting                                                       

     The Trust was organized as a Maryland corporation called Schroder Capital
Funds, Inc. on July 30, 1969, and was reorganized as a Delaware business trust  
on January 9, 1996. The Trust has                                               

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authority to issue an unlimited number of shares of beneficial interest. The    
Trust Board may, without shareholder approval, divide the authorized shares into
an unlimited number of separate portfolios or series (such as the Fund) and may 
divide such portfolios or series into classes of shares (such as the Advisor    
Shares), and the costs of doing so will be borne by the Trust. The Trust        
currently consists of eight separate portfolios, each of which has separate     
investment objectives and policies. The Fund currently consists of two classes  
of shares.                                                                      

      Each share of the Fund is entitled to participate equally in dividends and
other distributions and the proceeds of any liquidation except that, due to the 
differing expenses borne by the classes, dividends and liquidation proceeds for 
each class will likely differ. Shares are fully paid and non-assessable, and    
have no preemptive rights. Shareholders have non-cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
Trustees can elect 100% of the Trustees if they choose to do so. A shareholder  
is entitled to one vote for each full share held (and a fractional vote for each
fractional share held). Each share of the Fund has equal voting rights, except  
that if a matter affects only the shareholders of a particular class only       
shareholders of that class shall have a right to vote. On Trust matters         
requiring shareholder approval, shareholders of the Trust are entitled to vote  
only with respect to matters that affect the interests of the Fund or the class 
of shares they hold, except as otherwise required by applicable law.            

There will normally be no meetings of shareholders to elect Trustees
unless and until such time as less than a majority of the Trustees holding      
office have been elected by shareholders. However, the holders of not less than 
a majority of the outstanding shares of the Trust may remove any person serving 
as a Trustee and the Trust Board will call a special meeting of shareholders to 
consider removal of one or more Trustees if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust.            

From time to time, certain shareholders may own a large percentage of the shares
of the Fund. Accordingly, those shareholders may be able to greatly affect (if  
not determine) the outcome of a shareholder vote.                               

Reports                                                                         

The Trust sends to each Fund shareholder a semi-annual report and an
audited annual report containing the Fund's financial statements.               

Performance                                                                     

The Fund may include quotations of its average annual total return, 
cumulative total return and other performance measures in advertisements or     
reports to shareholders or prospective investors. Average annual total return of
a class of shares is based upon the overall dollar or percentage change in value
of a hypothetical investment each year over specified periods. Average annual   
total returns reflect the deduction of a proportional share of a Fund's expenses
(on an annual basis) and assumes investment and reinvestment of all dividends   
and distributions at NAV. Cumulative total returns are calculated similarly     
except that the total return is aggregated over the relevant period instead of  
annualized.                                                                     

Performance quotations are calculated separately for each class of  

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shares of the Fund. The Fund may also be compared to various unmanaged          
securities indices, groups of mutual funds tracked by mutual fund ratings       
services, or other general economic indicators. Unmanaged indices may assume the
reinvestment of dividends but do not reflect deductions for administrative and  
management costs and expenses.                                                  

 Performance information represents only past performance and does not
necessarily indicate future results. For a description of the methods used to   
determine total return and other performance measures for the Fund, see the SAI.

Custodian and Transfer Agent                                                    

The Chase Manhattan Bank, N.A. is custodian of the Fund's and of the
Portfolio's assets. Forum Financial Corp. serves as the Fund's transfer and     
dividend disbursing agent.                                                      

Shareholder Inquiries                                                           

Inquiries about the Fund, including its past performance, should be 
directed to:                                                                    

Schroder International Fund                 
P.O. Box 446                                
Portland, Maine 04112                       

Information about specific shareholder accounts may be obtained from the        
Transfer Agent by calling (800) 344-8332.                                       

Service Organizations                                                           

    The Glass-Steagall Act and other applicable laws and regulations provide
that banks may not engage in the business of underwriting, selling or           
distributing securities. There is currently no precedent prohibiting banks from 
performing administrative and shareholder servicing functions as Service        
Organizations. However, judicial or administrative decisions or interpretations 
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,    
could prevent a bank Service Organization from continuing to perform all or part
of its servicing activities. If a bank were prohibited from so acting, its      
shareholder clients would be permitted to remain shareholders of the Fund and   
alternative means for continuing the servicing of such shareholders would be    
sought. It is not expected that shareholders would suffer any adverse financial 
consequences as a result of any of these occurrences.                           

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Fund Structure                                                                  

     Classes of Shares. The Fund has two classes of shares, Advisor Shares and
Investor Shares. Investor Shares are offered by a separate prospectus to        
corporations, institutions, and fiduciaries, including fiduciary, agency, and   
custodial clients of bank trust departments, trust companies, and their         
affiliates. Advisor Shares incur more expenses than Investor Shares. Except for 
certain differences, each share of each class represents an undivided,          
proportionate interest in the Fund. Each share of the Fund is entitled to       
participate equally in dividends and other distributions and the proceeds of any
liquidation of the Fund except that, due to the differing expenses borne by the 
two classes, the amount of dividends and other distributions will differ between
the classes. Information about Investor Shares is available from the Fund by    
calling Schroder Advisors at (800) 730-2932.                                    

The Portfolio. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio, which has the same     
investment objective and substantially similar policies as the Fund.            
Accordingly, the Portfolio directly acquires its own securities and the Fund    
acquires an indirect interest in those securities. The Portfolio is a separate  
series of Schroder Core, a business trust organized under the laws of the State 
of Delaware in September 1995. Schroder Core is registered under the 1940 Act as
an open-end, management investment company and currently has four separate      
series. The assets of the Portfolio, a diversified portfolio, belong only to,   
and the liabilities of the Portfolio are borne solely by, the Portfolio and no  
other portfolio of Schroder Core.                                               

The Fund's investment in the Portfolio is in the form of a          
non-transferable beneficial interest. As of March 1, 1997, the Fund is the only 
institutional investor in the Portfolio. The Portfolio may permit other         
investment companies or institutional investors to invest in it. All other      
investors in the Portfolio will invest on the same terms and conditions as the  
Fund and will pay a proportionate share of the Portfolio's expenses.            

The Portfolio normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in the Portfolio will be entitled to    
vote in proportion to its relative beneficial interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other    
applicable law, the Fund will solicit proxies from its shareholders and will    
vote its interest in the Portfolio in proportion to the votes cast by its       
shareholders. If there are other investors in the Portfolio, there can be no    
assurance that any issue that receives a majority of the votes cast by Fund     
shareholders will receive a majority of votes cast by all investors in the      
Portfolio; indeed, if other investors hold a majority interest in the Portfolio,
they could have voting control of the Portfolio.                                

     The Portfolio will not sell its shares directly to members of the general
public. Another investor in the Portfolio, such as an investment company, that  
might sell its shares to members of the general public would not be required to 
sell its shares at the same public offering price as the Fund and could have    
different advisory and other fees and expenses than the Fund. Therefore, Fund   
shareholders may have different returns than shareholders in another investment 
company that invests exclusively in the Portfolio. There is currently no such   
other investment company that offers its shares to members of the general       
public. Information regarding any such funds in the future will be available    
from Schroder Core by calling Forum Financial Corp. at (800) 730-2932.          

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Under federal securities law, any person or entity that signs a     
registration statement may be liable for a misstatement or omission of a        
material fact in the registration statement. Schroder Core, its Trustees and    
certain of its officers are required to sign the registration statement of the  
Trust and may be required to sign the registration statements of certain other  
investors in the Portfolio. In addition, under federal securities law, Schroder 
Core may be liable for misstatements or omissions of a material fact in any     
proxy soliciting material of an investor in Schroder Core, including the Fund.  
Each investor in the Portfolio, including the Trust, will indemnify Schroder    
Core and its Trustees and officers ("Schroder Core Indemnitees") against certain
claims.                                                                         

  Indemnified claims are those brought against Schroder Core Indemnitees
based on a misstatement or omission of a material fact in the investor's        
registration statement or proxy materials. No indemnification need be made,     
however, if such alleged misstatement or omission relates to information about  
Schroder Core and was supplied to the investor by Schroder Core. Similarly,     
Schroder Core will indemnify each investor in the Portfolio, including the Fund,
for any claims brought against the investor with respect to the investor's      
registration statement or proxy materials, to the extent the claim is based on a
misstatement or omission of a material fact relating to information about       
Schroder Core that is supplied to the investor by Schroder Core. In addition,   
each registered investment company investor in the Portfolio will indemnify each
Schroder Core Indemnitee against any claim based on a misstatement or omission  
of a material fact relating to information about a series of the registered     
investment company that did not invest in the Schroder Core. The principal      
purpose of these cross-indemnity provisions is to limit the liability of        
Schroder Core to information that it knows or should know and can control. With 
respect to other prospectuses and other offering documents and proxy materials  
of investors in Schroder Core, its liability is similarly limited to information
about and supplied by it.                                                       

     Certain Risks of Investing in the Portfolio. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the        
Portfolio, if any. For example, if the Portfolio had a large investor other than
the Fund that redeemed its interest in the Portfolio, the Portfolio's remaining 
investors (including the Fund) might, as a result, experience higher pro rata   
operating expenses, thereby producing lower returns.                            

 The Fund may withdraw its entire investment from the Portfolio at any
time, if the Trust Board determines that it is in the best interests of the Fund
and its shareholders to do so. The Fund might withdraw, for example, if there   
were other investors in the Portfolio with power to, and who did by a vote of   
the shareholders of all investors (including the Fund), change the investment   
objective or policies of the Portfolio in a manner not acceptable to the Trust  
Board. A withdrawal could result in a distribution in kind of portfolio         
securities (as opposed to a cash distribution) by the Portfolio. That           
distribution could result in a less diversified portfolio of investments for the
Fund and could affect adversely the liquidity of the Fund's portfolio. If the   
Fund decided to convert those securities to cash, it would likely incur         
brokerage fees or other transaction costs. If the Fund withdrew its investment  
from the Portfolio, the Trust Board would consider appropriate alternatives,    
including the management of the Fund's assets in accordance with its investment 
objective and policies by SCMI, or the investment of all of the Fund's          
investable assets in another pooled investment entity having substantially the  
same investment objective as the Fund. The inability of the Fund to find a      
suitable replacement investment, if the Board decided not to permit SCMI to     
manage the Fund's assets, could have a significant impact on shareholders of the
Fund.                                                                           

     Each investor in the Portfolio, including the Fund, may be liable for all
obligations of the Portfolio. The risk to an investor in the Portfolio of       
incurring financial                                                             

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loss on account of such liability, however, is limited to circumstances in which
the Portfolio is unable to meet its obligations, the occurrence of which SCMI   
considers to be quite remote. Upon liquidation of the Portfolio, investors would
be entitled to share pro rata in the net assets of the Portfolio available for  
distribution to investors.                                                      

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Investment Adviser                                                              
Schroder Capital Management International Inc.                                  
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Administrator & Distributor                                                     
Schroder Fund Advisors Inc.                                                     
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company                        
Two Portland Square                                                             
Portland, Maine  04101                                                          

Custodian                                                                       
The Chase Manhattan Bank, N.A.                                                  
Global Custody Division                                                         
Woolgate House, Coleman Street                                                  
London EC2P 2HD, United Kingdom                                                 

Transfer and Dividend Disbursing Agent                                          
Forum Financial Corp.                                                           
P.O. Box 446                                                                    
Portland, Maine 04112                                                           

Independent Accountants                                                         
Coopers & Lybrand, L.L.P.                                                       
One Post Office Square                                                          
Boston, Massachusetts 02109                                                     

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Table of Contents                                                               

PROSPECTUS SUMMARY........................................................      
EXPENSES OF INVESTING                                                           
IN THE FUND...........................................................  
Fee Table.................................................................      
Example...................................................................      
FINANCIAL HIGHLIGHTS......................................................      
INVESTMENT OBJECTIVE......................................................      
INVESTMENT POLICIES.......................................................      
RISK CONSIDERATIONS.......................................................      
MANAGEMENT OF THE FUND....................................................      
Boards of Trustees........................................................      
Investment Adviser and Portfolio Managers.................................      
Administrative Services...................................................      
Distribution Plan  and Shareholder                                              
Services Plan...........................................................    
Expenses..................................................................      
Portfolio Transactions....................................................      
Code of Ethics............................................................      
INVESTMENT IN THE FUND....................................................      
Purchase of Shares........................................................      
Retirement Plans and Individual                                                 
Retirement Accounts.....................................................    
Exchanges.................................................................      
Redemption of Shares......................................................      
Net Asset Value...........................................................      
DIVIDENDS, DISTRIBUTIONS                                                        
AND TAXES...............................................................    
The Fund..................................................................      
The Portfolio.............................................................      
OTHER INFORMATION.........................................................      
Capitalization and Voting.................................................      
Reports...................................................................      
Performance...............................................................      
Custodian and Transfer Agent..............................................      
Shareholder Inquiries.....................................................      
Service Organizations.....................................................      
Fund Structure............................................................      

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SCHRODER EMERGING MARKETS FUND                                                  
INSTITUTIONAL PORTFOLIO                                                         

Investor Shares                                                                 

This fund seeks to achieve long-term capital appreciation direct or indirect    
investment in equity and debt securities of issuers domiciled or doing business 
in emerging market countries in regions such as Southeast Asia, Latin America,  
and Eastern and Southern Europe. It is designed for investors who seek the      
aggressive growth potential of emerging world markets and are willing to bear   
the special risks of investing in those markets.                                

Schroders                                                       

[GRAPHIC OMITTED]                                                     

Your Window On The World                                                        

Schroder Emerging Markets Fund (the "Fund"), a series of Schroder Capital Funds 
(Delaware) (the "Trust"), seeks to achieve its investment objective by investing
substantially all of its assets in Schroder Emerging Markets Fund Institutional 
Portfolio (the "Portfolio"), a separately managed series of Schroder Capital    
Funds ("Schroder Core"), a non-diversified open-end management                  

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investment company. The Portfolio has an identical investment objective and     
substantially similar investment policies as the Fund. Accordingly, the Fund's  
investment experience will correspond directly with the Portfolio's investment  
experience. (See "Other Information - Fund Structure").                         

This prospectus sets forth concisely the information you should know before     
investing and should be retained for future reference. To learn more about the  
Fund, you may obtain a copy of the Fund's current Statement of Additional       
Information (the "SAI") which is incorporated by reference into this Prospectus.

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The SAI dated March 1, 1997, as amended from time to time, has been filed with  
the Securities and Exchange Commission ("SEC") and is available along with other
related materials for reference on their Internet Web Site (http://www.sec.gov) 
or may be obtained without charge from the Trust by writing to Two Portland     
Square, Portland, Maine 04101 or by calling 1-800-290-9826. The Fund has not    
authorized anyone to provide you with information that is different from what is
contained in this prospectus or in other documents to which this prospectus     
refers you.                                                                     

MUTUAL FUND SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE    
FDIC, THE FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENT AGENCY AND ALSO ARE NOT
OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY BANK OR 
ITS AFFILIATES. MUTUAL FUND INVESTMENTS ARE SUBJECT TO INVESTMENT RISK,         
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.                                       

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

PROSPECTUS                                                                      
MARCH 1, 1997                                                                   

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PROSPECTUS SUMMARY                                                              

This Prospectus offers Investor Class shares ("Investor Shares" or  
"Shares") of the Fund. The Fund is a separately managed, non-diversified series 
of the Trust, an open-end, management investment company registered under the   
Investment Company Act of 1940 (the "1940 Act"). The following summary is       
qualified in its entirety by the more detailed information contained in this    
Prospectus.                                                                     

Objective. Long-term capital appreciation through direct or indirect
investment in equity and debt securities of issuers domiciled or doing business 
in emerging market countries in regions such as Southeast Asia, Latin America,  
and Eastern and Southern Europe. Current income will be incidental to the Fund's
objective.                                                                      

      Investment Adviser. The Portfolio's investment adviser is Schroder Capital
Management International Inc. ("SCMI"), 787 Seventh Avenue, New York, New York  
10019. The Fund (and indirectly its shareholders) bears a pro rata portion of   
the investment advisory fee the Portfolio pays to SCMI. See "Management of the  
Fund - Investment Adviser and Portfolio Managers."                              

      Administrative Services. Schroder Fund Advisors Inc. ("Schroder Advisors")
serves as administrator and distributor of the Fund, and Forum Administrative   
Services, Limited Liability Company ("Forum") serves as the Fund's              
sub-administrator.                                                              

    Purchases and Redemptions of Shares. Shares may be purchased or redeemed
by mail, by bank-wire and through your broker-dealer or other financial         
institution. The minimum initial investment is $250,000. There is no minimum for
subsequent investments. See "Investment in the Fund -- Purchase of Shares" and  
"-- Redemption of Shares." Purchases of Fund shares are subject to a purchase   
charge of 0.50% of the amount invested. Redemptions of Fund shares are subject  
to a redemption charge of 0.50% of the amount invested. See "Investment in the  
Fund -- Purchase of Shares" and " @ Redemption of Shares."                      

     Dividends and Other Distributions. The Fund annually declares and pays as
a dividend substantially all of its net investment income and at least annually 
distributes any net realized long-term capital gain. Dividends and long-term    
capital gain distributions are reinvested automatically in additional Investor  
Shares of the Fund at net asset value unless you elect in your Account          
Application, or otherwise in writing, to receive dividends and other            
distributions in cash. See "Dividends, Distributions and Taxes."                

Risk Considerations.                                                

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Alone, the Fund is not a balanced investment plan. It is intended for investors 
who seek the aggressive growth potential of emerging world markets and are      
willing to bear their special investment risks, including but not limited to    
tightening of exchange controls and expropriation, nationalization or           
confiscation of assets by local governments. The Fund is not intended for       
investors whose objective is assured income or preservation of capital:         
investments in the securities of foreign issuers, particularly in countries with
smaller, emerging capital markets, involve risks in addition to risks associated
with investments in the securities of U.S. issuers.                             

      Of course, as with any mutual fund, there is no assurance that the Fund or
Portfolio will achieve its investment objective. The Fund's net asset value     
("NAV") will vary because the market value of the Portfolio's investments will  
change with changes in the value of the securities in which the Portfolio       
invests and with changes in market conditions, interest rates, currency rates,  
or political or economic situations. When you sell your shares, they may be     
worth more or less than what you paid for them. For further information, see    
"Risk Considerations."                                                          

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 FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
Please call for complete information and to obtain a prospectus.
 Please read the prospectus carefully before you invest.

Schroder Capital Funds (Delaware) (1-800-290-9826)                              
Schroder International Fund                                                     
Schroder Emerging Markets Fund--                                                
Institutional Portfolio                                                   
Schroder International Smaller Companies Fund                                   
Schroder U.S. Smaller Companies Fund                                            
Schroder U.S. Equity Fund                                                       
Schroder Series Trust (1-800-464-3108)                                          
Schroder Equity Value Fund                                                      
Schroder Small Capitalization Value Fund                                        
Schroder High Yield Income Fund                                                 
Schroder Investment Grade Income Fund                                           
Schroder Short-Term Investment Fund                                             

EXPENSES OF INVESTING IN THE FUND                                               

Fee Table                                                                       

   The table below is intended to assist you in understanding the expenses
that an investor in Investor Shares of the Fund would incur. The Annual Fund    
Operating Expenses have been restated to reflect projected fees, expenses and   
waivers for the current fiscal year.                                            

Shareholder Transaction Expenses                                                

   Maximum Sales Load Imposed on Purchase ............................  None
   Maximum Sales Load Imposed on Reinvested Dividends.................  None
   Deferred Sales Load................................................  None
    Purchase Charge (based on amount invested)(1)........................0.50%
    Redemption Charge (based on net asset value of shares redeemed)(1).  0.50%

Annual Fund Operating Expenses (as a percentage of average net assets)(2)       

    Management Fees (after fee waivers)(3)(4)..........................  0.95%
   12b-1 Fees.........................................................  None
    Other Expenses.....................................................  0.50%
    Total Fund Operating Expenses(4)...................................  1.45%

  (1) The Purchase Charge and the Redemption Charge are paid to the Fund
     and are imposed on all purchases and redemptions of Shares except
 for Shares purchased through the reinvestment of dividends or
     distributions. See "Investment in the Fund -- Purchase of Shares"
and "-- Redemption of Shares."                              

  (2) Based on the Fund's expenses for the fiscal year ended October 31,
        1996. The Fund's expenses include the Fund's pro rata portion of all
operating expenses of the Portfolio.                        

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   (3) Management Fees reflect the fees paid by the Portfolio and the Fund
for investment advisory and administrative services.        
(4) Without fee waivers and expense reimbursements, Management Fees,
      Other Expenses and Total Operating Expenses would be 1.25%, 0.45%,
and 1.70%, respectively.                                    
 (5) SCMI and Schroder Advisors have voluntarily undertaken to waive a
        portion of their fees and assume certain expenses of the Fund during
       the current fiscal year in order to limit the Fund's total expenses
     to 1.45% of the Fund's average daily net assets. This undertaking
      cannot be withdrawn except by a majority vote of the Trust's Board
      of Trustees. See "Management of the Fund -- Expenses." Without fee
        waivers, Management Fees and Total Operating Expenses would be 1.10%
and 1.60%, respectively.                                    

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Example                                                                         

   The table below indicates how much you would pay in total expenses on a
$1,000 investment in the Fund, assuming (1) a 5% annual return; (2) reinvestment
of all dividends and other distributions; and (3) imposition of the purchase and
redemption charge. The example is based on the expenses listed above. The       
example should not be considered a representation of past or future expenses or 
returns; actual expenses or returns may vary from those shown. The 5% annual    
return is not a prediction of the Fund's return, but is the percentage required 
by the SEC for use in this example.                                             

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1 Year                                                        
Assuming redemptions ...........................  $ 25  
Assuming no redemptions ........................  $ 20  
3 Years                                                       
Assuming redemptions ...........................  $ 56  
Assuming no redemptions ........................  $ 51  
5 Years                                                       
Assuming redemptions ...........................  $ 90  
Assuming no redemptions ........................  $84   
10 Years                                                      
Assuming redemptions ..........................  $185 
Assuming no redemptions .......................  $178 

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FINANCIAL HIGHLIGHTS                                                            

     The financial highlights of the Fund are presented below to assist you in
evaluating per share performance of Investor Shares of the Fund for the periods 
shown. This information has been audited by Coopers & Lybrand L.L.P.,           
independent accountants to the Fund. The Fund's financial statements for the    
year ended October 31, 1996, and the related independent accountants' report are
contained in the Fund's Annual Report to Shareholders and are incorporated by   
reference into the SAI. Further information about the performance of the Fund is
contained in the Annual Report, which may be obtained without charge by writing 
the Fund at Two Portland Square, Portland, Maine 04101 or by calling            
1-800-290-9826.                                                                 

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                                                        [Enlarge/Download Table]


                                                             For the Year Ended  March 31, 1995 (a)
                                                                October 31,          Through       
                                                                  1996 (b)       October 31, 1995  
                                                             ------------------  ------------------
                                                                                                   
Net Asset Value, Beginning of period                              $10.63              $10.00       
                                                                  ------              ------       
Investment Operations:                                                                             
     Net investment Income                                        0.02 (c)              0.02       
     Net realized Gain (Loss)                                     0.43 (d)              0.61       
                                                                  ------              ------       
Total from Investment Operations                                    0.45                0.63       
                                                                  ------              ------       
     Distributions from Net Investment Income                      (0.02)               --         
                                                                  ------              ------       
     Distributions from Realized Capital Gain                                                      
Total Distributions                                                                                
Net Asset Value, End of period                                    $11.06              $10.63       
                                                                  ------              ------       
Total Return (e)                                                    4.22%               6.30%      
                                                                  ======              ======       
Ratios/Supplementary Data:                                                                         
     Net Assets, End of period (Thousands)                      $167,570             $18,423       
     Ratio of Expenses to Average Net Assets after waivers          1.60%(c)            1.58%(f)   
     Ratio of Net Investment Income to Average Net Assets                                          
        after waivers                                               0.36%(c)            0.46%(f)   
     Ratio of Expenses to Average Net Assets before waivers                                        
                                                                    1.71%(c)            2.45%(f)   
     Ratio of Net Investment Income to Average Net Assets                                          
        before waivers                                              0.25%(c)          (0.41)%(f)   
     Portfolio Turnover Rate (g)                                  102.70%              44.10%      
     Average Brokerage Commissions (h)                            $0.0008               N.A.       

(a) Commencement of operations.                                                 
(b) On May 17, 1996, the Fund began offering two classes of shares, Investor    
Shares and Advisor Shares, and all then outstanding shares of the Fund  
were converted to Investor Shares.                                      
(c) Includes the Fund's proportionate share of income and expenses of the       
Portfolio.                                                              
(d) The amount shown for a share outstanding does not correspond with the       
aggregate net gain (loss) on investments for the period ended due to the
 timing of sales and repurchases of Fund shares in relation to fluctuating
market values of the investments of the Fund.                           
(e) Total return calculation does not include the purchase or redemption fee    
of 0.50%, respectively.                                                 
(f) Annualized.                                                                 
(g) Portfolio turnover rate represents the rate of portfolio activity. The      
rate for year ended October 31, 1996, represents the portfolio turnover 
rate of the Portfolio.                                                  
(h) Amount represents the average commission per share paid to brokers on the   
purchase and sale of the Portfolio's investment portfolio securities.   

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INVESTMENT OBJECTIVE                                                            

The investment objective of the Fund is to seek to achieve long-term
capital appreciation through direct or indirect investment in equity and debt   
securities of issuers domiciled or doing business in emerging market countries  
in regions such as Southeast Asia, Latin America, and Eastern and Southern      
Europe. Current income will be incidental to the Fund's objective.              

The Fund is designed for investors who seek the aggressive growth   
potential of emerging markets and are willing to bear the special risks of      
investing a portion of their assets in those markets. The Fund is not a complete
investment program and investments in the securities of foreign issuers         
generally involve risks in addition to the risks associated with investments in 
the securities of U.S. issuers. The Fund is not intended for investors whose    
objective is assured income or preservation of capital. See "Risk               
Considerations."                                                                

     The Fund currently seeks to achieve its investment objective by investing
all of its investable assets in the Portfolio, which has substantially the same 
investment objective and substantially similar policies as the Fund. There can  
be no assurance that the Fund or Portfolio will achieve its investment          
objective.                                                                      

INVESTMENT POLICIES                                                             

   Although the following information describes the investment policies of
the Portfolio and the responsibilities of Schroder Core's Board of Trustees (the
"Schroder Core Board"), it applies equally to the Fund and the Trust's Board of 
Trustees (the "Trust Board"). Additional information concerning the investment  
policies of the Fund and the Portfolio is contained in the SAI.                 

     The investment objective, and the investment policies of the Fund and the
Portfolio that are designated as fundamental, may not be changed without        
approval of the holders of a majority of the outstanding voting securities of   
the Portfolio. A majority of outstanding voting securities means the lesser of  
(i) 67% of the shares present or represented at a shareholder meeting at which  
the holders of more than 50% of the outstanding shares are present or           
represented, or (ii) more than 50% of outstanding shares. Non-fundamental       
investment policies may be changed by the Schroder Core Board without approval  
of the investors in the Portfolio.                                              

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     Under normal market conditions, the Portfolio will invest at least 65% of
its total assets in emerging market equity and debt securities, including common
stocks; preferred stocks; convertible preferred stocks; stock rights and        
warrants; convertible debt securities; and non-convertible debt securities.     
(Investments in stock rights and warrants will not be considered for purposes of
determining compliance with this policy.) The Portfolio may invest up to 35% of 
its total assets in high-risk debt securities that are unrated or rated below   
investment grade. (See "Risk Considerations" below). Under certain              
circumstances, the Portfolio may invest indirectly in emerging market securities
by investing in other investment companies or vehicles. (See "Risk              
Considerations -- Investment in Other Investment Companies or Vehicles" below.) 

In recent years, many emerging market countries have begun programs of economic 
reform: removing import tariffs, dismantling trade barriers, deregulating       
foreign investment, privatizing state-owned industries, permitting the value of 
their currencies to float against the dollar and other major currencies, and    
generally reducing the level of state intervention in industry and commerce.    
Important intra-regional economic integration also holds the promise of greater 
trade and growth. At the same time, significant progress has been made in       
restructuring the heavy external debt burden that certain emerging market       
countries accumulated during the 1970s and 1980s. While there is no assurance   
that these trends will continue, the Portfolio's investment adviser will seek   
out attractive investment opportunities in these countries. The Portfolio may   
acquire emerging market securities that are not denominated in emerging market  
currency.                                                                       

"Emerging market" countries are all those not included in the Morgan
Stanley Capital International World Index ("MSCI World") of major world         
economies. If, however, the investment adviser determines that the economy of a 
MSCI World-listed country is an emerging market economy, the adviser may include
such country in the emerging market category. The following countries are       
currently excluded from the Portfolio's emerging market category: Australia,    
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy,    
Japan, Malaysia, Netherlands, New Zealand, Norway, Singapore, Spain, Sweden,    
Switzerland, United Kingdom, and the United States of America. The Portfolio    
will not necessarily seek to diversify investments on a geographic basis and may
invest more than 25% of its total assets in issuers located in any one country. 
(See "Risk Considerations -- Geographic Concentration.")                        

An issuer of a security will be considered to be domiciled or doing 
business in an emerging market when (1) it is organized under the laws of an    
emerging market country; (2) its primary securities trading market is in an     
emerging market country; (3) in the judgment of the investment adviser, at least
50% of the issuer's revenues or profits are derived from goods produced or sold,
investments made, or services performed in emerging market countries; or (4) it 
has at least 50% of its assets situated in emerging market countries. The       
Portfolio may consider investment companies to be located in the country or     
countries in which they primarily invest.                                       

      The following specific policies and limitations are considered at the time
of any purchase; SCMI may not buy these instruments or use these techniques     
unless it believes that they are consistent with the Portfolio's objective.     

     Common and Preferred Stock and Warrants. The Portfolio's investments will
consist primarily of the common or preferred stock of established emerging      
market companies that are listed on recognized securities exchanges or traded in
other established markets. However, the Portfolio may make limited investment in
convertible preferred stock, warrants and stock rights.                         

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    Common stockholders are the owners of the company issuing the stock and,
accordingly, vote on various corporate governance matters such as mergers. They 
are not creditors of the company, but rather, upon liquidation of the company   
they would be entitled to their pro rata share of the company's assets after    
creditors (including fixed income security holders) and preferred stockholders  
(if any) are paid. Preferred stock is a class of stock having a preference over 
common stock as to dividends and, generally, as to the recovery of investment. A
preferred stockholder is also a shareholder and not a creditor of the company.  
Equity securities owned by the Portfolio may be traded in the over-the counter  
market or on a securities exchange, but are not traded every day or in the      
volume typical of securities traded on a major U.S. national securities         
exchange. As a result, disposition by the Portfolio of a security to meet       
withdrawals by interest holders may require the Portfolio to sell these         
securities at a discount from market prices, to sell during periods when        
disposition is not desirable, or to make many small sales over a lengthy period 
of time. The market value of all securities, including equity securities, is    
based upon the market's perception of value and not necessarily the "book value"
of an issuer or other objective measure of a company's worth.                   

    Convertible preferred stock generally may be converted at a stated price
within a specific amount of time into a specified number of shares of common    
stock. A convertible security entitles the holder to receive the dividend paid  
on preferred stock until the convertible security is converted or exchanged.    
Before conversion, convertible securities have characteristics similar to       
non-convertible debt securities in that they ordinarily provide a stream of     
income with generally higher yields than those of common stocks of the same or  
similar issuers. These securities are usually senior to common stock in a       
company's capital structure, but usually are subordinated to non-convertible    
debt securities. In general, the value of a convertible security is the higher  
of its investment value (its value as a fixed income security) and its          
conversion value (the value of the underlying shares of common stock if the     
security is converted). As a fixed income security, the value of a convertible  
security generally increases when interest rates decline and generally decreases
when interest rates rise. The value of a convertible security is, however, also 
influenced by the value of the underlying common stock.                         

    The Portfolio may also invest in warrants, which are options to purchase
an equity security at a specified price (usually representing a premium over the
applicable market value of the underlying equity security at the time of the    
warrant's issuance) and usually during a specified period of time.              

American Depository Receipts ("ADRs"). Due to the absence of established        
securities markets in certain emerging market countries and restrictions in     
certain countries on direct investment by foreign entities, the Portfolio may   
invest in certain emerging market issuers through the purchase of sponsored and 
unsponsored American Depository Receipts ("ADRs") or other similar              

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securities, such as American Depository Shares, Global Depository Shares or     
International Depository Receipts. ADRs are receipts typically issued by U.S.   
banks evidencing ownership of the underlying securities into which they are     
convertible. These securities may or may not be denominated in the same currency
as the underlying securities. Unsponsored ADRs may be created without the       
participation of the foreign issuer. Holders of unsponsored ADRs generally bear 
all the costs of the ADR facility, whereas foreign issuers typically bear       
certain costs in a sponsored ADR. The bank or trust company depository of an    
unsponsored ADR may be under no obligation to distribute shareholder            
communications received from the foreign issuer or to pass through voting       
rights.                                                                         

Debt Securities. The Portfolio may seek capital appreciation through
investment in emerging market convertible or non-convertible debt securities.   
Capital appreciation in debt securities may arise as a result of a favorable    
change in relative foreign exchange rates, in relative interest rate levels, or 
in the creditworthiness of issuers. The receipt of income from such debt        
securities is incidental to the Portfolio's objective of long-term capital      
appreciation. Such income can be used, however, to offset the operating expenses
of the Portfolio. In accordance with its investment objective, the Portfolio    
will not seek to benefit from anticipated short-term fluctuations in currency   
exchange rates. The Portfolio also may invest to a certain extent in debt       
securities in order to participate in debt-to-equity conversion programs        
incident to corporate reorganizations.                                          

     Debt securities are generally subject to two kinds of risk -- Credit risk
and market risk. Credit risk refers to the ability of the debtor, and any other 
obligor, to pay principal and interest on the debt as it becomes due. The       
Portfolio may, from time to time, invest in debt securities with high risk and  
high yields (as compared to other debt securities meeting the Portfolio's       
investment criteria).                                                           

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The debt securities in which the Portfolio invests may be unrated, but will not 
be in default at the time of purchase. Market risk refers to the tendency of the
value of debt securities to vary inversely with interest rate changes. Certain  
debt instruments may also be subject to extension risk, which refers to change  
in total return on a debt instrument resulting from extension or abbreviation of
the instrument's maturity.                                                      

The Portfolio may invest in debt securities issued or guaranteed by 
emerging market governments (including countries, provinces and municipalities) 
or their agencies and instrumentalities ("governmental entities"); debt         
securities issued or guaranteed by international organizations designated or    
supported by multiple foreign governmental entities (which are not obligations  
of foreign governments) to promote economic reconstruction or development; and  
debt securities issued by corporations or financial institutions.               

Brady Bonds. The Portfolio may invest a portion of its assets in Brady Bonds,   
which are securities created through the exchange of existing commercial bank   
loans to sovereign entities for new obligations in connection with debt         
restructuring (under a debt restructuring plan introduced by former U.S.        
Secretary of the Treasury, Nicholas F. Brady). Brady Bonds have been issued only
recently, and therefore do not have a long payment history. Brady Bonds may have
collateralized and uncollateralized components, are issued in various currencies
and are actively traded in the over-the-counter secondary market. Brady Bonds   
are not considered U.S. Government securities. In light of the residual risk    
associated with the uncollateralized portions of Brady Bonds and, among other   
factors, the history of defaults with respect to commercial bank loans by public
and private entities of countries issuing Brady Bonds, investments in Brady     
Bonds are considered speculative. Brady Bonds acquired by the Portfolio could be
subject to restructuring arrangements or to requests for new credit, which could
cause the Portfolio to suffer a loss of interest or principal on its holdings.  
(For further information see "Brady Bonds," in the Statement of Additional      
Information.)                                                                   

      Investment in Other Investment Companies or Vehicles. The Portfolio may be
able to invest in certain emerging markets solely or primarily through          
governmentally authorized investment vehicles or companies. Pursuant to the 1940
Act, the Portfolio may invest up to 10% of its total assets                     

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in the shares of other investment companies and up to 5% of its total assets in 
any one investment company, as long as each investment does not represent more  
than 3% of the outstanding voting stock of the investment company at the time of
such investment.                                                                

    When investing through investment companies the Fund may pay substantial
premiums above such investment companies' net asset value per share. Such       
investments are subject to limitations under the 1940 Act and market            
availability. The Portfolio does not intend to invest in other investment       
companies unless, in the judgment of SCMI, the potential benefits of such       
investment justify the payments of any applicable premiums or sales charges. As 
a shareholder in an investment company, the Portfolio would bear its ratable    
share of the investment company's expenses, including its advisory and          
administrative fees. At the same time, the Portfolio would continue to pay its  
own fees and expenses.                                                          

  Temporary Defensive Investments. For temporary defensive purposes, the
Portfolio may invest without limitation in (or enter into repurchase agreements 
maturing in seven days or less with U.S. banks and broker-dealers with respect  
to) short-term debt securities, including commercial paper, U.S. Treasury bills,
other short-term U.S. Government securities, certificates of deposit, and       
bankers' acceptances of U.S. banks. The Portfolio also may hold cash and time   
deposits denominated in any major foreign currency in foreign banks. See the SAI
for further information about these securities.                                 

     Repurchase Agreements. The Portfolio may invest in repurchase agreements,
which are a means of investing monies for a short period, whereby a seller -- a 
U.S. bank or recognized broker-dealer -- sells securities to the Portfolio and  
agrees to repurchase them (at the Portfolio's cost plus interest) within a      
specified period (normally one day). The value of the underlying securities     
purchased by the Portfolio is monitored at all times by SCMI to ensure that the 
total value of the securities equals or exceeds the value of the repurchase     
agreement. The Portfolio's custodian bank holds the securities until they are   
repurchased. If the seller defaults under a repurchase agreement, the Portfolio 
may have difficulty exercising its rights to the underlying securities and may  
incur costs and experience time delays in disposing of them. To evaluate        
potential risk, SCMI reviews the creditworthiness of banks and dealers with     
which the Portfolio enters into repurchase agreements.                          

      Foreign Exchange Contracts. Changes in currency exchange rates will affect
the U.S. dollar values of securities denominated in foreign currencies. The rate
of exchange between the U.S. dollar and other currencies fluctuates in response 
to forces of supply and demand in the foreign exchange markets. These forces are
affected by the international balance of payments and other economic and        
financial conditions, government intervention, speculation, and other factors,  
many of which may be difficult (if not impossible) to predict. When investing in
foreign securities, the Portfolio usually effects currency exchange transactions
on a spot (i.e., cash) basis at the spot rate prevailing in the foreign exchange
market. The Portfolio incurs foreign exchange expenses in converting assets from
one currency to another.                                                        

      The Portfolio may enter into forward contracts for the purchase or sale of
foreign currency (i) to "lock in" the U.S. dollar price of the securities       
denominated in a foreign currency or the U.S. dollar value of interest and      
dividends to be paid on such securities or (ii) to hedge against the possibility
that a foreign currency may suffer a decline against the U.S. dollar. A forward 
currency contract is an obligation to purchase or sell a specific currency at a 
future date (which may be any fixed number of days from the date of the contract
agreed upon by the parties) at a price set at the time of the contract. This    
method of attempting to hedge against a decline in the value of a currency does 
not eliminate fluctuations in the underlying prices of securities and exposes   
the Portfolio to the risk that the counterparty is unable to perform. Although  
the strategy of engaging in foreign currency transactions could reduce the risk 
of loss due to a decline in                                                     

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the value of the hedged currency, it could also limit the potential gain from an
increase in the value of the currency. The Portfolio does not intend to maintain
a net exposure to such contracts if the fulfillment of obligations under such   
contracts would obligate it to deliver an amount of foreign currency in excess  
of the value of its portfolio securities or other assets denominated in the     
currency. The Portfolio will not enter into these contracts for speculative     
purposes and will not enter into non-hedging currency contracts. The Portfolio  
will generally not enter into a forward contract with a term of greater than one
year. Forward contracts are not exchange traded, and there can be no assurance  
that a liquid market will exist at a time when the Portfolio seeks to close out 
a forward contract. Currently, only a limited market, if any, exists for hedging
transactions relating to currencies in certain emerging markets or to securities
of issuers domiciled or principally engaged in business in certain emerging     
markets. This may limit the Portfolio's ability to effectively hedge its        
investments in those markets. These contracts involve a risk of loss if SCMI    
fails to predict currency values. The Portfolio has no plan to enter into       
currency futures or options contracts, but may do so in the future. See "Risk   
Considerations--Currency Fluctuations and Devaluations."                        

  Illiquid and Restricted Securities. The Portfolio will not purchase or
otherwise acquire any security if, as a result, more than 15% of its net assets 
(taken at current value) would be invested in securities that are illiquid (i)  
by virtue of the absence of a readily available market or (ii) because of legal 
or contractual restrictions on resale ("restricted securities"). There may be   
undesirable delays in selling illiquid securities at prices representing their  
fair value. This policy includes over-the-counter options held by the Portfolio 
and the portion of the assets used to cover such options. The limitation on     
investing in restricted securities does not include securities that may not be  
resold to the general public (pursuant to Rule 144A under the Securities Act of 
1933, as amended) but may be resold to qualified institutional purchasers. If   
SCMI determines that a "Rule 144A security" is liquid pursuant to guidelines    
adopted by the Schroder Core Board, the security will not be deemed illiquid.   
These guidelines take into account trading activity for the securities and the  
availability of reliable pricing information, among other factors. If there is a
lack of trading interest in a particular Rule 144A security, that security may  
become illiquid, which could affect the Portfolio's liquidity. See "Investment  
Policies -- Illiquid and Restricted Securities" in the SAI for further          
information.                                                                    

      Loans of Portfolio Securities. The Portfolio may lend portfolio securities
(otherwise than as occurs in repurchase transactions) to brokers, dealers and   
other financial institutions meeting specified credit conditions if the loan is 
collateralized in accordance with applicable regulatory requirements and if,    
after any loan, the value of the securities loaned does not exceed 25% of the   
value of the Portfolio's total assets. By so doing, the Portfolio attempts to   
earn interest income. In the event of the other party's bankruptcy, the         
Portfolio could experience delays in recovering the securities it lent; if, in  
the meantime, the value of the securities the Portfolio lent has increased, the 
Portfolio, and thus the Fund, could experience a loss.                          

 The Portfolio may lend its securities if it maintains in a segregated
account liquid assets equal to the current market value of the securities loaned
(including accrued interest thereon) plus the loan interest payable to the      
Portfolio. Any securities that the Portfolio receives as collateral will not    
become part of its portfolio at the time of the loan; and, in the event of a    
default by the borrower, the Portfolio will (if permitted by law) dispose of    
such collateral except for such part thereof that is a security in which the    
Portfolio is permitted to invest. While the                                     

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securities are on loan, the borrower will pay the Portfolio any accrued income  
on those securities, and the Portfolio may invest the cash collateral and earn  
income or receive an agreed upon fee from a borrower that has delivered cash    
equivalent collateral. Cash collateral received by the Portfolio will be        
invested in U.S. Government securities and liquid high grade debt obligations.  
The value of securities loaned will be marked to market daily. Portfolio        
securities purchased with cash collateral are subject to possible depreciation. 
Loans of securities by the Portfolio will be subject to termination at the      
Portfolio's or the borrower's option. The Portfolio may pay reasonable          
negotiated fees in connection with loaned securities, so long as such fees are  
set forth in a written contract and approved by the Schroder Core Board. See    
"Loans of Portfolio Securities" in the SAI for further information on securities
loans.                                                                          

Options and Futures Transactions. Although the Portfolio does not   
presently intend to do so, it may (a) write covered call options on portfolio   
securities and the U.S. dollar and emerging market currencies, without limit;   
(b) write covered put options on portfolio securities and the U.S. dollar and   
emerging market currencies with the limitation that the aggregate value of the  
obligations underlying the puts determined as of the date the options are sold  
will not exceed 50% of the Portfolio's net assets; (c) purchase call and put    
options in amounts up to 5% of its total assets; and (d)(i) purchase and sell   
futures contracts that are traded on U.S. and foreign commodity exchanges on    
underlying portfolio securities, any emerging market currency, U.S. and emerging
market fixed-income securities and such indices of U.S. or emerging market      
equity or fixed-income securities as may exist or come into being and (ii)      
purchase and write call and put options on such futures contracts, in all cases 
involving such futures contracts or options on futures contracts for hedging    
purposes only, and without limit, except that the Portfolio may not enter into  
futures contracts or purchase related options if, immediately thereafter, the   
amount committed to margin plus the amount paid for premiums for unexpired      
options on futures contracts generally exceeds 5% of the value of the           
Portfolio's total assets. All of the foregoing are referred to as "Hedging      
Instruments."                                                                   

 In general, the Portfolio may use Hedging Instruments: (1) to protect
against declines in the market value of the Portfolio's portfolio securities or 
stock index futures, and the currencies in which they are denominated, or (2) to
establish a position in securities markets as a temporary substitute for        
purchasing particular equity securities. The Portfolio will not use Hedging     
Instruments for speculation. Hedging Instruments have certain risks associated  
with them including: (a) the possible failure of such instruments as hedging    
techniques in cases where the price movement of the securities underlying the   
options or futures does not follow the price movements of the portfolio         
securities subject to the hedge; (b) potentially unlimited loss associated with 
futures transactions and the possible lack of a liquid secondary market for     
closing out a futures position; and (c) possible losses resulting from the      
inability of the Portfolio's investment adviser to predict the direction of     
stock prices, interest rates and other economic factors. In addition, only a    
limited market, if any, currently exists for hedging transactions relating to   
currencies in many emerging markets or to securities of issuers domiciled or    
principally engaged in business in emerging markets. This may limit the         
Portfolio's ability to effectively hedge its investments in such emerging market
countries. The Hedging Instruments the Portfolio may use and the risks          
associated with them are described in greater detail under "Options and Futures 
Transactions" in the SAI.                                                       

    When-Issued and Delayed Delivery Securities and Forward Commitments. The
Portfolio may purchase securities on a when-issued or delayed delivery basis or 
may purchase or sell securities on a forward commitment basis. When such        
transactions are negotiated, the price is fixed at the time of the commitment,  
but delivery and payment may take place a month or more after the date of the   
commitment. There is no overall limit on the percentage of the Portfolio's      
assets that may be committed to the purchase of securities on a when-issued,    
delayed delivery or forward commitment basis. An increase in the percentage of  
the Portfolio's assets committed to the purchase of securities on a when-issued,
delayed delivery or forward commitment basis may increase the volatility of the 
Portfolio's net asset value.                                                    

    When, As and If Issued Securities. The Portfolio may purchase securities
on a "when, as and if issued" basis under which the issuance of the security    
depends upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization, leveraged buyout or debt restructuring. If the        
anticipated event does not occur and the securities are not issued, the         
Portfolio will have lost an investment opportunity. There is no overall limit to
the percentage of the Portfolio's assets that may be committed to               

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the purchase of securities on a "when, as and if issued" basis. An increase in  
the percentage of the Portfolio's assets committed to the purchase of securities
on a "when, as and if issued" basis may increase the volatility of its net asset
value.                                                                          

RISK CONSIDERATIONS                                                             

Foreign Investments. All investments, domestic and foreign, involve risk.       
Investment in the securities of foreign issuers may involve risks in addition to
those normally associated with investments in the securities of U.S. issuers.   
While the Portfolio will generally invest only in securities of companies and   
governments in countries that SCMI considers both politically and economically  
stable, all foreign investments are subject to risks of foreign political and   
economic instability, adverse movements in foreign exchange rates, the          
imposition or tightening of exchange controls, or other limitations on          
repatriation of foreign capital. Foreign investments are subject to the risk of 
changes in foreign governmental attitudes towards private investment that could 
lead to nationalization, increased taxation or confiscation of Portfolio assets.

   Moreover, (i) dividends payable on foreign securities may be subject to
foreign withholding taxes, thereby reducing the income earned by the Portfolio; 
(ii) commission rates payable on foreign portfolio transactions are generally   
higher than in the United States; (iii) accounting, auditing and financial      
reporting standards differ from those in the United States, which means that    
less information about foreign companies may be available than is generally     
available about issuers of comparable securities in the U.S.; (iv) foreign      
securities often trade less frequently and with lower volume than U.S.          
securities and consequently may exhibit greater price volatility; and (v)       
foreign securities trading practices, including those involving securities      
settlement, may expose the Portfolio to increased risk in the event of a failed 
trade or the insolvency of a foreign broker-dealer or registrar.                

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      Regulation and Liquidity of Markets. Government supervision and regulation
of exchanges and brokers in emerging market countries is typically less         
extensive than in the United States. These markets may have different clearance 
and settlement procedures, and in certain cases, settlements have not kept pace 
with the volume of securities transactions, making them difficult to conduct.   
Delays in settlement could adversely affect or interrupt the Portfolio's        
intended investment program or result in investment losses due to intervening   
declines in security values.                                                    

     Securities markets in emerging market countries are substantially smaller
than U.S. securities markets and have substantially lower trading volume,       
resulting in diminished liquidity and greater price volatility. Reduced         
secondary market liquidity may make it more difficult for the Portfolio to      
determine the value of its portfolio securities or dispose of particular        
instruments when necessary. Brokerage commissions and other transaction costs on
foreign securities exchanges are also generally higher.                         

      Emerging Markets. In any emerging market country, there is the possibility
of expropriation of assets, confiscatory taxation, nationalization of companies 
or industries, foreign exchange controls, foreign investment controls on daily  
stock market movements, default in foreign government securities, political or  
social instability, or diplomatic developments that could affect investments in 
those countries. In the event of expropriation, nationalization or other        
confiscation, the Portfolio could lose its entire investment in a country. The  
economies of developing countries generally are heavily dependent upon          
international trade and, accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative  
currency values and other protectionist measures imposed or negotiated by the   
countries with which they trade. There may also be less monitoring and          
regulation of emerging markets and the activities of brokers there. Investing   
may require that the Portfolio adopt special procedures, seek local government  
approvals or take other actions that may incur costs for the Portfolio.         

Certain emerging market countries may restrict investment by foreign
entities by limiting the size of foreign investment in certain issuers;         
requiring prior approval of foreign investment by the government; imposing      
additional tax on foreign investors; or limiting foreign investors to specific  
classes of securities of an issuer that have less advantageous rights (with     
regard to price or convertibility, for example) than classes available to       
domiciliaries of the country. These restrictions or controls may at times limit 
or preclude investment in certain securities and may increase the costs and     
expenses of the Portfolio.                                                      

     Currency Fluctuations and Devaluations. Because the Portfolio will invest
heavily in non-U.S. currency-denominated securities, changes in foreign currency
exchange rates will affect the value of the Portfolio's investments. A decline  
against the dollar in the value of currencies in which the Portfolio's          
investments are denominated will result in a corresponding decline in the dollar
value of the Portfolio's assets. This risk is heightened in some emerging market
countries. Some emerging market countries may also have managed currencies that 
do not freely float against the dollar.                                         

The Portfolio is required to distribute substantially all of its    
investment income in U.S. dollars. Because most of the Portfolio's income will  
be received and realized in foreign currencies, a decline in the value of a     
particular foreign currency against the U.S. dollar that occurs after the       
Portfolio's income has been earned may require the Portfolio to liquidate some  
portfolio securities to acquire sufficient U.S. dollars to make such            
distributions. Similarly, if the exchange rate declines between the time the    
Portfolio incurs expenses in U.S. dollars and the time such expenses are paid,  
the Portfolio may be required to liquidate additional foreign securities to     
purchase the U.S. dollars required to meet such expenses.                       

      Inflation. Several emerging market countries have experienced high, and in
some periods extremely high, rates of inflation in recent years. Inflation and  
rapid fluctuations in inflation rates may adversely affect these countries'     
economies and securities markets. Further, inflation accounting rules in some   
emerging market countries require, for companies that keep accounting records in
the local currency, that certain assets and liabilities be restated on the      
company's balance sheet in order to express items in terms of currency of       
constant purchasing power. Inflation                                            

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accounting may indirectly generate losses or profits for certain emerging market
companies.                                                                      

 Non-Diversified Investments. Because suitable investments in emerging
market countries may be limited, the Portfolio, like the Fund, has classified   
itself as a "non-diversified investment company" under the 1940 Act so that it  
may invest more than 5% of its total assets in the securities of a single       
issuer. This classification may not be changed without a shareholder vote.      
However, so that the Portfolio may continue to qualify as a "regulated          
investment company" under Subchapter M of the Internal Revenue Code of 1986, as 
amended at the close of each quarter of the taxable year, (i) not more than 25% 
of the market value of the Portfolio's total assets will be invested in the     
securities of a single issuer, and (ii) with respect to 50% of the market value 
of its total assets, not more than 5% will be invested in the securities of a   
single issuer; and the Portfolio will not own more than 10% of the outstanding  
voting securities of a single issuer. See "Dividends, Distributions and Taxes." 

To the extent the Portfolio makes investments in excess of 5% of its
assets in a particular issuer, its exposure to credit and market risks          
associated with that issuer is increased. Also, since a relatively high         
percentage of the Portfolio's assets may be invested in the securities of a     
limited number of issuers, the Portfolio may be more susceptible to any single  
economic, political or regulatory occurrence than a diversified investment      
company.                                                                        

   Geographic Concentration. The Portfolio may invest more than 25% of its
total assets in issuers located in any one country. To the extent it invests in 
issuers of one country, the Portfolio is susceptible to factors adversely       
affecting that country, including political and economic developments and       
foreign exchange rate fluctuations as discussed above. The value of the         
Portfolio's assets may fluctuate more widely than the value of shares of a      
comparable fund with less geographic concentration.                             

Certain Risks of Debt Securities. The Portfolio may invest without limitation in
investment grade emerging market debt securities; it may invest up to 35% of its
total assets in debt securities that are unrated or are rated below investment  
grade (below Baa by Moody's or BBB by S&P; for a further description of S&P's   
and Moody's securities ratings please see the Appendix to the SAI). Note that   
even debt securities rated Baa by Moody's are considered to have speculative    
characteristics. Below investment grade securities (and unrated securities of   
comparable quality) ("high yield/high risk securities") are predominantly       
speculative with respect to the capacity to pay interest and repay principal,   
and generally involve a greater volatility of price than securities in higher   
rating categories. These securities are commonly referred to as "junk" bonds.   
The risks associated with junk bonds are generally greater than those associated
with higher-rated securities. The Portfolio is not obligated to dispose of      
securities due to rating changes by Moody's, S&P or other rating agencies. The  
Portfolio is not authorized to purchase debt securities that are in default,    
except for sovereign debt (discussed below) in which the Portfolio may invest no
more than 5% of its total assets while such sovereign debt securities are in    
default.                                                                        

     In purchasing high yield/high risk securities, the Portfolio will rely on
the investment adviser's judgment, analysis and experience in evaluating the    
creditworthiness of an issuer of such securities. Nonetheless, investors should 
review the investment objective and policies of the Fund and consider their     
willingness to assume risk before making an investment.                         

High yield/high risk securities' market values are affected more by 
individual issuer developments and are more sensitive to adverse economic       
changes than are higher-rated securities. Issuers of high yield/high risk       
securities may be highly leveraged and may not have more traditional methods of 
financing available to them.                                                    

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During economic downturns or substantial periods of rising interest rates,      
issuers of high yield/high risk securities, especially highly leveraged ones,   
may be less able to service their principal and interest payment obligations,   
meet their projected business goals, or obtain additional financing. The risk of
loss due to default by the issuer is significantly greater for holders of high  
yield/high risk securities because such securities may be unsecured and may be  
subordinated to other creditors of the issuer. In addition, the Portfolio may   
incur additional expenses if it is required to seek recovery upon a default by  
the issuer of such an obligation or participate in the restructuring of such    
obligation.                                                                     

  Periods of economic uncertainty and change will likely cause increased
volatility in the market prices of high yield/high risk securities and,         
correspondingly, the Portfolio's net asset value if it invests in such          
securities; market prices of such securities structured as zero coupon or       
pay-in-kind securities are more affected by interest rate changes and thus tend 
to be more volatile than securities that pay interest periodically and in cash. 

      High yield/high risk securities may have call or redemption features which
would permit an issuer to repurchase the securities from the Portfolio. If a    
call were exercised by the issuer during a period of declining interest rates,  
the Portfolio would likely have to replace called securities with lower yielding
securities, thus decreasing the Portfolio's net investment income and dividends 
to shareholders.                                                                

     While a secondary trading market for high yield/high risk securities does
exist, it is generally not as liquid as the secondary market for higher rated   
securities. In periods of reduced secondary market liquidity, prices of high    
yield/high risk securities may become volatile and experience sudden and        
substantial price declines. The Portfolio may, therefore, have difficulty       
disposing of particular issues to meet its liquidity needs or in response to a  
specific economic event (such as a deterioration in the creditworthiness of the 
issuer). Reduced secondary market liquidity for certain high yield/high risk    
securities also may make it more difficult for the Portfolio to obtain accurate 
market quotations (for purposes of valuing the Portfolio's investment           
portfolio): market quotations are generally available on many high yield/high   
risk securities only from a limited number of dealers and may not necessarily   
represent firm bids of such dealers or prices for actual sales. Under such      
conditions, high yield/high risk securities may have to be valued at fair value 
as determined by the Schroder Core Board or SCMI under Board-approved           
guidelines.                                                                     

 Adverse publicity and investor perceptions (which may not be based on
fundamental analysis) may decrease the value and liquidity of high yield/high   
risk securities, particularly in a thinly traded market. Factors adversely      
affecting the market value of high yield/high risk securities are likely to     
adversely affect the Portfolio's, and thus the Fund's, net asset value.         

   Sovereign Debt. Investment in sovereign debt carries high risk. Certain
emerging market countries such as Argentina, Brazil and Mexico are among the    
largest debtors to commercial banks and foreign governments. At times, certain  
emerging market countries have declared moratoria on the payment of principal   
and/or interest on outstanding debt. The governmental entity that controls the  
repayment of sovereign debt may not be able or willing to repay the principal   
and/or interest when due in accordance with the terms of such debt. A           
governmental entity's willingness or ability to repay principal and interest    
when it is due may be affected by many factors, such as its cash flow situation,
the extent of its foreign reserves, the availability of sufficient foreign      
exchange, the relative size of the debt service burden to the economy as a      
whole, and political restraints. The Portfolio, as a holder of sovereign debt,  
may be asked to participate in the rescheduling of such debt and to extend      
further loans to governmental entities. There is no bankruptcy proceeding by    
which defaulted sovereign debt may be collected.                                

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    The sovereign debt instruments in which the Portfolio may invest involve
great risk and are deemed to be the equivalent in terms of quality to high      
yield/high risk securities discussed above and are subject to many of the same  
risks as such securities. Similarly, the Portfolio may have difficulty disposing
of certain sovereign debt obligations because there may be a thin trading market
for such securities. The Portfolio will not invest more than 5% of its total    
assets in sovereign debt in default.                                            

      Portfolio Turnover. The Portfolio may engage in short-term trading but its
portfolio turnover rate is not expected to exceed 100%. High portfolio turnover 
and short-term trading involve correspondingly greater commission expenses and  
transaction costs. Also, higher portfolio turnover rates may cause shareholders 
of the Portfolio to recognize gains for federal income tax purposes. See        
"Taxation" in the SAI.                                                          

MANAGEMENT OF THE FUND                                                          

X Schroder Group Assets Under Management Worldwide
As of December 31, 1996 -- Over $130 Billion

 [GRAPHIC OMITTED]

THE SCHRODER INVESTMENT MANAGEMENT GROUP INVESTMENT AND REPRESENTATIVE OFFICES
WORLDWIDE INCLUDE NEW YORK, LONDON, BOSTON, ZURICH, WARSAW, TOKYO, HONG KONG, 
BEIJING, SHANGHAI, TAIPEI, SEOUL, BANGKOK, KUALA LUMPUR, SINGAPORE, JAKARTA,
SYDNEY, BUENOS AIRES, SAO PAULO, BOGOTA AND CARACAS.

 TOGETHER, SCHRODER CAPITAL MANAGEMENT INTERNATIONAL AND
SCHRODER CAPITAL MANAGEMENT MANAGE OVER $24 BILLION.

Boards of Trustees                                                              

The business and affairs of the Fund are managed under the direction of the     
Trust Board. The business and affairs of the Portfolio are managed under the    
direction of the Schroder Core Board. Additional information regarding the      
trustees and executive officers of the Trust, as well as Schroder Core's        
trustees and executive officers, may be found in the SAI under the heading      
"Management, Trustees and Officers."                                            

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Investment Adviser and Portfolio Managers                                       

  As investment adviser to the Portfolio, SCMI manages the Portfolio and
continuously reviews, supervises and administers its investments. SCMI is       
responsible for making decisions relating to the Portfolio's investments and    
placing purchase and sale orders regarding such investments with brokers or     
dealers it selects. For these services, the Investment Advisory Agreement       
between SCMI and Schroder Core provides that SCMI will receive a monthly        
advisory fee at the annual rate of 0.45% of the Portfolio's average daily net   
assets, which the Fund indirectly bears through its investment in the Portfolio.

SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the           
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is 
the holding company parent of a large world-wide group of banks and financial   
services companies (referred to as the "Schroder Group"), with associated       
companies and branch and representative offices in eighteen countries. The      
Schroder Group specializes in providing investment management services.         

      John A. Troiano, a Vice President of the Trust and Schroder Core, with the
assistance of an SCMI investment committee, is primarily responsible for the    
day-to-day management of the Portfolio's investment portfolio. Mr. Troiano      
managed the Fund's investment portfolio from its inception until it invested its
assets in the Portfolio and has managed the Portfolio's assets since its        
inception. Mr. Troiano has been a Managing Director of SCMI since October 1995  
and has been employed by various Schroder Group companies in the investment     
research and portfolio management areas since 1988.                             

      The Fund began pursuing its investment objective through investment in the
Portfolio on November 1, 1995. The Fund may withdraw its investment from the    
Portfolio at any time if the Board determines that it is in the best interests  
of the Fund and its shareholders to do so. (See "Other Information -- Fund      
Structure.") Accordingly, the Fund has retained SCMI as its investment adviser  
to manage the Fund's assets in the event the Fund withdraws its investment. SCMI
does not receive an investment advisory fee with respect to the Fund so long as 
the Fund remains completely invested in the Portfolio (or any other investment  
company). If the Fund resumes directly investing in portfolio securities, the   
Fund will pay SCMI a monthly advisory fee at the annual rate of 1.00% of the    
Fund's average daily net assets. The investment advisory agreement between SCMI 
and the Trust with respect to the Fund is the same in all material respects as  
the investment advisory contract between SCMI and Schroder Core with respect to 
the Portfolio (except as to the parties, the fees payable thereunder, the       
circumstances under which fees will be paid and the jurisdiction whose laws     
govern the agreement). For the fiscal year ended October 31, 1996, the Fund paid
SCMI an advisory fee of 0.10% of its average daily net assets.                  

Administrative Services                                                         

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On behalf of the Fund, the Trust has entered into an administrative 
services contract with Schroder Advisors, 787 Seventh Avenue, New York, New York
10019. On behalf of the Portfolio, the Trust has also entered into a            
sub-administration agreement with Forum, Two Portland Square, Portland, Maine   
04101. Pursuant to these agreements, Schroder Advisors and Forum provide certain
management and administrative services necessary for the Fund's operations.     
Schroder Advisors is compensated at the annual rate of 0.05% of the Portfolio's 
average daily net assets. Forum is compensated at the annual rate of 0.05% of   
the Portfolio's average daily net assets.                                       

      Schroder Advisors and Forum provide similar services to the Portfolio, for
which the Portfolio pays Schroder Advisors an annual rate of 0.075% and pays    
Forum a monthly fee at the annual rate of 0.075% of the Portfolio's average     
daily net assets.                                                               

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Expenses                                                                        

     SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
of their fees or assume certain expenses of the Fund in order to limit total    
Fund expenses (excluding taxes, interest, brokerage commissions and other       
portfolio transaction expenses and extraordinary expenses) chargeable to        
Investor Shares to 1.60% of the average daily net assets of the Fund            
attributable to those shares. This expense limitation cannot be modified or     
withdrawn except by a majority vote of the Trustees of the Trust who are not    
interested persons (as defined in the 1940 Act) of the Trust. If expense        
reimbursements are required, they will be made on a monthly basis; SCMI will    
reimburse the Fund for four-fifths of the amount required and Schroder Advisors 
will reimburse the Fund for the remaining one-fifth. Forum may voluntarily waive
all or a portion of their fees, from time to time.                              

Portfolio Transactions                                                          

SCMI places orders for the purchase and sale of the Portfolio's     
investments with brokers and dealers selected by SCMI and seeks "best execution"
of such portfolio transactions. The Portfolio may pay brokers higher than the   
lowest available commission rates when SCMI believes it is reasonable to do so  
in light of the value of the brokerage and research services provided.          
Commission rates for brokerage transactions are fixed on many foreign securities
exchanges, which may cause higher brokerage expenses to accrue to the Portfolio 
than would be the case for comparable transactions effected on U.S. securities  
exchanges.                                                                      

    Subject to the Portfolio's policy of obtaining the best price consistent
with quality of execution on transactions, SCMI may employ Schroder Securities  
Limited and its affiliates (collectively, "Schroder Securities"), affiliates of 
SCMI, to effect transactions of the Portfolio on certain foreign securities     
exchanges. Because of the                                                       

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affiliation between SCMI and Schroder Securities, the Portfolio's payment of    
commissions to Schroder Securities is subject to procedures adopted by the      
Schroder Core Board designed to ensure that commissions will not exceed the     
usual and customary brokers' commissions. No specific portion of the Portfolio's
brokerage will be directed to Schroder Securities and in no event will Schroder 
Securities receive any brokerage in recognition of research services.           

Consistent with the Conduct Rules of the National Association of    
Securities Dealers, Inc., and subject to seeking the most favorable price and   
execution available and such other policies as the Schroder Core Board may      
determine, SCMI may consider sales of shares of the Fund or any other entity    
that invests in the Portfolio as a factor in the selection of broker-dealers to 
execute portfolio transactions for the Portfolio.                               

  Although the Portfolio does not currently engage in directed brokerage
arrangements to pay expenses, it may do so in the future. These arrangements,   
(whereby brokers executing the Portfolio's portfolio transactions agree to pay  
designated expenses of the Portfolio if brokerage commissions generated by the  
Portfolio reached certain levels) might reduce the Portfolio's expenses (and,   
indirectly, the Fund's expenses), and would not be expected to materially       
increase the brokerage commissions paid by the Portfolio.                       

Code of Ethics                                                                  

The Trust, Schroder Core, SCMI, Schroder Advisors, and Schroders    
Incorporated have each adopted a code of ethics that contains a policy on       
personal securities transactions by "access persons," including portfolio       
managers and investment analysts. That policy complies in all material respects 
with the recommendations set forth in the Report of the Advisory Group on       
Personal Investing of the Investment Company Institute, of which the Trust is a 
member.                                                                         

INVESTMENT IN THE FUND                                                          

Purchase of Shares                                                              

Investors may purchase Investor Shares directly from the Trust.     
Prospectuses, sales material and Account Applications can be obtained from the  
Trust or through Forum Financial Corp., the Fund's transfer agent (the "Transfer
Agent"). See "Other Information -- Shareholder Inquiries." Investments may also 
be made through Financial Institutions and other organizations that assist their
customers in purchasing shares of the Fund ("Service Organizations"). Service   
Organizations may charge their customers a service fee for processing orders to 
purchase or sell shares of the Fund. Investors wishing to purchase shares       
through their accounts at a Service Organization should contact that            
organization directly for appropriate instructions.                             

 Shares of the Fund are offered at the net asset value next determined
after receipt of a completed Account Application (at the address set forth      
below). The minimum initial investment is $250,000. There is no minimum for     
subsequent investments. All purchase payments are invested in full and          
fractional shares. The Fund is authorized to reject any purchase order.         

     Purchases of Fund shares are subject to a purchase charge of 0.50% of the
amount invested. This charge is designed to cover the transaction costs the Fund
incurs (either directly or indirectly) as a result of investments in the Fund,  
including brokerage commissions in acquiring portfolio securities; currency     
transaction costs and transfer agent costs; and to protect the interests of     
shareholders. This charge, which is not a sales charge, is paid to the Fund, not
to Schroder Advisors or any other entity. The purchase charge is not assessed on
the reinvestment of dividends or distributions or shares purchased through a    
subscription in kind.                                                           

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  Purchases may be made by mailing a check (in U.S. dollars), payable to
Schroder Emerging Markets Fund Institutional Portfolio, to:                     

             Schroder Emerging Markets Fund Institutional Portfolio --
Investor Shares                             
P.O. Box 446                                
Portland, Maine 04112                       

For initial purchases, the check must be accompanied by a completed 
Account Application in proper form. Further documentation, such as corporate    
resolutions and instruments of authority, may be requested from corporations,   
administrators, executors, personal representatives, directors or custodians to 
evidence the authority of the person or entity making the subscription request. 

  Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as 
follows:                                                                        

Chase Manhattan Bank                        
New York, NY                                
ABA No.: 021000021                          
For Credit To: Forum Financial Corp.        
Account. No.: 910-2-718187                  
                Ref.: Schroder Emerging Markets Fund Institutional Portfolio
Investor Shares                             
Account of: (shareholder name)              
Account Number: (shareholder account number)

      The wire order must specify the name of the Fund, the shares' class (i.e.,
Investor Shares), the account name and number, address, confirmation number,    
amount to be wired, name of the wiring bank, and name and telephone number of   
the person to be contacted in connection with the order. If the initial         
investment is by wire, an account number will be assigned and an Account        
Application must be completed and mailed to the Fund before any account will    
become active. Wire orders received prior to 4:00 p.m. (Eastern Time) on each   
day that the New York Stock Exchange is open for trading (a "Fund Business Day")
will be processed at the net asset value determined as of that day. Wire orders 
received after 4:00 p.m. (Eastern Time) will be processed at the net asset value
determined as of the next Fund Business Day. See "Net Asset Value" below.       

   The Fund's Transfer Agent establishes for each shareholder of record an
open account to which all shares purchased and all reinvested dividends and     
other distributions are credited. Although most shareholders elect not to       
receive share certificates, certificates for full shares can be obtained by     
written request to the Fund's Transfer Agent. No certificates are issued for    
fractional shares.                                                              

  The Transfer Agent will deem an account lost if six months have passed
since correspondence to the shareholder's address of record is returned, unless 
the Transfer Agent determines the shareholder's new address. When an account is 
deemed lost, dividends and other distributions will automatically be reinvested.
In addition, the amount of any outstanding checks for dividends and other       
distributions that have been returned to the Transfer Agent will be reinvested  
and the checks will be canceled.                                                

Retirement Plans and Individual Retirement Accounts                             

     Shares of the Fund are offered in connection with tax-deferred retirement
plans. Application forms and further information about these plans, including   
applicable fees, are available upon request. Before investing in the Fund       
through one of these plans, investors should consult their tax advisors.        

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The Fund may be used as an investment vehicle for an IRA including  
SEP-IRA. An IRA naming The First National Bank of Boston as custodian is        
available from the Trust or the Transfer Agent. The minimum initial investment  
for an IRA is $2,000; the minimum subsequent investment is $2,500. Under certain
circumstances contributions to an IRA may be tax deductible. IRAs are available 
to individuals (and their spouse) who receive compensation or earned income     
whether or not they are active participants in a tax-qualified or               
government-approved retirement plan. An IRA contribution by an individual or    
spouse who participates in a tax-qualified or government-approved retirement    
plan may not be deductible, depending upon the individual's income. Individuals 
also may establish an IRA to receive a "rollover" contribution of distributions 
from another IRA or qualified plan. Tax advice should be obtained before        
effecting a rollover.                                                           

Statement of Intention                                                          

 Investor Share investors also may meet the minimum initial investment
requirement based on cumulative purchases by means of a written Statement of    
Intention, expressing the investor's intention to invest $250,000 or more in    
Investor Shares of the Fund within a period of 13 months.                       

   Investors wishing to enter into a Statement of Intention in conjunction
with their initial investment in shares of the Fund should complete the         
appropriate portion to the account application form. Current Fund shareholders  
can obtain a Statement of Intention form by contacting the Transfer Agent.      

      The Fund reserves the right to redeem Shares in any account if, at the end
of the Statement of Intention period, the account does not have a value of at   
least the minimum investment amount.                                            

Exchanges                                                                       

Shareholders may exchange shares of the Fund for Shares of any other
series of the Trust so long as they meet the initial investment minimum of the  
fund being purchased and maintain the respective minimum account balance in each
fund in which they own shares. Exchanges between each Fund are at net asset     
value.                                                                          

 Federal income tax purposes an exchange is considered to be a sale of
shares for on which a shareholder may realize a capital gain or loss. An        
exchange may be made by calling the Transfer Agent at (800) 344-8332 or by      
mailing written instructions to Schroder Capital Funds (Delaware), P.O. Box 446,
Portland, Maine 04112. Exchange privileges may be exercised only in those states
where shares of the other series of the Trust may legally be sold. Exchange     
privileges may be amended or terminated at any time upon sixty (60) days'       
notice.                                                                         

Redemption of Shares                                                            

    Shares of the Fund are redeemed at their next determined net asset value
after receipt by the Fund (at the address set forth above under "Purchase of    
Shares") of a redemption request in proper form. Redemption requests may be made
between 9:00 a.m. and 6:00 p.m. (Eastern Time) on each Fund Business Day.       
Redemption requests that are received prior to 4:00 p.m. (Eastern Time) will be 
processed at the net asset value determined as of that day. Redemption requests 
that are received after 4:00 p.m. (Eastern Time) will be processed at the net   
asset value determined the next Fund Business Day. See "Net Asset Value" below. 

     Redemptions of Fund shares are subject to a redemption charge of 0.50% of
the net asset value of the shares redeemed. This charge is designed to cover the
transaction costs the Fund incurs in redeeming Fund shares (either directly or  
indirectly as a result of its investment in the Portfolio), including brokerage 
commissions in selling portfolio securities, currency transaction costs,        
transfer agent costs, and to protect the interests of shareholders. This charge,
which is not a sales charge, is paid to the Fund, not to Schroder Advisors or   
any other entity. The redemption charge is not assessed on shares acquired      
through the reinvestment of dividends or distributions or on redemptions in     
kind. For purposes of computing the redemption charge, redemptions by a         
shareholder are deemed to be made in the following order: (i) from Shares       
purchased through the reinvestment of dividends and distributions (with respect 
to which no redemption charge is applied) and (ii) from Shares for which the    
redemption charge is applicable, on a first purchased, first redeemed basis.    

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     By Telephone. Redemption requests may be made by telephoning the Transfer
Agent at the telephone number on the cover page of this Prospectus. A           
shareholder must provide the Transfer Agent with the class of shares, the dollar
amount or number of shares to be redeemed, shareholder account number, and some 
additional form of identification such as a password. A redemption by telephone 
may be made only if the telephone redemption privilege option has been elected  
on the Account Application or otherwise in writing. In an effort to prevent     
unauthorized or fraudulent redemption requests by telephone, reasonable         
procedures will be followed by the Transfer Agent to confirm that telephone     
instructions are genuine. The Transfer Agent and the Trust generally will not be
liable for any losses due to unauthorized or fraudulent redemption requests, but
may be liable if they do not follow these procedures. Shares for which          
certificates have been issued may not be redeemed by telephone. In times of     
drastic economic or market change it may be difficult to make redemptions by    
telephone. If a shareholder cannot reach the Transfer Agent by telephone,       
redemption requests may be mailed or hand-delivered to the Transfer Agent.      

      Written Requests. Redemptions may be made by letter to the Fund specifying
the class of shares, the dollar amount or number of Shares to be redeemed, and  
the shareholder account number. The letter must also be signed in exactly the   
same way the account is registered (if there is more than one owner of the      
Shares, all must sign) and, in certain cases, signatures must be guaranteed by  
an institution that is acceptable to the Transfer Agent. Such institutions      
include certain banks, brokers, dealers (including municipal and government     
securities brokers and dealers), credit unions and savings associations.        
Notaries public are not acceptable. Further documentation may be requested to   
evidence the authority of the person or entity making the redemption request.   
Questions concerning the need for signature guarantees or documentation of      
authority should be directed to the Fund at the above address or by calling the 
telephone number appearing on the cover of this Prospectus.                     

   If Shares to be redeemed are held in certificate form, the certificates
must be enclosed with the redemption request and the assignment form on the back
of the certificates (or an assignment separate from the certificates but        
accompanied by the certificates) must be signed by all owners in exactly the    
same way the owners' names are written on the face of the certificates.         
Requirements for signature guarantees and/or documentation of authority as      
described above could also apply. For your protection, the Fund suggests that   
certificates be sent by registered mail.                                        

  Additional Redemption Information. Checks for redemption proceeds will
normally be mailed within seven days. No redemption proceeds will be mailed     
until checks in payment for the purchase of the Shares to be redeemed have been 
cleared, which may take up to 15 calendar days from the purchase date. Unless   
other instructions are given in proper form, a check for the proceeds of a      
redemption will be sent to the shareholder's address of record.                 

   The Fund may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that exchange is closed,
(ii) the SEC has by order permitted such suspension, or (iii) an emergency (as  
defined by rules of the SEC) exists making disposal of portfolio investments or 
determination of the Fund's net asset value not reasonably practicable.         

  If the Trust Board determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment wholly or    
partly in cash, the Fund may redeem Shares in whole or in part by a distribution
in kind of portfolio securities (from the investment portfolio of the Portfolio 
or of the Fund), in lieu of cash. The Fund will, however, redeem Shares solely  
in cash up to the lesser of $250,000 or 1% of net assets during any 90-day      
period for any one shareholder. In the event that payment for redeemed Shares is
made wholly or partly in portfolio securities, the shareholder may be subject to
additional risks and costs in converting the securities to cash. See "Additional
Purchase and Redemption Information" in the SAI.                                

  The proceeds of a redemption may be more or less than the amount
invested and, therefore, a redemption                                           

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may result in a gain or loss for Federal income tax purposes.                   

     Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem Shares in any account (other than an IRA) if at any
time the account does not have a value of at least $100,000 unless the value of 
the account falls below that amount solely as a result of market activity.      
Shareholders will be notified that the value of the account is less than        
$100,000 and be allowed at least 30 days to make an additional investment to    
increase the account balance to at least $100,000                               

Net Asset Value                                                                 

  The net asset value per share of the Fund is calculated separately for
each class of shares of the Fund at 4:00 p.m. (Eastern Time), Monday through    
Friday, each Fund Business Day, which excludes the following U.S. holidays: New 
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor 
Day, Thanksgiving Day and Christmas Day. Net asset value per Share is calculated
by dividing the aggregate value of the Fund's assets less all Fund liabilities, 
if any, by the number of Shares of the Fund outstanding.                        

   Generally, securities that are listed on recognized stock exchanges are
valued at the last reported sale price, on the day when the securities are      
valued (the "Valuation Day"), on the primary exchange on which the securities   
are principally traded. Listed securities traded on recognized stock exchanges  
for which there were no sales on the Valuation Day are valued at the last sale  
price on the preceding trading day or at closing mid-market prices. Securities  
traded in over-the-counter markets are valued at the most recent reported       
mid-market price. 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 Schroder Core Board.                                    

    Trading in securities on non-U.S. exchanges and over-the-counter markets
may not take place on every day that the New York Stock Exchange is open for    
trading. Furthermore, trading takes place in various foreign markets on days on 
which the Fund's net asset value is not calculated. If events materially        
affecting the value of foreign securities occur between the time when their     
price is determined and the time when net asset value is calculated, such       
securities will be valued at fair value as determined in good faith by using    
methods approved by the Schroder Core Board.                                    

All assets and liabilities of the Portfolio denominated in foreign  
currencies are valued in U.S. dollars based on the exchange rate last quoted by 
a major bank prior to the time when the net asset value of the Fund is          
calculated.                                                                     

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              

The Fund                                                                        

  The Fund intends to comply with the provisions of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies. By      
complying therewith, the Fund will not have to pay federal income tax on that   
part of its income that is distributed to shareholders. The Fund intends to     
distribute substantially all of its income and therefore, intends not to be     
subject to                                                                      

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federal income tax.                                                             

      Dividends and capital gain distributions on Investor Shares are reinvested
automatically in additional Investor Shares at net asset value unless the       
shareholder has elected in the Account Application or otherwise in writing, to  
receive dividends and other distributions in cash.                              

      After every dividend and other distribution, the value of a Share declines
by the amount of the distribution. Purchases made shortly before a dividend or  
other distribution include in the purchase price the amount of the distribution,
which will be returned to the investor in the form of a taxable distribution.   

   Dividends and other distributions paid by the Fund with respect to both
classes of its shares will be calculated in the same manner and at the same     
time. The per share dividends on Advisor Shares are expected to be lower than   
the per share dividends on Investor Shares as a result of 12b-1 fees and other  
compensation payable to Service Organizations for distribution assistance and   
shareholder servicing for the Advisor Shares.                                   

      Dividends from the Fund's income generally will be taxable to shareholders
as ordinary income, whether the dividends are invested in additional Shares or  
received in cash. Distributions by the Fund of any net capital gain will be     
taxable to a shareholder as long-term capital gain regardless of how long the   
shareholder has held the Shares. Each year the Trust will notify shareholders of
the tax status of dividends and other distributions.                            

      A redemption of Shares may result in taxable gain or loss to the redeeming
shareholder, depending on whether the redemption proceeds are more or less than 
the shareholder's basis in the redeemed Shares. If Shares are redeemed at a loss
after being held for six months or less, the loss will be treated as a          
long-term, rather than a short-term, capital loss to the extent of any capital  
gain distributions received on those Shares.                                    

The Fund must withhold 31% from dividends, capital gain distributions and       
redemption proceeds payable to any individuals and certain other noncorporate   
shareholders who do not furnish the Fund with a correct taxpayer identification 
number. Withholding at that rate also is required from dividends and capital    
gain distributions payable to such shareholders who otherwise are subject to    
backup withholding. Depending on the residence of a shareholder for tax         
purposes, distributions from the Fund may also be subject to state and local    
taxes, including withholding taxes.                                             

The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the SAI   
for further information.                                                        

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    In an effort to adhere to certain tax requirements, the Fund may have to
limit its investment activity in some types of instruments.                     

   If the Fund's dividends exceed its taxable income in any year, all or a
portion of the Fund's dividends may be treated as a return of capital to        
shareholders for tax purposes. Any return of capital will reduce the cost basis 
of your shares, which will result in a higher reported capital gain or a lower  
reported capital loss when you sell your shares. Shareholders will be notified  
by the Trust if a distribution included a return of capital.                    

Effect of Foreign Taxes. Foreign governments may impose taxes on the
Portfolio and its investments, which generally reduce the Fund's income.        
However, an offsetting tax credit or deduction may be available to you. If so,  
your tax statement will show more taxable income or capital gain than was       
actually distributed by the Fund but will also show the amount of the available 
offsetting credit or deduction.                                                 

If the Fund is eligible to do so, it intends to elect to permit its 
shareholders to take a credit (or a deduction) for the Fund's share of foreign  
income taxes paid by the Portfolio. If the Fund does make such an election, its 
shareholders would include as gross income in their Federal income tax returns  
both (i) distributions received from the Fund and (ii) the amount that the Fund 
advises is their pro rata portion of foreign income taxes paid with respect to  
or withheld from, dividends and interest paid to the Portfolio from its foreign 
investments. Shareholders then would be entitled, subject to certain            
limitations, to take a foreign tax credit against their Federal income tax      
liability for the amount of such foreign taxes or else to deduct such foreign   
taxes as an itemized deduction from gross income.                               

Shareholders should consult their own tax advisors as to the tax    
consequences of their ownership of Shares.                                      

The Portfolio                                                                   

 The Portfolio is not required to pay federal income tax because it is
classified as a partnership for federal income tax purposes. All interest,      
dividends, gains and losses of the Portfolio will be deemed to have been "passed
through" to the Fund in proportion to the Fund's holdings in the Portfolio,     
regardless of whether such interest, dividends or gains have been distributed by
the Portfolio.                                                                  

    The Portfolio intends to conduct its operations so as to enable the Fund
to qualify as a regulated investment company.                                   

OTHER INFORMATION                                                               

Capitalization and Voting                                                       

     The Trust was organized as a Maryland corporation called Schroder Capital
Funds, Inc. on July 30, 1969, and was reorganized as a Delaware business trust  
on January 9, 1996. The Trust has authority to issue an unlimited number of     
shares of beneficial interest. The Trust Board may, without shareholder         
approval, divide the authorized shares into an unlimited number of separate     
portfolios or series (such as the Fund) and may divide such portfolios or series
into classes of shares (such as the Investor Shares), and the costs of doing so 
will be borne by the Trust. The Trust currently consists of eight separate      
portfolios, each of which has separate investment objectives and policies.      

         The Fund currently consists of two classes of Shares. Each share of the
Fund is entitled to                                                             

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participate equally in dividends and other distributions and the proceeds of any
liquidation except that, due to the differing expenses borne by the classes,    
dividends and liquidation proceeds for each class will likely differ.           

    Shares are fully paid and non-assessable, and have no preemptive rights.
Shareholders have non-cumulative voting rights, which means that the holders of 
more than 50% of the shares voting for the election of Trustees can elect 100%  
of the Trustees if they choose to do so. A shareholder is entitled to one vote  
for each full share held (and a fractional vote for each fractional share held).
Each share of the Fund has equal voting rights, except that if a matter affects 
only the shareholders of a particular class only shareholders of that class     
shall have a right to vote. On Trust matters requiring shareholder approval,    
shareholders of the Trust are entitled to vote only with respect to matters that
affect the interests of the Fund or the class of shares they hold, except as    
otherwise required by applicable law.                                           

There will normally be no meetings of shareholders to elect Trustees
unless and until such time as less than a majority of the Trustees holding      
office have been elected by shareholders. However, the holders of not less than 
a majority of the outstanding shares of the Trust may remove any person serving 
as a Trustee and the Trust Board will call a special meeting of shareholders to 
consider removal of one or more Trustees if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust.            

     As of February 15, 1997, the Robert Wood Johnson Foundation may be deemed
to control the Fund for purposes of the 1940 Act. From time to time, certain    
shareholders may own a large percentage of the shares of the Fund, and those    
shareholders may be able to greatly affect (if not determine) the outcome of a  
shareholder vote.                                                               

Reports                                                                         

     The Trust sends each Fund shareholder a semi-annual report and an audited
annual report containing the Fund's financial statements.                       

Performance                                                                     

The Fund may include quotations of its average annual total return, 
cumulative total return and other performance measures in advertisements or     
reports to shareholders or prospective investors. Average annual total return of
a class of shares is based upon the overall dollar or percentage change in value
of a hypothetical investment each year over specified periods. Average annual   
total returns reflect the deduction of a proportional share of a Fund's expenses
(on an annual basis) and assumes investment and reinvestment of all dividends   
and distributions at NAV. Cumulative total returns are calculated similarly     
except that the total return is aggregated over the relevant period instead of  
annualized.                                                                     

Performance quotations are calculated separately for each class of shares of the
Fund. The Fund may also be compared to various unmanaged securities indices,    
groups of mutual funds tracked by mutual fund ratings services, or other general
economic indicators. Unmanaged indices may assume the reinvestment of dividends 
but do not reflect deductions for administrative and management costs and       
expenses.                                                                       

 Performance information represents only past performance and does not
necessarily indicate future results.                                            

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For a description of the methods used to determine total return and other       
performance measures for the Fund, see the SAI.                                 

Custodian and Transfer Agent                                                    

The Chase Manhattan Bank, N.A. is custodian of the Fund's and of the
Portfolio's assets. Forum Financial Corp. serves as the Fund's transfer and     
dividend disbursing agent.                                                      

Shareholder Inquiries                                                           

Inquiries about the Fund, including its past performance, should be 
directed to:                                                                    

          Schroder Emerging Markets Fund Institutional Portfolio
P.O. Box 446                                
Portland, Maine 04112                       

    Information about specific shareholder accounts may be obtained from the
Transfer Agent by calling (800) 344-8332.                                       

Service Organizations                                                           

    The Glass-Steagall Act and other applicable laws and regulations provide
that banks may not engage in the business of underwriting, selling or           
distributing securities. There is currently no precedent prohibiting banks from 
performing administrative and shareholder servicing functions as Service        
Organizations. However, judicial or administrative decisions or interpretations 
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,    
could prevent a bank Service Organization from continuing to perform all or part
of its servicing activities. If a bank were prohibited from so acting, its      
shareholder clients would be permitted to remain shareholders of the Fund and   
alternative means for continuing the servicing of such shareholders would be    
sought. It is not expected that shareholders would suffer any adverse financial 
consequences as a result of any of these occurrences.                           

Fund Structure                                                                  

      Classes of Shares. The Fund has two classes of shares, Investor Shares and
Advisor Shares. Advisor Shares are offered by a separate prospectus to          
individual investors, in most cases through Service Organizations. Advisor      
Shares incur more expenses than Investor Shares. Except for certain differences,
each share of each class represents an undivided, proportionate interest in the 
Fund. Each share of the Fund is entitled to participate equally in dividends and
other distributions and the proceeds of any liquidation of the Fund except that,
due to the differing expenses borne by the two classes, the amount of dividends 
and other distributions will differ between the classes. Information about      
Advisor Shares is available from the Fund by calling Schroder Advisors at (800) 
730-2932.                                                                       

The Portfolio. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio, which has the same     
investment objective and substantially similar policies as the Fund.            
Accordingly, the Portfolio directly acquires its own securities and the Fund    
acquires an indirect interest in those securities. The Portfolio is a separate  
series of Schroder Core, a business trust organized under the laws of the State 
of Delaware in September 1995. Schroder Core is registered under the 1940 Act as
an open-end, management investment company and currently has four separate      
series. The assets of the Portfolio, a diversified portfolio, belong only to,   
and the liabilities of the Portfolio are borne solely by, the Portfolio and no  
other portfolio of Schroder Core.                                               

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The Fund's investment in the Portfolio is in the form of a          
non-transferable beneficial interest. As of March 1, 1997, the Fund is the only 
institutional investor in the Portfolio. The Portfolio may permit other         
investment companies or institutional investors to invest in it. All other      
investors in the Portfolio will invest on the same terms and conditions as the  
Fund and will pay a proportionate share of the Portfolio's expenses.            

The Portfolio normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in the Portfolio will be entitled to    
vote in proportion to its relative beneficial interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other    
applicable law, the Fund will solicit proxies from its shareholders and will    
vote its interest in the Portfolio in proportion to the votes cast by its       
shareholders. If there are other investors in the Portfolio, there can be no    
assurance that any issue that receives a majority of the votes cast by Fund     
shareholders will receive a majority of votes cast by all investors in the      
Portfolio; indeed, if other investors hold a majority interest in the Portfolio,
they could have voting control of the Portfolio.                                

     The Portfolio will not sell its shares directly to members of the general
public. Another investor in the Portfolio, such as an investment company, that  
might sell its shares to members of the general public would not be required to 
sell its shares at the same public offering price as the Fund and could have    
different advisory and other fees and expenses than the Fund. Therefore, Fund   
shareholders may have different returns than shareholders in another investment 
company that invests exclusively in the Portfolio. There is currently no such   
other investment company that offers its shares to members of the general       
public. Information regarding any such funds in the future will be available    
from Schroder Core by calling Forum Financial Corp. at (800) 730-2932.          

Under federal securities law, any person or entity that signs a     
registration statement may be liable for a misstatement or omission of a        
material fact in the registration statement. Schroder Core, its Trustees and    
certain of its officers are required to sign the registration statement of the  
Trust and may be required to sign the registration statements of certain other  
investors in the Portfolio. In addition, under federal securities law, Schroder 
Core may be liable for misstatements or omissions of a material fact in any     
proxy soliciting material of a publicly offered investor in Schroder Core,      
including the Fund. Each investor in the Portfolio, including the Trust, will   
indemnify Schroder Core and its Trustees and officers ("Schroder Core           
Indemnitees") against certain claims.                                           

  Indemnified claims are those brought against Schroder Core Indemnitees
based on a misstatement or omission of a material fact in the investor's        
registration statement or proxy materials. No indemnification need be made,     
however, if such alleged misstatement or omission relates to information about  
Schroder Core and was supplied to the investor by Schroder Core. Similarly,     
Schroder Core will indemnify each investor in the Portfolio, including the Fund,
for any claims brought against the investor with respect to the investor's      
registration statement or proxy materials, to the extent the claim is based on a
misstatement or omission of a material fact relating to information about       
Schroder Core that is supplied to the investor by Schroder Core. In addition,   
each registered investment company investor in the Portfolio will indemnify each
Schroder Core Indemnitee against any claim based on a misstatement or omission  
of a material fact relating to information about a series of the registered     
investment company that did not invest in the Schroder Core. The purpose of     
these cross-indemnity provisions is principally to limit the liability of       
Schroder Core to information that it knows or should know and can control. With 
respect to other prospectuses and other offering documents and proxy materials  
of investors in Schroder Core, its liability is similarly limited to information
about and supplied by it.                                                       

     Certain Risks of Investing in the Portfolio. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the        
Portfolio, if any. For example, if the Portfolio had a large investor other     

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than the Fund that redeemed its interest in the Portfolio, the Portfolio's      
remaining investors (including the Fund) might, as a result, experience higher  
pro rata operating expenses, thereby producing lower returns.                   

 The Fund may withdraw its entire investment from the Portfolio at any
time, if the Trust Board determines that it is in the best interests of the Fund
and its shareholders to do so. The Fund might withdraw, for example, if there   
were other investors in the Portfolio with power to, and who did by a vote of   
the shareholders of all investors (including the Fund), change the investment   
objective or policies of the Portfolio in a manner not acceptable to the Trust  
Board. A withdrawal could result in a distribution in kind of portfolio         
securities (as opposed to a cash distribution) by the Portfolio. That           
distribution could result in a less diversified portfolio of investments for the
Fund and could affect adversely the liquidity of the Fund's portfolio. If the   
Fund decided to convert those securities to cash, it would likely incur         
brokerage fees or other transaction costs. If the Fund withdrew its investment  
from the Portfolio, the Trust Board would consider appropriate alternatives,    
including the management of the Fund's assets in accordance with its investment 
objective and policies by SCMI or the investment of all of the Fund's investable
assets in another pooled investment entity having substantially the same        
investment objective as the Fund. The inability of the Fund to find a suitable  
replacement investment, if the Board decided not to permit SCMI to manage the   
Fund's assets, could have a significant impact on shareholders of the Fund.     

     Each investor in the Portfolio, including the Fund, may be liable for all
obligations of the Portfolio. The risk to an investor in the Portfolio of       
incurring financial loss on account of such liability, however, is limited to   
circumstances in which the Portfolio is unable to meet its obligations, the     
occurrence of which SCMI considers to be quite remote. Upon liquidation of the  
Portfolio, investors would be entitled to share pro rata in the net assets of   
the Portfolio available for distribution to investors.                          

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Investment Adviser                                                              
Schroder Capital Management International Inc.                                  
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Administrator & Distributor                                                     
Schroder Fund Advisors Inc.                                                     
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company                        
Two Portland Square                                                             
Portland, Maine  04101                                                          

Custodian                                                                       
The Chase Manhattan Bank, N.A.                                                  
Global Custody Division                                                         
Woolgate House, Coleman Street                                                  
London EC2P 2HD, United Kingdom                                                 

Transfer and Dividend Disbursing Agent                                          
Forum Financial Corp.                                                           
P.O. Box 446                                                                    
Portland, Maine 04112                                                           

Independent Accountants                                                         
Coopers & Lybrand, L.L.P.                                                       
One Post Office Square                                                          
Boston, Massachusetts 02109                                                     

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Table of Contents                                                               

PROSPECTUS SUMMARY.......................................................       
EXPENSES OF INVESTING                                                           
IN THE FUND..........................................................   
Fee Table................................................................       
Example..................................................................       
FINANCIAL HIGHLIGHTS.....................................................       
INVESTMENT OBJECTIVE.....................................................       
INVESTMENT POLICIES......................................................       
RISK CONSIDERATIONS......................................................       
MANAGEMENT OF THE FUND...................................................       
Boards of Trustees.......................................................       
Investment Adviser and Portfolio Managers................................       
Administrative Services..................................................       
Expenses.................................................................       
Portfolio Transactions...................................................       
Code of Ethics...........................................................       
INVESTMENT IN THE FUND...................................................       
Purchase of Shares.......................................................       
Retirement Plans and Individual                                                 
Retirement Accounts....................................................     
Statement of Intention...................................................       
Exchanges................................................................       
Redemption of Shares.....................................................       
Net Asset Value..........................................................       
DIVIDENDS, DISTRIBUTIONS                                                        
AND TAXES..............................................................     
The Fund.................................................................       
The Portfolio............................................................       
OTHER INFORMATION........................................................       
Capitalization and Voting................................................       
Reports..................................................................       
Performance..............................................................       
Custodian and Transfer Agent.............................................       
Shareholder Inquiries....................................................       
Service Organizations....................................................       
Fund Structure...........................................................       

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SCHRODER EMERGING MARKETS FUND                                                  
INSTITUTIONAL PORTFOLIO                                                         

Advisor Shares                                                                  

This fund seeks to achieve long-term capital appreciation through direct or     
indirect investment in equity and debt securities of issuers domiciled or doing 
business in emerging market countries in regions such as Southeast Asia, Latin  
America, and Eastern and Southern Europe. It is designed for investors who seek 
the aggressive growth potential of emerging world markets and are willing to    
bear the special risks of investing in those markets.                           

Schroders                                                     

[GRAPHIC OMITTED]                                                     

Your Window On The World                                                    

Schroder Emerging Market Fund (the "Fund"), a series of Schroder Capital Funds  
(Delaware) (the "Trust"), seeks to achieve its investment objective by investing
substantially all of its assets in Schroder Emerging Markets Fund Institutional 
Portfolio (the "Portfolio"), a separately managed series of Schroder Capital    
Funds ("Schroder Core"), a non-diversified open-end management                  

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investment company. The Portfolio has an identical investment objective and     
substantially similar investment policies as the Fund. Accordingly, the Fund's  
investment experience will correspond directly with the Portfolio's investment  
experience. (See "Other Information - Fund Structure").                         

This prospectus sets forth concisely the information you should know before     
investing in and should be retained for future reference. To learn more about   
the Fund, you may obtain a copy of the Fund's current Statement of Additional   
Information (the "SAI") which is incorporated by reference into this Prospectus.
The SAI dated March 1, 1997, as amended from time to time has been filed with   
the Securities and Exchange Commission ("SEC") and is available along with other
related materials for reference on the SEC's Internet Web Site                  
(http://www.sec.gov) or may be obtained without charge from the Trust by writing
to Two Portland Square, Portland, Maine 04101 or by calling 1-800-290-9826. The 
Fund has not authorized anyone to provide you with information that is different
from what is contained in this Prospectus or in other documents to which this   
Prospectus refers you.                                                          

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MUTUAL FUND SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE    
FDIC, THE FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENT AGENCY AND ALSO ARE NOT
OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY BANK OR 
ITS AFFILIATES. MUTUAL FUND INVESTMENTS ARE SUBJECT TO INVESTMENT RISK,         
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.                                       

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

PROSPECTUS                                                                      
MARCH 1, 1997                                                                   

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PROSPECTUS SUMMARY                                                              

      This Prospectus offers Advisor Class shares ("Advisor Shares" or "Shares")
of the Fund. The Fund is a separately managed, non-diversified series of the    
Trust, an open-end, management investment company registered under the          
Investment Company Act of 1940 (the "1940 Act"). The following summary is       
qualified in its entirety by the more detailed information contained in this    
Prospectus.                                                                     

Objective. Long-term capital appreciation through direct or indirect
investment in equity and debt securities of issuers domiciled or doing business 
in emerging market countries in regions such as Southeast Asia, Latin America,  
and Eastern and Southern Europe. Current income will be incidental to the Fund's
objective.                                                                      

      Investment Adviser. The Portfolio's investment adviser is Schroder Capital
Management International Inc. ("SCMI"), 787 Seventh Avenue, New York, New York  
10019. The Fund (and indirectly its shareholders) bears a pro rata portion of   
the investment advisory fee the Portfolio pays to SCMI. See "Management of the  
Fund - Investment Adviser and Portfolio Managers."                              

      Administrative Services. Schroder Fund Advisors Inc. ("Schroder Advisors")
serves as administrator and distributor of the Fund, and Forum Administrative   
Services, Limited Liability Company ("Forum") serves as the Fund's              
sub-administrator.                                                              

    Purchases and Redemptions of Shares. Shares may be purchased or redeemed
by mail, by bank-wire and through your broker-dealer or other financial         
institution. The minimum initial investment is $250,000 There is no minimum for 
subsequent investments. See "Investment in the Fund -- Purchase of Shares" and  
"-- Redemption of Shares." Purchases of Fund shares are subject to a purchase   
charge of 0.50% of the amount invested. Redemptions of Fund shares are subject  
to a redemption charge of 0.50% of the amount invested. See "Investment in the  
Fund -- Purchase of Shares" and "Redemption of Shares."                         

     Dividends and Other Distributions. The Fund annually declares and pays as
a dividend substantially all of its net investment income and at least annually 
distributes any net realized long-term capital gain. Dividends and long-term    
capital gain distributions are reinvested automatically in additional Advisor   
Shares of the Fund at net asset value unless you elect in your Account          
Application, or otherwise in writing, to receive dividends and other            
distributions in cash. See "Dividends, Distributions and Taxes."                

Risk Considerations.                                                

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Alone, the Fund is not a balanced investment plan. It is intended for investors 
who seek the aggressive growth potential of emerging world markets and are      
willing to bear their special investment risks, including but not limited to    
tightening of exchange controls and expropriation, nationalization or           
confiscation of assets by local governments. The Fund is not intended for       
investors whose objective is assured income or preservation of capital:         
investments in the securities of foreign issuers, particularly in countries with
smaller, emerging capital markets, involve risks in addition to risks associated
with investments in the securities of U.S. issuers.                             

      Of course, as with any mutual fund, there is no assurance that the Fund or
Portfolio will achieve its investment objective. The Fund's net asset value     
("NAV") will vary because the market value of the Portfolio's investments will  
change with changes in the value of the securities in which the Portfolio       
invests and with changes in market conditions, interest rates, currency rates,  
or other political or economic situations. When you sell your shares, they may  
be worth more or less than what you paid for them. For further information, see 
"Risk Considerations."                                                          

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 FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
Please call for complete information and to obtain a prospectus.
 Please read the prospectus carefully before you invest.

Schroder Capital Funds (Delaware) (1-800-290-9826)                              
Schroder International Fund                                                     
Schroder Emerging Markets Fund--                                                
Institutional Portfolio                                                   
Schroder International Smaller Companies Fund                                   
Schroder U.S. Smaller Companies Fund                                            
Schroder U.S. Equity Fund                                                       
Schroder Series Trust (1-800-464-3108)                                          
Schroder Equity Value Fund                                                      
Schroder Small Capitalization Value Fund                                        
Schroder High Yield Income Fund                                                 
Schroder Investment Grade Income Fund                                           
Schroder Short-Term Investment Fund                                             

EXPENSES OF INVESTING IN THE FUND                                               

Fee Table                                                                       

   The table below is intended to assist you in understanding the expenses
that an investor in Advisor Shares of the Fund would incur. The Annual Fund     
Operating Expenses have been restated to reflect projected fees, expenses and   
waivers for the current fiscal year.                                            

Shareholder Transaction Expenses                                                

    Maximum Sales Load Imposed on Purchase .............................. None
    Maximum Sales Load Imposed on Reinvested Dividends................... None
    Deferred Sales Load.................................................. None
     Purchase Charge (based on amount invested)(1)........................ 0.50%
     Redemption Charge (based on net asset value of shares redeemed)(1)... 0.50%

Annual Fund Operating Expenses (as a percentage of average net assets)(2)       

     Management Fees after waivers (3)(4)................................. 0.95%
    12b-1 Fees........................................................... None
     Other Expenses....................................................... 0.75%
     Total Fund Operating Expenses(4)..................................... 1.70%

  (1) The Purchase Charge and the Redemption Charge are paid to the Fund
     and are imposed on all purchases and redemptions of Shares except
 for Shares purchased through the reinvestment of dividends or
     distributions. See "Investment in the Fund -- Purchase of Shares"
and "-- Redemption of Shares."                              

  (2) Based on the Fund's expenses for the fiscal year ended October 31,
        1996. The Fund's expenses include the Fund's pro rata portion of all
operating expenses of the Portfolio.                        

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   (3) Management Fees reflect the fees paid by the Portfolio and the Fund
for investment advisory and administrative services.        
 (4) SCMI and Schroder Advisors have voluntarily undertaken to waive a
        portion of their fees and assume certain expenses of the Fund during
       the current fiscal year in order to limit the Fund's total expenses
     to 1.70% of the Fund's average daily net assets. This undertaking
      cannot be withdrawn except by a majority vote of the Trust's Board
     of Trustees. See "Management of the Fund --Expenses." Without fee
        waivers, Management Fees and Total Operating Expenses would be 1.10%
and 1.85%, respectively.                                    

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Example                                                                         

   The table below indicates how much you would pay in total expenses on a
$1,000 investment in the Fund, assuming (1) a 5% annual return; (2) reinvestment
of all dividends and other distributions; and (3) imposition of the purchase and
redemption charge. The example is based on the expenses listed above. The       
example should not be considered a representation of past or future expenses or 
returns; actual expenses or returns may vary from those shown. The 5% annual    
return is not a prediction of the Fund's return, but is the percentage required 
by the SEC for use in this example.                                             

1 Year                                                        
Assuming redemptions ...........................  $ 27  
Assuming no redemptions ........................  $ 22  
3 Years                                                       
Assuming redemptions ...........................  $ 64  
Assuming no redemptions ........................  $ 59  
5 Years                                                       
Assuming redemptions ...........................  $102  
Assuming no redemptions ........................  $ 97  
10 Years                                                      
Assuming redemptions ..........................  $211 
Assuming no redemptions .......................  $206 

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FINANCIAL HIGHLIGHTS                                                            

The financial highlights are presented below to assist you in evaluating per    
share performance of the Fund. Information presented is for Investor Shares as  
Advisor Shares were not issued for the periods shown. This information has been 
audited by Coopers & Lybrand L.L.P., independent accountants to the Fund. The   
Fund's financial statements for the year ended October 31, 1996, and the related
independent accountants' report are contained in the Fund's Annual Report to    
Shareholders and are incorporated by reference into the SAI. Further information
about the performance of the Fund is contained in the Annual Report, which may  
be obtained without charge by writing the Fund at Two Portland Square, Portland,
Maine 04101 or by calling 1-800-290-9826.                                       

                                                        [Enlarge/Download Table]


                                                             For the Year Ended  March 31, 1995 (a)
                                                                October 31,            Through     
                                                                 1996 (b)         October 31, 1995 
                                                             ------------------  ------------------
                                                                                                   
Net Asset Value, Beginning of period                              $10.63               $10.00      
                                                                  ------               ------      
Investment Operations:                                                                             
     Net Investment Income                                        0.02 (c)               0.02      
     Net Realized Gain (Loss)                                     0.43 (d)               0.61      
                                                                  ------               ------      
Total from Investment Operations                                    0.45                 0.63      
                                                                  ------               ------      
     Distributions From Net Investment Income                      (0.02)                --        
                                                                  ------               ------      
     Distributions from Realized Capital Gain                                                      
Total Distributions                                                                                
Net Asset Value, End ofPperiod                                    $11.06               $10.63      
                                                                  ------               ------      
Total Return (e)                                                    4.22%                6.30%     
                                                                  ======               ======      
Ratios/Supplementary Data:                                                                         
     Net Assets, End Of Period (Thousands)                      $167,570              $18,423      
     Ratio of Expenses to Average Net Assets after waivers                                         
                                                                    1.60%(c)             1.58%(f)  
     Ratio of Net Investment Income to Average Net Assets                                          
        after waivers                                               0.36%(c)             0.46%(f)  
     Ratio of Expenses to Average Net Assets before waivers                                        
                                                                    1.71%(c)             2.45%(f)  
     Ratio of Net Investment Income (Loss) to Average Net                                          
        Assets before waivers                                       0.25%(c)           (0.41)%(f)  
     Portfolio Turnover Rate (G)                                  102.70%               44.10%     
     Average Brokerage Commissions (h)                            $0.0008                N.A.      


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(a) Commencement of operations.                                                 
(b) On May 17, 1996, the Fund began offering two classes of shares, Investor    
Shares and Advisor Shares, and all then outstanding shares of the Fund  
were converted to Investor Shares.                                      
(c) Includes the Fund's proportionate share of income and expenses of the       
Portfolio.                                                              
(d) The amount shown for a share outstanding does not correspond with the       
aggregate net gain (loss) on investments for the period ended due to the
 timing of sales and repurchases of Fund shares in relation to fluctuating
market values of the investments of the Fund.                           
(e) Total return calculation does not include the purchase or redemption fee    
of 0.50%, respectively.                                                 
(f) Annualized.                                                                 
(g) Portfolio turnover rate represents the rate of portfolio activity. The      
rate for year ended October 31, 1996, represents the portfolio turnover 
rate of the Portfolio.                                                  
(h) Amount represents the average commission per share paid to brokers on the   
purchase and sale of the Portfolio's investment portfolio securities.   

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INVESTMENT OBJECTIVE                                                            

The investment objective of the Fund is to seek to achieve long-term
capital appreciation through direct or indirect investment in equity and debt   
securities of issuers domiciled or doing business in emerging market countries  
in regions such as Southeast Asia, Latin America, and Eastern and Southern      
Europe. Current income will be incidental to the Fund's objective.              

The Fund is designed for investors who seek the aggressive growth   
potential of emerging markets and are willing to bear the special risks of      
investing a portion of their assets in those markets. The Fund is not a complete
investment program and investments in the securities of foreign issuers         
generally involve risks in addition to the risks associated with investments in 
the securities of U.S. issuers. The Fund is not intended for investors whose    
objective is assured income or preservation of capital. See "Risk               
Considerations."                                                                

     The Fund currently seeks to achieve its investment objective by investing
all of its investable assets in the Portfolio, which has substantially the same 
investment objective and substantially similar policies as the Fund. There can  
be no assurance that the Fund or Portfolio will achieve its investment          
objective.                                                                      

INVESTMENT POLICIES                                                             

   Although the following information describes the investment policies of
the Portfolio and the responsibilities of Schroder Core's Board of Trustees (the
"Schroder Core Board"), it applies equally to the Fund and the Trust's Board of 
Trustees (the "Trust Board"). Additional information concerning the investment  
policies of the Fund and the Portfolio is contained in the SAI.                 

     The investment objective, and the investment policies of the Fund and the
Portfolio that are designated as fundamental, may not be changed without        
approval of the holders of a majority of the outstanding voting securities of   
the Portfolio. A majority of outstanding voting securities means the lesser of  
(i) 67% of the shares present or represented at a shareholder meeting at which  
the holders of more than 50% of the outstanding shares are present or           
represented, or (ii) more than 50% of outstanding shares. Non-fundamental       
investment policies may be changed by the Schroder Core Board without approval  
of the investors in the Portfolio.                                              

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     Under normal market conditions, the Portfolio will invest at least 65% of
its total assets in emerging market equity and debt securities, including common
stocks; preferred stocks; convertible preferred stocks; stock rights and        
warrants; convertible debt securities; and non-convertible debt securities.     
(Investments in stock rights and warrants will not be considered for purposes of
determining compliance with this policy.) The Portfolio may invest up to 35% of 
its total assets in high-risk debt securities that are unrated or rated below   
investment grade. (See "Risk Considerations" below). Under certain              
circumstances, the Portfolio may invest indirectly in emerging market securities
by investing in other investment companies or vehicles. (See "Risk              
Considerations -- Investment in Other Investment Companies or Vehicles".) The   
Portfolio may acquire emerging market securities that are not denominated in    
emerging market currency.                                                       

  In recent years, many emerging market countries have begun programs of
economic reform: removing import tariffs, dismantling trade barriers,           
deregulating foreign investment, privatizing state-owned industries, permitting 
the value of their currencies to float against the dollar and other major       
currencies, and generally reducing the level of state intervention in industry  
and commerce. Important intra-regional economic integration also holds the      
promise of greater trade and growth. At the same time, significant progress has 
been made in restructuring the heavy external debt burden that certain emerging 
market countries accumulated during the 1970s and 1980s. While there is no      
assurance that these trends will continue, the Portfolio's investment adviser   
will seek out attractive investment opportunities in these countries.           

"Emerging market" countries are all those not included in the Morgan
Stanley Capital International World Index ("MSCI World") of major world         
economies. If, however, the investment adviser determines that the economy of a 
MSCI World-listed country is an emerging market economy, the adviser may include
such country in the emerging market category. The following countries are       
currently excluded from the Portfolio's emerging market category: Australia,    
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy,    
Japan, Malaysia, Netherlands, New Zealand, Norway, Singapore, Spain, Sweden,    
Switzerland, United Kingdom, and the United States of America. The Portfolio    
will not necessarily seek to diversify investments on a geographic basis and may
invest more than 25% of its total assets in issuers located in any one country. 
(See "Risk Considerations -- Geographic Concentration".)                        

An issuer of a security will be considered to be domiciled or doing 
business in an emerging market when (i) it is organized under the laws of an    
emerging market country; (ii) its primary securities trading market is in an    
emerging market country; (iii) in the judgment of the investment adviser, at    
least 50% of the issuer's revenues or profits are derived from goods produced or
sold, investments made, or services performed in emerging market countries; or  
(iv) it has at least 50% of its assets situated in emerging market countries.   
The Portfolio may consider investment companies to be located in the country or 
countries in which they primarily invest.                                       

      The following specific policies and limitations are considered at the time
of any purchase; SCMI may not buy these instruments or use these techniques     
unless it believes that they are consistent with the Portfolio's objective.     

     Common and Preferred Stock and Warrants. The Portfolio's investments will
consist primarily of the common or preferred stock of established emerging      
market companies that are listed on recognized securities exchanges or traded in
other established markets. However, the Portfolio may make limited investment in
convertible preferred stock, warrants and stock rights.                         

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    Common stockholders are the owners of the company issuing the stock and,
accordingly, vote on various corporate governance matters such as mergers. They 
are not creditors of the company, but rather, upon liquidation of the company   
they would be entitled to their pro rata share of the company's assets after    
creditors (including fixed income security holders) and preferred stockholders  
(if any) are paid. Preferred stock is a class of stock having a preference over 
common stock as to dividends and, generally, as to the recovery of investment. A
preferred stockholder is also a shareholder and not a creditor of the company.  
Equity securities owned by the Portfolio may be traded in the over-the counter  
market or on a securities exchange, but are not necessarily traded every day or 
in the volume typical of securities traded on a major U.S. national securities  
exchange. As a result, disposition by the Portfolio of a security to meet       
withdrawals by interest holders may require the Portfolio to sell these         
securities at a discount from market prices, to sell during periods when        
disposition is not desirable, or to make many small sales over a lengthy period 
of time. The market value of all securities, including equity securities, is    
based upon the market's perception of value and not necessarily the "book value"
of an issuer or other objective measure of a company's worth.                   

    Convertible preferred stock generally may be converted at a stated price
within a specific amount of time into a specified number of shares of common    
stock. A convertible security entitles the holder to receive the dividend paid  
on preferred stock until the convertible security is converted or exchanged.    
Before conversion, convertible securities have characteristics similar to       
non-convertible debt securities in that they ordinarily provide a stream of     
income with generally higher yields than those of common stocks of the same or  
similar issuers. These securities are usually senior to common stock in a       
company's capital structure, but usually are subordinated to non-convertible    
debt securities. In general, the value of a convertible security is the higher  
of its investment value (its value as a fixed income security) and its          
conversion value (the value of the underlying shares of common stock if the     
security is converted). As a fixed income security, the value of a convertible  
security generally increases when interest rates decline and generally decreases
when interest rates rise. The value of a convertible security is, however, also 
influenced by the value of the underlying common stock.                         

    The Portfolio may also invest in warrants, which are options to purchase
an equity security at a specified price (usually representing a premium over the
applicable market value of the underlying equity security at the time of the    
warrant's issuance) and usually during a specified period of time.              

    American Depository Receipts ("ADRs"). Due to the absence of established
securities markets in certain emerging market countries and restrictions in     
certain countries on direct investment by foreign entities, the Portfolio may   
invest in certain emerging market issuers through the purchase of sponsored and 
unsponsored American Depository Receipts ("ADRs") or other similar              

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securities, such as American Depository Shares, Global Depository Shares or     
International Depository Receipts. ADRs are receipts typically issued by U.S.   
banks evidencing ownership of the underlying securities into which they are     
convertible. These securities may or may not be denominated in the same currency
as the underlying securities. Unsponsored ADRs may be created without the       
participation of the foreign issuer. Holders of unsponsored ADRs generally bear 
all the costs of the ADR facility, whereas foreign issuers typically bear       
certain costs in a sponsored ADR. The bank or trust company depository of an    
unsponsored ADR may be under no obligation to distribute shareholder            
communications received from the foreign issuer or to pass through voting       
rights.                                                                         

Debt Securities. The Portfolio may seek capital appreciation through
investment in emerging market convertible or non-convertible debt securities.   
Capital appreciation in debt securities may arise as a result of a favorable    
change in relative foreign exchange rates, in relative interest rate levels, or 
in the creditworthiness of issuers. The receipt of income from such debt        
securities is incidental to the Portfolio's objective of long-term capital      
appreciation. Such income can be used, however, to offset the operating expenses
of the Portfolio. In accordance with its investment objective, the Portfolio    
will not seek to benefit from anticipated short-term fluctuations in currency   
exchange rates. The Portfolio also may invest to a certain extent in debt       
securities in order to participate in debt-to-equity conversion programs        
incident to corporate reorganizations.                                          

     Debt securities are generally subject to two kinds of risk -- Credit risk
and market risk. Credit risk refers to the ability of the debtor, and any other 
obligor, to pay principal and interest on the debt as it becomes due. The       
Portfolio may, from time to time, invest in debt securities with high risk and  
high yields (as compared to other debt securities meeting the Portfolio's       
investment criteria).                                                           

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The debt securities in which the Portfolio invests may be unrated, but will not 
be in default at the time of purchase. Market risk refers to the tendency of the
value of debt securities to vary inversely with interest rate changes. Certain  
debt instruments may also be subject to extension risk, which refers to change  
in total return on a debt instrument resulting from extension or abbreviation of
the instrument's maturity.                                                      

The Portfolio may invest in debt securities issued or guaranteed by 
emerging market governments (including countries, provinces and municipalities) 
or their agencies and instrumentalities ("governmental entities"); debt         
securities issued or guaranteed by international organizations designated or    
supported by multiple foreign governmental entities (which are not obligations  
of foreign governments) to promote economic reconstruction or development; and  
debt securities issued by corporations or financial institutions.               

Brady Bonds. The Portfolio may invest a portion of its assets in Brady Bonds,   
which are securities created through the exchange of existing commercial bank   
loans to sovereign entities for new obligations in connection with debt         
restructuring (under a debt restructuring plan introduced by former U.S.        
Secretary of the Treasury, Nicholas F. Brady). Brady Bonds have been issued only
recently, and therefore do not have a long payment history. Brady Bonds may have
collateralized and uncollateralized components, are issued in various currencies
and are actively traded in the over-the-counter secondary market. Brady Bonds   
are not considered U.S. Government securities. In light of the residual risk    
associated with the uncollateralized portions of Brady Bonds and, among other   
factors, the history of defaults with respect to commercial bank loans by public
and private entities of countries issuing Brady Bonds, investments in Brady     
Bonds are considered speculative. Brady Bonds acquired by the Portfolio could be
subject to restructuring arrangements or to requests for new credit, which could
cause the Portfolio to suffer a loss of interest or principal on its holdings.  
(For further information see "Brady Bonds," in the Statement of Additional      
Information.)                                                                   

      Investment in Other Investment Companies or Vehicles. The Portfolio may be
able to invest in certain emerging markets solely or primarily through          
governmentally authorized investment vehicles or                                

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companies. Pursuant to the 1940 Act, the Portfolio may invest up to 10% of its  
total assets in the shares of other investment companies and up to 5% of its    
total assets in any one investment company, as long as each investment does not 
represent more than 3% of the outstanding voting stock of the investment company
at the time of such investment.                                                 

    When investing through investment companies the Fund may pay substantial
premiums above such investment companies' net asset value per share. Such       
investments are subject to limitations under the 1940 Act and market            
availability. The Portfolio does not intend to invest in other investment       
companies unless, in the judgment of SCMI, the potential benefits of such       
investment justify the payments of any applicable premiums or sales charges. As 
a shareholder in an investment company, the Portfolio would bear its ratable    
share of the investment company's expenses, including its advisory and          
administrative fees. At the same time, the Portfolio would continue to pay its  
own fees and expenses.                                                          

  Temporary Defensive Investments. For temporary defensive purposes, the
Portfolio may invest without limitation in (or enter into repurchase agreements 
maturing in seven days or less with U.S. banks and broker-dealers with respect  
to) short-term debt securities, including commercial paper, U.S. Treasury bills,
other short-term U.S. Government securities, certificates of deposit, and       
bankers' acceptances of U.S. banks. The Portfolio also may hold cash and time   
deposits denominated in any major foreign currency in foreign banks. See the SAI
for further information about these securities.                                 

     Repurchase Agreements. The Portfolio may invest in repurchase agreements,
which are a means of investing monies for a short period, whereby a seller -- a 
U.S. bank or recognized broker-dealer -- sells securities to the Portfolio and  
agrees to repurchase them (at the Portfolio's cost plus interest) within a      
specified period (normally one day). The value of the underlying securities     
purchased by the Portfolio is monitored at all times by SCMI to ensure that the 
total value of the securities equals or exceeds the value of the repurchase     
agreement. The Portfolio's custodian bank holds the securities until they are   
repurchased. If the seller defaults under a repurchase agreement, the Portfolio 
may have difficulty exercising its rights to the underlying securities and may  
incur costs and experience time delays in disposing of them. To evaluate        
potential risk, SCMI reviews the creditworthiness of banks and dealers with     
which the Portfolio enters into repurchase agreements.                          

      Foreign Exchange Contracts. Changes in currency exchange rates will affect
the U.S. dollar values of securities denominated in foreign currencies. The rate
of exchange between the U.S. dollar and other currencies fluctuates in response 
to forces of supply and demand in the foreign exchange markets. These forces are
affected by the international balance of payments and other economic and        
financial conditions, government intervention, speculation, and other factors,  
many of which may be difficult (if not impossible) to predict. When investing in
foreign securities, the Portfolio usually effects currency exchange transactions
on a spot (i.e., cash) basis at the spot rate prevailing in the foreign exchange
market. The Portfolio incurs foreign exchange expenses in converting assets from
one currency to another.                                                        

      The Portfolio may enter into forward contracts for the purchase or sale of
foreign currency (i) to "lock in" the U.S. dollar price of the securities       
denominated in a foreign currency or the U.S. dollar value of interest and      
dividends to be paid on such securities or (ii) to hedge against the possibility
that a foreign currency may suffer a decline against the U.S. dollar. A forward 
currency contract is an obligation to purchase or sell a specific currency at a 
future date (which may be any fixed number of days from the date of the contract
agreed upon by the parties) at a price set at the time of the contract. This    
method of attempting to hedge against a decline in the value of a currency does 
not eliminate fluctuations in the underlying prices of securities and exposes   
the Portfolio to the risk that the counterparty is unable to perform.           

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Although the strategy of engaging in foreign currency transactions could reduce 
the risk of loss due to a decline in the value of the hedged currency, it could 
also limit the potential gain from an increase in the value of the currency. The
Portfolio does not intend to maintain a net exposure to such contracts if the   
fulfillment of obligations under such contracts would obligate it to deliver an 
amount of foreign currency in excess of the value of its portfolio securities or
other assets denominated in the currency. The Portfolio will not enter into     
these contracts for speculative purposes and will not enter into non-hedging    
currency contracts. The Portfolio will generally not enter into a forward       
contract with a term of greater than one year. Forward contracts are not        
exchange traded, and there can be no assurance that a liquid market will exist  
at a time when the Portfolio seeks to close out a forward contract. Currently,  
only a limited market, if any, exists for hedging transactions relating to      
currencies in certain emerging markets or to securities of issuers domiciled or 
principally engaged in business in certain emerging markets. This may limit the 
Portfolio's ability to effectively hedge its investments in those markets. These
contracts involve a risk of loss if SCMI fails to predict currency values. The  
Portfolio has no plan to enter into currency futures or options contracts, but  
may do so in the future. See "Risk Considerations--Currency Fluctuations and    
Devaluations."                                                                  

  Illiquid and Restricted Securities. The Portfolio will not purchase or
otherwise acquire any security if, as a result, more than 15% of its net assets 
(taken at current value) would be invested in securities that are illiquid (i)  
by virtue of the absence of a readily available market or (ii) because of legal 
or contractual restrictions on resale ("restricted securities"). There may be   
undesirable delays in selling illiquid securities at prices representing their  
fair value. This policy includes over-the-counter options held by the Portfolio 
and the portion of the assets used to cover such options. The limitation on     
investing in restricted securities does not include securities that may not be  
resold to the general public (pursuant to Rule 144A under the Securities Act of 
1933, as amended) but may be resold to qualified institutional purchasers. If   
SCMI determines that a "Rule 144A security" is liquid pursuant to guidelines    
adopted by the Schroder Core Board, the security will not be deemed illiquid.   
These guidelines take into account trading activity for the securities and the  
availability of reliable pricing information, among other factors. If there is a
lack of trading interest in a particular Rule 144A security, that security may  
become illiquid, which could affect the Portfolio's liquidity. See "Investment  
Policies -- Illiquid and Restricted Securities" in the SAI for further          
information.                                                                    

      Loans of Portfolio Securities. The Portfolio may lend portfolio securities
(otherwise than as occurs in repurchase transactions) to brokers, dealers and   
other financial institutions meeting specified credit conditions if the loan is 
collateralized in accordance with applicable regulatory requirements and if,    
after any loan, the value of the securities loaned does not exceed 25% of the   
value of the Portfolio's total assets. By so doing, the Portfolio attempts to   
earn interest income. In the event of the other party's bankruptcy, the         
Portfolio could experience delays in recovering the securities it lent; if, in  
the meantime, the value of the securities the Portfolio lent has increased, the 
Portfolio, and thus the Fund, could experience a loss.                          

 The Portfolio may lend its securities if it maintains in a segregated
account liquid assets equal to the current market value of the securities loaned
(including accrued interest thereon) plus the loan interest payable to the      
Portfolio. Any securities that the Portfolio receives as collateral will not    
become part of its portfolio at the time of the loan; and, in the event of a    
default by the borrower, the Portfolio will (if permitted by law) dispose of    
such collateral except for                                                      

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such part thereof that is a security in which the Portfolio is permitted to     
invest. While the securities are on loan, the borrower will pay the Portfolio   
any accrued income on those securities, and the Portfolio may invest the cash   
collateral and earn income or receive an agreed upon fee from a borrower that   
has delivered cash equivalent collateral. Cash collateral received by the       
Portfolio will be invested in U.S. Government securities and liquid high grade  
debt obligations. The value of securities loaned will be marked to market daily.
Portfolio securities purchased with cash collateral are subject to possible     
depreciation. Loans of securities by the Portfolio will be subject to           
termination at the Portfolio's or the borrower's option. The Portfolio may pay  
reasonable negotiated fees in connection with loaned securities, so long as such
fees are set forth in a written contract and approved by the Schroder Core      
Board. See "Loans of Portfolio Securities" in the SAI for further information on
securities loans.                                                               

Options and Futures Transactions. Although the Portfolio does not   
presently intend to do so, it may (a) write covered call options on portfolio   
securities and the U.S. dollar and emerging market currencies, without limit;   
(b) write covered put options on portfolio securities and the U.S. dollar and   
emerging market currencies with the limitation that the aggregate value of the  
obligations underlying the puts determined as of the date the options are sold  
will not exceed 50% of the Portfolio's net assets; (c) purchase call and put    
options in amounts up to 5% of its total assets; and (d)(i) purchase and sell   
futures contracts that are traded on U.S. and foreign commodity exchanges on    
underlying portfolio securities, any emerging market currency, U.S. and emerging
market fixed-income securities and such indices of U.S. or emerging market      
equity or fixed-income securities as may exist or come into being and (ii)      
purchase and write call and put options on such futures contracts, in all cases 
involving such futures contracts or options on futures contracts for hedging    
purposes only, and without limit, except that the Portfolio may not enter into  
futures contracts or purchase related options if, immediately thereafter, the   
amount committed to margin plus the amount paid for premiums for unexpired      
options on futures contracts generally exceeds 5% of the value of the           
Portfolio's total assets. All of the foregoing are referred to as "Hedging      
Instruments."                                                                   

 In general, the Portfolio may use Hedging Instruments: (1) to protect
against declines in the market value of the Portfolio's portfolio securities or 
stock index futures, and the currencies in which they are denominated, or (2) to
establish a position in securities markets as a temporary substitute for        
purchasing particular equity securities. The Portfolio will not use Hedging     
Instruments for speculation. Hedging Instruments have certain risks associated  
with them including: (a) the possible failure of such instruments as hedging    
techniques in cases where the price movement of the securities underlying the   
options or futures does not follow the price movements of the portfolio         
securities subject to the hedge; (b) potentially unlimited loss associated with 
futures transactions and the possible lack of a liquid secondary market for     
closing out a futures position; and (c) possible losses resulting from the      
inability of the Portfolio's investment adviser to predict the direction of     
stock prices, interest rates and other economic factors. In addition, only a    
limited market, if any, currently exists for hedging transactions relating to   
currencies in many emerging markets or to securities of issuers domiciled or    
principally engaged in business in emerging markets. This may limit the         
Portfolio's ability to effectively hedge its investments in such emerging market
countries. The Hedging Instruments the Portfolio may use and the risks          
associated with them are described in greater detail under "Options and Futures 
Transactions" in the SAI.                                                       

    When-Issued and Delayed Delivery Securities and Forward Commitments. The
Portfolio may purchase securities on a when-issued or delayed delivery basis or 
may purchase or sell securities on a forward commitment basis. When such        
transactions are negotiated, the price is fixed at the time of the commitment,  
but delivery and payment may take place a month or more after the date of the   
commitment. There is no overall limit on the percentage of the Portfolio's      
assets that may be committed to the purchase of securities on a when-issued,    
delayed delivery or forward commitment basis. An increase in the percentage of  
the Portfolio's assets committed to the purchase of securities on a when-issued,
delayed delivery or forward commitment basis may increase the volatility of the 
Portfolio's net asset value.                                                    

    When, As and If Issued Securities. The Portfolio may purchase securities
on a "when, as and if issued" basis under which the issuance of the security    
depends upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization, leveraged buyout or debt restructuring. If the        
anticipated event does not occur and the securities are not issued, the         
Portfolio will have lost an investment opportunity. There is no overall limit to
the percentage of the Portfolio's assets that may be committed to the purchase  
of securities on a "when, as and if issued" basis. An increase in the percentage
of the Portfolio's assets committed to the purchase of                          

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securities on a "when, as and if issued" basis may increase the volatility of   
its net asset value.                                                            

RISK CONSIDERATIONS                                                             

Foreign Investments. All investments, domestic and foreign, involve risk.       
Investment in the securities of foreign issuers may involve risks in addition to
those normally associated with investments in the securities of U.S. issuers.   
While the Portfolio will generally invest only in securities of companies and   
governments in countries that SCMI considers both politically and economically  
stable, all foreign investments are subject to risks of foreign political and   
economic instability, adverse movements in foreign exchange rates, the          
imposition or tightening of exchange controls, or other limitations on          
repatriation of foreign capital. Foreign investments are subject to the risk of 
changes in foreign governmental attitudes towards private investment that could 
lead to nationalization, increased taxation or confiscation of Portfolio assets.

   Moreover, (i) dividends payable on foreign securities may be subject to
foreign withholding taxes, thereby reducing the income earned by the Portfolio; 
(ii) commission rates payable on foreign portfolio transactions are generally   
higher than in the United States; (iii) accounting, auditing and financial      
reporting standards differ from those in the United States, which means that    
less information about foreign companies may be available than is generally     
available about issuers of comparable securities in the U.S.; (iv) foreign      
securities often trade less frequently and with lower volume than U.S.          
securities and consequently may exhibit greater price volatility; and (v)       
foreign securities trading practices, including those involving securities      
settlement, may expose the Portfolio to increased risk in the event of a failed 

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trade or the insolvency of a foreign broker-dealer or registrar.                

      Regulation and Liquidity of Markets. Government supervision and regulation
of exchanges and brokers in emerging market countries is typically less         
extensive than in the United States. These markets may have different clearance 
and settlement procedures, and in certain cases, settlements have not kept pace 
with the volume of securities transactions, making them difficult to conduct.   
Delays in settlement could adversely affect or interrupt the Portfolio's        
intended investment program or result in investment losses due to intervening   
declines in security values.                                                    

     Securities markets in emerging market countries are substantially smaller
than U.S. securities markets and have substantially lower trading volume,       
resulting in diminished liquidity and greater price volatility. Reduced         
secondary market liquidity may make it more difficult for the Portfolio to      
determine the value of its portfolio securities or dispose of particular        
instruments when necessary. Brokerage commissions and other transaction costs on
foreign securities exchanges are also generally higher.                         

      Emerging Markets. In any emerging market country, there is the possibility
of expropriation of assets, confiscatory taxation, nationalization of companies 
or industries, foreign exchange controls, foreign investment controls on daily  
stock market movements, default in foreign government securities, political or  
social instability, or diplomatic developments that could affect investments in 
those countries. In the event of expropriation, nationalization or other        
confiscation, the Portfolio could lose its entire investment in a country. The  
economies of developing countries generally are heavily dependent upon          
international trade and, accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative  
currency values and other protectionist measures imposed or negotiated by the   
countries with which they trade. There may also be less monitoring and          
regulation of emerging markets and the activities of brokers there. Investing   
may require that the Portfolio adopt special procedures, seek local government  
approvals or take other actions that may incur costs for the Portfolio.         

Certain emerging market countries may restrict investment by foreign
entities by limiting the size of foreign investment in certain issuers;         
requiring prior approval of foreign investment by the government; imposing      
additional tax on foreign investors; or limiting foreign investors to specific  
classes of securities of an issuer that have less advantageous rights (with     
regard to price or convertibility, for example) than classes available to       
domiciliaries of the country. These restrictions or controls may at times limit 
or preclude investment in certain securities and may increase the costs and     
expenses of the Portfolio.                                                      

     Currency Fluctuations and Devaluations. Because the Portfolio will invest
heavily in non-U.S. currency-denominated securities, changes in foreign currency
exchange rates will affect the value of the Portfolio's investments. A decline  
against the dollar in the value of currencies in which the Portfolio's          
investments are denominated will result in a corresponding decline in the dollar
value of the Portfolio's assets. This risk is heightened in some emerging market
countries. Some emerging market countries may also have managed currencies that 
do not freely float against the dollar.                                         

The Portfolio is required to distribute substantially all of its    
investment income in U.S. dollars. Because most of the Portfolio's income will  
be received and realized in foreign currencies, a decline in the value of a     
particular foreign currency against the U.S. dollar that occurs after the       
Portfolio's income has been earned may require the Portfolio to liquidate some  
portfolio securities to acquire sufficient U.S. dollars to make such            
distributions. Similarly, if the exchange rate declines between the time the    
Portfolio incurs expenses in U.S. dollars and the time such expenses are paid,  
the Portfolio may be required to liquidate additional foreign securities to     
purchase the U.S. dollars required to meet such expenses.                       

         Inflation. Several emerging market countries have experienced high, and
in some periods extremely high, rates of inflation in recent years. Inflation   
and rapid fluctuations in inflation rates may adversely affect these countries' 
economies and securities markets. Further, inflation accounting rules in some   
emerging market countries require, for companies that keep accounting records in
the local currency, that certain assets and liabilities be restated on          

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the company's balance sheet in order to express items in terms of currency of   
constant purchasing power. Inflation accounting may indirectly generate losses  
or profits for certain emerging market companies.                               

 Non-Diversified Investments. Because suitable investments in emerging
market countries may be limited, the Portfolio, like the Fund, has classified   
itself as a "non-diversified investment company" under the 1940 Act so that it  
may invest more than 5% of its total assets in the securities of a single       
issuer. This classification may not be changed without a shareholder vote.      
However, so that the Portfolio may continue to qualify as a "regulated          
investment company" under Subchapter M of the Internal Revenue Code of 1986, as 
amended at the close of each quarter of the taxable year, (i) not more than 25% 
of the market value of the Portfolio's total assets will be invested in the     
securities of a single issuer, and (ii) with respect to 50% of the market value 
of its total assets, not more than 5% will be invested in the securities of a   
single issuer; and the Portfolio will not own more than 10% of the outstanding  
voting securities of a single issuer. See "Dividends, Distributions and Taxes." 

To the extent the Portfolio makes investments in excess of 5% of its
assets in a particular issuer, its exposure to credit and market risks          
associated with that issuer is increased. Also, since a relatively high         
percentage of the Portfolio's assets may be invested in the securities of a     
limited number of issuers, the Portfolio may be more susceptible to any single  
economic, political or regulatory occurrence than a diversified investment      
company.                                                                        

   Geographic Concentration. The Portfolio may invest more than 25% of its
total assets in issuers located in any one country. To the extent it invests in 
issuers of one country, the Portfolio is susceptible to factors adversely       
affecting that country, including political and economic developments and       
foreign exchange rate fluctuations as discussed above. The value of the         
Portfolio's assets may fluctuate more widely than the value of shares of a      
comparable fund with less geographic concentration.                             

Certain Risks of Debt Securities. The Portfolio may invest without limitation in
investment grade emerging market debt securities; it may invest up to 35% of its
total assets in debt securities that are unrated or are rated below investment  
grade (below Baa by Moody's or BBB by S&P; for a further description of S&P's   
and Moody's securities ratings please see the Appendix to the SAI). Note that   
even debt securities rated Baa by Moody's are considered to have speculative    
characteristics. Below investment grade securities (and unrated securities of   
comparable quality) ("high yield/high risk securities") are predominantly       
speculative with respect to the capacity to pay interest and repay principal,   
and generally involve a greater volatility of price than securities in higher   
rating categories. These securities are commonly referred to as "junk" bonds.   
The risks associated with junk bonds are generally greater than those associated
with higher-rated securities. The Portfolio is not obligated to dispose of      
securities due to rating changes by Moody's, S&P or other rating agencies. The  
Portfolio is not authorized to purchase debt securities that are in default,    
except for sovereign debt (discussed below) in which the Portfolio may invest no
more than 5% of its total assets while such sovereign debt securities are in    
default.                                                                        

     In purchasing high yield/high risk securities, the Portfolio will rely on
the investment adviser's judgment, analysis and experience in evaluating the    
creditworthiness of an issuer of such securities. Nonetheless, investors should 
review the investment objective and policies of the Fund and consider their     
willingness to assume risk before making an investment.                         

High yield/high risk securities' market values are affected more by 
individual issuer developments and are more sensitive to adverse economic       
changes than are higher-rated securities. Issuers of high yield/high risk       

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securities may be highly leveraged and may not have more traditional methods of 
financing available to them. During economic downturns or substantial periods of
rising interest rates, issuers of high yield/high risk securities, especially   
highly leveraged ones, may be less able to service their principal and interest 
payment obligations, meet their projected business goals, or obtain additional  
financing. The risk of loss due to default by the issuer is significantly       
greater for holders of high yield/high risk securities because such securities  
may be unsecured and may be subordinated to other creditors of the issuer. In   
addition, the Portfolio may incur additional expenses if it is required to seek 
recovery upon a default by the issuer of such an obligation or participate in   
the restructuring of such obligation.                                           

  Periods of economic uncertainty and change will likely cause increased
volatility in the market prices of high yield/high risk securities and,         
correspondingly, the Portfolio's net asset value if it invests in such          
securities; market prices of such securities structured as zero coupon or       
pay-in-kind securities are more affected by interest rate changes and thus tend 
to be more volatile than securities that pay interest periodically and in cash. 

      High yield/high risk securities may have call or redemption features which
would permit an issuer to repurchase the securities from the Portfolio. If a    
call were exercised by the issuer during a period of declining interest rates,  
the Portfolio would likely have to replace called securities with lower yielding
securities, thus decreasing the Portfolio's net investment income and dividends 
to shareholders.                                                                

     While a secondary trading market for high yield/high risk securities does
exist, it is generally not as liquid as the secondary market for higher rated   
securities. In periods of reduced secondary market liquidity, prices of high    
yield/high risk securities may become volatile and experience sudden and        
substantial price declines. The Portfolio may therefore have difficulty         
disposing of particular issues to meet its liquidity needs or in response to a  
specific economic event (such as a deterioration in the creditworthiness of the 
issuer). Reduced secondary market liquidity for certain high yield/high risk    
securities also may make it more difficult for the Portfolio to obtain accurate 
market quotations (for purposes of valuing the Portfolio's investment           
portfolio): market quotations are generally available on many high yield/high   
risk securities only from a limited number of dealers and may not necessarily   
represent firm bids of such dealers or prices for actual sales. Under such      
conditions, high yield/high risk securities may have to be valued at fair value 
as determined by the Schroder Core Board or SCMI under Board-approved           
guidelines.                                                                     

 Adverse publicity and investor perceptions (which may not be based on
fundamental analysis) may decrease the value and liquidity of high yield/high   
risk securities, particularly in a thinly traded market. Factors adversely      
affecting the market value of high yield/high risk securities are likely to     
adversely affect the Portfolio's, and thus the Fund's, net asset value.         

   Sovereign Debt. Investment in sovereign debt carries high risk. Certain
emerging market countries such as Argentina, Brazil and Mexico are among the    
largest debtors to commercial banks and foreign governments. At times, certain  
emerging market countries have declared moratoria on the payment of principal   
and/or interest on outstanding debt. The governmental entity that controls the  
repayment of sovereign debt may not be able or willing to repay the principal   
and/or interest when due in accordance with the terms of such debt. A           
governmental entity's willingness or ability to repay principal and interest    
when it is due may be affected by many factors, such as its cash flow situation,
the extent of its foreign reserves, the availability of sufficient foreign      
exchange, the relative size of the debt service burden to the economy as a      
whole, and political restraints. The Portfolio, as a holder of sovereign debt,  
may be asked to participate in the rescheduling of such debt and to extend      
further loans to governmental entities. There is no bankruptcy proceeding       

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by which defaulted sovereign debt may be collected.                             

    The sovereign debt instruments in which the Portfolio may invest involve
great risk and are deemed to be the equivalent in terms of quality to high      
yield/high risk securities discussed above and are subject to many of the same  
risks as such securities. Similarly, the Portfolio may have difficulty disposing
of certain sovereign debt obligations because there may be a thin trading market
for such securities. The Portfolio will not invest more than 5% of its total    
assets in sovereign debt in default.                                            

      Portfolio Turnover. The Portfolio may engage in short-term trading but its
portfolio turnover rate is not expected to exceed 100%. High portfolio turnover 
and short-term trading involve correspondingly greater commission expenses and  
transaction costs. Also, higher portfolio turnover rates may cause shareholders 
of the Portfolio to recognize gains for federal income tax purposes. See        
"Taxation" in the SAI.                                                          

MANAGEMENT OF THE FUND                                                          

X Schroder Group Assets Under Management Worldwide
As of December 31, 1996 -- Over $130 Billion

 [GRAPHIC OMITTED]

THE SCHRODER INVESTMENT MANAGEMENT GROUP INVESTMENT AND REPRESENTATIVE OFFICES
WORLDWIDE INCLUDE NEW YORK, LONDON, BOSTON, ZURICH, WARSAW, TOKYO, HONG KONG, 
BEIJING, SHANGHAI, TAIPEI, SEOUL, BANGKOK, KUALA LUMPUR, SINGAPORE, JAKARTA,
SYDNEY, BUENOS AIRES, SAO PAULO, BOGOTA AND CARACAS.

 TOGETHER, SCHRODER CAPITAL MANAGEMENT INTERNATIONAL AND
SCHRODER CAPITAL MANAGEMENT MANAGE OVER $24 BILLION.

Boards of Trustees                                                              

   The business and affairs of the Fund are managed under the direction of
the Trust Board. The business and affairs of the Portfolio are managed under the
direction of the Schroder Core Board. Additional information regarding the      
trustees and executive officers of the Trust, as well as Schroder Core's        
trustees and executive officers, may be found in the SAI under the heading      
"Management, Trustees and Officers."                                            

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Investment Adviser and Portfolio Managers                                       

As investment adviser to the Portfolio, SCMI manages the Portfolio and          
continuously reviews, supervises and administers its investments. SCMI is       
responsible for making decisions relating to the Portfolio's investments and    
placing purchase and sale orders regarding such investments with brokers or     
dealers it selects. For these services, the Investment Advisory Agreement       
between SCMI and Schroder Core provides that SCMI will receive a monthly        
advisory fee at the annual rate of 0.45% of the Portfolio's average daily net   
assets, which the Fund indirectly bears through its investment in the Portfolio.

SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the           
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is 
the holding company parent of a large world-wide group of banks and financial   
services companies (referred to as the "Schroder Group"), with associated       
companies and branch and representative offices in eighteen countries. The      
Schroder Group specializes in providing investment management services.         

John A. Troiano, a Vice President of the Trust and Schroder Core, with the      
assistance of an SCMI investment committee, is primarily responsible for the    
day-to-day management of the Portfolio's investment portfolio. Mr. Troiano      
managed the Fund's investment portfolio from its inception until it invested its
assets in the Portfolio and has managed the Portfolio's assets since its        
inception. Mr. Troiano has been a Managing Director of SCMI since October 1995  
and has been employed by various Schroder Group companies in the investment     
research and portfolio management areas since 1988.                             

The Fund began pursuing its investment objective through investment in the      
Portfolio on November 1, 1995. The Fund may withdraw its investment from the    
Portfolio at any time if the Board determines that it is in the best interests  
of the Fund and its shareholders to do so. (See "Other Information -- Fund      
Structure.") Accordingly, the Fund has retained SCMI as its investment adviser  
to manage the Fund's assets in the event the Fund withdraws its investment. SCMI
does not receive an investment advisory fee with respect to the Fund so long as 
the Fund remains completely invested in the Portfolio (or any other investment  
company). If the Fund resumes directly investing in portfolio securities, the   
Fund will pay SCMI a monthly advisory fee at the annual rate of 1.00% of the    
Fund's average daily net assets. The investment advisory agreement between SCMI 
and the Trust with respect to the Fund is the same in all material respects as  
the investment advisory contract between SCMI and Schroder Core with respect to 
the Portfolio (except as to the parties, the fees payable thereunder, the       
circumstances under which fees will be paid and the jurisdiction whose laws     
govern the agreement). For the fiscal year ended October 31, 1996, the Fund paid
SCMI an advisory fee of 0.10% of its average daily net assets.                  

Administrative Services                                                         

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On behalf of the Fund, the Trust has entered into an administrative services    
contract with Schroder Advisors, 787 Seventh Avenue, New York, New York 10019.  
On behalf of the Fund, the Trust has also entered into a sub-administration     
agreement with Forum, Two Portland Square, Portland, Maine 04101. Pursuant to   
these agreements, Schroder Advisors and Forum provide certain management and    
administrative services necessary for the Fund's operations. Schroder Advisors  
is compensated at the annual rate of 0.05 of the Fund's average daily net       
assets. Forum is compensated at the annual rate of 0.05% of the Fund's average  
daily net assets.                                                               

Schroder Advisors and Forum provide similar services to the Portfolio, for which
the Portfolio pays Schroder Advisors an annual rate of 0.075% and pays Forum a  
monthly fee at the annual rate of 0.075% of the Portfolio's average daily net   
assets.                                                                         

Distribution Plan and Shareholder Services Plan                                 

Schroder Advisors acts as distributor of the Fund's shares. Under a distribution
plan, adopted pursuant to Rule 12b-1 under the 1940 Act (the "Distribution      
Plan") by the Trust on behalf of the Fund, the Trust each month may compensate  
Schroder Advisors or others for costs and reimburse expenses incurred in        
connection with the distribution of Advisor Shares. This payment is subject to a
limit of an annual rate of 0.50% of the Fund's average daily net assets         
attributable to Advisor Shares. The maximum annual amount payable under the     
Distribution Plan is currently 0.25%, but no payments will be made under the    
Distribution Plan with respect to Advisor Shares until the Board so authorizes. 

Reimbursement under the Distribution Plan may be for various types of costs,    
including: (i) advertising expenses, (ii) costs of printing prospectuses and    
other materials to be given or sent to prospective investors, (iii) expenses of 
sales employees or agents of Schroder Advisors, including salary, commissions,  
travel and related expenses in connection with the distribution of Advisor      
Shares, (iv) payments to broker-dealers who advise shareholders regarding the   
purchase, sale, or retention of Advisor Shares, and (v) payments to banks, trust
companies, broker-dealers (other than Schroder Advisors) or other financial     
organizations (collectively, "Service Organizations"). Payments to Service      
Organizations under the Distribution Plan are calculated by reference to the    
average daily net assets of Advisor Shares held by shareholders who have a      
brokerage or other service relationship with the Service Organization. The Fund 
will not be liable for distribution expenditures made by Schroder Advisors in   
any given year in excess of the maximum amount payable under the Distribution   
Plan in that year. Costs or expenses in excess of the annual limit may not be   
carried forward to future years. Salary expenses of sales personnel who are     
responsible for marketing various shares of portfolios of the Trust may be      
allocated to those portfolios, including the Advisor Shares of the Fund, that   
have adopted a plan similar to that of the Fund on the basis of average daily   
net assets. Travel expenses may be allocated to, or divided among, the          
particular portfolios of the Trust for which they are incurred.                 

The Trust, on behalf of the Fund, has also adopted a shareholder Service Plan   
(the "Shareholder Service Plan") pursuant to which Schroder Advisors is         
authorized to pay Service Organizations a servicing fee. Payments under the     
Shareholder Service Plan may be for various types of services, including: (i)   
answering customer inquiries regarding the manner in which purchases, exchanges 
and redemptions of shares of the Fund may be effected and other matters         
pertaining to the Fund's services, (ii) providing necessary personnel and       
facilities to establish and maintain shareholder accounts and records, (iii)    
assisting shareholders in arranging for processing purchase, exchange and       
redemption transactions, (iv) arranging for the wiring of funds, (v)            

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guaranteeing shareholder signatures in connection with redemption orders and    
transfers and changes in shareholder-designated accounts, (vi) integrating      
periodic statements with other customer transactions and (vii) providing such   
other related services as the shareholder may request. The maximum amount       
payable under the Shareholder Service Plan to Schroder Advisors is 0.25% of the 
Fund's average daily net assets attributable to Advisor Shares.                 

Payments to Service Organizations under the Shareholder Service Plan are        
calculated by reference to the average daily net assets of Advisor Shares held  
by shareholders who have a brokerage or other service relationship with the     
Service Organization. Some Service Organizations may impose additional or       
different conditions on their clients, such as requiring them to invest more    
than the minimum investments specified by the Fund or charging a direct fee for 
servicing. If imposed, these fees would be in addition to any amounts paid to   
the Service Organization by Schroder Advisors. Each Service Organization has    
agreed to transmit to its clients a schedule of any such fees. Shareholders     
using Service Organizations are urged to consult them regarding any such fees or
conditions.                                                                     

Expenses                                                                        

SCMI and Schroder Advisors have voluntarily undertaken to waive a portion of    
their fees or assume certain expenses of the Fund in order to limit total Fund  
expenses (excluding taxes, interest, brokerage commissions and other portfolio  
transaction expenses and extraordinary expenses) chargeable to Advisor Shares to
1.85% of the average daily net assets of the Fund attributable to those shares. 
This expense limitation cannot be modified or withdrawn except by a majority    
vote of the Trustees of the Trust who are not interested persons (as defined in 
the 1940 Act) of the Trust. If expense reimbursements are required, they will be
made on a monthly basis; SCMI will reimburse the Fund for four-fifths of the    
amount required and Schroder Advisors will reimburse the Fund for the remaining 
one-fifth. Forum may voluntarily waive all or a portion of their fees, from time
to time.                                                                        

Portfolio Transactions                                                          

SCMI places orders for the purchase and sale of the Portfolio's investments with
brokers and dealers selected by SCMI and seeks "best execution" of such         
portfolio transactions. The Portfolio may pay brokers higher than the lowest    
available commission rates when SCMI believes it is reasonable to do so in light
of the value of the brokerage and research services provided. Commission rates  
for brokerage transactions are fixed on many foreign securities exchanges, which
may cause higher brokerage expenses to accrue to the Portfolio than would be the
case for comparable transactions effected on U.S. securities exchanges.         

Subject to the Portfolio's policy of obtaining the best price consistent with   
quality of execution on transactions, SCMI may employ Schroder Securities       
Limited and its affiliates (collectively, "Schroder Securities"), affiliates of 
SCMI, to effect transactions of the Portfolio on certain foreign securities     
exchanges. Because of the affiliation between SCMI and Schroder Securities, the 
Portfolio's payment of commissions to Schroder Securities is subject to         
procedures adopted by the Schroder Core Board designed to ensure that the       
commissions will not exceed the usual and customary brokers' commissions. No    
specific portion of the Portfolio's brokerage will be directed to Schroder      
Securities and in no event will Schroder Securities receive any brokerage in    
recognition of research services.                                               

Consistent with the Conduct Rules of the National Association of Securities     
Dealers, Inc., and subject to seeking the most favorable price and execution    
available and such other policies as the Schroder Core Board may determine, SCMI
may consider sales of shares of the Fund or any other entity that invests in the
Portfolio as a factor in the selection of broker-dealers to execute portfolio   
transactions for the Portfolio.                                                 

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Although the Portfolio does not currently engage in directed brokerage          
arrangements to pay expenses, it may do so in the future. These arrangements,   
(whereby brokers executing the Portfolio's portfolio transactions agree to pay  
designated expenses of the Portfolio if brokerage commissions generated by the  
Portfolio reached certain levels) might reduce the Portfolio's expenses (and,   
indirectly, the Fund's expenses), and would not be expected to materially       
increase the brokerage commissions paid by the Portfolio.                       

Code of Ethics                                                                  

The Trust, Schroder Core, SCMI, Schroder Advisors, and Schroders Incorporated   
have each adopted a code of ethics that contains a policy on personal securities
transactions by "access persons," including portfolio managers and investment   
analysts. That policy complies in all material respects with the recommendations
set forth in the Report of the Advisory Group on Personal Investing of the      
Investment Company Institute, of which the Trust is a member.                   

INVESTMENT IN THE FUND                                                          

Purchase of Shares                                                              

Investors may purchase Advisor Shares directly from the Trust.      
Prospectuses, sales material and Account Applications can be obtained from the  
Trust or through Forum Financial Corp., the Fund's transfer agent (the "Transfer
Agent"). See "Other Information -- Shareholder Inquiries." Investments may also 
be made through Service Organizations that assist their customers in purchasing 
shares of the Fund ("Service Organizations"). Service Organizations may charge  
their customers a service fee for processing orders to purchase or sell shares  
of the Fund. Investors wishing to purchase shares through their accounts at a   
Service Organization should contact that organization directly for appropriate  
instructions.                                                                   

 Shares of the Fund are offered at the net asset value next determined
after receipt of a completed Account Application (at the address set forth      
below). The minimum initial investment is $250,000. There is no minimum for     
subsequent investments. All purchase payments are invested in full and          
fractional shares. The Fund is authorized to reject any purchase order.         

     Purchases of Fund shares are subject to a purchase charge of 0.50% of the
amount invested. This charge is designed to cover the transaction costs the Fund
incurs (either directly or indirectly) as a result of investments in the Fund,  
including brokerage commissions in acquiring portfolio securities; currency     
transaction costs and transfer agent costs; and to protect the interests of     
shareholders. This charge, which is not a sales charge, is paid to the Fund, not
to Schroder Advisors or any other entity. The purchase charge is not assessed on
the reinvestment of dividends or distributions or shares purchased through a    
subscription in kind.                                                           

  Purchases may be made by mailing a check (in U.S. dollars), payable to
Schroder Emerging Markets Fund Institutional Portfolio, to:                     

             Schroder Emerging Markets Fund Institutional Portfolio --
Advisor Shares                              
P.O. Box 446                                
Portland, Maine 04112                       

For initial purchases, the check must be accompanied by a completed 
Account Application in proper form. Further documentation may be requested from 
corporations, administrators, executors, personal representatives,              

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directors or custodians to evidence the authority of the person or entity making
the subscription request.                                                       

  Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as 
follows:                                                                        

Chase Manhattan Bank                        
New York, NY                                
ABA No.: 021000021                          
For Credit To: Forum Financial Corp.        
Account. No.: 910-2-718187                  
                Ref.: Schroder Emerging Markets Fund Institutional Portfolio
Advisor Shares                              
Account of: (shareholder name)              
Account Number: (shareholder account number)

      The wire order must specify the name of the Fund, the shares' class (i.e.,
Advisor Shares), the account name and number, address, confirmation number,     
amount to be wired, name of the wiring bank, and name and telephone number of   
the person to be contacted in connection with the order. If the initial         
investment is by wire, an account number will be assigned and an Account        
Application must be completed and mailed to the Fund before any account will    
become active. Wire orders received prior to 4:00 p.m. (Eastern Time) on each   
day that the New York Stock Exchange is open for trading (a "Fund Business Day")
will be processed at the net asset value determined as of that day. Wire orders 
received after 4:00 p.m. (Eastern Time) will be processed at the net asset value
determined as of the next Fund Business Day. See "Net Asset Value" below.       

   The Fund's Transfer Agent establishes for each shareholder of record an
open account to which all shares purchased and all reinvested dividends and     
other distributions are credited. Although most shareholders elect not to       
receive share certificates, certificates for full shares can be obtained by     
written request to the Transfer Agent. No certificates are issued for fractional
shares.                                                                         

  The Transfer Agent will deem an account lost if six months have passed
since correspondence to the shareholder's address of record is returned, unless 
the Transfer Agent determines the shareholder's new address. When an account is 
deemed lost, dividends and other distributions will automatically be reinvested.
In addition, the amount of any outstanding checks for dividends and other       
distributions that have been returned to the Transfer Agent will be reinvested  
and the checks will be canceled.                                                

Retirement Plans and Individual Retirement Accounts                             

     Shares of the Fund are offered in connection with tax-deferred retirement
plans. Application forms and further information about these plans, including   
applicable fees, are available upon request. Before investing in the Fund       
through one of these plans, investors should consult their tax advisors.        

The Fund may be used as an investment vehicle for an IRA including  
SEP-IRA. An IRA naming The First National Bank of Boston as custodian is        
available from the Trust or the Transfer Agent. The minimum initial investment  
for an IRA is $250; the minimum subsequent investment is $250. Under certain    
circumstances contributions to an IRA may be tax deductible. IRAs are available 
to individuals (and their spouse) who receive compensation or earned income     
whether or not they are active participants in a tax-qualified or               
government-approved retirement plan. An IRA contribution by an individual or    
spouse who participates in a tax-qualified or government-approved retirement    
plan may not be deductible, depending upon the individual's income. Individuals 
also may establish an IRA to receive a "rollover" contribution of distributions 
from another IRA or qualified plan. Tax advice should be obtained before        
effecting a rollover.                                                           

Exchanges                                                                       

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Shareholders may exchange Shares of the Fund for shares of any other
series of the Trust so long as they meet the initial investment minimum of the  
fund being purchased and maintain the respective minimum account balance in each
fund in which they own shares. Exchanges between each Fund are at net asset     
value.                                                                          

     For federal income tax purposes an exchange is considered to be a sale of
shares on which a shareholder may realize a capital gain or loss. An exchange   
may be made by calling the Transfer Agent at (800) 344-8332 or by mailing       
written instructions to Schroder Capital Funds (Delaware), P.O. Box 446,        
Portland, Maine 04112. Exchange privileges may be exercised only in those states
where shares of the other series of the Trust may legally be sold. Exchange     
privileges may be amended or terminated at any time upon sixty (60) days'       
notice.                                                                         

Redemption of Shares                                                            

    Shares of the Fund are redeemed at their next determined net asset value
after receipt by the Fund (at the address set forth above under "Purchase of    
Shares") of a redemption request in proper form. Redemption requests may be made
between 9:00 a.m. and 6:00 p.m. (Eastern Time) on each Fund Business Day.       
Redemption requests that are received prior to 4:00 p.m. (Eastern Time) will be 
processed at the net asset value determined as of that day. Redemption requests 
that are received after 4:00 p.m. (Eastern Time) will be processed at the net   
asset value determined the next Fund Business Day. See "Net Asset Value" below. 

     Redemptions of Fund shares are subject to a redemption charge of 0.50% of
the net asset value of the shares redeemed. This charge is designed to cover the
transaction costs the Fund incurs in redeeming Fund shares (either directly or  
indirectly as a result of its investment in the Portfolio), including brokerage 
commissions in selling portfolio securities, currency transaction costs,        
transfer agent costs, and to protect the interests of shareholders. This charge,
which is not a sales charge, is paid to the Fund, not to Schroder Advisors or   
any other entity. The redemption charge is not assessed on shares acquired      
through the reinvestment of dividends or distributions or on redemptions in     
kind. For purposes of computing the redemption charge, redemptions by a         
shareholder are deemed to be made in the following order: (i) from Shares       
purchased through the reinvestment of dividends and distributions (with respect 
to which no redemption charge is applied) and (ii) from Shares for which the    
redemption charge is applicable, on a first purchased, first redeemed basis.    

     By Telephone. Redemption requests may be made by telephoning the Transfer
Agent at the telephone number on the cover page of this Prospectus. A           
shareholder must provide the Transfer Agent with the class of shares, the dollar
amount or number of shares to be redeemed, shareholder account number, and some 
additional form of identification such as a password. A redemption by telephone 
may be made only if the telephone redemption privilege option has been elected  
on the Account Application or otherwise in writing. In an effort to prevent     
unauthorized or fraudulent redemption requests by telephone, reasonable         
procedures will be followed by the Transfer Agent to confirm that telephone     
instructions are genuine. The Transfer Agent and the Trust generally will not be
liable for any losses due to unauthorized or fraudulent redemption requests, but
may be liable if they do not follow these procedures. Shares for which          
certificates have been issued may not be redeemed by telephone. In times of     
drastic economic or market change it may be difficult to make redemptions by    
telephone. If a shareholder cannot reach the Transfer Agent by telephone,       
redemption requests may be mailed or hand-delivered to the Transfer Agent.      

      Written Requests. Redemptions may be made by letter to the Fund specifying
the class of shares, the dollar amount or number of Shares to be redeemed, and  
the shareholder account number. The letter must also be signed in exactly the   
same way the account is registered (if there is more than one owner of the      
Shares, all must sign) and, in certain cases, signatures must be guaranteed by  
an institution that is acceptable to the Transfer Agent. Such institutions      
include certain banks, brokers, dealers (including municipal and government     
securities brokers and dealers), credit unions and savings associations.        
Notaries public are not acceptable. Further documentation may be requested to   
evidence the authority of the person or entity making the redemption request.   
Questions concerning the need for signature guarantees or documentation of      
authority should be directed to the Fund at the above address or by calling the 
telephone number appearing on the cover of                                      

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this Prospectus.                                                                

         If Shares to be redeemed are held in certificate form, the certificates
must be enclosed with the redemption request and the assignment form on the back
of the certificates (or an assignment separate from the certificates but        
accompanied by the certificates) must be signed by all owners in exactly the    
same way the owners' names are written on the face of the certificates.         
Requirements for signature guarantees and/or documentation of authority as      
described above could also apply. For your protection, the Fund suggests that   
certificates be sent by registered mail.                                        

  Additional Redemption Information. Checks for redemption proceeds will
normally be mailed within seven days. No redemption proceeds will be mailed     
until checks in payment for the purchase of the Shares to be redeemed have been 
cleared, which may take up to 15 calendar days from the purchase date. Unless   
other instructions are given in proper form, a check for the proceeds of a      
redemption will be sent to the shareholder's address of record.                 

   The Fund may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that exchange is closed,
(ii) the SEC has by order permitted such suspension, or (iii) an emergency (as  
defined by rules of the SEC) exists making disposal of portfolio investments or 
determination of the Fund's net asset value not reasonably practicable.         

  If the Trust Board determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment wholly or    
partly in cash, the Fund may redeem Shares in whole or in part by a distribution
in kind of portfolio securities (from the investment portfolio of the Portfolio 
or of the Fund), in lieu of cash. The Fund will, however, redeem Shares solely  
in cash up to the lesser of $250,000 or 1% of net assets during any 90-day      
period for any one shareholder. In the event that payment for redeemed Shares is
made wholly or partly in portfolio securities, the shareholder may be subject to
additional risks and costs in converting the securities to cash. See "Additional
Purchase and Redemption Information" in the SAI.                                

     The proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal income tax
purposes.                                                                       

     Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem Shares in any account (other than an IRA) if at any
time the account does not have a value of at least $100,000 unless the value of 
the account falls below that amount solely as a result of market activity.      
Shareholders will be notified that the value of the account is less than        
$100,000 and be allowed at least 30 days to make an additional investment to    
increase the account balance to at least $100,000.                              

Net Asset Value                                                                 

  The net asset value per share of the Fund is calculated separately for
each class of shares of the Fund at 4:00 p.m. (Eastern Time), Monday through    
Friday, each Fund Business Day, which excludes the following U.S. holidays: New 
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor 
Day, Thanksgiving Day and Christmas Day. Net asset value per Share is calculated
by dividing the aggregate value of the Fund's assets less all Fund liabilities, 
if any, by the number of Shares of the Fund outstanding.                        

   Generally, securities that are listed on recognized stock exchanges are
valued at the last reported sale price, on the day when the securities are      
valued (the "Valuation Day"), on the primary exchange on which the securities   
are principally traded. Listed securities traded on recognized stock exchanges  
for which there were no sales on the Valuation Day are valued at the last sale  
price on the preceding trading day or at closing mid-market                     

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prices. Securities traded in over-the-counter markets are valued at the most    
recent reported mid-market price. 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 Schroder Core Board.                   

Trading in securities on non-U.S. exchanges and over-the-counter markets may not
take place on every day that the New York Stock Exchange is open for trading.   
Furthermore, trading takes place in various foreign markets on days on which the
Fund's net asset value is not calculated. If events materially affecting the    
value of foreign securities occur between the time when their price is          
determined and the time when net asset value is calculated, such securities will
be valued at fair value as determined in good faith by using methods approved by
the Schroder Core                                                               

     Board. All assets and liabilities of the Portfolio denominated in foreign
currencies are valued in U.S. dollars based on the exchange rate last quoted by 
a major bank prior to the time when the net asset value of the Fund is          
calculated.                                                                     

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              

The Fund                                                                        

  The Fund intends to comply with the provisions of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies. By      
complying therewith, the Fund will not have to pay federal income tax on that   
part of its income that is distributed to shareholders. The Fund intends to     
distribute substantially all of its income and therefore, intends not to be     
subject to federal income tax.                                                  

     Dividends and capital gain distributions on Advisor Shares are reinvested
automatically in additional Advisor Shares at net asset value unless the        
shareholder has elected in the Account Application or otherwise in writing, to  
receive dividends and other distributions in cash.                              

      After every dividend and other distribution, the value of a Share declines
by the amount of the distribution. Purchases made shortly before a dividend or  
other distribution include in the purchase price the amount of the distribution,
which will be returned to the investor in the form of a taxable distribution.   

   Dividends and other distributions paid by the Fund with respect to both
classes of its shares will be calculated in the same manner and at the same     
time. The per share dividends on Advisor Shares are expected to be lower than   
the per share dividends on Investor Shares as a result of 12b-1 fees and other  
compensation payable to Service Organizations for distribution assistance and   
shareholder servicing for the Advisor Shares.                                   

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      Dividends from the Fund's income generally will be taxable to shareholders
as ordinary income, whether the dividends are invested in additional Shares or  
received in cash. Distributions by the Fund of any net capital gain will be     
taxable to a shareholder as long-term capital gain regardless of how long the   
shareholder has held the Shares. Each year the Trust will notify shareholders of
the tax status of dividends and other distributions.                            

      A redemption of Shares may result in taxable gain or loss to the redeeming
shareholder, depending on whether the redemption proceeds are more or less than 
the shareholder's basis in the redeemed Shares. If Shares are redeemed at a loss
after being held for six months or less, the loss will be treated as a          
long-term, rather than a short-term, capital loss to the extent of any capital  
gain distributions received on those Shares.                                    

     The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate   
shareholders who do not furnish the Fund with a correct taxpayer identification 
number. Withholding at that rate also is required from dividends and capital    
gain distributions payable to such shareholders who otherwise are subject to    
backup withholding. Depending on the residence of a shareholder for tax         
purposes, distributions from the Fund may also be subject to state and local    
taxes, including withholding taxes.                                             

    In an effort to adhere to certain tax requirements, the Fund may have to
limit its investment activity in some types of instruments.                     

   If the Fund's dividends exceed its taxable income in any year, all or a
portion of the Fund's dividends may be treated as a return of capital to        
shareholders for tax purposes. Any return of capital will reduce the cost basis 
of your shares, which will result in a higher reported capital gain or a lower  
reported capital loss when you sell your shares. Shareholders will be notified  
by the Trust if a distribution included a return of capital.                    

Effect of Foreign Taxes. Foreign governments may impose taxes on the
Portfolio and its investments, which generally reduce the Fund's income.        
However, an offsetting tax credit or deduction may be available to you. If so,  
your tax statement will show more taxable income or capital gain than was       
actually distributed by the Fund but will also show the amount of the available 
offsetting credit or deduction.                                                 

If the Fund is eligible to do so, it intends to elect to permit its 
shareholders to take a credit (or a deduction) for the Fund's share of foreign  
income taxes paid by the Portfolio. If the Fund does make such an election, its 
shareholders would include as gross income in their Federal income tax returns  
both (i) distributions received from the Fund and (ii) the amount that the Fund 
advises is their pro rata portion of foreign income taxes paid with respect to  
or withheld from, dividends and interest paid to the Portfolio from its foreign 
investments. Shareholders then would be entitled, subject to certain            
limitations, to take a foreign tax credit against their Federal income tax      
liability for the amount of such foreign taxes or else to deduct such foreign   
taxes as an itemized deduction from gross income.                               

The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the SAI   
for further information. Shareholders should consult their own tax advisors as  
to the tax consequences of their ownership of Shares.                           

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The Portfolio                                                                   

 The Portfolio is not required to pay federal income tax because it is
classified as a partnership for federal income tax purposes. All interest,      
dividends, gains and losses of the Portfolio will be deemed to have been "passed
through" to the Fund in proportion to the Fund's holdings in the Portfolio,     
regardless of whether such interest, dividends or gains have been distributed by
the Portfolio.                                                                  

    The Portfolio intends to conduct its operations so as to enable the Fund
to qualify as a regulated investment company.                                   

OTHER INFORMATION                                                               

Capitalization and Voting                                                       

     The Trust was organized as a Maryland corporation called Schroder Capital
Funds, Inc. on July 30, 1969, and was reorganized as a Delaware business trust  
on January 9, 1996. The Trust has authority to issue an unlimited number of     
shares of beneficial interest. The Trust Board may, without shareholder         
approval, divide the authorized shares into an unlimited number of separate     
portfolios or series (such as the Fund) and may divide such portfolios or series
into classes of shares (such as the Advisor Shares), and the costs of doing so  
will be borne by the Trust. The Trust currently consists of eight separate      
portfolios, each of which has separate investment objectives and policies.      

     The Fund currently consists of three classes of Shares. Each share of the
Fund is entitled to participate equally in dividends and other distributions and
the proceeds of any liquidation except that, due to the differing expenses borne
by the classes, dividends and liquidation proceeds for each class will likely   
differ.                                                                         

    Shares are fully paid and non-assessable, and have no preemptive rights.
Shareholders have non-cumulative voting rights, which means that the holders of 
more than 50% of the shares voting for the election of Trustees can elect 100%  
of the Trustees if they choose to do so. A shareholder is entitled to one vote  
for each full share held (and a fractional vote for each fractional share held).
Each share of the Fund has equal voting rights, except that if a matter affects 
only the shareholders of a particular class only shareholders of that class     
shall have a right to vote. On Trust matters requiring shareholder approval,    
shareholders of the Trust are entitled to vote only with respect to matters that
affect the interests of the Fund or the class of shares they hold, except as    
otherwise required by applicable law.                                           

There will normally be no meetings of shareholders to elect Trustees
unless and until such time as less than a majority of the Trustees holding      
office have been elected by shareholders. However, the holders of not less than 
a majority of the outstanding shares of the Trust may remove any person serving 
as a Trustee and the Trust Board will call a special meeting of shareholders to 
consider removal of one or more Trustees if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust.            

     As of February 15, 1997, the Robert Wood Johnson Foundation may be deemed
to                                                                              

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control the Fund for purposes of the 1940 Act. From time to time, certain       
shareholders may own a large percentage of the shares of the Fund, and those    
shareholders may be able to greatly affect (if not determine) the outcome of a  
shareholder vote.                                                               

Reports                                                                         

     The Trust sends each Fund shareholder a semi-annual report and an audited
annual report containing the Fund's financial statements.                       

Performance                                                                     

The Fund may include quotations of its average annual total return, 
cumulative total return and other performance measures in advertisements or     
reports to shareholders or prospective investors. Average annual total return of
a class of shares is based upon the overall dollar or percentage change in value
of a hypothetical investment each year over specified periods. Average annual   
total returns reflect the deduction of a proportional share of a Fund's expenses
(on an annual basis) and assumes investment and reinvestment of all dividends   
and distributions at NAV. Cumulative total returns are calculated similarly     
except that the total return is aggregated over the relevant period instead of  
annualized.                                                                     

Performance quotations are calculated separately for each class of shares of the
Fund. The Fund may also be compared to various unmanaged securities indices,    
groups of mutual funds tracked by mutual fund ratings services, or other general
economic indicators. Unmanaged indices may assume the reinvestment of dividends 
but do not reflect deductions for administrative and management costs and       
expenses.                                                                       

 Performance information represents only past performance and does not
necessarily indicate future results. For a description of the methods used to   
determine total return and other performance measures for the Fund, see the SAI.

Custodian and Transfer Agent                                                    

The Chase Manhattan Bank, N.A. is custodian of the Fund's and of the
Portfolio's assets. Forum Financial Corp. serves as the Fund's transfer and     
dividend disbursing agent.                                                      

Shareholder Inquiries                                                           

Inquiries about the Fund, including its past performance, should be 
directed to:                                                                    

          Schroder Emerging Markets Fund Institutional Portfolio
P.O. Box 446                                
Portland, Maine 04112                       

    Information about specific shareholder accounts may be obtained from the
Transfer Agent by calling (800) 344-8332.                                       

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Service Organizations                                                           

    The Glass-Steagall Act and other applicable laws and regulations provide
that banks may not engage in the business of underwriting, selling or           
distributing securities. There is currently no precedent prohibiting banks from 
performing administrative and shareholder servicing functions as Service        
Organizations. However, judicial or administrative decisions or interpretations 
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,    
could prevent a bank Service Organization from continuing to perform all or part
of its servicing activities. If a bank were prohibited from so acting, its      
shareholder clients would be permitted to remain shareholders of the Fund and   
alternative means for continuing the servicing of such shareholders would be    
sought. It is not expected that shareholders would suffer any adverse financial 
consequences as a result of any of these occurrences.                           

Fund Structure                                                                  

      Classes of Shares. The Fund has two classes of shares, Investor Shares and
Advisor Shares. Investor Shares are offered by a separate prospectus to         
corporations, institutions, and fiduciaries, including fiduciary, agency, and   
custodial clients of bank trust departments, trust companies, and their         
affiliates. Advisor Shares incur more expenses than Investor Shares. Except for 
certain differences, each share of each class represents an undivided,          
proportionate interest in the Fund. Each share of the Fund is entitled to       
participate equally in dividends and other distributions and the proceeds of any
liquidation of the Fund except that, due to the differing expenses borne by the 
two classes, the amount of dividends and other distributions will differ between
the classes. Information about Investor Shares is available from the Fund by    
calling Schroder Advisors at (800) 730-2932.                                    

The Portfolio. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio, which has the same     
investment objective and substantially similar policies as the Fund.            
Accordingly, the Portfolio directly acquires its own securities and the Fund    
acquires an indirect interest in those securities. The Portfolio is a separate  
series of Schroder Core, a business trust organized under the laws of the State 
of Delaware in September 1995. Schroder Core is registered under the 1940 Act as
an open-end, management investment company and currently has four separate      
series. The assets of the Portfolio, a diversified portfolio, belong only to,   
and the liabilities of the Portfolio are borne solely by, the Portfolio and no  
other portfolio of Schroder Core.                                               

The Fund's investment in the Portfolio is in the form of a          
non-transferable beneficial interest. As of March 1, 1997, the Fund is the only 
institutional investor in the Portfolio. The Portfolio may permit other         
investment companies or institutional investors to invest in it. All other      
investors in the Portfolio will invest on the same terms and conditions as the  
Fund and will pay a proportionate share of the Portfolio's expenses.            

The Portfolio normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in the Portfolio will be entitled to    
vote in proportion to its relative beneficial interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other    
applicable law, the Fund will solicit proxies from its shareholders and will    
vote its interest in the Portfolio in proportion to the votes cast by its       
shareholders. If there are other investors in the Portfolio, there can be no    
assurance that any issue that receives a majority of the votes cast by Fund     
shareholders will receive a majority of votes cast by all investors in the      
Portfolio; indeed, if other investors hold a majority interest in the Portfolio,
they could have voting control of the Portfolio.                                

     The Portfolio will not sell its shares directly to members of the general
public. Another investor in the                                                 

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Portfolio, such as an investment company, that might sell its shares to members 
of the general public would not be required to sell its shares at the same      
public offering price as the Fund and could have different advisory and other   
fees and expenses than the Fund. Therefore, Fund shareholders may have different
returns than shareholders in another investment company that invests exclusively
in the Portfolio. There is currently no such other investment company that      
offers its shares to members of the general public. Information regarding any   
such funds in the future will be available from Schroder Core by calling Forum  
Financial Corp. at (800) 730-2932.                                              

Under federal securities law, any person or entity that signs a     
registration statement may be liable for a misstatement or omission of a        
material fact in the registration statement. Schroder Core, its Trustees and    
certain of its officers are required to sign the registration statement of the  
Trust and may be required to sign the registration statements of certain other  
investors in the Portfolio. In addition, under federal securities law, Schroder 
Core may be liable for misstatements or omissions of a material fact in any     
proxy soliciting material of a publicly offered investor in Schroder Core,      
including the Fund. Each investor in the Portfolio, including the Trust, will   
indemnify Schroder Core and its Trustees and officers ("Schroder Core           
Indemnitees") against certain claims.                                           

  Indemnified claims are those brought against Schroder Core Indemnitees
based on a misstatement or omission of a material fact in the investor's        
registration statement or proxy materials. No indemnification need be made,     
however, if such alleged misstatement or omission relates to information about  
Schroder Core and was supplied to the investor by Schroder Core. Similarly,     
Schroder Core will indemnify each investor in the Portfolio, including the Fund,
for any claims brought against the investor with respect to the investor's      
registration statement or proxy materials, to the extent the claim is based on a
misstatement or omission of a material fact relating to information about       
Schroder Core that is supplied to the investor by Schroder Core. In addition,   
each registered investment company investor in the Portfolio will indemnify each
Schroder Core Indemnitee against any claim based on a misstatement or omission  
of a material fact relating to information about a series of the registered     
investment company that did not invest in the Schroder Core. The purpose of     
these cross-indemnity provisions is principally to limit the liability of       
Schroder Core to information that it knows or should know and can control. With 
respect to other prospectuses and other offering documents and proxy materials  
of investors in Schroder Core, its liability is similarly limited to information
about and supplied by it.                                                       

     Certain Risks of Investing in the Portfolio. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the        
Portfolio, if any. For example, if the Portfolio had a large investor other than
the Fund that redeemed its interest in the Portfolio, the Portfolio's remaining 
investors (including the Fund) might, as a result, experience higher pro rata   
operating expenses, thereby producing lower returns.                            

 The Fund may withdraw its entire investment from the Portfolio at any
time, if the Trust Board determines that it is in the best interests of the Fund
and its shareholders to do so. The Fund might withdraw, for example, if there   
were other investors in the Portfolio with power to, and who did by a vote of   
the shareholders of all investors (including the Fund), change the investment   
objective or policies of the Portfolio in a manner not acceptable to the Trust  
Board. A withdrawal could result in a distribution in kind of portfolio         
securities (as opposed to a cash distribution) by the Portfolio. That           
distribution could result in a less diversified portfolio of investments for the
Fund and could affect adversely the liquidity of the Fund's portfolio. If the   
Fund decided to convert those securities to cash, it would likely incur         
brokerage fees or other transaction costs. If the Fund withdrew its investment  
from the Portfolio, the Trust Board would consider appropriate alternatives,    
including the management of the Fund's assets in accordance with its investment 
objective and policies by SCMI or the investment of all of the Fund's investable
assets in another pooled investment entity having substantially the same        
investment objective as the Fund. The inability of the Fund to find a suitable  
replacement investment, if the Board decided not to permit SCMI to manage the   
Fund's assets, could have a significant impact on shareholders of the Fund.     

     Each investor in the Portfolio, including the Fund, may be liable for all
obligations of the Portfolio.                                                   

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The risk to an investor in the Portfolio of incurring financial loss on account 
of such liability, however, is limited to circumstances in which the Portfolio  
is unable to meet its obligations, the occurrence of which SCMI considers to be 
quite remote. Upon liquidation of the Portfolio, investors would be entitled to 
share pro rata in the net assets of the Portfolio available for distribution to 
investors.                                                                      

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Investment Adviser                                                              
Schroder Capital Management International Inc.                                  
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Administrator & Distributor                                                     
Schroder Fund Advisors Inc.                                                     
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company                        
Two Portland Square                                                             
Portland, Maine  04101                                                          

Custodian                                                                       
The Chase Manhattan Bank, N.A.                                                  
Global Custody Division                                                         
Woolgate House, Coleman Street                                                  
London EC2P 2HD, United Kingdom                                                 

Transfer and Dividend Disbursing Agent                                          
Forum Financial Corp.                                                           
P.O. Box 446                                                                    
Portland, Maine 04112                                                           

Independent Accountants                                                         
Coopers & Lybrand, L.L.P.                                                       
One Post Office Square                                                          
Boston, Massachusetts 02109                                                     

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Table of Contents                                                               

PROSPECTUS SUMMARY........................................................      
EXPENSES OF INVESTING                                                           
IN THE FUND...........................................................  
Fee Table.................................................................      
Example...................................................................      
FINANCIAL HIGHLIGHTS......................................................      
INVESTMENT OBJECTIVE......................................................      
INVESTMENT POLICIES.......................................................      
RISK CONSIDERATIONS.......................................................      
MANAGEMENT OF THE FUND....................................................      
Boards of Trustees........................................................      
Investment Adviser and Portfolio Managers.................................      
Administrative Services...................................................      
Distribution Plan and Shareholder                                               
Service Plan............................................................    
Expenses..................................................................      
Portfolio Transactions....................................................      
Code of Ethics............................................................      
INVESTMENT IN THE FUND....................................................      
Purchase of Shares........................................................      
Retirement Plans and Individual                                                 
Retirement Accounts.....................................................    
Exchanges.................................................................      
Redemption of Shares......................................................      
Net Asset Value...........................................................      
DIVIDENDS, DISTRIBUTIONS                                                        
AND TAXES...............................................................    
The Fund..................................................................      
The Portfolio.............................................................      
OTHER INFORMATION.........................................................      
Capitalization and Voting.................................................      
Reports...................................................................      
Performance...............................................................      
Custodian and Transfer Agent..............................................      
Shareholder Inquiries.....................................................      
Service Organizations.....................................................      
Fund Structure............................................................      

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SCHRODER U.S. SMALLER COMPANIES FUND                                            

Investor Shares                                                                 

This fund's investment objective is capital appreciation. It seeks to achieve   
its objective by investing primarily in equity securities of companies domiciled
in the United States that have market capitalizations of $1.5 billion or less.  
It is intended for long-term investors seeking to diversify their growth        
investments who are willing to accept the risks associated with investments in  
smaller companies. Current income is incidental to the objective of capital     
appreciation.                                                                   

Schroders                                                   

[GRAPHIC OMITTED]                                                     

Your Window On The World                                                    

Schroder U.S. Smaller Companies Fund (the "Fund"), a series of Schroder Capital 
Funds (Delaware) (the "Trust"), seeks to achieve its investment objective by    
investing substantially all of its assets in Schroder U.S. Smaller Companies    
Portfolio (the "Portfolio"), which invests, under normal market conditions, at  
least 65% of its total assets in equity securities of companies domiciled in the
United States that, at the time of purchase, have market capitalizations of $1.5
billion or less. The Portfolio is a separately managed, diversified series of   
Schroder Capital Funds ("Schroder Core"), an open-end management investment     
company. The Portfolio has an identical investment objective and substantially  
similar investment policies as the Fund. Accordingly, the Fund's investment     
experience will correspond directly with the Portfolio's investment experience. 
See "Other Information -- Fund Structure."                                      

This prospectus sets forth concisely the information you should know before     
investing and should be retained for further reference. To learn more about the 
Fund, you may obtain a copy of the Fund's current Statement of Additional       
Information (the "SAI") which is incorporated by reference into this Prospectus.
The SAI dated March 1, 1997, as amended from time to time, has been filed with  
the Securities and Exchange Commission ("SEC") and is available along with other
related materials for reference on their Internet Web Site (http://www.sec.gov) 
or may be obtained without charge from the Trust by writing to Two Portland     
Square, Portland, Maine 04101 or by calling 1-800-290-9826. The Fund has not    
authorized anyone to provide you with information that is different from what is
contained in this prospectus or in other documents to which this prospectus     
refers you.                                                                     

MUTUAL FUND SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE    
FDIC, THE FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENT AGENCY AND ALSO ARE NOT
OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY BANK OR 
ITS AFFILIATES. MUTUAL FUND INVESTMENTS ARE SUBJECT TO INVESTMENT RISK,         
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.                                       

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

PROSPECTUS                                                                      
MARCH 1, 1997                                                                   
PROSPECTUS SUMMARY                                                              

This prospectus offers Investor Class shares ("Investor Shares" or  
"Shares") of the Fund. The Fund is a separately managed, diversified series of  
the Trust, an open-end, management investment company registered under the      
Investment Company Act of 1940 (the "1940 Act"). The following summary is       
qualified in its entirety by the more detailed information contained in this    
Prospectus.                                                                     

Objective. Capital appreciation.                                    

      Strategy. Invests at least 65% of its total assets in equity securities of
companies domiciled in the United States that have market capitalizations, at   
the time of purchase, of $1.5 billion or less.                                  

      Investment Adviser. The Portfolio's investment adviser is Schroder Capital
Management International Inc.                                                   

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("SCMI"), 787 Seventh Avenue, New York, New York 10019. The Fund (and indirectly
its shareholders) bears a pro rata portion of the investment advisory fee the   
Portfolio pays to SCMI. See "Management of the Fund - Investment Adviser and    
Portfolio Managers."                                                            

Administrative Services. Schroder Fund Advisors Inc.                

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("Schroder Advisors") serves as administrator and distributor of the Fund, and  
Forum Administrative Services, Limited Liability Company ("Forum") serves as the
Fund's sub-administrator.                                                       

    Purchases and Redemptions of Shares. Shares may be purchased or redeemed
by mail, by bank-wire and through your broker-dealer or other financial         
institution. The minimum initial investment is $10,000, except that the minimum 
for an Individual Retirement Account ("IRA") is $2,000. The minimum subsequent  
investment is $2,500. See "Investment in the Fund -- Purchase of Shares" and "--
Redemption of Shares."                                                          

     Dividends and Other Distributions. The Fund annually declares and pays as
a dividend substantially all of its net investment income and at least annually 
distributes any net realized long-term capital gain and gains from foreign      
currency transactions. Dividends and long-term capital gain distributions are   
reinvested automatically in additional Investor Shares of the Fund at net asset 
value unless you elect in your Account Application, or otherwise in writing, to 
receive dividends and other distributions in cash. See "Dividends, Distributions
and Taxes."                                                                     

Risk Considerations. Alone, the Fund is not a balanced investment plan. It is   
intended for long-term investors seeking to diversify their growth investments  
willing to accept the risks associated with investments in smaller companies.   
The Portfolio's policy of investing in smaller companies involves risks in      
addition to those normally associated with investments in equity securities     

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of large capitalization companies. Of course, as with any mutual fund, there is 
no assurance that the Fund or Portfolio will achieve its investment objective.  

     The Fund's net asset value ("NAV") varies because the market value of the
Portfolio's investments will change with changes in the value of the securities 
in which the Portfolio invests and with changes in market conditions, interest  
rates, currency rates, or political or economic situations. When you sell your  
shares, they may be worth more or less than what you paid for them. For further 
information, see "Risk Considerations."                                         

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 FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
Please call for complete information and to obtain a prospectus.
 Please read the prospectus carefully before you invest.

Schroder Capital Funds (Delaware) (1-800-290-9826)                              
Schroder International Fund                                                     
Schroder Emerging Markets Fund--                                                
Institutional Portfolio                                                   
Schroder International Smaller Companies Fund                                   
Schroder U.S. Smaller Companies Fund                                            
Schroder U.S. Equity Fund                                                       
Schroder Series Trust (1-800-464-3108)                                          
Schroder Equity Value Fund                                                      
Schroder Small Capitalization Value Fund                                        
Schroder High Yield Income Fund                                                 
Schroder Investment Grade Income Fund                                           
Schroder Short-Term Investment Fund                                             

EXPENSES OF INVESTING IN THE FUND                                               

Fee Table                                                                       

   The table below is intended to assist you in understanding the expenses
that an investor in Investor Shares of the Fund would incur. There are no       
transaction expenses associated with purchases or redemptions of Investor       
Shares. The Annual Fund Operating Expenses reflect projected fees, expenses and 
waivers for the current fiscal year.                                            

Annual Fund Operating Expenses (as a percentage of average net assets)(1)       
     Management Fees (after fee waivers) (2)(3)........................... 0.53%
     12b-1 Fees...........................................................  None
     Other Expenses (3)................................................... 0.96%
     Total Fund Operating Expenses (4).................................... 1.49%

    (1)   Based on the Fund's expenses for the fiscal year ended October 31,
            1996. The Fund's expenses include the Fund's pro rata portion of all
operating expenses of the Portfolio.                    
     (2)   Management Fees reflect the fees paid by the Portfolio and the Fund
for investment advisory and administrative services.    
     (3)   Without fee waivers and expense reimbursements, Management Fees and
        Total Operating Expenses would be 0.85% and 1.81%, respectively.
   (4)   SCMI and Schroder Advisors have voluntarily undertaken to waive a
            portion of their fees and assume certain expenses of the Fund during
           the current fiscal year in order to limit the Fund's total expenses
         to 1.49% of the Fund's average daily net assets. This undertaking
          cannot be withdrawn except by a majority vote of the Trust's Board
of Trustees. See "Management of the Fund--Expenses."    

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Example                                                                         

   The table below indicates how much you would pay in total expenses on a
$1,000 investment in the Fund, assuming (1) a 5% annual return and (2)          
redemption at the end of each time period. The example is based on the expenses 
listed above and assumes the reinvestment of all dividends and other            
distributions. The example should not be considered a representation of past or 
future expenses or returns; actual expenses or returns may vary from those      
shown. The 5% annual return is not a prediction of the Fund's return, but is the
percentage required by the SEC for use in this example.                         

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   1 YEAR ..........................   $15
   3 YEARS .........................   $47
   5 YEARS .........................   $82
  10 YEARS .........................  $178

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FINANCIAL HIGHLIGHTS                                                            

The financial highlights are presented below to assist you in evaluating per    
share performance of the Fund's Investor Shares for the periods shown. This     
information is part of the Fund's financial statements and has been audited by  
Coopers & Lybrand L.L.P., independent accountants to the Fund. The Fund's       
financial statements for the year ended October 31, 1996, and the related       
independent accountants' report are contained in the Fund's Annual Report to    
Shareholders and are incorporated by reference into the SAI. Further information
about the performance of the Fund is contained in the Annual Report, which may  
be obtained without charge by writing the Fund at Two Portland Square, Portland,
Maine 04101 or by calling 1-800-290-9826.                                       

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                                                        [Enlarge/Download Table]


                                                     For the Years Ended                     For the Period   
                                                          October 31,                     August 6, 1993 (b) -
                                                  1996(a)             1995         1994     October 31, 1993  
------------------------------------------------------------ --------- ---------------------------------------
                                                                                                              
Net Asset Value, Beginning of Period              $15.14             $11.81       $10.99        $10.00        
                                                  ------             ------       ------        ------        
Investment Operations:                                                                                        
     Net Investment Loss                           (0.06)(c)          (0.04)       (0.07)        (0.02)       
     Net Realized and Unrealized Gain (Loss)        4.10               3.78         0.97          1.01        
                                                  ------             ------       ------        ------        
Total from Investment Operations                    4.04               3.74         0.90          0.99        
                                                  ------             ------       ------        ------        
Distributions from Net Realized Gain                                                                          
                                                   (1.95)             (0.41)       (0.08)         --          
                                                  ------             ------       ------        ------        
Net Asset Value, End of Period                    $17.23             $15.14       $11.81        $10.99        
                                                  ======             ======       ======        ======        
Total Return                                       29.35%             32.84%        8.26%         9.90%       
                                                  ======             ======       ======        ======        
Ratios/Supplementary Data:                                                                                    
     Net Assets, End of Period (Thousands)       $13,743            $15,287      $13,324       $12,489        
     Ratio of Expenses to Average Net Assets        1.49%(c)(d)        1.49%        1.45%         2.03%(e)    
     Ratio of Net Investment Loss to                                                                          


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                                                                [Download Table]
                                                                                  

  Average Net Assets                   (0.35%)(c)(d)  (0.30)%  (0.58)%  (0.99%)(e)
Portfolio Turnover Rate(f)             58.50%         92.68%   70.82%   12.58%    
Average Brokerage Commission Rate(g)  $0.0583           N/A      N/A      N/A     


(a) On May 17, 1996, the Fund began offering two classes of shares, Investor    
Shares and Advisor Shares, and all then outstanding shares of the Fund  
were converted to Investor Shares.                                      
(b) Commencement of operations.                                                 
(c) Includes the Fund's proportionate share of income and expenses of the       
Portfolio.                                                              
(d) During the year ended October 31, 1996, various fees were waived. Had such  
waivers not occurred, the ratio of expenses to average net assets would 
  have been 1.80% and the ratio of net investment loss to average net assets
would have been (0.66)%, both of which include the Fund's proportionate 
share of income and expenses of the Portfolio.                          
(e) Annualized.                                                                 
(f) Portfolio turnover rate represents the rate of portfolio activity. The      
rate for year ended October 31, 1996 represents the portfolio turnover  
rate of the Portfolio.                                                  
(g) The average commission per share paid to brokers represents the amount      
  paid to brokers on the purchase and sale of portfolio securities while the
Fund was making investments directly in securities.                     

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INVESTMENT OBJECTIVE                                                            

 The investment objective of the Fund is capital appreciation. Current
income will be incidental to the objective of capital appreciation. The Fund is 
not intended for investors whose objective is assured income or preservation of 
capital. It is, rather, appropriate for investors who can bear the special risks
associated with investment in smaller capitalization companies.                 

     The Fund currently seeks to achieve its investment objective by investing
all of its investable assets in the Portfolio, which has substantially the same 
investment objective and substantially similar policies as the Fund. There can  
be no assurance that the Fund or Portfolio will achieve its investment          
objective.                                                                      

INVESTMENT POLICIES                                                             

   Although the following information describes the investment policies of
the Portfolio and the responsibilities of Schroder Core's Board of Trustees (the
"Schroder Core Board"), it applies equally to the Fund and the Trust's Board of 
Trustees (the "Trust Board"). Additional information concerning the investment  
policies of the Fund and the Portfolio is contained in the SAI.                 

  The investment objective, and the investment policies of the Portfolio
that are designated as fundamental, may not be changed without approval of the  
holders of a majority of the outstanding voting securities of the Portfolio. A  
majority of outstanding voting securities means the lesser of (i) 67% of the    
shares present or represented at a shareholder meeting at which the holders of  
more than 50% of the outstanding shares are present or represented, or (ii) more
than 50% of outstanding shares. Non-fundamental investment policies of the      
Portfolio may be changed by the Schroder Core Board without approval of the     
investors in the Portfolio.                                                     

 Under normal market conditions the Portfolio will seek to achieve its
investment objective by investing at least 65% of its total assets in equity    
securities of United States-domiciled companies that at the time of purchase    
have market capitalizations of $1.5 billion or less. (Market capitalization     
means the market value of a company's outstanding stock.)                       

  In its investment approach, SCMI will identify securities of companies
that it believes can generate above average earnings growth, and are selling at 
favorable prices in relation to book values and earnings. SCMI's assessment of  
the competency of an issuer's management will be an important investment        
consideration. These criteria are not rigid, and other investments may be       
included in the Portfolio if they could help the Portfolio attain its objective.
These criteria can be changed by the Schroder Core Board, without shareholder   
approval.                                                                       

      The Portfolio will invest principally in equity securities, namely, common
stocks; securities convertible into common stocks; or, subject to special       
limitations, rights or warrants to subscribe for or purchase common stocks. A   
convertible security is a bond, debenture, note, preferred stock or other       
security that may be converted into or exchanged for a prescribed amount of     
common stock of the same or a different issuer within a particular period of    
time at a specified price or formula. The Portfolio may also invest to a limited
degree in non-convertible debt securities and preferred stocks when SCMI        
believes that such investments are warranted to achieve the Portfolio's         
investment objective.                                                           

 The Portfolio may invest in securities of small, unseasoned companies
(which, together with any predecessors, have been in operation for less than    
three years), as well as in securities of more established companies. The       
Portfolio intends to invest no more than 5% of its total assets in unseasoned   
companies.                                                                      

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   Although there is no minimum rating for debt securities (convertible or
non-convertible) in which the Portfolio may invest, the Portfolio intends to    
invest no more than 5% of its net assets in debt securities rated below Baa by  
Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's Ratings 
Services ("S&P") (such securities are commonly known as "high yield/high risk"  
securities or "junk bonds"), and it will not invest in debt securities that are 
in default. Prices of high yield/high risk securities are generally more        
volatile than prices of higher rated securities; and junk bonds are generally   
deemed more vulnerable to default on interest and principal payments. It should 
be noted that even bonds rated Baa by Moody's or BBB by S&P are described by    
them as having speculative characteristics; changes in economic conditions or   
other circumstances are more likely to weaken the ability of issuers of such    
bonds to make principal and interest payments than is the case with higher grade
bonds. The Portfolio is not obligated to dispose of securities due to rating    
changes by Moody's, S&P or other agencies. See the SAI for information about the
risks associated with investing in junk bonds.                                  

For temporary defensive purposes, the Portfolio may invest without  
limitation in (or enter into repurchase agreements maturing in seven days or    
less with U.S. banks and broker-dealers with respect to) short-term debt        
securities, including commercial paper, U.S. Treasury bills, other short-term   
U.S. Government securities, certificates of deposit, and bankers' acceptances of
U.S. banks. The Portfolio also may hold cash and time deposits in U.S. banks.   
See "Investment Policies" in the SAI for further information about these        
securities.                                                                     

      The following specific policies and limitations are considered at the time
of any purchase; SCMI may not buy these instruments or use these techniques     
unless it believes that they are consistent with the Portfolio's objective.     

Common and Preferred Stock and Warrants. The Portfolio may invest in
common and preferred stock. Common stockholders are the owners of the company   
issuing the stock and, accordingly, vote on various corporate governance matters
such as mergers. They are not creditors of the company, but rather, upon        
liquidation of the company, they would be entitled to their pro rata share of   
the company's assets after creditors (including fixed income security holders)  
and preferred stockholders (if any) are paid. Preferred stock is a class of     
stock having a preference over common stock as to dividends and, generally, as  
to the recovery of investment. A preferred stockholder is also a shareholder and
not a creditor of the company.                                                  

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Dividends paid to common and preferred stockholders are distributions of the    
earnings of the company and are not interest payments (which are expenses of the
company). Equity securities owned by the Portfolio may be traded in the over-the
counter market or on a securities exchange, but are not necessarily traded every
day or in the volume typical of securities traded on a major U.S. national      
securities exchange. As a result, disposition by the Portfolio of a security to 
meet withdrawals by interest holders may require the Portfolio to sell these    
securities at a discount from market prices, to sell during periods when        
disposition is not desirable, or to make many small sales over a lengthy period 
of time. The market value of all securities, including equity securities, is    
based upon the market's perception of value and not necessarily the "book value"
of an issuer or other objective measure of a company's worth.                   

    Convertible preferred stock generally may be converted at a stated price
within a specific amount of time into a specified number of shares of common    
stock. A convertible security entitles the holder to receive the dividend paid  
on preferred stock until the convertible security is converted or exchanged.    
Before conversion, convertible securities have characteristics similar to       
non-convertible debt securities in that they ordinarily provide a stream of     
income with generally higher yields than those of common stocks of the same or  
similar issuers. These securities are usually senior to common stock in a       
company's capital structure, but are usually subordinated to non-convertible    
debt securities. In general, the value of a convertible security is the higher  
of its investment value (its value as a fixed income security) and its          
conversion value (the value of the underlying shares of common stock if the     
security is converted). As a fixed income security, the value of a convertible  
security generally increases when interest rates decline and generally decreases
when interest rates rise. The value of a convertible security is, however, also 
influenced by the value of the underlying common stock.                         

    The Portfolio may also invest in warrants, which are options to purchase
an equity security at a specified price (usually representing a premium over the
applicable market value of the underlying equity security at the time of the    
warrant's issuance) and usually during a specified period of time. The Portfolio
may not invest in warrants if, as a result, more than 5% of its net assets would
be so invested or if more than 2% of its net assets would be invested in        
warrants not listed on a major U.S. stock exchange.                             

     Repurchase Agreements. The Portfolio may invest in repurchase agreements,
which are a means of investing monies for a short period whereby a seller -- a  
U.S. bank or recognized broker-dealer -- sells securities to the Portfolio and  
agrees to repurchase them (at the Portfolio's cost plus interest) within a      
specified period (normally one day). The values of the underlying securities    
purchased by the Portfolio are monitored at all times by SCMI to ensure that the
total value of the securities equals or exceeds the value of the repurchase     
agreement. The Portfolio's custodian bank holds the securities until they are   
repurchased. If a seller defaults under a repurchase agreement, the Portfolio   
may have difficulty exercising its rights to the underlying securities and may  
incur costs and experience time delays in disposing of them. To evaluate        
potential risk, SCMI reviews the creditworthiness of banks and dealers with     
which the Portfolio enters into repurchase agreements.                          

  Illiquid and Restricted Securities. The Portfolio will not purchase or
otherwise acquire any security if, as a result, more than 15% of its net assets 
(taken at current value) would be invested in securities that are illiquid (i)  
by virtue of the absence of a readily available market or (ii) because of legal 
or contractual restrictions on resale ("restricted securities"). There may be   
undesirable delays in selling illiquid securities at prices representing their  
fair value. This policy includes over-the-counter options held by the Portfolio 
and the portion of the assets used to cover such options. The limitation on     
investing in restricted securities does not include securities that may not be  
resold to the general public but may be resold (pursuant to Rule 144A under the 
Securities Act of 1933, as amended) to qualified institutional purchasers. If   
SCMI determines that a "Rule 144A security" is liquid pursuant to guidelines    
adopted by the Schroder Core Board, the security will not be deemed illiquid.   
These guidelines take into account trading activity for the securities and the  
availability of reliable pricing information, among other factors. If there is a
lack of trading interest in a particular Rule 144A security, that security may  
become illiquid, which could affect the Portfolio's liquidity. See "Investment  
Policies -- Illiquid and Restricted Securities" in the SAI for further          
information.                                                                    

      Loans of Portfolio Securities. The Portfolio may lend portfolio securities
(otherwise than in repurchase                                                   

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transactions) to brokers, dealers and other financial institutions meeting      
specified credit conditions if the loan is collateralized in accordance with    
applicable regulatory requirements and if, after any loan, the value of the     
securities loaned does not exceed 25% of the Portfolio's total asset value. By  
so doing, the Portfolio attempts to earn interest income. In the event of the   
other party's bankruptcy, the Portfolio could experience delays in recovering   
the securities it lent; if in the meantime, the value of the securities the     
Portfolio lent has increased, the Portfolio could experience a loss.            

 The Portfolio may lend its securities if it maintains collateral in a
segregated account, and its liquid assets are equal to the current market value 
of the securities loaned (including accrued interest thereon) plus the loan     
interest payable to the Portfolio. Any securities that the Portfolio receives as
collateral will not become part of its portfolio at the time of the loan; in the
event of a default by the borrower, the Portfolio will (if permitted by law)    
dispose of such collateral except for such part thereof that is a security in   
which the Portfolio is permitted to invest. While the securities are on loan,   
the borrower will pay the Portfolio any accrued income on those securities, and 
the Portfolio may invest the cash collateral and earn income or receive an      
agreed upon fee from a borrower that has delivered cash equivalent collateral.  
Cash collateral received by the Portfolio will be invested in U.S. Government   
securities and liquid high grade debt obligations. The value of securities      
loaned will be marked to market daily. Portfolio securities purchased with cash 
collateral are subject to possible depreciation. Loans of securities by the     
Portfolio will be subject to termination at the Portfolio's or the borrower's   
option. The Portfolio may pay reasonable negotiated fees in connection with     
loaned securities, so long as such fees are set forth in a written contract and 
approved by the Schroder Core Board.                                            

    Options and Futures Transactions. While the Portfolio does not presently
intend to do so, it may write covered call options and purchase certain put and 
call options, stock index futures, and options on stock index futures and       
broadly-based stock indices, all of which are referred to as "Hedging           
Instruments." In general, the Portfolio may use Hedging Instruments: (1) to     
protect against declines in the market value of the portfolio's securities or   
(2) to establish a position in the equities markets as a temporary substitute   
for purchasing particular equity securities. The Portfolio will not use Hedging 
Instruments for speculation. The Hedging Instruments the Portfolio is authorized
to use have certain risks associated with them, including (a) the possible      
failure of such instruments as hedging techniques in cases where the price      
movements of the securities underlying the options or futures do not follow the 
price movements of the portfolio securities subject to the hedge; (b)           
potentially unlimited loss associated with futures transactions and the possible
lack of a liquid secondary market for closing out a futures position; and (c)   
possible losses resulting from the inability of SCMI to predict the direction of
stock prices, interest rates and other economic factors. The Hedging Instruments
the Portfolio may use and the risks associated with them are described in       
greater detail under "Options and Futures Transactions" in the SAI.             

    Short Sales Against-the-Box. The Portfolio may not sell securities short
except in "short sales against-the-box." For federal income tax purposes, short 
sales against-the-box may be made to defer recognition of gain or loss on the   
sale of securities "in the box;" and no income can result and no gain can be    
realized from securities sold short against-the-box until the short position is 
closed out. Such short sales are subject to the limits described under          
"Fundamental Restrictions" above. See "Short Sales Against-the-Box" in the SAI  
for further details.                                                            

RISK CONSIDERATIONS                                                             

Smaller Companies. While all investments have risks, investments in 
smaller capitalization companies carry greater risk than investments in larger  
capitalization companies. Smaller capitalization companies generally experience 
higher growth rates and higher failure rates than do larger capitalization      
companies; and the trading volume of smaller capitalization companies'          
securities is normally lower than that of larger capitalization companies and,  
consequently, generally has a disproportionate effect on market price (tending  
to make prices rise more in response to buying demand and fall more in response 
to selling pressure).                                                           

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  Unseasoned Issuers. Investments in small, unseasoned issuers generally
carry greater risk than is customarily associated with larger, more seasoned    
companies. Such issuers often have products and management personnel that have  
not been tested by time or the marketplace and their financial resources may not
be as substantial as those of more established companies. Their securities      
(which the Portfolio may purchase when they are offered to the public for the   
first time) may have a limited trading market which can adversely affect their  
sale by the Portfolio and can result in such securities being priced lower than 
otherwise might be the case. If other institutional investors engage in trading 
this type of security, the Portfolio may be forced to dispose of its holdings at
prices lower than might otherwise be obtained.                                  

MANAGEMENT OF THE FUND                                                          

X Schroder Group Assets Under Management Worldwide
As of December 31, 1996 -- Over $130 Billion

 [GRAPHIC OMITTED]

THE SCHRODER INVESTMENT MANAGEMENT GROUP INVESTMENT AND REPRESENTATIVE OFFICES
WORLDWIDE INCLUDE NEW YORK, LONDON, BOSTON, ZURICH, WARSAW, TOKYO, HONG KONG, 
BEIJING, SHANGHAI, TAIPEI, SEOUL, BANGKOK, KUALA LUMPUR, SINGAPORE, JAKARTA,
SYDNEY, BUENOS AIRES, SAO PAULO, BOGOTA AND CARACAS.

 TOGETHER, SCHRODER CAPITAL MANAGEMENT INTERNATIONAL AND
SCHRODER CAPITAL MANAGEMENT MANAGE OVER $24 BILLION.

Boards of Trustees                                                              

The business and affairs of the Fund are managed under the direction of the     
Trust Board. The business and affairs of the Portfolio are managed under the    
direction of the Schroder Core Board. Additional information regarding the      
trustees and executive officers of the Trust, as well as Schroder Core's        
trustees and executive officers, may be found in the SAI under the heading      
"Management, Trustees and Officers."                                            

Investment Adviser and Portfolio Managers                                       

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  As investment adviser to the Portfolio, SCMI manages the Portfolio and
continuously reviews, supervises and administers its investments. SCMI is       
responsible for making decisions relating to the Portfolio's investments and    
placing purchase and sale orders regarding such investments with brokers or     
dealers it selects. For these services, the Investment Advisory Agreement       
between SCMI and Schroder Core provides that SCMI will receive a monthly        
advisory fee at the annual rate of 0.60% of the Portfolio's average daily net   
assets, which the Fund indirectly bears through its investment in the Portfolio.

 SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is 
the holding company parent of a large world-wide group of banks and financial   
services companies (referred to as the "Schroder Group"), with associated       
companies and branch and representative offices in eighteen countries. The      
Schroder Group specializes in providing investment management services.         

    The investment management team of Fariba Talebi (a Vice President of the
Trust and a Group Vice President of SCMI) and Ira Unschuld (a Vice President of 
the Trust and of SCMI) with the assistance of an investment committee, is       
primarily responsible for the day-to-day management of the Portfolio's          
investments and has so managed the Portfolio since its inception. Ms. Talebi and
Mr. Unschuld have been employed by SCMI in the investment research and portfolio
management areas since 1987 and 1990, respectively.                             

      The Fund began pursuing its investment objective through investment in the
Portfolio on August 15, 1996. The Fund may withdraw its investment from the     
Portfolio at any time if the Trust Board determines that it is in the best      
interests of the Fund and its shareholders to do so. See "Other Information --  
Fund Structure." Accordingly, the Trust has retained SCMI as its investment     
adviser to manage the Fund's assets in the event the Fund withdraws its         
investment. SCMI does not receive an investment advisory fee from the Fund so   
long as the Fund remains completely invested in the Portfolio (or any other     
investment company). If the Fund resumes directly investing in portfolio        
securities, it will pay SCMI an advisory fee, payable monthly, at the annual    
rate of 0.50% of the Fund's average daily net assets for the first $100 million 
of the Fund's average daily net assets; 0.40% up to $150 million of the Fund's  
average daily net assets; and 0.35% of the Fund's average daily net assets      
greater than $250 million. The investment advisory agreement between SCMI and   
the Trust with respect to the Fund is the same in all material respects as      
Schroder Core's Investment Advisory Contract with respect to the Portfolio      
(except as to the parties, the fees payable thereunder, the circumstances under 
which fees will be paid and the jurisdiction whose laws govern the contract).   

Administrative Services                                                         

On behalf of the Fund, the Trust has entered into an administrative 
services contract with Schroder Advisors, 787 Seventh Avenue, New York, New York
10019. On behalf of the Portfolio, the Trust has also entered into a            
sub-administration agreement with Forum, Two Portland Square, Portland, Maine   
04101. Pursuant to these agreements, Schroder Advisors and Forum provide certain
management and administrative services necessary for the Fund's operations.     
Schroder Advisors is compensated at the annual rate of 0.25% of the Fund's      
average daily net assets. Forum is compensated at the annual rate of 0.075% of  
the Fund's average daily net assets.                                            

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  Schroder Advisors and Forum provide similar services to the Portfolio.
Schroder Advisors provides such services without compensation. The portfolio    
pays Forum a monthly fee at the annual rate of 0.075% of the Portfolio's average
daily net assets for its sub-administration services.                           

Expenses                                                                        

     SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
of their fees or assume certain expenses of the Fund in order to limit total    
Fund expenses (excluding taxes, interest, brokerage commissions and other       
portfolio transaction expenses and extraordinary expenses) chargeable to        
Investor Shares to 1.49% of the average daily net assets of the Fund            
attributable to those shares. This expense limitation cannot be modified or     
withdrawn except by a majority vote of the Trustees of the Trust who are not    
interested persons (as defined in the 1940 Act) of the Trust. If expense        
reimbursements are required, they will be made on a monthly basis. Forum may    
voluntarily waive all or a portion of their fees, from time to time.            

Portfolio Transactions                                                          

SCMI places orders for the purchase and sale of the Portfolio's     
investments with brokers and dealers selected by SCMI in its discretion and     
seeks "best execution" of such portfolio transactions. The Portfolio may pay    
higher than the lowest available commission rates when SCMI believes it is      
reasonable to do so in light of the value of the brokerage and research services
provided by the broker effecting the transaction.                               

    Subject to the Portfolio's policy of obtaining the best price consistent
with quality of execution on transactions, SCMI may employ (a) Schroder Wertheim
& Company, Incorporated and its affiliates ("Schroder Wertheim"), affiliates of 
SCMI, to effect transactions of the Portfolio on the New York Stock Exchange and
(b) Schroder Securities Limited and its affiliates ("Schroder Securities"),     
affiliates of SCMI, to effect transactions of the Portfolio, if any, on certain 
foreign securities exchanges. Because of the affiliation between SCMI and both  
Schroder Wertheim and Schroder Securities, the Portfolio's payment of           
commissions to them is subject to procedures adopted by the Schroder Core Board 
designed to ensure that the commissions will not exceed the usual and customary 
brokers' commissions. No specific portion of the Portfolio's brokerage will be  
directed to Schroder Wertheim or Schroder Securities, and in no event will      
either receive any brokerage in recognition of research services.               

Consistent with the Conduct Rules of the National Association of    
Securities Dealers, Inc., and subject to seeking the most favorable price and   
execution available and such other policies as the Schroder Core Board may      
determine, SCMI may consider sales of shares of the Fund or any other entity    
that invests in the Portfolio as a factor in the selection of broker-dealers to 
execute portfolio transactions for the Portfolio.                               

  Although the Portfolio does not currently engage in directed brokerage
arrangements to pay expenses, it may do so in the future. These arrangements    
(whereby brokers executing the Portfolio's portfolio transactions agree to pay  
designated expenses of the Portfolio if brokerage commissions generated by the  
Portfolio reached certain levels) might reduce the Portfolio's expenses (and,   
indirectly, the Fund's expenses), and would not be expected to increase         
materially the brokerage commissions paid by the Portfolio. Brokerage           
commissions are not deemed to be Fund expenses.                                 

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Code of Ethics                                                                  

The Trust, Schroder Core, SCMI, Schroder Advisors, and Schroders    
Incorporated have each adopted a code of ethics that contains a policy on       
personal securities transactions by "access persons," including portfolio       
managers and investment analysts. That policy complies in all material respects 
with the recommendations set forth in the Report of the Advisory Group on       
Personal Investing of the Investment Company Institute, of which the Trust is a 
member.                                                                         

INVESTMENT IN THE FUND                                                          

Purchase of Shares                                                              

Investors may purchase Investor Shares directly from the Trust.     
Prospectuses, sales material and Account Applications can be obtained from the  
Trust or through Forum Financial Corp., the Fund's transfer agent (the "Transfer
Agent"). See "Other Information -- Shareholder Inquiries." Investments may also 
be made through service organizations that assist their customers in purchasing 
shares of the Fund ("Service Organizations"). Service Organizations may charge  
their customers a service fee for processing orders to purchase or sell shares  
of the Fund. Investors wishing to purchase shares through their accounts at a   
Service Organization should contact that organization directly for appropriate  
instructions.                                                                   

 Shares of the Fund are offered at the net asset value next determined
after receipt of a completed Account Application (at the address set forth      
below). The minimum initial investment is $10,000, except that the minimum for  
an IRA is $2,000. The minimum subsequent investment is $2,500. All purchase     
payments are invested in full and fractional shares. The Fund is authorized to  
reject any purchase order.                                                      

  Purchases may be made by mailing a check (in U.S. dollars), payable to
Schroder U.S. Smaller Companies Fund, to:                                       

         Schroder U.S. Smaller Companies Fund--Investor Shares
P.O. Box 446                                
Portland, Maine 04112                       

For initial purchases, the check must be accompanied by a completed 
Account Application in proper form. Further documentation may be requested from 
corporations, administrators, executors, personal representatives, directors or 
custodians to evidence the authority of the person or entity making the         
subscription request.                                                           

  Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as 
follows:                                                                        

Chase Manhattan Bank                        
New York, NY                                
ABA No.: 021000021                          
For Credit To: Forum Financial Corp.        
Account. No.: 910-2-718187                  
              Ref.: Schroder U.S. Smaller Companies Fund Investor Shares
Account of: (shareholder name)              
Account Number: (shareholder account number)

      The wire order must specify the name of the Fund, the shares' class (i.e.,
Investor Shares), the account name and number, address, confirmation number,    
amount to be wired, name of the wiring bank, and name and telephone number of   
the person to be contacted in connection with the order. If the initial         
investment is by wire, an account number will be assigned and an Account        
Application must be completed and                                               

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mailed to the Fund before any account will become active. Wire orders received  
prior to 4:00 p.m. (Eastern Time) on each day that the New York Stock Exchange  
is open for trading (a "Fund Business Day") will be processed at the net asset  
value determined as of that day. Wire orders received after 4:00 p.m. (Eastern  
Time) will be processed at the net asset value determined as of the next Fund   
Business Day. See "Net Asset Value" below.                                      

    The Fund's Transfer Agent establishes for each shareholder of record, an
open account to which all shares purchased and all reinvested dividends and     
other distributions are credited. Although most shareholders elect not to       
receive share certificates, certificates for full shares can be obtained by     
written request to the Fund's Transfer Agent. No certificates are issued for    
fractional shares.                                                              

  The Transfer Agent will deem an account lost if six months have passed
since correspondence to the shareholder's address of record is returned, unless 
the Transfer Agent determines the shareholder's new address. When an account is 
deemed lost, dividends and other distributions will automatically be reinvested.
In addition, the amount of any outstanding checks for dividends and other       
distributions that have been returned to the Transfer Agent will be reinvested  
and such checks will be canceled.                                               

Retirement Plans and Individual Retirement Accounts                             

     Shares of the Fund are offered in connection with tax-deferred retirement
plans. Application forms and further information about these plans, including   
applicable fees, are available upon request. Before investing in the Fund       
through one of these plans, investors should consult their tax advisors.        

The Fund may be used as an investment vehicle for an IRA including  
SEP-IRA. An IRA naming The First National Bank of Boston as custodian is        
available from the Trust or the Transfer Agent. The minimum initial investment  
for an IRA is $2,000; the minimum subsequent investment is $2,500. Under certain
circumstances contributions to an IRA may be tax deductible. IRAs are available 
to individuals (and their spouses) who receive compensation or earned income,   
whether or not they are active participants in a tax-qualified or               
government-approved retirement plan. An IRA contribution by an individual (or   
spouse) who participates in a tax-qualified or government-approved retirement   
plan may not be deductible, depending upon the individual's income. Individuals 
also may establish an IRA to receive a "rollover" contribution of distributions 
from another IRA or a qualified plan. Tax advice should be obtained before      
effecting a rollover.                                                           

Statement of Intention                                                          

 Investor Share investors also may meet the minimum initial investment
requirement based on cumulative purchases by means of a written Statement of    
Intention, expressing the investor's intention to invest $10,000 or more in     
Investor Shares of the Fund within a period of 13 months. Each purchase of      
shares under a Statement of Intention will be made at net asset value plus the  
sales charge applicable at the time of the purchase to a single transaction of  
the dollar amount indicated in the Statement.                                   

   Investors wishing to enter into a Statement of Intention in conjunction
with their initial investment in shares of the Fund should complete the         
appropriate portion to the account application form. Current Fund shareholders  
can obtain a Statement of Intention form by contacting the Transfer Agent.      

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      The Fund reserves the right to redeem Shares in any account if, at the end
of the Statement of Intention period, the account does not have a value of at   
least the minimum investment amount.                                            

Exchanges                                                                       

Shareholders may exchange Shares of the Fund for Shares of any other
series of the Trust so long as they meet the initial investment minimum of the  
fund being purchased and maintain the respective minimum account balance in each
Fund in which they own shares. Exchanges between each Fund are at net asset     
value.                                                                          

   An exchange is considered to be a sale of shares for federal income tax
purposes on which a shareholder may realize a capital gain or loss. An exchange 
may be made by calling the transfer agent at (800) 344-8332 or by mailing       
written instructions to Schroder Capital Funds (Delaware), P.O. Box 446,        
Portland, Maine 04112. Exchange privileges may be exercised only in those states
where shares of the other series of the Trust may legally be sold. Exchange     
privileges may be amended or terminated at any time upon sixty (60) days'       
notice.                                                                         

Redemption of Shares                                                            

    Shares of the Fund are redeemed at their next determined net asset value
after receipt by the Fund (at the address set forth above under "Purchase of    
Shares") of a redemption request in proper form. Redemption requests may be made
between 9:00 a.m. and 6:00 p.m. (Eastern Time) on each Fund Business Day.       
Redemption requests that are received prior to 4:00 p.m. (Eastern Time) will be 
processed at the net asset value determined as of that day. Redemption requests 
that are received after 4:00 p.m. (Eastern Time) will be processed at the net   
asset value determined the next Fund Business Day. See "Net Asset Value" below. 

     By Telephone. Redemption requests may be made by telephoning the Transfer
Agent at the telephone number on the cover page of this Prospectus. A           
shareholder must provide the Transfer Agent with the class of Shares, the dollar
amount or number of shares to be redeemed, shareholder account number, and some 
additional form of identification such as a password. A redemption by telephone 
may be made only if the telephone redemption privilege option has been elected  
on the Account Application or otherwise in writing. In an effort to prevent     
unauthorized or fraudulent redemption requests by telephone, reasonable         
procedures will be followed by the Transfer Agent to confirm that telephone     
instructions are genuine. The Transfer Agent and the Trust generally will not be
liable for any losses due to unauthorized or fraudulent redemption requests, but
may be liable if they do not follow these procedures. Shares for which          
certificates have been issued may not be redeemed by telephone. In times of     
drastic economic or market change, it may be difficult to make redemptions by   
telephone. If a shareholder cannot reach the Transfer Agent by telephone,       
redemption requests may be mailed or hand-delivered to the Transfer Agent.      

      Written Requests. Redemptions may be made by letter to the Fund specifying
the class of shares, the dollar amount or number of Shares to be redeemed, and  
the shareholder account number. The letter must also be signed in exactly the   
same way the account is registered (if there is more than one owner of the      
Shares, all must sign) and, in certain cases, signatures must be guaranteed by  
an institution that is acceptable to the Transfer Agent. Such institutions      
include certain banks, brokers, dealers (including municipal and government     
securities brokers and dealers), credit unions and savings associations.        
Notaries public are not acceptable. Further documentation may be requested to   
evidence the authority of the person or entity making the redemption request.   
Questions concerning the need for signature guarantees or documentation of      
authority should be directed to the Fund at the above address or by calling the 
telephone number appearing on the cover of this Prospectus.                     

   If Shares to be redeemed are held in certificate form, the certificates
must be enclosed with the redemption request and the assignment form on the back
of the certificates (or an assignment separate from the certificates but        
accompanied by the certificates) must be signed by all owners in exactly the    
same way the owners' names are written on the face of the certificates.         
Requirements for signature guarantees and/or documentation of authority as      
described above could also apply. For your protection, the Fund suggests that   
certificates be sent by registered mail.                                        

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  Additional Redemption Information. Checks for redemption proceeds will
normally be mailed within seven days. No redemption proceeds will be mailed     
until checks in payment for the purchase of the Shares to be redeemed have been 
cleared, which may take up to 15 calendar days from the purchase date. Unless   
other instructions are given in proper form, a check for the proceeds of a      
redemption will be sent to the shareholder's address of record.                 

   The Fund may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that exchange is closed,
(ii) the SEC has by order permitted such suspension, or (iii) an emergency (as  
defined by rules of the SEC) exists making disposal of portfolio investments or 
determination of the Fund's net asset value not reasonably practicable.         

  If the Trust Board determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment wholly or    
partly in cash, the Fund may redeem Shares in whole or in part by a distribution
in kind of portfolio securities (from the investment portfolio of the Portfolio 
or of the Fund), in lieu of cash. The Fund will, however, redeem Shares solely  
in cash up to the lesser of $250,000 or 1% of net assets during any 90-day      
period for any one shareholder. In the event that payment for redeemed Shares is
made wholly or partly in portfolio securities, the shareholder may be subject to
additional risks and costs in converting the securities to cash. See "Additional
Purchase and Redemption Information" in the SAI.                                

     The proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal income tax
purposes.                                                                       

     Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem Shares in any account (other than an IRA) if at any
time the account does not have a value of at least $2,000, unless the value of  
the account falls below that amount solely as a result of market activity.      
Shareholders will be notified that the value of the account is less than $2,000 
and be allowed at least 30 days to make an additional investment to increase the
account balance to at least $2,000.                                             

Net Asset Value                                                                 

  The net asset value per share of the Fund is calculated separately for
each class of Shares of the Fund at 4:00 p.m. (Eastern Time), Monday through    
Friday, each Fund Business Day, which excludes the following U.S. holidays: New 
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor 
Day, Thanksgiving Day and Christmas Day. Net asset value per Share is calculated
by dividing the aggregate value of the Fund's assets less all Fund liabilities, 
if any, by the number of Shares of the Fund outstanding.                        

   Generally, securities that are listed on recognized stock exchanges are
valued at the last reported sale price, on the day when the securities are      
valued (the "Valuation Day"), on the primary exchange on which the securities   
are principally traded. Listed securities traded on recognized stock exchanges  
for which there were no sales on the Valuation Day are valued at the last sale  
price on the preceding trading day or at closing mid-market prices. Securities  
traded in over-the-counter markets are valued at the most recent reported       
mid-market price. 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 Schroder Core Board.                                    

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              

The Fund                                                                        

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  The Fund intends to comply with the provisions of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies. By      
complying therewith, the Fund do not have to pay federal income tax on that part
of its income that is distributed to shareholders. The Fund intends to          
distribute substantially all of its income and therefore, intends not to be     
subject to federal income tax. In its effort to adhere to these requirements,   
the Fund may have to limit its investment activity in some types of instruments.

      Dividends and capital gain distributions on Investor Shares are reinvested
automatically in additional Investor Shares at net asset value unless the       
shareholder has elected in the Account Application or otherwise in writing, to  
receive dividends and other distributions in cash.                              

      After every dividend and other distribution, the value of a Share declines
by the amount of the distribution. Purchases made shortly before a dividend or  
other distribution include in the purchase price the amount of the distribution,
which will be returned to the investor in the form of a taxable distribution.   

   Dividends and other distributions paid by the Fund with respect to both
classes of its shares will be calculated in the same manner and at the same     
time. The per share dividends on Advisor Shares are expected to be lower than   
the per share dividends on Investor Shares as a result of compensation payable  
to Service Organizations for shareholder servicing for the Advisor Shares.      

      Dividends from the Fund's income generally will be taxable to shareholders
as ordinary income, whether dividends are invested in additional Shares or      
received in cash. Distributions by the Fund of any net capital gain will be     
taxable to a shareholder as long-term capital gain regardless of how long the   
shareholder has held the Shares. Each year the Trust will notify shareholders of
the tax status of dividends and other distributions.                            

     Dividends from the Fund will qualify for the dividends-received deduction
for corporate shareholders to the extent dividends do not exceed the aggregate  
amount of dividends received by the Fund from domestic corporations, provided   
the Fund shares are held for more than 45 days. If securities held by the Fund  
are considered to be debt-financed (generally, acquired with borrowed funds);   
are held by the Fund for fewer than 46 days (91 days in the case of certain     
preferred stock); or are subject to certain forms of hedges or short sales, then
the portion of the dividends paid by the Fund attributable to such securities   
will not be eligible for the dividends-received deduction.                      

A                                                             

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redemption of Shares may result in taxable gain or loss to the redeeming        
shareholder, depending on whether the redemption proceeds are more or less than 
the shareholder's basis in the redeemed Shares. If Shares are redeemed at a loss
after being held for six months or less, the loss will be treated as a          
long-term, rather than a short-term, capital loss to the extent of any capital  
gain distributions received on those Shares.                                    

     The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate   
shareholders who do not furnish the Fund with a correct taxpayer identification 
number. Withholding at that rate also is required from dividends and capital    
gain distributions payable to such shareholders who otherwise are subject to    
backup withholding. Depending on the residence of a shareholder for tax         
purposes, distributions from the Fund may also be subject to state and local    
taxes, including withholding taxes.                                             

   If the Fund's dividends exceed its taxable income in any year, all or a
portion of the Fund's dividends may be treated as a return of capital to        
shareholders for tax purposes. Any return of capital will reduce the cost basis 
of your shares, which will result in a higher reported capital gain or a lower  
reported capital loss when you sell your shares. Shareholders will be notified  
by the Trust if a distribution includes a return of capital.                    

The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the SAI   
for further information. Shareholders should consult their own tax advisors as  
to the tax consequences of their ownership of Shares.                           

The Portfolio                                                                   

The Portfolio not required to pay federal income tax because it is  
classified as a partnership for federal income tax purposes. All interest,      
dividends, gain and loss of the Portfolio will be deemed to have been "passed   
through" to the Fund in proportion to the Fund's holdings in the Portfolio,     
regardless of whether such interest, dividends or gains have been distributed by
the Portfolio.                                                                  

    The Portfolio intends to conduct its operations so as to enable the Fund
to qualify as a regulated investment company.                                   

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OTHER INFORMATION                                                               

Capitalization and Voting                                                       

     The Trust was organized as a Maryland corporation called Schroder Capital
Funds, Inc. on July 30, 1969, and was reorganized as a Delaware business trust  
on January 9, 1996. The Trust has authority to issue an unlimited number of     
shares of beneficial interest. The Trust Board may, without shareholder         
approval, divide the authorized shares into an unlimited number of separate     
portfolios or series (such as the Fund) and may divide such portfolios or series
into classes of shares (such as the Investor Shares), and the costs of doing so 
will be borne by the Trust. The Trust currently consists of eight separate      
series, each of which has separate investment objectives and policies.          

   The Fund currently consists of two classes of shares. Each share of the
Fund is entitled to participate equally in dividends and other distributions and
the proceeds of any liquidation except that, due to the differing expenses borne
by the classes, dividends and liquidation proceeds for each class will likely   
differ.                                                                         

Shares are fully paid, non-assessable and have no preemptive rights.
Shareholders have non-cumulative voting rights, which means that the holders of 
more than 50% of the shares voting for the election of Trustees can elect 100%  
of the Trustees if they choose to do so. A shareholder is entitled to one vote  
for each full share held (and a fractional vote for each fractional share held).
Each share of the Fund has equal voting rights, except that if a matter affects 
only the shareholders of a particular class only shareholders of that class     
shall have a right to vote. On Trust matters requiring shareholder approval,    
shareholders of the Trust are entitled to vote only with respect to matters that
affect the interests of the fund or the class of shares they hold, except as    
otherwise required by applicable law.                                           

There will normally be no meetings of shareholders to elect Trustees
unless and until such time as less than a majority of the Trustees holding      
office have been elected by shareholders. However, the holders of not less than 
a majority of the outstanding shares of the Trust may remove any person serving 
as a Trustee and the Trust Board will call a special meeting of shareholders to 
consider removal of one or more Trustees if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust.            

From time to time, certain shareholders may own a large percentage of the shares
of the Fund. Accordingly, those shareholders may be able to greatly affect (if  
not determine) the outcome of a shareholder vote. As of February 15, 1997,      
Schroder Nominees Limited may be deemed to have controlled the Fund for purposes
of the 1940 Act.                                                                

Reports                                                                         

     The Trust sends each Fund shareholder a semi-annual report and an audited
annual report containing the Fund's financial statements.                       

Performance                                                                     

The Fund may include quotations of its average annual total return, 
cumulative total return and other performance measures in advertisements or     
reports to shareholders or prospective investors.                               

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Average annual total return of a class of shares is based upon the overall      
dollar or percentage change in value of a hypothetical investment each year over
specified periods. Average annual total returns reflect the deduction of a      
proportional share of a Fund's expenses (on an annual basis) and assumes        
investment and reinvestment of all dividends and distributions at NAV.          
Cumulative total returns are calculated similarly except that the total return  
is aggregated over the relevant period instead of annualized.                   

     Performance quotations are calculated separately for each class of shares
of the Fund. The Fund may also be compared to various unmanaged securities      
indices, groups of mutual funds tracked by mutual fund ratings services, or     
other general economic indicators. Unmanaged indices may assume the reinvestment
of dividends but do not reflect deductions for administrative and management    
costs and expenses.                                                             

 Performance information represents only past performance and does not
necessarily indicate future results. For a description of the methods used to   
determine total return and other performance measures for the Fund, see the SAI.

Custodian and Transfer Agent                                                    

The Chase Manhattan Bank, N.A. is custodian of the Fund's and of the
Portfolio's assets. Forum Financial Corp. serves as the Fund's transfer and     
dividend disbursing agent.                                                      

Shareholder Inquiries                                                           

Inquiries about the Fund, including its past performance, should be 
directed to:                                                                    

Schroder U.S. Smaller Companies Fund        
P.O. Box 446                                
Portland, Maine 04112                       

    Information about specific shareholder accounts may be obtained from the
Transfer Agent by calling (800) 344-8332.                                       

Service Organizations                                                           

    The Glass-Steagall Act and other applicable laws and regulations provide
that banks may not engage in the business of underwriting, selling or           
distributing securities. There is currently no precedent prohibiting banks from 
performing administrative and shareholder servicing functions as Service        
Organizations. However, judicial or administrative decisions or interpretations 
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,    
could prevent a bank Service Organization from continuing to perform all or part
of its servicing activities. If a bank were prohibited from so acting, its      
shareholder clients would be permitted to remain shareholders of the Fund and   
alternative means for continuing the servicing of such shareholders would be    
sought. It is not expected that shareholders would suffer any adverse financial 
consequences as a result of any of these occurrences.                           

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Fund Structure                                                                  

      Classes of Shares. The Fund has two classes of shares, Investor Shares and
Advisor Shares. Advisor Shares are offered by a separate prospectus to          
individual investors, in most cases through Service Organizations. Advisor      
Shares incur more expenses than Investor Shares. Except for certain differences,
each share of each class represents an undivided, proportionate interest in the 
Fund. Each share of the Fund is entitled to participate equally in dividends and
other distributions and the proceeds of any liquidation of the Fund except that,
due to the differing expenses borne by the two classes, the amount of dividends 
and other distributions will differ between the classes. Information about      
Advisor Shares is available from the Fund by calling Schroder Advisors at (800) 
730-2932.                                                                       

The Portfolio. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio, which has the same     
investment objective and substantially similar policies as the Fund.            
Accordingly, the Portfolio directly acquires its own securities and the Fund    
acquires an indirect interest in those securities. The Portfolio is a separate  
series of Schroder Core, a business trust organized under the laws of the State 
of Delaware in September 1995. Schroder Core is registered under the 1940 Act as
an open-end, management investment company and currently has four separate      
series. The assets of the Portfolio, a diversified portfolio, belong only to,   
and the liabilities of the Portfolio are borne solely by, the Portfolio and no  
other portfolio of Schroder Core.                                               

The Fund's investment in the Portfolio is in the form of a          
non-transferable beneficial interest. As of March 1, 1997, there are two        
institutional investors in the Portfolio, the Fund and Norwest Advantage        
SmallCap Opportunities Fund. The Portfolio may permit other investment companies
or institutional investors to invest in it. All other investors in the Portfolio
will invest on the same terms and conditions as the Fund and will pay a         
proportionate share of the Portfolio's expenses.                                

The Portfolio normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in the Portfolio will be entitled to    
vote in proportion to its relative beneficial interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other    
applicable law, the Fund will solicit proxies from its shareholders and will    
vote its interest in the Portfolio in proportion to the votes cast by its       
shareholders. If there are other investors in the Portfolio, there can be no    
assurance that any issue that receives a majority of the votes cast by Fund     
shareholders will receive a majority of votes cast by all investors in the      
Portfolio; indeed, if other investors hold a majority interest in the Portfolio,
they could have voting control of the Portfolio.                                

     The Portfolio will not sell its shares directly to members of the general
public. Another investor in the Portfolio, such as an investment company, that  
might sell its shares to members of the general public would not be required to 
sell its shares at the same public offering price as the Fund and could have    
different fees and expenses than the Fund. Therefore, Fund shareholders may have
different returns than shareholders in another investment company that invests  
exclusively in the Portfolio. There is currently no such other investment       
company that offers its shares to members of the general public. Information    
regarding any such funds in the future will be available from Schroder Core by  
calling (800) 730-2932.                                                         

Under federal securities law, any person or entity that signs a     
registration statement may be liable for a misstatement or omission of a        
material fact in it. Schroder Core, its Trustees and certain of its officers are
required to sign the registration statement of the Trust and may be required to 
sign the registration statements of certain other investors in the Portfolio. In
addition, Schroder Core may be liable for misstatements or omissions of a       
material fact in                                                                

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any proxy soliciting material of an investor in Schroder Core, including the    
Fund. Each investor in the Portfolio, including the Trust, will indemnify       
Schroder Core and its Trustees and officers ("Schroder Core Indemnitees")       
against certain claims.                                                         

s                                                                               

  Indemnified claims are those brought against Schroder Core Indemnitees
based on a misstatement or omission of a material fact in the investor's        
registration statement or proxy materials. No indemnification need be made,     
however, if such alleged misstatement or omission relates to information about  
Schroder Core and was supplied to the investor by Schroder Core. Similarly,     
Schroder Core will indemnify each investor in the Portfolio, including the Fund,
for any claims brought against the investor with respect to the investor's      
registration statement or proxy materials, to the extent the claim is based on a
misstatement or omission of a material fact relating to information about       
Schroder Core that is supplied to the investor by Schroder Core. In addition,   
each registered investment company investor in the Portfolio will indemnify each
Schroder Core Indemnitee against any claim based on a misstatement or omission  
of a material fact relating to information about a series of the registered     
investment company that did not invest in the Schroder Core. The purpose of     
these cross-indemnity provisions is principally to limit the liability of       
Schroder Core to information that it knows or should know and can control. With 
respect to other prospectuses, other offering documents and proxy materials of  
investors in Schroder Core, its liability is similarly limited to information   
about and supplied by it.                                                       

     Certain Risks of Investing in the Portfolio. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the        
Portfolio: for example, if the Portfolio had a large investor other than the    
Fund that redeemed its interest in the Portfolio, the Portfolio's remaining     
investors (including the Fund) might, as a result, experience higher pro rata   
operating expenses, thereby producing lower returns.                            

 The Fund may withdraw its entire investment from the Portfolio at any
time, if the Trust Board determines that it is in the best interests of the Fund
and its shareholders to do so. The Fund might withdraw, for example, if there   
were other investors in the Portfolio who did by a vote of the shareholders of  
all investors (including the Fund), change the investment objective or policies 
of the Portfolio in a manner not acceptable to the Trust Board. A withdrawal    
could result in a distribution in kind of portfolio securities (as opposed to a 
cash distribution) by the Portfolio. That distribution could result in a less   
diversified portfolio of investments for the Fund and could affect adversely the
liquidity of the Fund's portfolio. If the Fund decided to convert those         
securities to cash, it would likely incur brokerage fees or other transaction   
costs. If the Fund withdrew its investment from the Portfolio, the Trust Board  
would consider appropriate alternatives, including the management of the Fund's 
assets in accordance with its investment objective and policies by SCMI, or the 
investment of all of the Fund's investable assets in another pooled investment  
entity having substantially the same investment objective as the Fund. The      
inability of the Fund to find a suitable replacement investment, if the Board   
decided not to permit SCMI to manage the Fund's assets, could have a significant
impact on shareholders the Fund.                                                

     Each investor in the Portfolio, including the Fund, may be liable for all
obligations of the Portfolio but not any other portfolio of Schroder Core. The  
risk to an investor in the Portfolio of incurring financial loss on account of  
such liability, however, is limited to circumstances in which the Portfolio is  
unable to meet its obligations, the occurrence of which SCMI considers to be    
quite remote. Upon liquidation of the Portfolio, investors would be entitled to 
share pro rata in the net assets of the Portfolio available for distribution to 
investors.                                                                      

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Investment Adviser                                                              
Schroder Capital Management International Inc.                                  
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Administrator & Distributor                                                     
Schroder Fund Advisors Inc.                                                     
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company                        
Two Portland Square                                                             
Portland, Maine  04101                                                          

Custodian                                                                       
The Chase Manhattan Bank, N.A.                                                  
Chase MetroTech Center                                                          
Brooklyn, New York  11245                                                       

Transfer and Dividend Disbursing Agent                                          
Forum Financial Corp.                                                           
P.O. Box 446                                                                    
Portland, Maine 04112                                                           

Independent Accountants                                                         
Coopers & Lybrand, L.L.P.                                                       
One Post Office Square                                                          
Boston, Massachusetts 02109                                                     

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Table of Contents                                                               

PROSPECTUS SUMMARY........................................................      
EXPENSES OF INVESTING                                                           
IN THE FUND...........................................................  
Fee Table.................................................................      
Example...................................................................      
FINANCIAL HIGHLIGHTS......................................................      
INVESTMENT OBJECTIVE......................................................      
INVESTMENT POLICIES.......................................................      
RISK CONSIDERATIONS.......................................................      
MANAGEMENT OF THE FUND....................................................      
Boards of Trustees........................................................      
Investment Adviser and Portfolio Managers.................................      
Administrative Services...................................................      
Expenses..................................................................      
Portfolio Transactions....................................................      
Code of Ethics............................................................      
INVESTMENT IN THE FUND....................................................      
Purchase of Shares........................................................      
Retirement Plans and                                                            
Individual Retirement Accounts........................................  
Statement of Intention....................................................      
Exchanges.................................................................      
Redemption of Shares......................................................      
Net Asset Value...........................................................      
DIVIDENDS, DISTRIBUTIONS                                                        
AND TAXES.............................................................  
The Fund..................................................................      
The Portfolio.............................................................      
OTHER INFORMATION.........................................................      
Capitalization and Voting.................................................      
Reports...................................................................      
Performance...............................................................      
Custodian and Transfer Agent..............................................      
Shareholder Inquires......................................................      
Service Organizations.....................................................      
Fund Structure............................................................      

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SCHRODER U.S. SMALLER COMPANIES FUND                                            

Advisor Shares                                                                  

This fund's investment objective is capital appreciation. It seeks to achieve   
its objective by investing primarily in equity securities of companies domiciled
in the United States that have market capitalizations of $1.5 billion or less.  
It is intended for long-term investors seeking to diversify their growth        
investments who are willing to accept the risks associated with investments in  
smaller companies. Current income is incidental to the objective of capital     
appreciation.                                                                   

Schroders                                                     

[GRAPHIC OMITTED]                                                     

Your Window On The World                                                      

Schroder U.S. Smaller Companies Fund (the Fund"), a series of Schroder Capital  
Funds (Delaware) (the "Trust"), seeks to achieve its investment objective by    
investing substantially all of its assets in Schroder U.S. Smaller Companies    
Portfolio (the "Portfolio"), which invests, under normal market conditions, at  
least 65% of its total assets in equity securities of companies domiciled in the
United States that, at the time of purchase, have market capitalizations of $1.5
billion or less. The Portfolio is a separately managed, diversified series of   
Schroder Capital Funds ("Schroder Core"), an open-end management investment     
company. The Portfolio has an identical investment objective and substantially  
similar investment policies as the Fund. Accordingly, the Fund's investment     
experience will correspond directly with the Portfolio's investment experience. 
See "Other Information -- Fund Structure."                                      

This prospectus sets forth concisely the information you should know before     
investing and should be retained for further reference. To learn more about the 
Fund, you may obtain a copy of the Fund's                                       

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current Statement of Additional Information (the "SAI") which is incorporated by
reference into this Prospectus. The SAI dated March 1, 1997, as amended from    
time to time, has been filed with the Securities and Exchange Commission ("SEC")
and is available along with other related materials for reference on their      
Internet Web Site (http://www.sec.gov) or may be obtained without charge from   
the Trust by writing to Two Portland Square, Portland, Maine 04101 or by calling
1-800-290-9826. The Fund has not authorized anyone to provide you with          
information that is different from what is contained in this prospectus or in   
other documents to which this prospectus refers you.                            

MUTUAL FUND SHARES OFFERED ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT,
THE FDIC, THE FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENT AGENCY AND ALSO ARE
NOT OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY BANK
OR ITS AFFILIATES. MUTUAL FUND INVESTMENTS ARE SUBJECT TO INVESTMENT RISK,      
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.                                       

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

PROSPECTUS                                                                      

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MARCH 1, 1997                                                                   

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PROSPECTUS SUMMARY                                                              

      This prospectus offers Advisor Class shares ("Advisor Shares" or "Shares")
of the Fund. The Fund is a separately managed, diversified series of the Trust, 
an open-end, management investment company registered under the Investment      
Company Act of 1940 (the "1940 Act"). The following summary is qualified in its 
entirety by the more detailed information contained in this Prospectus.         

Objective. Capital appreciation.                                    

      Strategy. Invests at least 65% of its total assets in equity securities of
companies domiciled in the United States that have market capitalizations, at   
the time of purchase, of $1.5 billion or less.                                  

      Investment Adviser. The Portfolio's investment adviser is Schroder Capital
Management International Inc. ("SCMI"), 787 Seventh Avenue, New York, New York  
10019. The Fund (and indirectly its shareholders) bears a pro rata portion of   
the investment advisory fee the Portfolio pays to SCMI. See "Management of the  
Fund - Investment Adviser and Portfolio Managers."                              

Administrative Services. Schroder Fund Advisors Inc.                

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("Schroder Advisors") serves as administrator and distributor of the Fund, and  
Forum Administrative Services, Limited Liability Company ("Forum") serves as the
Fund's sub-administrator.                                                       

    Purchases and Redemptions of Shares. Shares may be purchased or redeemed
by mail, by bank-wire and through your broker-dealer or other financial         
institution. The minimum initial investment is $10,000, except that the minimum 
for an Individual Retirement Account ("IRA") is $2,000. The minimum subsequent  
investment is $2,500. See "Investment in the Fund -- Purchase of Shares" and "--
Redemption of Shares."                                                          

     Dividends and Other Distributions. The Fund annually declares and pays as
a dividend substantially all of its net investment income and at least annually 
distributes any net realized long-term capital gain and gains from foreign      
currency transactions. Dividends and long-term capital gain distributions are   
reinvested automatically in additional Advisor Shares of the Fund at net asset  
value unless you elect in your Account Application, or otherwise in writing, to 
receive dividends and other distributions in cash. See "Dividends, Distributions
and Taxes."                                                                     

      Risk Considerations. Alone, the Fund is not a balanced investment plan. It
is intended for long-term investors seeking to diversify their growth           
investments willing to accept the risks associated with investments in smaller  
companies. The Portfolio's policy of investing in smaller companies involves    
risks in addition to those normally associated with investments in equity       
securities of                                                                   

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large capitalization companies. Of course, as with any mutual fund, there is no 
assurance that the Fund or Portfolio will achieve its investment objective.     

     The Fund's net asset value ("NAV") varies because the market value of the
Portfolio's investments will change with changes in the value of the securities 
in which the Portfolio invests and with changes in market conditions, interest  
rates, currency rates, or political or economic situations. When you sell your  
shares, they may be worth more or less than what you paid for them. For further 
information, see "Risk Considerations."                                         

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 FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
Please call for complete information and to obtain a prospectus.
 Please read the prospectus carefully before you invest.

Schroder Capital Funds (Delaware) (1-800-290-9826)                              
Schroder International Fund                                                     
Schroder Emerging Markets Fund--                                                
Institutional Portfolio                                                   
Schroder International Smaller Companies Fund                                   
Schroder U.S. Smaller Companies Fund                                            
Schroder U.S. Equity Fund                                                       
Schroder Series Trust (1-800-464-3108)                                          
Schroder Equity Value Fund                                                      
Schroder Small Capitalization Value Fund                                        
Schroder High Yield Income Fund                                                 
Schroder Investment Grade Income Fund                                           
Schroder Short-Term Investment Fund                                             

EXPENSES OF INVESTING IN THE FUND                                               

Fee Table                                                                       

   The table below is intended to assist you in understanding the expenses
that an investor in Advisor Shares of the Fund would incur. There are no        
transaction expenses associated with purchases or redemptions of Advisor Shares.
The Annual Fund Operating Expenses reflect projected fees, expenses and waivers 
for the current fiscal year.                                                    

Annual Fund Operating Expenses (as a percentage of average net assets)(1)       
     Management Fees (2).................................................. 0.53%
     12b-1 Fees (3).......................................................  None
     Other Expenses....................................................... 1.21%
     Total Fund Operating Expenses (4).................................... 1.74%

  (1) Based on the Fund's expenses for the fiscal year ended October 31,
        1996. The Fund's expenses include the Fund's pro rata portion of all
operating expenses of the Portfolio.                        

   (2) Management Fees reflect the fees paid by the Portfolio and the Fund
for investment advisory and administrative services.        

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(3) In the future, subject to the approval of the Trust's Board of  
  Trustees, 12b-1 fees may be charged at an annual rate of up to
0.50%.                                                      
 (4) SCMI and Schroder Advisors have voluntarily undertaken to waive a
        portion of their fees and assume certain expenses of the Fund during
       the current fiscal year in order to limit the Fund's total expenses
     to 1.74% of the Fund's average daily net assets. This undertaking
      cannot be withdrawn except by a majority vote of the Trust's Board
       of Trustees. See "Management of the Fund--Expenses." ." Without fee
        waivers, Management Fees and Total Operating Expenses would be 0.85%
and 2.06%, respectively.                                    

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Example                                                                         

   The table below indicates how much you would pay in total expenses on a
$1,000 investment in the Fund, assuming (1) a 5% annual return and (2)          
redemption at the end of each time period. The example is based on the expenses 
listed above and assumes the reinvestment of all dividends and other            
distributions. The example should not be considered a representation of past or 
future expenses or returns; actual expenses or returns may vary from those      
shown. The 5% annual return is not a prediction of the Fund's return, but is the
percentage required by the SEC for use in this example.                         

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         1 YEAR ..........................   $18
         3 YEARS .........................   $55
         5 YEARS .........................   $94
        10 YEARS .........................  $205

FINANCIAL HIGHLIGHTS                                                            

    The financial highlights are presented below to assist you in evaluating
per share performance of the Fund's Advisor Shares for the periods shown. This  
information is part of the Fund's financial statements and has been audited by  
Coopers & Lybrand L.L.P., independent accountants to the Fund. The Fund's       
financial statements for the year ended October 31, 1996, and the related       
independent accountants' report are contained in the Fund's Annual Report to    
Shareholders and are incorporated by reference into the SAI. Further information
about the performance of the Fund is contained in the Annual Report, which may  
be obtained without charge by writing the Fund at Two Portland Square, Portland,
Maine 04101 or by calling 1-800-290-9826.                                       

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                                                        [Enlarge/Download Table]


                                                    For the Years Ended              For the Period      
                                                         October 31,               August 6, 1993 (b) -  
                                                 1996(a)             1995         1994   October 31, 1993
---------------------------------------------------------------------------------------------------------
                                                                                                         
Net Asset Value, Beginning of Period             $15.14             $11.81       $10.99       $10.00     
                                                 ------             ------       ------       ------     
Investment Operations:                                                                                   
     Net Investment Loss                          (0.06)(c)          (0.04)       (0.07)       (0.02)    
     Net Realized and Unrealized Gain on                                                                 
       Investments                                 4.10               3.78         0.97         1.01     
                                                 ------             ------       ------       ------     
Total from Investment Operations                   4.04               3.74         0.90         0.99     
                                                 ------             ------       ------       ------     
Distributions from Net Realized Gain on                                                                  
      Investments                                 (1.95)             (0.41)       (0.08)        --       
                                                 ------             ------       ------       ------     
Net Asset Value, End of Period                   $17.23             $15.14       $11.81       $10.99     
                                                 ======             ======       ======       ======     
Total Return                                      29.35%             32.84%        8.26%        9.90%    
                                                 ======             ======       ======       ======     
Ratios/Supplementary Data:                                                                               


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                                                        [Enlarge/Download Table]
                                                                                        

Net Assets, End of Period (Thousands)    $13,743         $15,287   $13,324   $12,489    
Ratio of Expenses to Average Net Assets    1.49%(c)(d)     1.49%     1.45%     2.03%(e) 
Ratio of Net Investment Loss to Average                                                 
  Net Assets                              (0.35%)(c)(d)   (0.30)%   (0.58)%   (0.99%)(e)
Portfolio Turnover Rate(f)                58.50%          92.68%    70.82%    12.58%    
Average Brokerage Commission Rate(g)     $0.0583            N/A       N/A       N/A     


(a) On May 17, 1996, the Fund began offering two classes of shares, Investor    
Shares and Advisor Shares, and all then outstanding shares of the Fund  
were converted to Investor Shares.                                      
(b) Commencement of operations.                                                 
(c) Includes the Fund's proportionate share of income and expenses of the       
Portfolio.                                                              
(d) During the year ended October 31, 1996, various fees were waived. Had such  
waivers not occurred, the ratio of expenses to average net assets would 
  have been 1.80% and the ratio of net investment loss to average net assets
would have been (0.66)%, both of which include the Fund's proportionate 
share of income and expenses of the Portfolio.                          
(e) Annualized.                                                                 
(f) Portfolio turnover rate represents the rate of portfolio activity. The      
rate for year ended October 31, 1996 represents the portfolio turnover  
rate of the Portfolio.                                                  
(g) The average commission per share paid to brokers represents the amount      
  paid to brokers on the purchase and sale of portfolio securities while the
Fund was making investments directly in securities.                     

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INVESTMENT OBJECTIVE                                                            

 The investment objective of the Fund is capital appreciation. Current
income will be incidental to the objective of capital appreciation. The Fund is 
not intended for investors whose objective is assured income or preservation of 
capital. It is, rather, appropriate for investors who can bear the special risks
associated with investment in smaller capitalization companies.                 

     The Fund currently seeks to achieve its investment objective by investing
all of its investable assets in the Portfolio, which has substantially the same 
investment objective and substantially similar policies as the Fund. There can  
be no assurance that the Fund or Portfolio will achieve its investment          
objective.                                                                      

INVESTMENT POLICIES                                                             

   Although the following information describes the investment policies of
the Portfolio and the responsibilities of Schroder Core's Board of Trustees (the
"Schroder Core Board"), it applies equally to the Fund and the Trust's Board of 
Trustees (the "Trust Board"). Additional information concerning the investment  
policies of the Fund and the Portfolio is contained in the SAI.                 

  The investment objective, and the investment policies of the Portfolio
that are designated as fundamental, may not be changed without approval of the  
holders of a majority of the outstanding voting securities of the Portfolio. A  
majority of outstanding voting securities means the lesser of (i) 67% of the    
shares present or represented at a shareholder meeting at which the holders of  
more than 50% of the outstanding shares are present or represented, or (ii) more
than 50% of outstanding shares. Non-fundamental investment policies of the      
Portfolio may be changed by the Schroder Core Board without approval of the     
investors in the Portfolio.                                                     

 Under normal market conditions the Portfolio will seek to achieve its
investment objective by investing at least 65% of its total assets in equity    
securities of United States-domiciled companies that at the time of purchase    
have market capitalizations of $1.5 billion or less. (Market capitalization     
means the market value of a company's outstanding stock.)                       

  In its investment approach, SCMI will identify securities of companies
that it believes can generate above average earnings growth, and are selling at 
favorable prices in relation to book values and earnings. SCMI's assessment of  
the competency of an issuer's management will be an important investment        
consideration. These criteria are not rigid, and other investments may be       
included in the Portfolio if they could help the Portfolio attain its objective.
These criteria can be changed by the Schroder Core Board, without shareholder   
approval.                                                                       

      The Portfolio will invest principally in equity securities, namely, common
stocks; securities convertible into common stocks; or, subject to special       
limitations, rights or warrants to subscribe for or purchase common             

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stocks. A convertible security is a bond, debenture, note, preferred stock or   
other security that may be converted into or exchanged for a prescribed amount  
of common stock of the same or a different issuer within a particular period of 
time at a specified price or formula. The Portfolio may also invest to a limited
degree in non-convertible debt securities and preferred stocks when SCMI        
believes that such investments are warranted to achieve the Portfolio's         
investment objective.                                                           

 The Portfolio may invest in securities of small, unseasoned companies
(which, together with any predecessors, have been in operation for less than    
three years), as well as in securities of more established companies. The       
Portfolio intends to invest no more than 5% of its total assets in unseasoned   
issuers.                                                                        

   Although there is no minimum rating for debt securities (convertible or
non-convertible) in which the Portfolio may invest, the Portfolio intends to    
invest no more than 5% of its net assets in debt securities rated below Baa by  
Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's Ratings 
Services ("S&P") (such securities are commonly known as "high yield/high risk"  
securities or "junk bonds"), and it will not invest in debt securities that are 
in default. Prices of high yield/high risk securities are generally more        
volatile than prices of higher rated securities; and junk bonds are generally   
deemed more vulnerable to default on interest and principal payments. It should 
be noted that even bonds rated Baa by Moody's or BBB by S&P are described by    
them as having speculative characteristics; changes in economic conditions or   
other circumstances are more likely to weaken the ability of issuers of such    
bonds to make principal and interest payments than is the case with higher grade
bonds. The Portfolio is not obligated to dispose of securities due to rating    
changes by Moody's, S&P or other agencies. See the SAI for information about the
risks associated with investing in junk bonds.                                  

For temporary defensive purposes, the Portfolio may invest without  
limitation in (or enter into repurchase agreements maturing in seven days or    
less with U.S. banks and broker-dealers with respect to) short-term debt        
securities, including commercial paper, U.S. Treasury bills, other short-term   
U.S. Government securities, certificates of deposit, and bankers' acceptances of
U.S. banks. The Portfolio also may hold cash and time deposits in U.S. banks.   
See "Investment Policies" in the SAI for further information about these        
securities.                                                                     

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      The following specific policies and limitations are considered at the time
of any purchase; SCMI may not buy these instruments or use these techniques     
unless it believes that they are consistent with the Portfolio's objective.     

Common and Preferred Stock and Warrants. The Portfolio may invest in
common and preferred stock. Common stockholders are the owners of the company   
issuing the stock and, accordingly, vote on various corporate governance matters
such as mergers. They are not creditors of the company, but rather, upon        
liquidation of the company, they would be entitled to their pro rata share of   
the company's assets after creditors (including fixed income security holders)  
and preferred stockholders (if any) are paid. Preferred stock is a class of     
stock having a preference over common stock as to dividends and, generally, as  
to the recovery of investment. A preferred stockholder is also a shareholder and
not a creditor of the company. Dividends paid to common and preferred           
stockholders are distributions of the earnings of the company and are not       
interest payments(which are expenses of the company). Equity securities owned by
the Portfolio may be traded in the over-the counter market or on a securities   
exchange, but are not necessarily traded every day or in the volume typical of  
securities traded on a major U.S. national securities exchange. As a result,    
disposition by the Portfolio of a security to meet withdrawals by interest      
holdersmay require the Portfolio to sell these securities at a discount from    
market prices, to sell during periods when disposition is not desirable, or to  
make many small sales over a lengthy period of time. The market value of all    
securities, including equity securities, is based upon the market's perception  
of value and not necessarily the "book value" of an issuer or other objective   
measure of a company's worth.                                                   

    Convertible preferred stock generally may be converted at a stated price
within a specific amount of time into a specified number of shares of common    
stock. A convertible security entitles the holder to receive the dividend paid  
on preferred stock until the convertible security is converted or exchanged.    
Before conversion, convertible securities have characteristics similar to       
non-convertible debt securities in that they ordinarily provide a stream of     
income with generally higher yields than those of common stocks of the same or  
similar issuers. These securities are usually senior to common stock in a       
company's capital structure, but are usually subordinated to non-convertible    
debt securities. In general, the value of a convertible security is the higher  
of its investment value (its value as a fixed income security) and its          
conversion value (the value of the underlying shares of common stock if the     
security is converted). As a fixed income security, the value of a convertible  
security generally increases when interest rates decline and generally decreases
when interest rates rise. The value of a convertible security is, however, also 
influenced by the value of the underlying common stock.                         

    The Portfolio may also invest in warrants, which are options to purchase
an equity                                                                       

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security at a specified price (usually representing a premium over the          
applicable market value of the underlying equity security at the time of the    
warrant's issuance) and usually during a specified period of time. The Portfolio
may not invest in warrants if, as a result, more than 5% of its net assets would
be so invested or if more than 2% of its net assets would be invested in        
warrants not listed on a major U.S. stock exchange.                             

     Repurchase Agreements. The Portfolio may invest in repurchase agreements,
which are a means of investing monies for a short period whereby a seller -- a  
U.S. bank or recognized broker-dealer -- sells securities to the Portfolio and  
agrees to repurchase the m (at the Portfolio's cost plus interest) within a     
specified period (normally one day). The values of the underlying securities    
purchased by the Portfolio are monitored at all times by SCMI to ensure that the
total value of the securities equals or exceeds the value of the repurchase     
agreement. The Portfolio's custodian bank holds the securities until they are   
repurchased. If a seller defaults under a repurchase agreement, the Portfolio   
may have difficulty exercising its rights to the underlying securities and may  
incur costs and experience time delays in disposing of them. To evaluate        
potential risk, SCMI reviews the creditworthiness of banks and dealers with     
which the Portfolio enters into repurchase agreements.                          

  Illiquid and Restricted Securities. The Portfolio will not purchase or
otherwise acquire any security if, as a result, more than 15% of its net assets 
(taken at current value) would be invested in securities that are illiquid (i)  
by virtue of the absence of a readily available market or (ii) because of legal 
or contractual restrictions on resale ("restricted securities"). There may be   
undesirable delays in selling illiquid securities at prices representing their  
fair value. This policy includes over-the-counter options held by the Portfolio 
and the portion of the assets used to cover such options. The limitation on     
investing in restricted securities does not include securities that may not be  
resold to the general public but may be resold(pursuant to Rule 144A under the  
Securities Act of 1933, as amended) to qualified institutional purchasers. If   
SCMI determines that a "Rule 144A security" is liquid pursuant to guidelines    
adopted by the Schroder Core Board, the security will not be deemed illiquid.   
These guidelines take into account trading activity for the securities and the  
availability of reliable pricing information, among other factors. If there is a
lack of trading interest in a particular Rule 144A security, that security may  
become illiquid, which could affect the Portfolio's liquidity. See "Investment  
Policies -- Illiquid and Restricted Securities" in the SAI for further          
information.                                                                    

      Loans of Portfolio Securities. The Portfolio may lend portfolio securities
(otherwise than in repurchase transactions) to brokers, dealers and other       
financial institutions meeting specified credit conditions if the loan is       
collateralized in accordance with applicable regulatory requirements and if,    
after any loan, the value of the securities loaned does not exceed 25% of the   
Portfolio's total assetvalue. By so doing, the Portfolio attempts to earn       
interest income. In the event of the other party's bankruptcy, the Portfolio    
could experience delays in recovering the securities it lent; if in the         
meantime, the value of the securities the Portfolio lent has increased, the     
Portfolio could experience a loss.                                              

 The Portfolio may lend its securities if it maintains collateral in a
segregated account, and its liquid assets are equal to the current market value 
of the securities loaned (including accrued interest thereon) plus the loan     
interest payable to the Portfolio. Any securities that the Portfolio receives as
collateral will not become part of its portfolio at the time of the loan; in the
event of a default by the borrower, the Portfolio will(if permitted by law)     
dispose of such collateral except for such part thereof that is a security in   
which the Portfolio is permitted to invest. While the                           

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securities are on loan, the borrower will pay the Portfolio any accrued income  
on those securities, and the Portfolio may invest the cash collateral and earn  
income or receive an agreed upon fee from a borrower that has delivered cash    
equivalent collateral. Cash collateral received by the Portfolio will be        
invested in U.S. Government securities and liquid high grade debt obligations.  
The value of securities loaned will be marked to market daily. Portfolio        
securities purchased with cash collateral are subject to possible depreciation. 
Loans of securities by the Portfolio will be subject to termination at the      
Portfolio's or the borrower's option. The Portfolio may pay reasonable          
negotiated fees in connection with loaned securities, so long as such fees are  
set forth in a written contract and approved by the Schroder Core Board.        

    Options and Futures Transactions. While the Portfolio does not presently
intend to do so, it may write covered call options and purchase certain put and 
call options, stock index futures, and options on stock index futures and       
broadly-based stock indices, all of which are referred to as "Hedging           
Instruments." In general, the Portfolio may use Hedging Instruments: (1) to     
protect against declines in the market value of the portfolio's securities or   
(2) to establish a position in the equities markets as a temporary substitute   
for purchasing particular equity securities. The Portfolio will not use Hedging 
Instruments for speculation. The Hedging Instruments the Portfolio is authorized
to use have certain risks associated with them, including (a) the possible      
failure of such instruments as hedging techniques in cases where the price      
movements of the securities underlying the options or futures do not follow the 
price movements of the portfolio securities subject to the hedge; (b)           
potentially unlimited loss associated with futures transactions and the possible
lack of a liquid secondary market for closing out a futures position; and (c)   
possible losses resulting from the inability of SCMI to predict the direction of
stock prices, interest rates and other economic factors. The Hedging Instruments
the Portfolio may use and the risks associated with them are described in       
greater detail under "Options and Futures Transactions" in the SAI.             

    Short Sales Against-the-Box. The Portfolio may not sell securities short
except in "short sales against-the-box." For federal income tax purposes, short 
sales against-the-box may be made to defer recognition of gain or loss on the   
sale of securities "in the box;" and no income can result and no gain can be    
realized from securities sold short against-the-box until the short position is 
closed out. S uch short sales are subject to the limits described under         
"Fundamental Restrictions" above. See "Short Sales Against-the-Box" in the SAI  
for further details.                                                            

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RISK CONSIDERATIONS                                                             

Smaller Companies. While all investments have risks, investments in 
smaller capitalization companies carry greater risk than investments in larger  
capitalization companies. Smaller capitalization companies generally experience 
higher growth rates and higher failure rates than do larger capitalization      
companies; and the trading volume of smaller capitalization companies'          
securities is normally lower than that of larger capitalization companies and,  
consequently, generally has a disproportionate effect on market price (tending  
to make prices rise more in response to buying demand and fall more in response 
to selling pressure).                                                           

  Unseasoned Issuers. Investments in small, unseasoned issuers generally
carry greater risk than is customarily associated with larger, more seasoned    
companies. Such issuers often have products and management personnel that have  
not been tested by time or the marketplaceand their financial resources may not 
be as substantial as those of more established companies. Their securities      
(which the Portfolio may purchase when they are offered to the public for the   
first time) may have a limited trading market which can adversely affect their  
sale by the Portfolio and can result in such securities being priced lower than 
otherwise might be the case. If other institutional investors engage in trading 
this type of security, the Portfolio may be forced to dispose of its holdings at
prices lower than might otherwise be obtained.                                  

MANAGEMENT OF THE FUND                                                          

Schroder Group Assets Under Management Worldwide
As of December 31, 1996 -- Over $130 Billion

[MAP OF WORLD]

THE SCHRODER INVESTMENT MANAGEMENT GROUP INVESTMENT AND REPRESENTATIVE OFFICES
WORLDWIDE INCLUDE NEW YORK, LONDON, BOSTON, ZURICH, WARSAW, TOKYO, HONG KONG, 
BEIJING, SHANGHAI, TAIPEI, SEOUL, BANGKOK, KUALA LUMPUR, SINGAPORE, JAKARTA,
SYDNEY, BUENOS AIRES, SAO PAULO, BOGOTA AND CARACAS.

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 TOGETHER, SCHRODER CAPITAL MANAGEMENT INTERNATIONAL AND
SCHRODER CAPITAL MANAGEMENT MANAGE OVER $24 BILLION.

Boards of Trustees                                                              

   The business and affairs of the Fund are managed under the direction of
the Trust Board. The business and affairs of the Portfolio are managed under the
direction of the Schroder Core Board. Information regarding the trustees and    
executive officers of the Trust, as well as Schroder Core's trustees and        
executive officers, may be found in the SAI under the heading                   

"Management, Trustees and Officers."                                            

Investment Adviser and Portfolio Managers                                       

  As investment adviser to the Portfolio, SCMI manages the Portfolio and
continuously reviews, supervises and administersits investments. SCMI is        
responsible for making decisions relating to the Portfolio's investments and    
placing purchase and sale orders regarding such investments with brokers or     
dealers it selects. For these services, the Investment Advisory Agreement       
between SCMI and Schroder Core provides that SCMI will receive a monthly        
advisory fee at the annual rate of 0.60% of the Portfolio's average daily net   
assets, which the Fund indirectly bears through its investment in the Portfolio.

 SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is 
the holding company parent of a large world-wide group of banks and financial   
services companies (referred to as the "Schroder Group"), with associated       
companies and branch and representative offices in eighteen countries. The      
Schroder Group specializes in providing investment management services.         

   The investment management team of Fariba Talebi(a Vice President of the
Trust and a Group Vice President of SCMI) and Ira Unschuld (a Vice President of 
the Trust and of SCMI) with the assistance of an investment committee, is       
primarily responsible for the day-to-day management of the Portfolio's          
investments and has so managed the Portfolio since its                          

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inception. Ms. Talebi and Mr. Unschuld have been employed by SCMI in the        
investment research and portfolio management areas since 1987 and 1990,         
respectively.                                                                   

      The Fund began pursuing its investment objective through investment in the
Portfolio on August 15, 1996. The Fund may withdraw its investment from the     
Portfolio at any time if the Trust Board determines that it is in the best      
interests of the Fund and its shareholders to do so. See "Other Information --  
Fund Structure." Accordingly, the Trust has retained SCMI as its investment     
adviser to manage the Fund's assets in the event the Fund withdraws its         
investment. SCMI does not receive an investment advisory fee from the Fund so   
long as the Fund remains completely invested in the Portfolio (or any other     
investment company). If the Fund resumes directly investing in portfolio        
securities, it will pay SCMI an advisory fee, payable monthly, at the annual    
rate of 0.50% of the Fund's average daily net assets for the first $100 million 
of the Fund's average daily net assets; 0.40% up to $150 million of the Fund's  
average daily net assets; and 0.35% of the Fund's average daily net assets      
greater than $250 million. The investment advisory agreement between SCMI and   
the Trust with respect to the Fund is the same in all material respects as      
Schroder Core's Investment Advisory Contract with respect to the Portfolio      
(except as to the parties, the fees payable thereunder, the circumstances under 
which fees will be paid and the jurisdiction whose laws govern the contract).   

Administrative Services                                                         

On behalf of the Fund, the Trust has entered into an administrative 
services contract with Schroder Advisors, 787 Seventh Avenue, New York, New York
10019. On behalf of the Portfolio, the Trust has also entered into a            
sub-administration agreement with Forum, Two Portland Square, Portland, Maine   
04101. Pursuant to these agreements, Schroder Advisors and Forum provide certain
management and administrative services necessary for the Fund's operations.     
Schroder Advisors is compensated at the annual rate of 0.25% of the Fund's      
average daily net assets. Forum is compensated at the annual rate of 0.075% of  
the Fund's average daily net assets.                                            

  Schroder Advisors and Forum provide similar services to the Portfolio.
Schroder Advisors provides such services without compensation. The Portfolio    
pays Forum a monthly fee at the annual rate of 0.075% of the Portfolio 's       
average daily net assets for its sub-administration services.                   

Distribution Plan and Shareholder Services Plan                                 

Schroder Advisors acts as distributor of the Fund's shares. Schroder
Advisors was organized in 1989 and registered as a broker-dealer to serve as an 
administrator and distributor of the Fund and other mutual funds. The Trust may 
compensate Schroder Advisors under a distribution plan, adopted pursuant to Rule
12b-1 under the 1940 Act (the "Distribution Plan") by the Trust on behalf of the
Fund's Advisor Shares. Schroder Advisors, in turn, may use these payments to    
compensate                                                                      

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others for services provided, or to reimburse others for expenses incurred in   
connection with the distribution of Advisor Shares. Payments under the          
Distribution Plan would be made monthly at an annual rate of up to 0.50% of the 
Fund's average daily net assets attributable to Advisor Shares. The maximum     
annual amount payable under the Distribution Plan is currently 0.25%, but no    
payments will be made under the Distribution Plan until the Board so authorizes.

   Payments under the Distribution Plan may be for various types of costs,
including: (i) advertising expenses, (ii) costs of printing prospectuses and    
other materials to be given or sent to prospective investors, (iii) expenses of 
sales employees or agents of Schroder Advisors, including salary, commissions,  
travel and related expenses in connection with the distribution of Advisor      
Shares, (iv) payments to broker-dealers who advise shareholders regarding the   
purchase, sale, or retention of Advisor Shares, and (v) payments to banks, trust
companies, broker-dealers (other than Schroder Advisors) or other financial     
organizations (collectively, "Service Organizations"). Payments to a particular 
Service Organization under the Distribution Plan will be calculated by reference
to the average daily net assets of Advisor Shares owned beneficially by         
investors who have a brokerage or other service relationship with the Service   
Organization. The Fund will not be liable for distribution expenditures made by 
Schroder Advisors in any given year in excess of the maximum amount payable     
under the Distribution Plan in that year. Costs or expenses in excess of the    
annual limit may not be carried forward to future years. Salary expenses of     
sales personnel who are responsible for marketing various shares of portfolios  
of the Trust may be allocated to those portfolios, including the Advisor Shares 
of the Fund, that have adopted a plan similar to that of the Fund on the basis  
of average daily net assets. Travel expenses may be allocated to, or divided    
among, the particular portfolios of the Trust for which they are incurred.      

The Trust, on behalf of the Fund, has also adopted a shareholder service plan   
(the "Shareholder Service Plan"), pursuant to which Schroder Advisors is        
authorized to pay Service Organizations a servicing fee. Payments under the     
Shareholder Service Plan may be for various types of services, including: (i)   
answering customer inquiries regarding the manner in which purchases, exchanges 
and redemptions of shares of the Fund may be effected and other matters         
pertaining to the Fund's services, (ii) providing necessary personnel and       
facilities to establish and maintain shareholder accounts and records, (iii)    
assisting shareholders in arranging for processing purchase, exchange and       
redemption transactions, (iv) arranging for the wiring of funds, (v)            
guaranteeing shareholder signatures in connection with redemption orders and    
transfers and changes in shareholder-designated accounts, (vi) integrating      
periodic statements with other customer transactions and (vii) providing such   
other related services as the shareholder may request.                          

     The maximum amount payable under the Shareholder Service Plan to Schroder
Advisors is 0.25% of the Fund's average daily net assets attributable to Advisor
Shares.                                                                         

Payments to a particular Service Organization under the Shareholder 
Service Plan are calculated by reference to the average daily net assets of     
Advisor Shares                                                                  

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owned beneficially by investors who have a brokerage or other service           
relationship with the Service Organization. Some Service Organizations may      
impose additional or different conditions on their clients, such as requiring   
their clients to invest more than the minimum or subsequent investments         
specified by the Fund or charging a direct fee for servicing. If imposed, these 
fees would be in addition to any amounts which might be paid to the Service     
Organization by Schroder Advisors. Each Service Organization has agreed to      
transmit to its clients a schedule of any such fees. Shareholders using Service 
Organizations are urged to consult them regarding any such fees or conditions.  

Expenses                                                                        

     SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
of their fees or assume certain expenses of the Fund in order to limit total    
Fund expenses (excluding taxes, interest, brokerage commissions and other       
portfolio transaction expenses and extraordinary expenses) chargeable to Advisor
Shares to 1.74% of the average daily net assets of the Fund attributable to     
those shares. This expense limitation cannot be modified or withdrawn except by 
a majority vote of the Trustees of the Trust who are not interested persons (as 
defined in the 1940 Act) of the Trust. If expense reimbursements are required,  
they will be made on a monthly basis. Forum may voluntarily waive all or a      
portion of their fees, from time to time.                                       

Portfolio Transactions                                                          

SCMI places orders for the purchase and sale of the Portfolio's     
investments with brokers and dealers selected by SCMI in its discretion and     
seeks "best execution" of such portfolio transactions. The Portfolio may pay    
higher than the lowest available commission rates when SCMI believes it is      
reasonable to do so in light of the value of the brokerage and research services
provided by the broker effecting the transaction.                               

    Subject to the Portfolio's policy of obtaining the best price consistent
with quality of execution on transactions, SCMI may employ (a) Schroder Wertheim
& Company, Incorporated and its affiliates ( "Schroder Wertheim"), affiliates of
SCMI, to effect transactions of the Portfolio on the New York Stock Exchange and
(b) Schroder Securities Limited and its affiliates ("Schroder Securities"),     
affiliates of SCMI, to effect transactions of the Portfolio, if any, on certain 
foreign securities exchanges. Because of the affiliation between SCMI and both  
Schroder Wertheim and Schroder Securities, the Portfolio's payment of           
commissions to them is subject to procedures adopted by the Schroder Core Board 
designed to ensure that the commissions will not exceed the usual and customary 
brokers' commissions. No specific portion of the Portfolio's brokerage will be  
directed to Schroder Wertheim or Schroder Securities, and in no event will      
either receive any brokerage in recognition of research services.               

Consistent with the Conduct Rules of the National Association of    
Securities Dealers, Inc., and subject to seeking the most favorable price and   
execution available and such other policies as the Schroder Core Board may      
determine, SCMI may consider sales of shares of the Fund or any other entity    
that invests in the Portfolio as a factor in the selection of broker-dealers to 
execute portfolio transactions for the Portfolio.                               

  Although the Portfolio does not currently engage in directed brokerage
arrangements to                                                                 

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pay expenses, it may do so in the future. These arrangements(whereby brokers    
executing the Portfolio's portfolio transactions agree to pay designated        
expenses of the Portfolio if brokerage commissions generated by the Portfolio   
reached certain levels) might reduce the Portfolio's expenses (and, indirectly, 
the Fund's , and would not be expected to increase materially the brokerage     
commissions paid by the Portfolio. Brokerage commissions are not deemed to be   
Fund expenses.                                                                  

Code of Ethics                                                                  

The Trust, Schroder Core, SCMI, Schroder Advisors, and Schroders    
Incorporated have each adopted a code of ethics that contains a policy on       
personal securities transactions by "access persons," including portfolio       
managers and investment analysts. That policy complies in all material respects 
with the recommendations set forth in the Report of the Advisory Group on       
Personal Investing of the Investment Company Institute, of which the Trust is a 
member.                                                                         

INVESTMENT IN THE FUND                                                          

Purchase of Shares                                                              

Investors may purchase Advisor Shares directly from the Trust.      
Prospectuses, sales material and Account Applications can be obtained from the  
Trust or through Forum Financial Corp., the Fund's transfer agent (the "Transfer
Agent"). See"Other Information -- Shareholder Inquiries." Investments may also  
be made through Service Organizations that assist their customers in purchasing 
shares of the Fund. Service Organizations may charge their customers a service  
fee for processing orders to purchase or sell shares of the Fund. Investors     
wishing to purchase shares through their accounts at a Service Organization     
should contact that organization directly for appropriate instructions.         

 Shares of the Fund are offered at the net asset value next determined
after receipt of a completed Account Application (at the address set forth      
below). The minimum initial investment is $10,000, except that the minimumfor an
IRA is $2,000. The minimum subsequent investment is $2,500. All purchase        
payments are invested in full and fractional shares. The Fund is authorized to  
reject any purchase order.                                                      

  Purchases may be made by mailing a check (in U.S. dollars), payable to
Schroder U.S. Smaller Companies Fund, to:                                       

                          Schroder U.S. Smaller Companies Fund--Advisor Shares
P.O. Box 446              
Portland, Maine 04112     

     For initial purchases, the check must be accompanied by a completed
Account Application in proper form. Further documentation may be requested from 
corporations, administrators, executors, personal                               

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representatives, directors or custodians to evidence the authority of the person
or entity making the subscription request.                                      

  Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as 
follows:                                                                        

Chase Manhattan Bank                        
New York, NY                                
ABA No.: 021000021                          
For Credit To: Forum Financial Corp.        

Account No.: 910-2-718187                   
               Ref.: Schroder U.S. Smaller Companies Fund - Advisor Shares
Account of: (shareholder name)              
Account Number: (shareholder account number)

      The wire order must specify the name of the Fund, the shares' class (i.e.,
Advisor Shares), the account name and number, address, confirmation number,     
amount to be wired, name of the wiring bank, and name and telephone number of   
the person to be contacted in connection with the order. If the initial         
investment is by wire, an account number will be assigned and an Account        
Application must be completed and mailed to the Fund before any account will    
become active. Wire orders received prior to 4:00 p.m. ( Eastern Time) on each  
day that the New York Stock Exchange is open for trading (a "Fund Business Day")
will be processed at the net asset value determined as of that day. Wire orders 
received after 4:00 p.m. (Eastern Time) will be processed at the net asset value
determined as of the next Fund Business Day. See "Net Asset Value" below.       

    The Fund's Transfer Agent establishes for each shareholder of record, an
open account to which all shares purchased and all reinvested dividends and     
other distributions are credited. Although most shareholders elect not to       
receive share certificates, certificates for full shares can be obtained by     
written request to the Fund's Transfer Agent. No certificates are issued for    
fractional shares.                                                              

  The Transfer Agent will deem an account lost if six months have passed
since correspondence to the shareholder's address of record is returned, unless 
the Transfer Agent determines the shareholder's new address. When an account is 
deemed lost, dividends and other distributions will automatically be reinvested.
In addition, the amount of any outstanding checks for dividends and other       
distributions that have been returned to the Transfer Agent will be reinvested  
and the checks will be canceled.                                                

Retirement Plans and Individual Retirement Accounts                             

     Shares of the Fund are offered in connection with tax-deferred retirement
plans. Application forms and further information about these plans, including   
applicable fees, are available upon request. Before investing in the Fund       
through one of these plans, investors should consult their tax advisors.        

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      The Fund may be used as an investment vehicle for an IRAincluding SEP-IRA.
An IRA naming The First National Bank of Boston as custodian is available from  
the Trust or the Transfer Agent. The minimum initial investment for an IRA is   
$2,000; the minimum subsequent investment is $2,500. Under certain circumstances
contributions to an IRA may be tax deductible. IRAs are available to individuals
(and their spouses) who receive compensation or earned income, whether or not   
they are active participants in a tax-qualified or government-approved          
retirement plan. An IRA contribution by an individual (or spouse) who           
participates in a tax-qualified or government-approved retirement plan may not  
be deductible, depending upon the individual's income. Individuals also may     
establish an IRA to receive a "rollover""rollover" contribution of distributions
from another IRA or a qualified plan. Tax advice should be obtained before      
effecting a rollover.                                                           

Exchanges                                                                       

Shareholders may exchange shares of the Fund for Shares of any other
series of the Trust so long as they meet the initial investment minimum of the  
fund being purchased and maintain the respective minimum account balance in each
Fund in which they own shares. Exchanges between each Fund are at net asset     
value.                                                                          

   An exchange is considered to be a sale of shares for Federal income tax
purposes on which a shareholder may realize a capital gain or loss. An exchange 
may be made by calling the Transfer Agent at (800) 344-8332 or by mailing       
written instructions to Schroder Capital Funds (Delaware), P.O. Box 446,        
Portland, Maine 04112. Exchange privileges may be exercised only in those states
where shares of the other series of the Trust may legally be sold. Exchange     
privileges may be amended or terminated at any time upon sixty (60) days'       
notice.                                                                         

Redemption of Shares                                                            

    Shares of the Fund are redeemed at their next determined net asset value
after receipt by the Fund (at the address set forth above under "Purchase of    
Shares") of a redemption request in proper form.Redemption requests may be made 
between 9:00 a.m. and 6:00 p.m. ( Eastern Time) on each Fund Business Day.      
Redemption requests that are received prior to 4:00 p.m. (Eastern Time) will be 
processed at the net asset value determined as of that day. Redemption requests 
that are received after 4:00 p.m. (Eastern Time) will be processed at the net   
asset value determined the next Fund Business Day. See "Net Asset Value" below. 

     By Telephone. Redemption requests may be made by telephoning the Transfer
Agent at the telephone number on the cover page of this Prospectus. A           
shareholder must provide the Transfer Agent with the class of Shares, the dollar
amount or number of shares to be redeemed, shareholder account number, and some 
additional form of identification such as a password. A redemption by telephone 
may be made only if the telephone redemption privilege option has been elected  
on the Account Application or otherwise in writing.                             

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In an effort to prevent unauthorized or fraudulent redemption requests by       
telephone, reasonable procedures will be followed by the Transfer Agent to      
confirm that telephone instructions are genuine. The Transfer Agent and the     
Trust generally will not be liable for any losses due to unauthorized or        
fraudulent redemption requests, but may be liable if they do not follow these   
procedures. Shares for which certificates have been issued may not be redeemed  
by telephone. In times of drastic economic or market change, it may be difficult
to make redemptions by telephone. If a shareholder cannot reach the Transfer    
Agent by telephone, redemption requests may be mailed or hand-delivered to the  
Transfer Agent.                                                                 

      Written Requests. Redemptions may be made by letter to the Fund specifying
the class of shares, the dollar amount or number of Shares to be redeemed, and  
the shareholder account number. The letter must also be signed in exactly the   
same way the account is registered (if there is more than one owner of the      
Shares, all must sign) and, in certain cases, signatures must be guaranteed by  
an institution that is acceptable to the Transfer Agent. Such institutions      
include certain banks, brokers, dealers (including municipal and government     
securities brokers and dealers), credit unions and savings associations.        
Notaries public are not acceptable. Further documentation may be requested to   
evidence the authority of the person or entity making the redemption request.   
Questions concerning the need for signature guarantees or documentation of      
authority should be directed to the Fund at the above address or by calling the 
telephone number appearing on the cover of this Prospectus.                     

   If Shares to be redeemed are held in certificate form, the certificates
must be enclosed with the redemption request and the assignment form on the back
of the certificates(or an assignment separate from the certificates but         
accompanied by the certificates) must be signed by all owners in exactly the    
same way the owners' names are written on the face of the certificates.         
Requirements for signature guarantees and/or documentation of authority as      
described above could also apply. For your protection, the Fund suggests that   
certificates be sent by registered mail.                                        

  Additional Redemption Information. Checks for redemption proceeds will
normally be mailed within seven days. No redemption proceeds will be mailed     
until checks in payment for the purchase of the Shares to be redeemed have been 
cleared, which may take up to15 calendar days from the purchase date. Unless    
other instructions are given in proper form, a check for the proceeds of a      
redemption will be sent to the shareholder's address of record.                 

   The Fund may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that exchange is closed,
(ii) the SEC has by order permitted such suspension, or (iii) an emergency(as   
defined by rules of the SEC) exists making disposal of portfolio investments or 
determination of the Fund's net asset value not reasonably practicable.         

  If the Trust Board determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment wholly or    
partly in cash, the Fund may redeem Shares in whole or in part by a distribution
in kind of portfolio securities (from the                                       

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investment portfolio of the Portfolio or of the Fund), in lieu of cash. The Fund
will, however, redeem Shares solely in cash up to the lesser of $250,000 or 1%  
of net assets during any 90-day period for any one shareholder. In the event    
that payment for redeemed Shares is made wholly or partly in portfolio          
securities, the shareholder may be subject to additional risks and costs in     
converting the securities to cash. See "Additional Purchase and Redemption      
Information" in the SAI.                                                        

     The proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal income tax
purposes.                                                                       

     Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem Shares in any account (other than an IRA) if at any
time the account does not have a value of at least $2,000, unless the value of  
the account falls below that amount solely as a result of market activity.      
Shareholders will be notified that the value of the account is less than $2,000 
and be allowed at least 30 days to make an additional investment to increase the
account balance to at least $2,000.                                             

Net Asset Value                                                                 

  The net asset value per share of the Fund is calculated separately for
each class of shares of the Fund at 4:00 p.m. (Eastern Time), Monday through    
Friday, each Fund Business Day, which excludes the following U.S. holidays: New 
Year"s Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor 
Day, Thanksgiving Day and Christmas Day. Net asset value per Share is calculated
by dividing the aggregate value of the Fund's assets less all Fund liabilities, 
if any, by the number of Shares of the Fund outstanding.                        

   Generally, securities that are listed on recognized stock exchanges are
valued at the last reported sale price, on the day when the securities are      
valued (the "Valuation Day"), on the primary exchange on which the securities   
are principally traded. Listed securities traded on recognized stock exchanges  
for which there were no sales on the Valuation Day are valued at the last sale  
price on the preceding trading day or at closing mid-market prices. Securities  
traded in over-the-counter markets are valued at the most recent reported       
mid-market price. 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 Schroder Core Board.                                    

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              

The Fund                                                                        

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  The Fund intends to comply with the provisions of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies. By      
complying therewith, the Fund will not have to pay federal income tax on that   
part of its income that is distributed to shareholders. The Fund intends to     
distribute substantially all of its income and therefore, intends not to be     
subject to federal income tax. In its effort to adhere to these requirements,   
the Fund may have to limit its investment activity in some types of instruments.

     Dividends and capital gain distributions on Advisor Shares are reinvested
automatically in additional Advisor Shares at net asset value unless the        
shareholder has elected in the Account Application or otherwise in writing, to  
receive dividends and other distributions in cash.                              

      After every dividend and other distribution, the value of a Share declines
by the amount of the distribution. Purchases made shortly before a dividend or  
other distribution include in the purchase price the amount of the distribution,
which will be returned to the investor in the form of a taxable distribution.   

   Dividends and other distributions paid by the Fund with respect to both
classes of its shares will be calculated in the same manner and at the same     
time. The per share dividends on Advisor Shares are expected to be lower than   
the per share dividends on Investor Shares as a result of compensation payable  
to Service Organizations for shareholder servicing for the Advisor Shares.      

      Dividends from the Fund's income generally will be taxable to shareholders
as ordinary income, whether dividends are invested in additional Shares or      
received in cash. Distributions by the Fund of any net capital gainwill be      
taxable to a shareholder as long-term capital gain regardless of how long the   
shareholder has held the Shares . Each year the Trust will notify shareholders  
of the tax status of dividends and other distributions.                         

     Dividends from the Fund will qualify for the dividends-received deduction
for corporate shareholders to the extent dividends do not exceed the aggregate  
amount of dividends received by the Fund from domestic corporations, provided   
the Fund shares are held for more than 45 days. If securities held by the Fund  
are considered to be debt-financed (generally, acquired with borrowed funds);   
are held by the Fund for fewer than 46 days (91 days in the                     

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case of certain preferred stock); or are subject to certain forms of hedges or  
short sales, then the portion of the dividends paid by the Fund attributable to 
such securities will not be eligible for the dividends-received deduction.      

A redemption of Shares may result in taxable gain or loss to the redeeming      
shareholder, depending on whether the redemption proceeds are more or less than 
the shareholder's basis in the redeemed Shares. If Shares are redeemed at a loss
after being held for six months or less, the loss will be treated as a          
long-term, rather than a short-term, capital loss to the extent of any capital  
gain distributions received on those Shares.                                    

     The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate   
shareholders who do not furnish the Fund with a correct taxpayer identification 
number. Withholding at that rate also is required from dividends and capital    
gain distributions payable to such shareholders who otherwise are subject to    
backup withholding. Depending on the residence of a shareholder for tax         
purposes, distributions from the Fund may also be subject to state and local    
taxes, including withholding taxes.                                             

   If the Fund's dividends exceed its taxable income in any year, all or a
portion of the Fund's dividends may be treated as a return of capital to        
shareholders for tax purposes. Any return of capital will reduce the cost basis 
of your shares, which will result in a higher reported capital gain or a lower  
reported capital loss when you sell your shares. Shareholders will be notified  
by the Trust if a distribution includes a return of capital.                    

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The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the SAI   
for further information. Shareholders should consult their own tax advisors as  
to the tax consequences of their ownership of Shares.                           

The Portfolio                                                                   

    The Portfolio is not be required to pay federal income tax because it is
classified as a partnership for federal income tax purposes. All interest,      
dividends, gain and loss of the Portfolio will be deemed to have been "passed   
through" to the Fund in proportion to the Fund's holdings in the Portfolio,     
regardless of whether such interest, dividends or gains have been distributed by
the Portfolio.                                                                  

    The Portfolio intends to conduct its operations so as to enable the Fund
to qualify as a regulated investment company.                                   

OTHER INFORMATION                                                               

Capitalization and Voting                                                       

     The Trust was organized as a Maryland corporation called Schroder Capital
Funds, Inc. on July 30, 1969, and was reorganized as a Delaware business trust  
on January 9, 1996. The Trust has authority to issue an unlimited number of     
shares of beneficial interest. The Trust Board may, without shareholder         
approval, divide the authorized shares into an unlimited number of separate     
portfolios or series (such as the Fund) and may divide such portfolios or series
into classes of shares (such as the Advisor Shares), and the costs of doing so  
will be borne by the Trust. The Trust currently consists of eight separate      
series, each of which has separate investment objectives and policies.          

The Fund currently consists of two classes of                                   

Shares. Each share of the Fund is entitled to participate equally in
dividends and other distributions and the proceeds of any liquidation except    
that, due to the differing expenses borne by the classes, dividends and         
liquidation proceeds for each class will likely differ.                         

Shares are fully paid, non-assessable and have no preemptive rights.
Shareholders have non-cumulative voting rights, which means that the holders of 
more than 50% of the shares voting for the election of Trustees can elect 100%  
of the Trustees if they choose to do so. A shareholder is entitled to one vote  
for each full share held (and a fractional vote for each fractional share held).
Each share of the Fund has equal voting rights, except that if a matter         

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affects only the shareholders of a particular class only shareholders of that   
class shall have a right to vote. On Trust matters requiring shareholder        
approval, shareholders of the Trust are entitled to vote only with respect to   
matters that affect the interests of the fund or the class of shares they hold, 
except as otherwise required by applicable law.                                 

There will normally be no meetings of shareholders to elect Trustees
unless and until such time as less than a majority of the Trustees holding      
office have been elected by shareholders. However, the holders of not less than 
a majority of the outstanding shares of the Trust may remove any person serving 
as a Trustee and the Trust Board will call a special meeting of shareholders to 
consider removal of one or more Trustees if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust.            

     From time to time, certain shareholders may own a large percentage of the
shares of the Fund. Accordingly, those shareholders may be able to greatly      
affect (if not determine) the outcome of a shareholder vote. As of February 15, 
1997, Donaldson Lufkin & Jenrette and National Investors Service Corp. may be   
deemed to have controlled the Fund for purposes of the 1940 Act.                

Reports                                                                         

The Trust sends each Fund shareholder a semi-annual report and an audited annual
report containing the Fund's financial statements.                              

Performance                                                                     

The Fund may include quotations of its average annual total return, 
cumulative total return and other performance measures in advertisements or     
reports to shareholders or prospective investors. TAverage annual total return  
of a class of shares is based upon the overall dollar or percentage change in   
value of a hypothetical investment each year over specified periods. Average    
annual total returns reflect the deduction of a proportional share of a Fund's  
expenses (on an annual basis) and assumes investment and reinvestment of all    
dividends and distributions at NAV. Cumulative total returns are calculated     
similarly except that the total return is aggregated over the relevant period   
instead of annualized.                                                          

Performance quotations are calculated separately for each class of shares of the
Fund. The Fund may also be compared to various unmanaged securities indices,    
groups of mutual funds tracked by mutual fund ratings services, or other general
economic indicators. Unmanaged indices may assume the reinvestment ofdividends  
but do not reflect deductions for                                               

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administrative and management costs and expenses.                               

 Performance information represents only past performance and does not
necessarily indicate future results. For a description of the methods used to   
determine total return and other performance measures for the Fund, see the SAI.

Custodian and Transfer Agent                                                    

The Chase Manhattan Bank, N.A. is custodian of the Fund's and of the
Portfolio's assets. Forum Financial Corp. serves as the Fund's transfer and     
dividend disbursing agent.                                                      

Shareholder Inquiries                                                           

Inquiries about the Fund, including its past performance, should be 
directed to:                                                                    

          Schroder U.S. Smaller Companies Fund
P.O. Box 446              
Portland, Maine 04112     

    Information about specific shareholder accounts may be obtained from the
Transfer Agent by calling (800) 344-8332.                                       

Service Organizations                                                           

    The Glass-Steagall Act and other applicable laws and regulations provide
that banks may not engage in the business of underwriting, selling or           
distributing securities. There is currently no precedent prohibiting banks from 
performing administrative and shareholder servicing functions as Service        
Organizations. However, judicial or administrative decisions or interpretations 
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,    
could prevent a bank Service Organization from continuing to perform all or part
of its servicing activities. If a bank were prohibited from so acting, its      
shareholder clients would be permitted to remain shareholders of the Fund and   
alternative means for continuing the servicing of such shareholders would be    
sought. It is not expected that shareholders would suffer any adverse financial 
consequences as a result of any of these occurrences.                           

Fund Structure                                                                  

      Classes of Shares. The Fund has two classes of shares, Investor Shares and
Advisor Shares. Investor Shares are offered by a separate prospectus to         
corporations, institutions, and fiduciaries, including fiduciary, agency, and   
custodial clients of bank trust departments, trust companies, and their         
affiliates. Advisor Shares incur more                                           

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expenses than Investor Shares. Except for certain differences, each share of    
each class represents an undivided, proportionate interest in the Fund. Each    
share of the Fund is entitled to participate equally in dividends and other     
distributions and the proceeds of any liquidation of the Fund except that, due  
to the differing expenses borne by the two classes, the amount of dividends and 
other distributions will differ between the classes. Information about Investor 
Shares is available from the Fund by calling Schroder Advisors at (800)         
730-2932.                                                                       

The Portfolio. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio, which has the same     
investment objective and substantially similar policies as the Fund.            
Accordingly, the Portfolio directly acquires its own securities and the Fund    
acquires an indirect interest in those securities. The Portfolio is a separate  
series of Schroder Core, a business trust organized under the laws of the State 
of Delaware in September 1995. Schroder Core is registered under the 1940 Act as
an open-end, management investment company and currently has four separate      
series. The assets of the Portfolio, a diversified portfolio, belong only to,   
and the liabilities of the Portfolio are borne solely by, the Portfolio and no  
other portfolio of Schroder Core.                                               

The Fund's investment in the Portfolio is in the form of a          
non-transferable beneficial interest. As of March 1, 1997, there are two        
institutional investors in the Portfolio, the Fund and Norwest Advantage Funds  
SmallCap Opportunities Fund. The Portfolio may permit other investment companies
or institutional investors to invest in it. All other investors in the Portfolio
will invest on the same terms and conditions as the Fund and will pay a         
proportionate share of the Portfolio's expenses.                                

The Portfolio normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in the Portfolio will be entitled to    
vote in proportion to its relative beneficial interest in the Portfolio. On most
issues subject to a vote of investors, as required by the 1940 Act and other    
applicable law, the Fund will solicit proxies from its shareholders and will    
vote its interest in the Portfolio in proportion to the votes cast by its       
shareholders. If there are other investors in the Portfolio, there can be no    
assurance that any issue that receives a majority of the votes cast by Fund     
shareholders will receive a majority of votes cast by all investors in the      
Portfolio; indeed, if other investors hold a majority interest in the Portfolio,
they could have voting control of the Portfolio.                                

     The Portfolio will not sell its shares directly to members of the general
public. Another investor in the Portfolio, such as an investment company, that  
might sell its shares to members of the general public would not be required to 
sell its shares at the same public offering price as the Fund and could have    
different fees and expenses than the Fund. Therefore, Fund shareholders may have
different returns than shareholders in another investment company               

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that invests exclusively in the Portfolio. There is currently no such other     
investment company that offers its shares to members of the general public.     
Information regarding any such funds in the future will be available from       
Schroder Core by calling (800) 730-2932.                                        

Under federal securities law, any person or entity that signs a     
registration statement may be liable for a misstatement or omission of a        
material fact in it. Schroder Core, its Trustees and certain of its officers are
required to sign the registration statement of the Trust and may be required to 
sign the registration statements of certain other investors in the Portfolio. In
addition, Schroder Core may be liable for misstatements or omissions of a       
material fact in any proxy soliciting material of an investor in Schroder Core, 
including the Fund. Each investor in the Portfolio, including the Trust, will   
indemnify Schroder Core and its Trustees and officers ("Schroder Core           
Indemnitees") against certain claims.                                           

  Indemnified claims are those brought against Schroder Core Indemnitees
based on a misstatement or omission of a material fact in the investor's        
registration statement or proxy materials. No indemnification need be made,     
however, if such alleged misstatement or omission relates to information about  
Schroder Core and was supplied to the investor by Schroder Core. Similarly,     
Schroder Core will indemnify each investor in the Portfolio, including the Fund,
for any claims brought against the investor with respect to the investor's      
registration statement or proxy materials, to the extent the claim is based on a
misstatement or omission of a material fact relating to information about       
Schroder Core that is supplied to the investor by Schroder Core. In addition,   
each registered investment company investor in the Portfolio will indemnify each
Schroder Core Indemnitee against any claim based on a misstatement or omission  
of a material fact relating to information about a series of the registered     
investment company that did not invest in the Schroder Core. The purpose of     
these cross-indemnity provisions is principally to limit the liability of       
Schroder Core to information that it knows or should know and can control. With 
respect to other prospectuses, other offering documents and proxy materials of  
investors in Schroder Core, its liability is similarly limited to information   
about and supplied by it.                                                       

     Certain Risks of Investing in the Portfolio. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the        
Portfolio: for example, if the Portfolio had a large investor other than the    
Fund that redeemed its interest in the Portfolio, the Portfolio's remaining     
investors (including the Fund) might, as a result, experience higher pro rata   
operating expenses, thereby producing lower returns.                            

 The Fund may withdraw its entire investment from the Portfolio at any
time, if the Trust Board determines that it is in the best interests of the Fund
and its shareholders to do so. The Fund might withdraw, for example, if there   
were other investors in the Portfolio who did by a vote of the shareholders of  
all investors (including the Fund), change the investment objective or policies 
of the Portfolio in a manner not acceptable to the Trust Board. A withdrawal    
could result in a distribution in kind of portfolio securities (as opposed to a 
cash                                                                            

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distribution) by the Portfolio. That distribution could result in a less        
diversified portfolio of investments for the Fund and could affect adversely the
liquidity of the Fund's portfolio. If the Fund decided to convert those         
securities to cash, it would likely incur brokerage fees or other transaction   
costs. If the Fund withdrew its investment from the Portfolio, the Trust Board  
would consider appropriate alternatives, including the management of the Fund's 
assets in accordance with its investment objective and policies by SCMI, or the 
investment of all of the Fund's investable assets in another pooled investment  
entity having substantially the same investment objective as the Fund. The      
inability of the Fund to find a suitable replacement investment, if the Board   
decided not to permit SCMI to manage the Fund's assets, could have a significant
impact on shareholders the Fund.                                                

       Each investor in the Portfolio, including the Fund, may be liable for
all obligations of the Portfolio. The risk to an investor in the Portfolio of   
incurring financial loss on account of such liability, however, is limited to   
circumstances in which the Portfolio is unable to meet its obligations, the     
occurrence of which SCMI considers to be quite remote. Upon liquidation of the  
Portfolio, investors would be entitled to share pro rata in the net assets of   
the Portfolio available for distribution to investors.                          

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Investment Adviser                                                              
Schroder Capital Management International Inc.                                  
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Administrator & Distributor                                                     
Schroder Fund Advisors Inc.                                                     
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company                        
Two Portland Square                                                             
Portland, Maine  04101                                                          

Custodian                                                                       
The Chase Manhattan Bank, N.A.                                                  
Chase MetroTech Center                                                          
Brooklyn, New York  11245                                                       

Transfer and Dividend Disbursing Agent                                          
Forum Financial Corp.                                                           
P.O. Box 446                                                                    
Portland, Maine 04112                                                           

Independent Accountants                                                         
Coopers & Lybrand, L.L.P.                                                       
One Post Office Square                                                          
Boston, Massachusetts 02109                                                     

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Table of Contents 

PROSPECTUS SUMMARY.........................................                     
EXPENSES OF INVESTING                                                           
IN THE FUND............................................                 
Fee Table..................................................                     
Example....................................................                     
FINANCIAL HIGHLIGHTS.......................................                     
INVESTMENT OBJECTIVE.......................................                     
INVESTMENT POLICIES........................................                     
RISK CONSIDERATIONS........................................                     
MANAGEMENT OF THE FUND.....................................                     
Boards of Trustees.........................................                     
Investment Adviser and Portfolio Managers..................                     
Administrative Services....................................                     
Distribution Plan and                                                           
Shareholder Services Plan..............................                 
Expenses...................................................                     
Portfolio Transactions.....................................                     
Code of Ethics.............................................                     
INVESTMENT IN THE FUND.....................................                     
Purchase of Shares.........................................                     
Retirement Plans and                                                            
Individual Retirement Accounts.........................                 
Exchanges..................................................                     
Redemption of Shares.......................................                     
Net Asset Value............................................                     
DIVIDENDS, DISTRIBUTIONS                                                        
AND TAXES..............................................                 
The Fund...................................................                     
The Portfolio..............................................                     
OTHER INFORMATION..........................................                     
Capitalization and Voting..................................                     
Reports....................................................                     
Performance................................................                     
Custodian and Transfer Agent...............................                     
Shareholder Inquires.......................................                     
Service Organizations......................................                     
Fund Structure.............................................                     

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SCHRODER U.S. EQUITY FUND                                                       

Investor Shares                                                                 

This fund seeks growth of capital by investing substantially all of its assets  
in common stock and securities convertible into common stock. Income, while a   
factor in portfolio selection, is secondary to the principal objective of       
capital growth.                                                                 

Schroders                                   
Your Window On The World                                      

This prospectus sets forth concisely the information you should know before     
investing in Schroder U.S. Equity Fund (the "Fund") and should be retained for  
future reference. To learn more about the Fund, a series of Schroder Capital    
Funds (Delaware) (the "Trust"), you may obtain a copy of the Fund's current     
Statement of Additional Information (the "SAI") which is incorporated by        

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reference into this Prospectus. The SAI dated March 1, 1997, as amended from    
time to time, has been filed with the Securities and Exchange Commission ("SEC")
and is available along with other related materials for reference on their      
Internet Web Site (http://www.sec.gov) or may be obtained without charge from   
the Trust by writing to Two Portland Square, Portland, Maine 04101 or by calling
1-800-290-9826. The Fund has not authorized anyone to provide you with          
information that is different from what is contained in this document or in     
other documents to which the Fund refers you.                                   

MUTUAL FUND SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE    
FDIC, THE FEDERAL RESERVE SYSTEM OR ANY OTHER GOVERNMENT AGENCY. THE SHARES ALSO
ARE NOT OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY 
BANK OR ITS AFFILIATES. MUTUAL FUND INVESTMENTS ARE SUBJECT TO INVESTMENT RISK, 
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.                                       

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

PROSPECTUS                                                                      
MARCH 1, 1997                                                                   

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PROSPECTUS SUMMARY                                                              

This prospectus offers Investor Class shares ("Investor Shares" or  
"Shares") of the Fund. The Fund is a separately managed, diversified series of  
the Trust, an open-end, management investment company registered under the      
Investment Company Act of 1940 (the "1940 Act").                                

   The following summary is qualified in its entirety by the more detailed
information contained in this Prospectus.                                       

Objective. Growth of capital. Income, while a factor in portfolio   
selection, is secondary to growth of capital.                                   

     Strategy. Invests substantially all of its assets in the common stock and
in securities convertible into the common stock of U.S. issuers.                

 Investment Adviser. The Fund's investment adviser is Schroder Capital
Management International Inc. ("SCMI"), 787 Seventh Avenue, New York, New York  
10019. See "Management of the Fund -- Investment Adviser and Portfolio          
Managers."                                                                      

      Administrative Services. SCMI is also the administrator and distributor of
the Fund. The Trust and SCMI have entered into a Sub-Administration Agreement   
with Forum Financial Services, Inc. ("Forum"), through which Forum provides the 
Fund with management and administrative services other than those provided by   
SCMI. See "Management of the Fund -- Administrative Services."                  

     Purchases and Redemptions of Shares. You may purchase or redeem shares by
mail, by bank-wire and through your broker-dealer or other financial            
institution. The minimum initial investment is $10,000, except that the minimum 
for an Individual Retirement Account ("IRA") is $2,000. The minimum subsequent  
investment is $2,500. See "Investment in the Fund -- Purchase of Shares" and "--
Redemption of Shares."                                                          

     Dividends and Other Distributions. The Fund annually declares and pays as
a dividend substantially all of its net investment income and at least annually 
distributes any net realized long-term capital gain. Dividends and capital gain 
distributions are reinvested automatically in additional Investor Shares of the 
Fund at net asset value unless you elect in your Account Application, or        
otherwise in writing, to receive dividends or other distributions in cash. See  
"Dividends, Distributions and Taxes."                                           

     Risk Considerations. There can be no assurance that the Fund will achieve
its investment objective. The Fund's net asset value and total return will      
fluctuate with changes in the value of the securities in which the Fund invests.
When you sell your shares, they may be worth more or less than what you paid for
them. For further information see "Risk Considerations".                        

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 FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
Please call for complete information and to obtain a prospectus.
 Please read the prospectus carefully before you invest.

[LOGO]

Schroder Capital Funds (Delaware) (1-800-290-9826)                        
Schroder International Fund                                               
Schroder Emerging Markets Fund--                                          
Institutional Portfolio                                 
Schroder International Smaller Companies Fund                             
Schroder U.S. Smaller Companies Fund                                      
Schroder U.S. Equity Fund                                                 

Schroder Series Trust (1-800-464-3108)                                    
Schroder Equity Value Fund                                                
Schroder Small Capitalization Value Fund                                  
Schroder High Yield Income Fund                                           
Schroder Investment Grade Income Fund                                     
Schroder Short-Term Investment Fund                                       

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EXPENSES OF INVESTING IN THE FUND                                               

Fee Table                                                                       

 The table below is intended to help you understand the expenses that an
investor in Investor Shares of the Fund would incur. There are no transaction   
expenses associated with purchases or redemptions of Investor Shares. The Annual
Fund Operating Expenses have been restated to reflect projected fees, expenses  
and waivers for the current fiscal year.                                        

Annual Fund Operating Expenses (as a percentage of average net assets)          
    Management Fees (after waivers) (1)(2).............................. 0.65%
    12b-1 Fees..........................................................  None
    Other Expenses...................................................... 0.83%
    Total Fund Operating Expenses (after waivers)(2).................... 1.48%

(1) Management Fees reflect the fees paid by the Fund to SCMI and its 
affiliate for investment advisory and administrative services.
     (2) Without fee waivers, Management Fees and Total Operating Expenses would
be 0 75% and 1.58%, respectively.                             

   SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
  of their fees and assume certain expenses of the Fund during the current
 fiscal year in order to limit the Fund's total expenses to 1.48% of the
Fund's average daily net assets. This undertaking cannot be withdrawn 
     except by a majority vote of the Trust's Board of Trustees. See "Management
of the Fund--Expenses."                                               

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Example                                                                         

   The table below indicates how much you would pay in total expenses on a
$1,000 investment in the Fund, assuming (1) a 5% annual return and (2)          
redemption at the end of each time period. The example is based on the expenses 
listed above and assumes the reinvestment of all dividends and other            
distributions. The example should not be considered a representation of past or 
future expenses or returns; actual expenses or returns may vary from those      
shown. The 5% annual return is not a prediction of the Fund's return, but is the
percentage required by the SEC for use in this example.                         

1 YEAR------------------------------$15       
3 YEARS-----------------------------$47       
5 YEARS-----------------------------$81       
10 YEARS----------------------------$177      

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FINANCIAL HIGHLIGHTS                                                            

The financial highlights of the Fund are presented below to help you
evaluate per share performance of Investor Shares for the periods shown. This   
information has been audited by Coopers & Lybrand L.L.P., independent           
accountants to the Fund. The Fund's financial statements for the year ended     
October 31, 1996 and the related independent accountants' report are contained  
in the Fund's Annual Report to Shareholders and are incorporated by reference   
into the SAI. Further information about the performance of the Fund is contained
in the Annual Report, which may be obtained without charge by writing the Fund  
at Two Portland Square, Portland, Maine 04101 or by calling 1-800-290-9826.     

                                                        [Enlarge/Download Table]

                                                   Year Ended October 31,                                  
                       1996     1995     1994    1993    1992     1991    1990     1989    1988     1987   
                       ----     ----     ----    ----    ----     ----    ----     ----    ----     ----   
                                                                                                           
Net Asset Value,       9.41      8.52    11.28   10.51    9.56     7.05    8.35     7.49   10.15    12.55  
                       ----      ----    -----   -----    ----     ----    ----     ----   -----    -----  
  Beginning of year                                                                                        
Investment                                                                                                 
  Operations:                                                                                              
  Net Investment       0.04      0.07     0.04    0.05    0.02     0.09    0.11     0.17    0.18     0.20  
  Income                                                                                                   
  Net Realized         1.62      1.33    (0.27)   1.86    1.61     2.57   (0.77)    1.30    0.28     0.18  
   Income and                                                                                              
   Unrealized Gain                                                                                         
   (Loss) on                                                                                               
   Investments                                                                                             
Total From             1.66      1.40    (0.23)   1.91    1.63     2.66   (0.66)    1.47    0.46     0.38  
  Investment                                                                                               
  Operations                                                                                               
Distributions                                                                                              
  from Net            (0.07)    (0.05)   (0.01)  (0.04)  (0.04)   (0.11)  (0.11)   (0.15)  (0.18)   (0.25) 
   Investment Income                                                                                       
  from net Realized   (1.24)    (0.46)   (2.52)  (1.10)  (0.58)   --      (0.53)   (0.46)  (2.94)   (2.53) 
   Capital Gains                                                                                           
  from Capital                                                                                             
   Paid-In            --        --       --      --      (0.06)   (0.04)  --       --      --       --     
                    =======================================================================================
Total Distributions   (1.31)    (0.51)   (2.53)  (1.14)  (0.68)   (0.15)  (0.64)   (0.61)  (3.12)   (2.78) 

Net Asset Value,      $9.76     $9.41    $8.52  $11.28  $10.51    $9.56   $7.05    $8.35   $7.49   $10.15  
  End of Year                                                                                              
                    =======================================================================================

Total Return          19.45%    17.68%   (2.01)% 19.49%  17.74%   38.16%  (8.78)%  21.05%   7.74%    2.55% 
                    =======================================================================================

Ratios/Supplementary Data:                                                                                 
  Net Assets, End    $17,187   19,688   18,483  21,865  19,882   20,234  18,290   23,838  25,569   29,749  
   of Year                                                                                                 
   (Thousands)                                                                                             
  Ratio of Expenses    1.40%(a)  1.40%    1.31%   1.18%   1.40%    1.39%   1.34%    1.49%   1.60%    1.30% 
   to Average Net                                                                                          
   Assets                                                                                                  
  Ratio of Net         0.43%(a)  0.78%    0.41%   0.51%   0.42%    1.30%   1.59%    1.99%   1.89%    1.60% 
   Investment                                                                                              
   Income to                                                                                               
   Average Net                                                                                             
   Assets                                                                                                  
  Portfolio           56.8%     57.21%   27.43%  57.78%  31.33%   29.98%  28.31%   40.35%  18.42%   43.11% 
   Turnover Rate                                                                                           
 Average brokerage                                                                                         
  commission rate (b) $0.0599    N/A      N/A     N/A      N/A      N/A     N/A      N/A     N/A     N/A   

(a) During the year ended October 31, 1996, the investment adviser waived a     
  portion of its fee. Had such waiver not occurred, the ratio of expenses to
average net assets would have been 1.43% and the ratio of net investment
income to average net assets would have been 0.40%.                     
(b) Amount represents the average commission per share paid to brokers on the   
purchase and sale of portfolio securities.                              

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INVESTMENT OBJECTIVE                                                            

      The primary investment objective of the Fund is to seek growth of capital.
Income, while a factor in portfolio selection, is secondary to the principal    
objective. The Fund is not intended for investors whose objective is assured    
income or preservation of capital. There can be no assurance that the Fund will 
achieve its investment objective.                                               

  The Fund in the future may seek to achieve its investment objective by
holding, as its only investment securities, the securities of another investment
company having identical investment objectives and policies as the Fund (in     
accordance with the provisions of the 1940 Act or any orders, rules or          
regulations thereunder adopted by the Securities and Exchange Commission).      

INVESTMENT POLICIES                                                             

      The investment objective, and the investment policies of the Fund that are
designated as fundamental, may not be changed without approval of the holders of
a majority of the outstanding voting securities of the Fund. A majority of      
outstanding voting securities means the lesser of (i) 67% of the shares present 
or represented at a shareholder meeting at which the holders of more than 50% of
the outstanding shares are present or represented, or (ii) more than 50% of     
outstanding shares. Unless otherwise indicated, all investment policies of the  
Portfolio are not fundamental and may be changed by the Schroder Core Board     
without shareholder approval.                                                   

The Fund will seek to achieve its investment objective by investing 
substantially all of its assets in the common stock and securities convertible  
into the common stock of U.S. issuers. As part of this policy, the Fund may also
invest in other securities with common stock purchase warrants attached, in such
warrants themselves, or in other rights to purchase common stock.               

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The Fund may also invest up to 15% of its assets in investment grade
non-convertible preferred securities and non-convertible debt securities when   
management believes that they will yield greater returns than U.S. Government   
securities or bank certificates of deposit.                                     

The Fund will generally purchase securities that SCMI believes have 
potential for capital appreciation. Securities will generally be sold when the  
Fund believes that such potential no longer exists or the risk of market-price  
decline is too great.                                                           

    For temporary defensive purposes, the Fund may invest all or any portion
of its assets in investment grade corporate bonds or debentures (meaning for    
these purposes bonds or debentures rated "A" or better by Standard & Poor's or  
the equivalent thereof); preferred stock; U.S. Government securities; or bank   
certificates of deposit. Management may pursue a temporary defensive strategy   
when it believes that the market appears relatively fully priced or when        
uncertain economic conditions make assuming a temporary defensive position      
advisable.                                                                      

   The Fund may also invest temporarily in certain short-term fixed income
securities. Such securities (which may include U.S. Government securities,      
commercial paper, bank certificates of deposit and bankers' acceptances, and    
repurchase agreements collateralized by these securities) may be used to invest 
uncommitted cash balances or to maintain liquidity to meet shareholder          
redemptions or other Fund obligations. The Fund will limit its total investment 
at any time in these securities for this operating purpose to not more than 25% 
of its total assets.                                                            

 The Fund may from time to time acquire securities that are subject to
legal or contractual restrictions on resale. The risk involved is that a        
considerable delay might occur between the time a decision is made to sell such 
securities and the time the Fund is permitted to sell all or part of such       
securities (publicly under a registration statement or an exemption from        
registration, or privately to a suitable purchaser). That delay could lower the 
price the Fund obtains for the securities and, in a registration, the Fund could
be required to pay registration expenses.                                       

     The Fund is authorized to borrow money from a bank on its promissory note
or other evidence of indebtedness. Monies borrowed would be invested and any    
appreciation thereon (to the extent it exceeded interest paid on the loan) would
increase the net asset value of Fund shares.                                    

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If, however, the investment performance of additional monies failed to cover the
Fund's interest charges, the net asset value would decrease faster than would   
otherwise be the case. This is the speculative feature known as "leverage".     

   The Fund's authority to borrow is subject to limitations. Any borrowing
(i) cannot exceed one-third of the value of the Fund's total assets after the   
borrowing, (ii) if at any time it exceeded the one-third limitation, the Fund   
would within three days thereafter (not including Sundays or holidays) or such  
longer period as the SEC may prescribe by rules and regulations, reduce its     
borrowings to the limitation, and (iii) might or might not be secured and, if   
secured, all or any part of the Fund's assets could be pledged. To comply with  
these limitations, the Fund might be required to dispose of certain of its      
assets when it might be disadvantageous to do so. The Fund has not borrowed for 
investment or any other purpose during the last ten years and, as a             
non-fundamental                                                                 

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policy, has no current intention of borrowing for investment in the future.     

      The following specific policies and limitations are considered at the time
of any purchase; SCMI may not buy these instruments or use these techniques     
unless it believes that they are consistent with the Portfolio's objective.     
Current holdings and recent investment strategies are described in the Fund's   
Annual and Semi-Annual Reports.                                                 

      Common and Preferred Stock and Warrants. The Fund may invest in common and
preferred stock. Common stockholders are the owners of the company issuing the  
stock and, accordingly, vote on various corporate governance matters such as    
mergers. They are not creditors of the company: upon liquidation of the company 
they would be entitled to their pro rata share of the company's assets after    
creditors (including fixed income security holders) and preferred stockholders  
(if any) are paid. Preferred stock is a class of stock having a preference over 
common stock as to dividends and, generally, as to the recovery of investment. A
preferred stockholder is also a shareholder and not a creditor of the company.  
Dividends paid to common and preferred stockholders are distributions of the    
earnings of the company and are not interest payments (which are expenses of the
company). Equity securities owned by the Fund may be traded in the over-the     
counter market or on a securities exchange, but are not necessarily traded every
day or in the volume typical of securities traded on a major U.S. national      
securities exchange. As a result, disposition by the Fund of a security to meet 
withdrawals by interest holders may require the Fund to sell these securities at
a discount from market prices                                                   

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; to sell during periods when disposition is not desirable; or to make many     
small sales over a lengthy period of time. The market value of all securities,  
including equity securities, is based upon the market's perception of value and 
not necessarily the "book value" of an issuer or other objective measure of a   
company's worth.                                                                

  The Fund may also invest in warrants, which are options to purchase an
equity security at a specified price (usually representing a premium over the   
applicable market value of the underlying equity security at the time of the    
warrant's issuance) and usually during a specified period of time.              

      Repurchase Agreements. The Fund may invest in repurchase agreements, which
are a means of investing monies for a short period: a seller -- a U.S. bank or  
recognized broker-dealer -- sells securities to the Fund and agrees to          
repurchase them (at the Fund's cost plus interest) within a specified period    
(normally one day). The values of the underlying securities purchased by the    
Fund are monitored at all times by SCMI to ensure that the total value of the   
securities equals or exceeds the value of the repurchase agreement. The Fund's  
custodian bank holds the securities until they are repurchased. If the seller   
defaults under a repurchase agreement, the Fund may have difficulty exercising  
its rights to the underlying securities and may incur costs and experience time 
delays in disposing of them. To evaluate potential risk, SCMI reviews the       
creditworthiness of banks and dealers with which the Fund enters into repurchase
agreements.                                                                     

      Illiquid and Restricted Securities. As a non-fundamental policy, the
Fund will not purchase or otherwise acquire any security if, as a result, more  
than 10% of its net assets (taken at current value) would be invested in        
securities that are illiquid (i) by virtue of the absence of a readily available
market or (ii) because of legal or contractual restrictions on resale           
("restricted securities"). There may be undesirable delays in selling illiquid  
securities at prices representing their fair value. This policy includes        
over-the-counter options held by the Fund and the portion of its assets used to 
cover such options. The limitation on investing in restricted securities does   
not include securities that may not be resold to the general public but may be  
resold to qualified institutional purchasers (pursuant to Rule 144A under the   
Securities Act of 1933, as amended). If SCMI determines that a "Rule 144A       
security" is liquid pursuant to guidelines adopted by the Trust Board, the      
security will not be deemed illiquid. These guidelines take into account trading
activity for the securities and the availability of reliable pricing            
information, among other factors. If there is a lack of trading interest in a   
particular Rule 144A security, that security may become illiquid, which could   
affect the Fund's liquidity. See "Investment Policies -- Illiquid and Restricted
Securities" in the SAI for further information.                                 

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MANAGEMENT OF THE FUND                                                          

Schroder Group Assets Under Management Worldwide
As of December 31, 1996 -- Over $130 Billion

[LOGO]

The Schroder Investment Management Group investment and representative
offices worldwide include New York, London, Boston, Zurich, Warsaw, Tokyo,
Hong Kong, Beijing, Shanghai, Taipei, Seoul, Bangkok, Kuala Lumpur, Singapore,
 Jakarta, Sydney, Buenos Aires, Sao Paulo, Bogota and Caracas.

 TOGETHER, SCHRODER CAPITAL MANAGEMENT INTERNATIONAL AND
SCHRODER CAPITAL MANAGEMENT MANAGE OVER $24 BILLION.

Board of Trustees                                                               

   The business and affairs of the Fund are managed under the direction of
the Board of Trustees of the Trust (the "Trust Board"). The Trustees are Peter  
E. Guernsey, John I. Howell, Clarence F. Michalis, Hermann C. Schwab and Mark J.
Smith. Additional information regarding the trustees and executive officers of  
the Trust may be found in the SAI under the heading "Management, Trustees and   
Officers."                                                                      

Investment Adviser and Portfolio Managers                                       

     As investment adviser to the Fund, SCMI manages the Fund and continuously
reviews, supervises                                                             

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and administers its investments. SCMI is responsible for making decisions       
relating to the Fund's investments and placing purchase and sale orders         
regarding such investments with brokers or dealers it selects. For these        
services, the Investment Advisory Agreement between SCMI and the Trust provides 
that SCMI will receive a monthly fee at the annual rate of 0.75% of the Fund's  
average daily net assets for the first $100 million and 0.50% of the Fund's     
average daily net assets in excess of $100 million. For the fiscal year ended   
October 31, 1996, the total advisory fees paid by the Fund to SCMI represented  
an annual effective rate of 0.75% of the Fund's average daily net assets.       

 SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is 
the holding company parent of a large world-wide group of banks and financial   
services companies (referred to as the "Schroder Group"), with associated       
companies and branch and representative offices in eighteen countries. The      
Schroder Group specializes in providing investment management services.         

     Paul Morris, a Vice President of the Trust and a Senior Vice President of
SCMI, with the assistance of an investment committee, is primarily responsible  
for the day-to-day management of the Fund's investments and has so managed the  
Fund since February 1997. Mr. Morris has been employed by SCMI in the investment
research and portfolio management areas since ____.                             

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Administrative Services                                                         

 Through its investment advisory contract with the Fund, SCMI provides
administrative services to the Fund. The Trust and SCMI have entered into a     
sub-administration agreement with Forum. Pursuant to these agreements, Forum    
provides certain additional management and administrative services necessary for
the Fund's operations. Payment for Forum's services is made by SCMI and is not a
separate expense of the Fund.                                                   

Expenses                                                                        

     SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
of their fees or assume certain expenses of the Fund in order to limit total    
Fund expenses (excluding taxes, interest, brokerage commissions and other       
portfolio transaction expenses and extraordinary expenses) chargeable to        
Investor Shares to 1.43% of the average daily net assets of the Fund            
attributable to those shares. This expense limitation cannot be                 

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modified or withdrawn except by a majority vote of the Trustees of the Trust who
are not affiliated persons (as defined in the 1940 Act) of the Trust. If expense
reimbursements are required, they will be made on a monthly basis.              

Portfolio Transactions                                                          

  SCMI places orders for the purchase and sale of the Fund's investments
with brokers and dealers selected by SCMI and seeks "best execution" of such    
portfolio transactions. The Fund may pay higher than the lowest available       
commission rates when SCMI believes it is reasonable to do so in light of the   
value of the brokerage and research services provided by the broker effecting   
the transaction.                                                                

    Subject to the Fund's policy of obtaining the best price consistent with
quality of execution on transactions, SCMI may employ Schroder Wertheim &       
Company, Incorporated and its affiliates ("Schroder Wertheim"), affiliates of   
SCMI, to effect transactions of the Fund on the New York Stock Exchange. Because
of the affiliation between SCMI and Schroder Wertheim, the Fund's payment of    
commissions to Schroder Wertheim is subject to procedures adopted by the Board  
designed to ensure that such commissions will not exceed the usual and customary
brokers' commissions. No specific portion of the Fund's brokerage will be       
directed to Schroder Wertheim and in no event will Schroder Wertheim receive any
brokerage in recognition of research services.                                  

Consistent with the Conduct Rules of the National Association of    
Securities Dealers, Inc. and subject to seeking the most favorable price and    
execution available and such other policies as the Trust Board may determine,   
SCMI may consider sales of shares of the Fund as a factor in the selection of   
broker-dealers to execute transactions for the Fund.                            

Although the Fund does not currently engage in directed brokerage   
arrangements to pay expenses, it may do so in the future. These arrangements    
(whereby brokers executing the Fund's portfolio transactions would agree to pay 
designated expenses of the Fund if brokerage commissions generated by the Fund  
reached certain levels) might reduce the Fund's expenses and would not be       
expected to increase materially the brokerage commissions paid by the Fund.     
Brokerage commissions are not deemed to be Fund expenses.                       

Code of Ethics                                                                  

  The Trust, SCMI and Schroders Incorporated have each adopted a code of
ethics that contains a policy on personal securities transactions by "access    
persons," including portfolio managers and investment analysts. That policy     
complies in all material respects with the recommendations set forth in the     
Report of the Advisory Group on Personal Investing of the Investment Company    
Institute, of which the Trust is a member.                                      

INVESTMENT IN THE FUND                                                          

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Purchase of Shares                                                              

Investors may purchase Investor Shares directly from the Trust.     
Prospectuses, sales material and Account Applications can be obtained from the  
Trust or through Forum Financial Corp., the Fund's transfer agent (the "Transfer
Agent"). (See "Other Information -- Shareholder Inquires".) Investments may also
be made through Service Organizations that assist their customers in purchasing 
shares of the Fund. Such Service Organizations may charge their customers a     
service fee for processing orders to purchase or sell shares of the Fund.       
Investors wishing to purchase shares through their accounts at a Service        
Organization should contact that organization directly for appropriate          
instructions.                                                                   

 Shares of the Fund are offered at the net asset value next determined
after receipt of a completed Account Application (at the address set forth      
below). The minimum initial investment is $10,000, except that the minimum for  
an IRA is $2,000. The minimum subsequent investment is $2,500. All purchase     
payments are invested in full and fractional shares. The Fund is authorized to  
reject any purchase order.                                                      

  Purchases may be made by mailing a check (in U.S. dollars), payable to
Schroder U.S. Equity Fund, to:                                                  

Schroder U.S. Equity Fund 
P.O. Box 446              
Portland, Maine 04112     

For initial purchases, the check must be accompanied by a completed 
Account Application in proper form. Further documentation, such as corporate    
resolutions and instruments of authority, may be requested from corporations,   
administrators, executors, personal representatives, directors or custodians to 
evidence the authority of the person or entity making the subscription request. 

  Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as 
follows:                                                                        

Chase Manhattan Bank      
New York, NY              
ABA No.: 021000021        
          For Credit To: Forum Financial Corp.
Acct. No.: 910-2-718187   
                       Ref.: Schroder U.S. Equity Fund - Investor Shares
    Account of: (shareholder name)
                  Account Number: (shareholder account number)

      The wire order must specify the name of the Fund, the shares' class (i.e.,
Investor) the account name and number, address, confirmation number, amount to  
be wired, name of the wiring bank                                               

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, and name and telephone number of the person to be contacted in connection with
the order. If the initial investment is by wire, an account number will be      
assigned and an Account Application must be completed and mailed to the Fund    
before any account can become active. Wire orders received prior to 4:00 p.m.   
(Eastern Time) on each day that the New York Stock Exchange is open for trading 
(a "Fund Business Day") will be processed at the net asset value determined as  
of that day. Wire orders received after 4:00 p.m. (Eastern Time) will be        
processed at the net asset value determined as of the next Fund Business Day.   
See "Net Asset Value" below.                                                    

  The Fund's Transfer Agent, as the shareholder's agent, establishes for
each shareholder of record an open account to which all shares purchased and all
reinvested dividends and capital gain distributions are credited. Although most 
shareholders elect not to receive share certificates, certificates for full     
shares can be obtained by specific written request to the Fund's Transfer Agent.
No certificates are issued for fractional shares.                               

  The Transfer Agent will deem an account lost if six months have passed
since correspondence to the shareholder's address of record is returned, unless 
the Transfer Agent determines the shareholder's new address. When an account is 
deemed lost, dividends and capital gains will be reinvested. In addition, the   
amount of any outstanding checks for dividends and capital gains that have been 
returned to the Transfer Agent will be reinvested and such checks will be       
canceled.                                                                       

Retirement Plans and Individual Retirement Accounts                             

     Shares of the Fund are offered in connection with tax-deferred retirement
plans. Applications forms and further information about these plans, including  
applicable fees, are available upon request. Before investing in the Fund       
through one of these plans, investors should consult their tax advisors.        

The Fund may be used as an investment vehicle for an                

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IRA including SEP-IRA. An IRA naming The First National Bank of Boston as       
custodian is available from the Trust or the Transfer Agent. The minimum initial
investment for an IRA is $2,000; the minimum subsequent investment is $2,500.   
Under certain circumstances contributions to an IRA may be tax deductible. IRAs 
are available to individuals (and their spouses) who receive compensation or    
earned income, whether or not they are active participants in a tax-qualified or
government-approved retirement plan. An IRA contribution by an individual (or   
spouse) who participates in a tax-qualified or government-approved retirement   
plan may not be deductible, depending upon the individual's income. Individuals 
also may establish an IRA to receive a "rollover" contribution of distributions 
from another IRA or a qualified plan. Tax advice should be obtained before      
effecting a rollover.                                                           

Statements of Intention                                                         

 Investor Share investors also may meet the minimum initial investment
requirement based on cumulative purchases by means of a written Statement of    
Intention, expressing the investor's intention to invest $10,000 or more in     
Investor Shares of the Fund within a period of 13 months. Each purchase of      
shares under a Statement of Intention will be made at net asset value plus the  
sales charge applicable at the time of the purchase to a single transaction of  
the dollar amount indicated in the Statement.                                   

   Investors wishing to enter into a Statement of Intention in conjunction
with their initial investment in shares of the Fund should complete the         
appropriate portion to the account application form. Current Fund shareholders  
can obtain a Statement of Intention form by contacting the Transfer Agent.      

      The Fund reserves the right to redeem Shares in any account if, at the end
of the Statement of Intention period, the account does not have a value of at   
least the minimum investment amount.                                            

Exchanges                                                                       

Shareholders may exchange shares of the Fund for shares of any other
series of Schroder Capital Funds (Delaware) so long as they maintain the        
respective minimum account balance in each Fund in which they own shares.       
Exchanges between each Fund are at net asset value.                             

     For federal income tax purposes an exchange is considered to be a sale of
shares on which a shareholder may realize a capital gain or loss. An exchange   
may be made by calling FFC at (800) 811-8258 or by mailing written instructions 
to Schroder Capital Funds (Delaware), P.O. Box 446, Portland, Maine 04112.      
Exchange privileges may be exercised only in those states where shares of the   
other series of Schroder Capital Funds (Delaware) may legally be sold, and may  
be amended or terminated at any time upon sixty (60) days' notice.              

Redemption of Shares                                                            

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    Shares of the Fund are redeemed at their next determined net asset value
after receipt by the Fund (at the address set forth above under "Purchase of    
Shares") of a redemption request in proper form. Redemption requests may be made
between 9:00 a.m. and 6:00 p.m. (Eastern Time) on each Fund Business Day.       
Redemption requests that are received prior to 4:00 p.m. (Eastern Time) will be 
processed at the net asset value determined as of that day. Redemption requests 
that are received after 4:00 p.m. (Eastern Time) will be processed at the net   
asset value determined the next Fund Business Day. See "Net Asset Value" below. 

  By Telephone. Redemption requests may be made by telephoning the
Transfer Agent at the telephone number on the cover page of this Prospectus. A  
shareholder must provide the Transfer Agent with the class of Shares, the dollar
amount or number of shares to be redeemed, shareholder account number, and some 
additional form of identification such as a password. A redemption by telephone 
may be made only if the telephone redemption privilege option has been elected  
on the Account Application or otherwise in writing. In an effort to prevent     
unauthorized or fraudulent redemption requests by telephone, reasonable         
procedures will be followed by the Transfer Agent to confirm that such          
instructions are genuine. The Transfer Agent and the Trust generally will not be
liable for any losses due to unauthorized or fraudulent redemption requests, but
may be liable if they do not follow these procedures. Shares for which          
certificates have been issued may not be redeemed by telephone. In times of     
drastic economic or market changes, it may be difficult to make redemptions by  
telephone. If a shareholder cannot reach the Transfer Agent by telephone,       
redemption requests may be mailed or hand-delivered to the Transfer Agent.      

 Written Requests. Redemptions may be made by letter to the Fund
specifying the class of shares, the dollar amount or number of Shares to be     
redeemed, and the shareholder account number. The letter must also be signed in 
exactly the same way the account is registered (if there is more than one owner 
of the Shares, all must sign) and, in certain cases, signatures must be         
guaranteed by an institution that is acceptable to the Transfer Agent. Such     
institutions include certain banks, brokers, dealers (including municipal and   
government securities brokers and dealers), credit unions and savings           
associations. Notaries public are not acceptable. Further documentation may be  
requested to evidence the authority of the person or entity making the          
redemption request. Questions concerning the need for signature guarantees or   
documentation of authority should be directed to the Fund at the above address  
or by calling the telephone number appearing on the cover of this Prospectus.   

         If Shares to be redeemed are held in certificate form, the certificates
must be enclosed with the redemption request and the assignment form on the back
of the certificates (or an assignment separate from the certificates            

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but accompanied by the certificates) must be signed by all owners in exactly the
same way the owners' names are written on the face of the certificates.         
Requirements for signature guarantees and/or documentation of authority as      
described above could also apply. For your protection, the Fund suggests that   
certificates be sent by registered mail.                                        

  Additional Redemption Information. Checks for redemption proceeds will
normally be mailed within seven days. No redemption proceeds will be mailed     
until checks in payment for the purchase of the Shares to be redeemed have been 
cleared, which may take up to 15 calendar days from the purchase date. Unless   
other instructions are given in proper form, a check for the proceeds of a      
redemption will be sent to the shareholder's address of record.                 

   The Fund may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that exchange is closed,
(ii) the SEC has by order permitted such suspension, or (iii) an emergency (as  
defined by rules of the SEC) exists making disposal of portfolio investments or 
determination of the Fund's net asset value not reasonably practicable.         

  If the Board determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment wholly or    
partly in cash, the Fund may redeem Shares in whole or in part by a distribution
in kind of portfolio securities (from the investment portfolio of the Portfolio 
or of the Fund), in lieu of cash, in conformity with applicable rules of the    
SEC. The Fund will, however, redeem Shares solely in cash up to the lesser of   
$250,000 or 1% of net assets during any 90-day period for any one shareholder.  
In the event that payment for redeemed Shares is made wholly or partly in       
portfolio securities, the shareholder may be subject to additional risks and    
costs in converting the securities to cash. See "Additional Purchase and        
Redemption Information -- Redemption in Kind" in the SAI. The proceeds of a     
redemption may be more or less than the amount invested and, therefore, a       
redemption may result in a gain or loss for Federal income tax purposes.        

     Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem Shares in any account (other than an IRA) if at any
time the account does not have a value of at least $10,000, unless the value of 
the account falls below that amount solely as a result of market activity.      
Shareholders will be notified that the value of the account is less than $10,000
and be allowed at least 30 days to make an additional investment to increase the
account balance to at least $10,000.                                            

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Net Asset Value                                                                 

  The net asset value per share of the Fund is calculated separately for
each class of Shares of the Fund at 4:00 p.m. (Eastern Time), Monday through    
Friday, each Fund Business Day, which excludes the following U.S. holidays: New 
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor 
Day, Thanksgiving Day and Christmas Day. Net asset value per Share is calculated
by dividing the aggregate value of the Fund's assets less all Fund liabilities, 
if any, by the number of Shares of the Fund outstanding.                        

   Generally, securities that are listed on recognized stock exchanges are
valued at the last reported sale price, on the day when the securities are      
valued (the "Valuation Day"), on the primary exchange on which the securities   
are principally traded. Listed securities traded on recognized stock exchanges  
for which there were no sales on the Valuation Day are valued at the last sale  
price on the preceding trading day or at closing mid-market prices. Securities  
traded in over-the-counter markets are valued at the most recent reported       
mid-market price. 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 Board.                                                  

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              

 The Fund intends to comply with the provisions of Subchapter M of the
Internal Revenue Code of 1986, as amended, applicable to regulated investment   
companies. By so doing, the Fund will be relieved of Federal income tax on that 
part of its investment company taxable income that is distributed to            
shareholders (consisting generally of its share of the Portfolio's net          
investment income, net short-term capital gain, and gain from certain foreign   
currency transactions); and that part of its net long-term capital gain that is 
distributed to shareholders. The Fund intends to distribute substantially all of
its investment company taxable income and its net realized long-term capital    
gain at least annually and, therefore, intends not to be subject to Federal     
income tax. The Fund                                                            

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also may make an additional dividend or other distribution if necessary to avoid
a 4% excise tax on certain undistributed income and gain. There are tax         
requirements that all funds must follow in order to avoid federal taxation. In  
its effort to adhere to these requirements, the Fund may have to limit its      
investment activity in some types of instruments. Dividends and capital gain    
distributions on Investor Shares are reinvested automatically in additional     
Investor Shares at net asset value unless the shareholder has elected in the    
Account Application or otherwise in writing, to receive distributions in cash.  

      Dividends paid by the Fund out of its net investment income (including net
realized short-term capital gain) are taxable to shareholders of the Fund as    
ordinary income even if the dividends are reinvested in additional shares of the
Fund. Distributions of net realized long-term capital gain, if any, are taxable 
to shareholders of the Fund as long-term capital gain, regardless of the length 
of time the shareholder may have held shares in the Fund at the time of         
distribution. If a shareholder holds shares for six months or less and during   
that period receives a distribution taxable to the shareholder as long-term     
capital gain, any loss realized on the sale of the shares during that six-month 
period would be a long-term capital loss to the extent of the distribution.     

      After every dividend and other distribution, the value of a Share declines
by the amount of the distribution. Purchases made shortly before a dividend or  
other distribution include in the purchase price the amount of the distribution,
which will be returned to the investor in the form of a taxable distribution.   

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     It is expected that a portion of the Fund's dividends from net investment
income will be eligible for the dividends received deduction for corporations.  
The amount of such dividends eligible for the dividends received deduction is   
limited to the amount of dividends from domestic corporations received during   
the Fund's fiscal year. To the extent the Fund invests in the securities of     
domestic issuers, the dividends to shareholders of the Fund may qualify for the 
dividends received deduction for corporations.                                  

   Dividends and other distributions paid by the Fund with respect to both
classes of its shares will be calculated in the same manner and at the same     
time. The per share dividends on Advisor Shares are expected to be lower than   
the per share dividends on Investor Shares as a result of 12b-1 fees and other  
compensation payable to Service Organizations for distribution assistance and   
shareholder servicing for the Advisor Shares.                                   

     The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any shareholder who does not furnish the Fund    
with a correct taxpayer identification number; who fails to make required       
certifications; or who is subject to backup withholding. Depending on the       
residence of a shareholder for tax purposes, distributions from the Fund may    
also be subject to state and local taxes, including withholding taxes.          

The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the SAI   
for further information. Shareholders should consult their own tax advisors as  
to the tax consequences of their ownership of Shares.                           

OTHER INFORMATION                                                               

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Capitalization and Voting                                                       

The Trust was organized as a Maryland corporation ("Schroder Capital
Funds, Inc.") on July 30, 1969 and on January 9, 1996 was reorganized as a      
Delaware business trust. The Trust has authority to issue an unlimited number of
shares of beneficial interest. The Board may, without shareholder approval,     
divide the authorized shares into an unlimited number of separate portfolios or 
series (such as the Fund) and may divide such portfolios or series into classes 
of shares (such as the Investor Shares), and the costs of doing so will be borne
by the Trust. The Trust currently consists of eight separate series, each of    
which has separate investment objectives and policies. The Fund currently       
consists of two classes of Shares.                                              

      Each share of the Fund is entitled to participate equally in dividends and
other distributions and the proceeds of any liquidation except that, due to the 
differing expenses borne by the classes, dividends and liquidation proceeds for 
each class will likely differ. Shares are fully paid and non-assessable, and    
have no preemptive rights. Shareholders have non-cumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
Trustees can elect 100% of the Trustees if they choose to do so. A shareholder  
is entitled to one vote for each full share held (and a fractional vote for each
fractional share held). Each share of the Fund has equal voting rights, except  
that if a matter affects only the shareholders of a particular class only       
shareholders of that class shall have a right to vote. On matters requiring     
shareholder approval, shareholders of the Trust are entitled to vote only with  
respect to matters that affect the interests of the fund and class of shares    
they hold, except as otherwise required by applicable law.                      

There will normally be no meetings of shareholders to elect Trustees
unless and until such time as less than a majority of the Trustees holding      
office have been elected by shareholders. However, the holders of not less than 
a majority of the outstanding shares of the Trust may remove any person serving 
as a Trustee and the Board will call a special meeting of shareholders to       
consider removal of one or more Trustees if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust.            

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     From time to time, certain shareholders may own a large percentage of the
shares of the Fund. Accordingly, those shareholders may be able to greatly      
affect (if not determine) the outcome of a shareholder vote. As of February 15, 
1997, Schroder Nominees Limited may be deemed to have controlled the Fund for   
purposes of the 1940 Act.                                                       

Reports                                                                         

The Trust sends to each Fund shareholder a semi-annual report and an
audited annual report containing the Fund's financial statements.               

Performance                                                                     

The Fund may include quotations of its average annual total return, 
cumulative total return and other non-standard performance measures in          
advertisements or reports to shareholders or prospective investors. Average     
annual total return of a class of shares is based upon the overall dollar or    
percentage change in value of a hypothetical investment each year over specified
periods. Average annual total returns reflect the deduction of a proportional   
share of a Fund's expenses (on an annual basis) and assumes investment and      
reinvestment of all dividends and distributions at NAV. Cumulative total returns
are calculated similarly except that the total return is aggregated over the    
relevant period instead of annualized.                                          

     Performance quotations are calculated separately for each class of shares
of the Fund. The Fund may also be compared to various unmanaged securities      
indices, groups of mutual funds tracked by mutual fund ratings services, or     
other general economic indicators. Unmanaged indices may assume the reinvestment
of dividends but do not reflect deductions for administrative and management    
costs and expenses.                                                             

  Performance information for the Fund represents only past performance:
performance should be considered in light of the Fund's investment objective and
policies and the market conditions during the measured time period and should   
not be considered a representation of what may be achieved in the future. For a 
description of the methods used to determine total return and other performance 
measures for the Fund, please see the SAI.                                      

Custodian and Transfer Agent                                                    

   The Chase Manhattan Bank, N.A. is custodian of the Fund's assets. Forum
Financial Corp. serves as the Fund's transfer and dividend disbursing agent.    

Shareholder Inquiries                                                           

Inquiries about the Fund, including its past performance, should be 
directed to:                                                                    

Schroder U.S. Equity Fund 
P.O. Box 446              
Portland, Maine 04112     

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    Information about specific shareholder accounts may be obtained from the
Transfer Agent by calling (800) 344-8332.                                       

Service Organizations                                                           

    The Glass-Steagall Act and other applicable laws and regulations provide
that banks may not engage in the business of underwriting, selling or           
distributing securities. There is currently no precedent prohibiting banks from 
performing administrative and shareholder servicing functions as Service        
Organizations. However, judicial or administrative decisions or interpretations 
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,    
could prevent a bank from continuing to perform all or part of its servicing    
activities. If a bank were prohibited from so acting, its shareholder clients   
would be permitted to remain shareholders of the Fund and alternative means for 
continuing the servicing of such shareholders would be sought. It is not        
expected that shareholders would suffer any adverse financial consequences as a 
result of any of these occurrences.                                             

Fund Structure                                                                  

      Classes of Shares. The Fund has two classes of shares, Investor Shares and
Advisor Shares. Advisor Shares are offered by a separate prospectus to          
individual investors, in most cases through Service Organizations. Advisor      
Shares incur more expenses than Investor Shares. Except for certain differences,
each share of each class represents an undivided, proportionate interest in the 
Fund. Each share of the Fund is entitled to participate equally in dividends and
other distributions and the proceeds of any liquidation of the Fund except that,
due to the differing expenses borne by the two classes, the amount of dividends 
and other distributions will differ between the classes. Information about      
Advisor Shares is available from the Fund by calling Schroder Advisors at (800) 
730-2932.                                                                       

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Investment Adviser                                                              
Schroder Capital Management International Inc.                                  
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Administrator & Distributor                                                     
Schroder Capital Management International Inc.                                  
787 Seventh Avenue                                                              
New York, New York 10019                                                        

Sub-Administrator                                                               
Forum Financial Services, Inc.                                                  
Two Portland Square                                                             
Portland, Maine  04101                                                          

Custodian                                                                       
The Chase Manhattan Bank, N.A.                                                  
Chase MetroTech Center                                                          
Brooklyn, New York  11245                                                       

Transfer and Dividend Disbursing Agent                                          
Forum Financial Corp.                                                           
P.O. Box 446                                                                    
Portland, Maine 04112                                                           

Independent Accountants                                                         
Coopers & Lybrand, L.L.P.                                                       
One Post Office Square                                                          
Boston, Massachusetts 02109                                                     

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Table of Contents                                                               

PROSPECTUS SUMMARY.......................................                       
EXPENSES OF INVESTING                                                           
IN THE FUND..........................................                   
Fee Table................................................                       
Example..................................................                       
FINANCIAL HIGHLIGHTS.....................................                       
INVESTMENT OBJECTIVE.....................................                       
INVESTMENT POLICIES......................................                       
MANAGEMENT OF THE FUND...................................                       
Boards of Trustees.......................................                       
Investment Adviser and Portfolio Managers................                       
Administrative Services..................................                       
Expenses.................................................                       
Portfolio Transactions...................................                       
Code of Ethics...........................................                       
INVESTMENT IN THE FUND...................................                       
Purchase of Shares.......................................                       
Retirement Plans and Individual                                                 
Retirement Accounts....................................                     
Statements of Intention..................................                       
Exchanges................................................                       
Redemption of Shares.....................................                       
Net Asset Value..........................................                       
DIVIDENDS, DISTRIBUTIONS                                                        
AND TAXES..............................................                     
OTHER INFORMATION........................................                       
Capitalization and Voting................................                       
Reports..................................................                       
Performance..............................................                       
Custodian and Transfer Agent.............................                       
Shareholder Inquires.....................................                       
Service Organizations....................................                       
Fund Structure...........................................                       

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 SCHRODER INTERNATIONAL FUND

 Statement of Additional Information
 March 1, 1997

 [GRAPHIC OMITTED]

Investment Advisor                                                              

Schroder Capital Management International Inc. ("SCMI") 

Administrator and Distributor                                                   
Schroder Fund Advisors, Inc. ("Schroder Advisors")                              

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company ("Forum")              

Transfer Agent and Dividend Disbursing Agent                                    
Forum Financial Corp. ("FFC")                                                   

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General Information:                (207) 879-8903                              
Account Information:                (800) 344-8332                              
Fax:                                (207) 879-6206                              

Investor Shares of Schroder International Fund ("the Fund") are offered for sale
at net asset value with no sales charge as an investment vehicle for            
individuals, institutions, corporations and fiduciaries. Advisor Shares of the  
Fund are offered to individual investors, in most cases through Service         
Organizations (as defined herein). Advisor Shares incur more expenses than      
Investor Shares.                                                                

This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when preceded or accompanied by the current         
Prospectus for the Fund dated March 1, 1997 (the "Prospectus"). This SAI        
contains additional and more detailed information than that set forth in the    
Prospectus and should be read in conjunction with the Prospectus and retained   
for future reference. You may obtain an additional copy of the Prospectus       
without charge by writing to the Fund at Two Portland Square, Portland, Maine   
04101 or calling the numbers listed above.                                      

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         TABLE OF CONTENTS                                                  PAGE

        Introduction..........................................................
        Investment Policies...................................................
        Foreign Securities....................................................
        Depository Receipts...................................................
Use of Forward Contracts in Foreign                           
          Exchange Transactions...............................................
        U.S. Government Securities............................................
        Bank Obligations......................................................
        Short-Term Debt Securities............................................
        Repurchase Agreements.................................................
        Investment Restrictions...............................................
Management                                                    
        Officers and Trustees.................................................
        Investment Adviser....................................................
        Administrative Services...............................................
        Distribution of Fund Shares...........................................
        Service Organizations.................................................
        Portfolio Accounting..................................................
        Fees and Expenses.....................................................
Portfolio Transactions                                        
        Investment Decisions..................................................
        Brokerage and Research Services.......................................
Additional Purchase and Redemption Information                
        Redemption in Kind....................................................
        Taxation .............................................................
Other Information                                             
        Organization..........................................................
        Capitalization and Voting.............................................
        Principal Shareholders................................................
        Custody of Fund Assets................................................
        Transfer Agent and Dividend Disbursing Agent..........................
        Performance Information...............................................
        Independent Accountants...............................................
        Counsel  .............................................................
        Registration Statement................................................

        Financial Statements..................................................
        Appendix..............................................................

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INTRODUCTION                                                                    

Schroder International Fund (the "Fund") is a diversified, separately-managed   
series of Schroder Capital Funds (Delaware) (the "Trust"), an open-end          
management investment company consisting of eight separate portfolios, each of  
which has different investment objectives and policies.                         

The Fund's investment objective is capital appreciation through investment in   
securities markets outside the United States. Investments in foreign securities 
involve certain risks not associated with domestic investing, and there can be  
no assurance that the Fund's objective will be achieved. The Fund currently     
seeks to achieve its investment objective by holding, as its only investment    
securities, the securities of International Equity Fund (the "Portfolio"), a    
separate series of Schroder Capital Funds ("Schroder Core").                    

The Fund was originally organized in 1985 as a separate portfolio of Fund Source
("Fund Source"), a Massachusetts business trust. Pursuant to a reorganization   
(the "Reorganization") which became effective August 1, 1989, all assets and    
liabilities of such series were transferred to the Trust in exchange for shares 
of common stock of the Trust classified as the "Schroder International Equity   
Fund." Such shares were distributed to the former shareholders of such series of
Fund Source and it thereby became a portfolio of the Trust. References in this  
SAI to the Fund with respect to periods prior to the effective date of the      
Reorganization mean as it was constituted as a portfolio of Fund Source.        

INVESTMENT POLICIES                                                             

Introduction                                                                    

The following information supplements the "Investment Objectives" and           
"Investment Policies" sections of the Prospectus. The Fund currently seeks to   
achieve its investment objective by investing all of its investable assets in   
the Portfolio. Since the Fund has the same investment objective and policies as 
the Portfolio and currently invests all of its assets in the Portfolio,         
investment policies are discussed with respect to the Portfolio only.           

The Portfolio will normally invest at least 65% of its total assets in equity   
securities (including common and preferred stock, convertible securities,       
depository receipts, and warrants or rights to purchase such equity securities) 
of companies domiciled outside the United States. Investments also may be made  
in debt obligations of foreign governments, corporations and international or   
supranational organizations (and their agencies or instrumentalities).          

For temporary defensive purposes, to accumulate cash for investments, or to meet
anticipated redemptions, the Portfolio may invest in (or enter into repurchase  
agreements with banks and broker dealers with respect to) short-term debt       
securities, including Treasury bills and other U.S. Government securities, and  
certificates of deposit and bankers' acceptances of U.S. banks. The Portfolio   
may also hold cash and time deposits in foreign banks, denominated in any major 
foreign currency.                                                               

In anticipation of foreign exchange requirements and to avoid losses due to     
adverse movements in foreign currency exchange rates, the Portfolio also may    
enter into forward contracts to purchase and sell foreign currencies.           

Foreign Securities                                                              

Investment in the securities of non-U.S. issuers may involve risks in addition  
to those normally associated with investments in the securities of U.S. issuers.
There may be less publicly available information about foreign issuers than is  
available for U.S. issuers, and foreign auditing, accounting and financial      
reporting practices may differ from U.S. practices. Foreign securities markets  
may be less active than U.S. markets and trading may be thin: as a result       
foreign securities prices may be more volatile. The Portfolio's investment      
adviser, Schroder Capital Management International Inc. ("SCMI" or "Adviser")   
will, in general, invest only in securities of companies and governments of     
countries which, in its judgment, are both politically and economically stable. 
Nevertheless, all foreign investments are subject to risks of foreign political 
and economic instability, adverse movements in foreign exchange rates, the      
imposition or tightening of exchange controls or other limitations on the       
repatriation of foreign capital and changes in foreign governmental attitudes   
toward private investment, possibly leading to nationalization, increased       
taxation, or confiscation of Portfolio assets.                                  

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Depository Receipts                                                             

Investments in securities of foreign issuers may on occasion be in the form of  
sponsored or unsponsored American Depository Receipts ("ADRs") or European      
Depository Receipts ("EDRs"), or other similar securities convertible into      
securities of foreign issuers. These securities may not necessarily be          
denominated in the same currency as the securities into which they may be       
converted. ADRs are receipts typically issued in the United States by a bank or 
trust company, evidencing ownership of the underlying securities. EDRs are      
typically issued in Europe under a similar arrangement. Generally, ADRs, in     
registered form, are designed for use in the U.S. securities markets and EDRs,  
in bearer form, are designed for use in European securities markets. Unsponsored
ADRs may be created without the participation of the foreign issuer. Holders of 
these ADRs generally bear all the costs of the ADR facility, whereas foreign    
issuers typically bear certain costs in a sponsored ADR. The bank or trust      
company depository of an unsponsored ADR may be under no obligation to          
distribute shareholder communications received from the foreign issuer or to    
pass through voting rights.                                                     

Use of Forward Contracts in Foreign Exchange Transactions                       

To protect or "hedge" against adverse movements in foreign currency exchange    
rates, the Portfolio may invest in forward contracts to purchase or sell an     
agreed-upon amount of a specified currency at a future date (which may be any   
fixed number of days from the date of the contract agreed upon by the parties)  
at a price set at the time of the contract. Such contracts are traded in the    
interbank market directly between currency traders (usually large commercial    
banks) and their customers. A forward contract generally has no deposit         
requirement, and no commissions are charged at any stage for trades. Although   
such contracts tend to minimize the risk of loss due to a decline in the value  
of the currency sold, they expose the Portfolio to the risk that the            
counterparty is unable to perform and they tend to limit gain that might result 
from an increase in the value of the currency during the contract period.       

U.S. Government Securities                                                      

The Portfolio may invest in obligations issued or guaranteed by the U.S.        
Government (or its agencies or instrumentalities) that have remaining maturaties
not exceeding one year. Agencies and instrumentalities that issue or guarantee  
debt securities have been established or sponsored by the U.S. Government and   
include the Bank for Cooperatives, the Export-Import Bank, the Federal Farm     
Credit System, the Federal Home Loan Banks, the Federal Home Loan Mortgage      
Corporation, the Federal Intermediate Credit Banks, the Federal Land Banks, the 
Federal National Mortgage Association, the Government National Mortgage         
Association and the Student Loan Marketing Association. Except for obligations  
issued by the U.S. Treasury and the Government National Mortgage Association,   
none of the obligations of the other agencies or instrumentalities referred to  
above are backed by the full faith and credit of the U.S. Government.           

Bank Obligations                                                                

The Portfolio may invest in obligations of U.S. banks (including certificates of
deposit and bankers' acceptances) whose total assets at the time of purchase    
exceed $1 billion. Such banks must be members of the Federal Deposit Insurance. 

The Portfolio also may invest in certificates of deposit issued by foreign      
banks, denominated in any major foreign currency. The Portfolio will invest in  
instruments issued by foreign banks that, in the view of SCMI and Trustees of   
Schroder Core, are of of comparable credit-worthiness and financial stature to  
U.S. banks used by the Portfolio.                                               

A certificate of deposit is an interest-bearing negotiable certificate issued by
a bank against funds deposited in the bank. A bankers' acceptance is a          
short-term draft drawn on a commercial bank by a borrower, usually in connection
with an international commercial transaction. Although the borrower is liable   
for payment of the draft, the bank unconditionally guarantees to pay the draft  
at its face value on the maturity date.                                         

Short-Term Debt Securities                                                      

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The Portfolio may invest in commercial paper -- short-term unsecured promissory 
notes issued in bearer form by bank holding companies, corporations and finance 
companies. The commercial paper purchased by the Portfolio for temporary        
defensive purposes consists of direct obligations of domestic issuers that at   
the time of investment are rated "P-1" by Moody's Investors Service, Inc.       
("Moody's") or "A-1" by Standard & Poor's ("S&P"), or securities which, if not  
rated, are issued by companies having an outstanding debt issue currently rated 
Aa by Moody's or AAA or AA by S&P. The rating "P-1" is the highest commercial   
paper rating assigned by Moody's and the rating "A-1" is the highest commercial 
paper ratings assigned by S&P.                                                  

Repurchase Agreements                                                           

The Portfolio may invest in securities subject to repurchase agreements, with   
U.S. banks or broker-dealers, that mature in seven days or less. In a typical   
repurchase agreement the seller of a security commits itself at the time of the 
sale to repurchase that security from the buyer at a mutually agreed-upon time  
and price. The repurchase price exceeds the sale price, reflecting an           
agreed-upon interest rate effective for the period the buyer owns the security  
subject to repurchase. The agreed-upon rate is unrelated to the interest rate on
that security. SCMI will monitor the value of the underlying security at the    
time the transaction is entered into and at all times during the term of the    
repurchase agreement to insure that the value of the security always equals or  
exceeds the repurchase price. If a seller defaults under a repurchase agreement,
the Portfolio may have difficulty exercising its rights to the underlying       
securities and may incur costs and experience time delays in connection with the
disposition of such securities. To evaluate potential risks, SCMI reviews the   
credit-worthiness of banks and dealers with which the Portfolio enters into     
repurchase agreements.                                                          

INVESTMENT RESTRICTIONS                                                         

The following investment restrictions restate or are in addition to those       
described under "Investment Restrictions" and "Investment Policies" in the      
Prospectus. Under the following restrictions -- which unless otherwise indicated
may not be changed without the approval of the holders of a majority of the     
Portfolio's outstanding shares -- the Portfolio will not:                       

(a)      Invest more than 5% of its assets in the securities of any single      
     issuer. This restriction does not apply to securities issued by the
U.S. Government, its agencies or instrumentalities;           

(b)      Purchase more than 10% of the voting securities of any one issuer;     

(c)      Invest more than 10% of its assets in "illiquid securities" (Securities
    that cannot be disposed of within seven days at their then current
value). For purposes of this limitation, "illiquid securities"
includes, except in those circumstances described below, (i)  
        "restricted securities", which are securities that cannot be resold to
        the public without registration under Federal securities law, and (ii)
        securities of issuers (together with all predecessors) having a record
of less than three years of continuous operation;             

(d)      Invest 25% or more of the value of its total assets in any one         
industry;                                                     

(e)      Borrow money, except from banks for temporary emergency purposes, and  
   then only in an amount not exceeding 5% of the value of the total
assets of the Portfolio;                                      

(f)      Pledge, mortgage or hypothecate its assets to an extent greater than   
10% of the value of its total assets;                         

(g)      Purchase securities on margin or sell short;                           

(h)      Make investments for the purpose of exercising control or management;  

(i)      Purchase or sell real estate (provided that the Portfolio may invest in
        securities issued by companies that invest in real estate or interests
therein);                                                     

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(j)      Make loans to other persons (provided that for purposes of this        
       restriction, entering into repurchase agreements, acquiring corporate
debt securities and investing in U.S. Government obligations, 
   short-term commercial paper, certificates of deposit and bankers'
acceptances shall not be deemed to be the making of a loan);  

(k)      Invest in commodities; commodity contracts other than foreign currency 
      forward contracts; or oil, gas and other mineral resource, lease, or
arbitrage transactions.                                       

(l)      Write, purchase or sell options, puts, calls, straddles, spreads, or   
combinations thereof.                                         

(m)      Underwrite securities issued by other persons (except to the extent    
        that, in connection with the disposition of its portfolio investments,
    it may be deemed to be an underwriter under U.S. securities laws);

(n)      Invest in warrants, valued at the lower of cost or market, to more than
     5% of the value of the Portfolio's net assets. Included within that
  amount, but not to exceed 2% of the value of the Portfolio's net
         assets, may be warrants that are not listed on the New York or American
         Stock Exchange. Warrants acquired by the Portfolio in units or attached
to securities may be deemed to be without value;              

(o)      As a non-fundamental policy, invest in or hold securities of any issuer
         if officers or Trustees of the Company or SCMI individually owning more
         than 0.5% of the securities of such issuer together own more than 5% of
the securities of such issuer; and                            

(p)      Purchase more than 3% of the outstanding securities of any closed-end  
  investment company. (Any such purchase of securities issued by a
         closed-end investment company will otherwise be made in full compliance
        with Sections 12(d)(1)(a)(i), (ii) and (iii) of the Investment Company
Act of the 1940 Act.)                                         

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As a non-fundamental policy, the Portfolio will not invest in restricted        
securities. This policy does not include restricted securities eligible for     
resale to qualified institutional purchasers pursuant to Rule 144A under the    
Securities Act of 1933 that are determined to be liquid by SCMI pursuant to     
guidelines adopted by the Schroder Core Board. Such guidelines take into account
trading activity for such securities and the availability of reliable pricing   
information, among other factors. If there is a lack of trading interest in     
particular Rule 144A securities, these securities may be illiquid.              

MANAGEMENT                                                                      

Officers and Trustees                                                           

The following information relates to the principal occupations during the past  
five years of each Trustee and executive officer of the Trust and shows the     
nature of any affiliation with SCMI. Each of these individuals currently serves 
in the same capacity for Schroder Core.                                         

Peter E. Guernsey, Oyster Bay, New York - Trustee of the Trust - Insurance      
Consultant since August 1986; prior thereto Senior Vice President, Marsh &      
McLennan, Inc., insurance brokers.                                              

Ralph E. Hansmann (Honorary), 40 Wall Street, New York, New York - Honorary     
Trustee of the Trust - Private investor; Director, First Eagle Fund of America, 
Inc.; Director, Verde Exploration, Ltd.; Trustee Emeritus, Institute for        
Advanced Study; Trustee and Treasurer, New York Public Library; Life Trustee,   
Hamilton College.                                                               

John I. Howell, 7 Riverside Road, Greenwich, Connecticut - Trustee of the Trust 
- Private Consultant since February 1987; Director, American International      
Group, Inc.; Director, American International Life Assurance Company of New     
York.                                                                           

Clarence F. Michalis, 44 East 64th Street, New York, New York - Trustee of the  
Trust - Chairman of the Board of Directors, Josiah Macy, Jr. Foundation         
(charitable foundation).                                                        

Hermann C. Schwab, 787 Seventh Avenue, New York, New York - Chairman (Honorary) 
and Trustee of the Trust - retired since March, 1988; prior thereto, consultant 
to SCMI since February 1, 1984.                                                 

Mark J. Smith(a) (b), 33 Gutter Lane, London, England - a Vice President and    
Trustee of the Trust - First Vice President of SCMI since April 1990; Director  
and Vice President, Schroder Advisors since 1989.                               

Robert G. Davy, 787 Seventh Avenue, New York, New York - a Vice-President of the
Trust - Director of SCMI and Schroder Capital Management International Ltd.     
since 1994; First Vice President of SCMI since July, 1992; prior thereto,       
employed by various affiliates of Schroders plc in various positions in the     
investment research and portfolio management areas since 1986.                  

Margaret H. Douglas-Hamilton(b) (c), 787 Seventh Avenue, New York, New York -   
Secretary of the Trust - Secretary of SCM since July 1995; Secretary of Schroder
Advisers since April 1990; First Vice President and General Counsel of Schroders
Incorporated(b) since May 1987; prior thereto, partner of Sullivan & Worcester, 
a law firm.                                                                     

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Richard R. Foulkes, 787 Seventh Avenue, New York, New York - a Vice President of
the Trust; Deputy Chairman of SCMI since October 1995; Director and Executive   
Vice President of Schroder Capital Management International Ltd. since 1989.    

David I. Goldstein, 2 Portland Square, Portland, Maine - Assistant Treasurer and
Assistant Secretary of the Trust Counsel, Forum Financial Services, Inc. Since  
1991; prior thereto, associate at Kirkpatrick & Lockhart, Washington, D.C.      

Barbara Gottlieb(c), 787 Seventh Avenue, New York, New York - Assistant         
Secretary of the Trust - Assistant Vice President of SWIS since July 1995 prior 
thereto held various positions with SWIS affiliates.                            

Robert Jackowitz(b) (c), 787 Seventh Avenue, New York, New York - Treasurer of  
the Trust - Vice President of SCM since September 1995; Treasurer of SCM and    
Schroder Advisers since July 1995; Vice President of SCMI since June 1995; and  
Assistant Treasurer of Schroders Incorporated since January 1993.               

John Y. Keffer, 2 Portland Square, Portland, Maine - Vice President of the      
Trust. President of Forum Financial Services, Inc., the Fund's                  
sub-administrator, and Forum Financial Corp., the Fund's transfer and dividend  
disbursing agent and fund accountant.                                           

Jane P. Lucas, (c) 787 Seventh Avenue, New York, New York - Vice President of   
the Trust - Director and Senior Vice President SCMI; Director of SCM since      
September 1995; Assistant Director Schroder Investment Management Ltd. since    
June 1991.                                                                      

Gerardo Machado, 787 Seventh Avenue, New York, New York - Assistant Secretary of
the Trust - Associate, SCMI.                                                    

Catherine A. Mazza, 787 Seventh Avenue, New York, New York - Vice President of  
the Trust - President of Schroder Advisors since 1997; First Vice President of  
SCMI and SCM since 1996; prior thereto, held various marketing positions at     
Alliance Capital, an investment adviser, since July 1985.                       

Thomas G. Sheehan, 2 Portland Square, Portland, Maine - Assistant Treasurer and 
Assistant Secretary of the Trust - Counsel, Forum Financial Services, Inc. since
1993; prior thereto, Special Counsel, U.S. Securities and Exchange Commission,  
Division of Investment Management, Washington, D.C.                             

Fariba Talebi, 787 Seventh Avenue, New York, New York - Vice President of the   
Trust - First Vice President of SCMI since April 1993, employed in various      
positions in the investment research and portfolio management areas since 1987. 

John A. Troiano(b), 787 Seventh Avenue, New York, New York - Vice President of  
the Trust - Managing Director and Senior Vice President of SCMI since October   
1995; Director of Schroder Advisors since October 1992; Director of SCMI since  
1991; prior thereto, employed by various affiliates of SCMI in various positions
in the investment research and portfolio management areas since 1981.           

Ira L. Unschuld, 787 Seventh Avenue, New York, New York - Vice President of the 
Trust - Vice President of SCMI since April, 1993 and an Associate from July,    
1990 to April, 1993; prior to July, 1990, employed by various financial         
institutions as a securities or financial analyst.                              

(a)      Interested Trustee of the Trust within the meaning of the 1940 Act.    

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(b)      Schroder  Fund  Advisors,  Inc.  ("Schroder  Advisors")  is  a  wholly-
 owned subsidiary of SCMI, which is a wholly-owned subsidiary of
         Schroders Incorporated, which in turn is an indirect, wholly-owned U.S.
subsidiary of Schroders plc.                                  

(c)      Schroder Capital Management Inc. ("SCM") is a wholly-owned subsidiary  
    of Schroder Wertheim Holdings Incorporated which is a wholly-owned
     subsidiary of Schroders, Incorporated, which in turn is an indirect
wholly-owned U.S. subsidiary of Schroders plc.                

Officers and Trustees who are interested persons of the Trust receive no salary,
fees or compensation from the Fund. Independent Trustees of the Trust receive an
annual fee of $1,000 and a fee of $250 for each meeting of the Board attended by
them except in the case of Mr. Schwab, who receives an annual fee of $1,500 and 
a fee of $500 for each meeting attended. The Fund has no bonus, profit sharing, 
pension or retirement plans.                                                    

The following table provides the fees paid to each Trustee of the Trust for the 
fiscal year ended October 31, 1996.                                             

                                                        [Enlarge/Download Table]

Name of Trustee                           Aggregate            Pension or     Estimated Annual    Total Compensation
                                  Compensation From   Retirement Benefits        Benefits Upon   From Trust And Fund
                                              Trust    Accrued As Part of           Retirement       Complex Paid To
                                                           Trust Expenses                                   Trustees
--------------------------------------------------------------------------------------------------------------------

                                                                                                                    
Mr. Guernsey                                 $1,750                    $0                   $0                $1,750
Mr. Hansmann                                  1,375                     0                    0                 1,375
Mr. Howell                                    1,750                     0                    0                 1,750
Mr. Michalis                                  1,750                     0                    0                 1,750
Mr. Schwab                                    3,000                     0                    0                 3,000
Mr. Smith                                         0                     0                    0                     0

As of February 15, 1997 the officers and Trustees of the Trust owned, in the    
aggregate, less than 1% of the Fund's outstanding shares.                       

Although the Trust is a Delaware business trust, certain of its Trustees or     
officers are residents of the United Kingdom and substantially all of their     
assets may be located outside of the U.S. As a result it may be difficult for   
U.S. investors to effect service upon such persons within the U.S., or to       
realize U.S. civil judgment against them. Civil remedies and criminal penalties 
under U.S. Federal securities laws may be unenforceable in the U.K Extradition  
treaties now in effect between the U.S. and the United Kingdom might not subject
such persons to effective enforcement of the criminal penalties of such acts.   

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Investment Adviser                                                              

SCMI, 787 Seventh Avenue, New York, New York, 10019, serves as Adviser to the   
Portfolio pursuant to an Investment Advisory Contract between the Trust and     
SCMI. SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the     
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is 
the holding company parent of a large worldwide group of banks and financial    
service companies (referred to as the "Schroder Group"), with associated        
companies and branch and representative offices in eighteen countries. The      
Schroder Group specializes in providing investment management services.         

Pursuant to the Investment Advisory Contract, SCMI is responsible for managing  
the investment and reinvestment of the Fund's assets included and for           
continuously reviewing, supervising and administering its investments. In this  
regard, it is the responsibility of SCMI to make decisions relating to the      
Fund's investments and to place purchase and sale orders regarding such         
investments with brokers or dealers it selects . SCMI also furnishes to the     
Board which has overall responsibility for the business and affairs of the      
Trust, periodic reports on the investment performance of the Fund.              

Under the terms of the Investment Advisory Contract, SCMI is required to manage 
the Fund's investment portfolio in accordance with applicable laws and          
regulations. In making its investment decisions, SCMI does not use material     
information that may be in its possession or in the possession of its           
affiliates.                                                                     

The Investment Advisory Contract will continue in effect provided such          
continuance is approved annually (i) by the holders of a majority of the        
outstanding voting securities of the Fund or by the Trust Board and (ii) by a   
majority of the Trustees who are not parties to such Contract or "interested    
persons" (as defined in the 1940 Act) of any such party. The Investment Advisory
Contract may be terminated without penalty by vote of the Trustees or the       
shareholders of the Fund on 60 days' written notice to the Adviser, or by the   
Adviser on 60 days' written notice to the Trusts and it will terminate          
automatically if assigned. The Investment Advisory Contract also provides that, 
with respect to the Fund, neither SCMI nor its personnel shall be liable for any
error of judgment or mistake of law or for any act or omission in the           
performance of its or their duties to the Fund, except for willful misfeasance, 
bad faith or gross negligence in the performance of its or their duties or by   
reason of reckless disregard of its or their obligations and duties under the   
Investment Advisory Contract.                                                   

The Fund pays SCMI for its services a fee of 0.45% of its average daily net     
assets for the first $100 million of The Fund's net such assets, 0.40% of the   
next $150 million of average daily assets, and 0.35% of the Fund's average daily
net assets in excess of $250 million. For the fiscal years ended October 31,    
1994, 1995 and 1996, SCMI received advisory fees of $1,665,176, $893,082 and    
$_______________, respectively.                                                 

The Fund currently invests all of its assets in the Portfolio. SCMI will not    
receive an investment advisory fee with respect to the Fund so long as the Fund 
remains completely invested in the Portfolio or any other investment company.   
The Fund may withdraw its investment from the Portfolio at any time if the Board
determines that it is in the best interests of the Fund and its shareholders to 
do so. Accordingly, the Fund retains SCMI as its investment adviser to manage   
the Fund's assets in the event the Fund so withdraws its investment.            

The investment advisory contract between Schroder Core and SCMI with respect to 
the Portfolio is the same in all material respects as the Fund's Investment     
Advisory Contract (except as to the parties, the circumstances under which fees 
will be paid, the jurisdiction whose laws govern the agreement and fees payable 
thereunder). For its investment advisory services under the Investment Advisory 
Contract with respect to the Portfolio, SCMI receives an advisory fee of 0.45%  
of the Portfolio's average daily net assets.                                    

Administrative Services                                                         

On behalf of the Fund, the Trust has entered into an Administrative Services    
Contract with Schroder Fund Advisors Inc. ("Schroder Advisors"), 787 Seventh    
Avenue, New York, New York 10019. The Trust and Schroder Advisors have entered  
into a Sub-Administration Agreement with Forum Financial Services, Inc.         
("Forum"). Pursuant to their agreements,                                        

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Schroder Advisors and Forum provide management and administrative services other
than those provided by SCMI including: (i) preparation of shareholder reports   
and communications, (ii) regulatory compliance, such as reports to and filings  
with the Securities and Exchange Commission [and state securities commissions]  
and (iii) general supervision of the operation of the Fund, including           
coordination of the services performed by the Fund's investment adviser,        
transfer agent, custodian, independent accountants, legal counsel and others.   
Schroder Advisors is a wholly-owned subsidiary of SCMI, and is a registered     
broker-dealer organized to act as administrator and distributor of mutual funds.
Effective July 5, 1995, Schroder Advisors changed its name from Schroder Capital
Distributors Inc.                                                               

For these services, Schroder Advisors receives from the Fund a fee, payable     
monthly, at the annual rate of 0.20% of the Fund's average daily net assets. For
the fiscal years ended October 31, 1994, 1995 and 1996, Schroder Advisors       
received administrative fees of $832,588; $446,541; and $434,804 respectively.  
Payment for Forum's services is made by Schroder Advisors and is not a separate 
expense of the Fund.                                                            

The Administrative Services Contract and Sub-Administration Agreement are       
terminable with respect to the Fund without penalty, at any time, by vote of a  
majority of the Trustees who are not "interested persons" of the Trust (As      
defined in the 1940 Act) and who have no direct or indirect financial interest  
in the operation of the Fund's Distribution Plan or in the Administrative       
Services Contract or Sub-Administration Agreement, upon not more than 60 days'  
written notice to Schroder Advisors or Forum, as appropriate, or by vote of the 
holders of a majority of the shares of the Fund, or upon 60 days' notice by     
Schroder Advisors or Forum. The Administrative Services Contract will terminate 
automatically in the event of its assignment.                                   

The Sub-Administration Agreement is terminable with respect to the Fund without 
penalty, at any time, by the Board, Schroder Advisors and the Adviser upon 60   
days' written notice to Forum or by Forum upon 60 days' written notice to the   
Fund and Schroder Advisors, and the Adviser, as appropriate.                    

Schroder Advisors and Forum provide similar services to the Portfolio pursuant  
to administrative services agreements between Schroder Core and each of these   
entities, for which Schroder Advisors and Forum are separately compensated at an
annual rate of 0.075% of the average daily net assets of the Portfolio. The fees
paid by the Fund to SCMI and Schroder Advisors therefore may equal up to 0.80%  
of the Fund's average daily net assets. The administrative services agreements  
are the same in all material respects as the Fund's respective agreements       
(except as to the parties, the circumstances under which fees will be paid, the 
fees payable thereunder and the jurisdiction whose laws govern the agreement).  

Distribution of Fund Shares                                                     

Under a Distribution Plan (the "Plan") adopted by the Fund, the Trust will pay  
directly or will reimburse the Adviser or a broker-dealer registered under the  
Securities Exchange Act of 1934 (the Adviser or such registered broker-dealer,  
if so designated, being a "Distributor" of the Fund shares) monthly (subject to 
a limit of 0.50% per annum of the Fund's average daily net assets) for the sum  
of (a) advertising expenses including advertising by radio, television,         
newspapers, magazines, brochures, sales literature or direct mail, (b) costs of 
printing prospectuses and other materials to be given or sent to prospective    
investors, (c) expenses of sales employees or agents of the Distributor,        
including salary, commissions, travel and related expenses in connection with   
the distribution of Fund shares, and (d) payments to broker-dealers (other than 
the Distributor) or other organizations (other than banks) for services rendered
in the distribution of the Fund's shares, including payments in amounts based on
the average daily value of Fund shares owned by shareholders in respect of which
the broker-dealer or organization has a distributing relationship. The Fund will
make no payments or reimbursements under the Distribution Plan until the Board  
specifically further so authorizes. The Fund will not be liable for distribution
expenditures made by the Distributor in any given year in excess of the maximum 
amount (0.50% per annum of the Fund's average daily net assets) payable under   
the Plan in that year. Salary expense of sales staff responsible for marketing  
shares of the Fund may be allocated among various portfolios of the Trust that  
have adopted a Plan similar to that of the Fund on the basis of average net     
assets; travel expenses are allocated among the portfolios of the Trust. The    
Board of Trustees has concluded that there is a reasonable likelihood that the  
Plan will benefit the Fund and its shareholders.                                

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Without shareholder approval, the Plan may not be amended to increase materially
the costs that the Fund may bear. Other material amendments to the Plan must be 
approved by the Board and by the Trustees who are not "interested persons" of   
the Trust and who have direct or indirect financial interest in the operation of
the Plan or in any related agreement (by vote cast in person at a meeting called
for the purpose of considering such amendments). The selection and nomination of
the Trustees of the Trust has been committed to the discretion of the Trustees  
who are not "interested persons" of the Trust. The Plan has been approved, and  
is subject to annual approval, by the Board and by the Trustees who are not     
"interested persons" and have no direct or indirect financial interest in the   
operation of the Plan (by vote cast in person at a meeting called for the       
purpose of voting on the Plan). The Fund Investor Shares will make no payments  
under the Distribution Plan until the Board specifically so authorizes. The Plan
is terminable with respect to the Fund at any time by a vote of a majority of   
the Trustees who are not "interested persons" of the Trust and who have no      
direct or indirect financial interest in the operation of the Plan or by vote of
the holders of a majority of the shares of the Fund.                            

Schroder Advisors acts as Distributor of the Fund's shares.                     

During the fiscal year ended October 31, 1996, the Fund spent, pursuant to the  
Plan the following amounts on:                                                  

                                                                [Download Table]


                                                         Period Ended       
                                                          October 31        
                                                    1996               1995 
                                                    -----              ---- 
                                                                            
advertising                                         $ -0-              $ -0-

printing and mailing of prospectuses to other than  $ -0-              $ -0-
  current shareholders                                                      

compensation to underwriters                        $ -0-              $ -0-

compensation to dealers                             $ -0-              $ -0-

compensation to sales personnel                     $ -0-              $ -0-

interest, carrying, or other financing charges      $ -0-              $ -0-


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Service Organizations                                                           

The Fund may also contract with banks, trust companies, broker-dealers or other 
financial organizations ("Service Organizations") to provide certain            
administrative services for the Fund. The Fund may pay fees (which will vary    
depending upon the services provided) to Service Organizations in amounts up to 
an annual rate of 0.25% of the daily net asset value of the Fund's shares owned 
by shareholders with whom the Service Organization has a servicing relationship.
Services provided by Service Organization may include: providing personnel and  
facilities necessary to establish and maintain certain shareholder accounts and 
records; assisting in processing purchase and redemption transactions; arranging
for the wiring of funds; transmitting and receiving funds in connection with    
client orders to purchase or redeem shares; verifying and guaranteeing client   
signatures in connection with redemption orders, transfers among and changes in 
client-designated accounts; providing periodic statements of client's account   
balances and, to the extent practicable, integrating such information with other
client transactions; furnishing periodic and annual statements and confirmations
of all purchases and redemption of shares in a client's account; transmitting   
proxy statements, annual reports, and updating prospectuses and other           
communications from the Fund to clients; and such other services as the Fund or 
a client reasonably may request, to the extent permitted by applicable statute, 
rule or regulation. Neither SCMI nor Schroder Advisors will be a Service        
Organization or receive fees for servicing. The Fund will make no such payments 
to service organizations until the Board specifically so authorizes.            

Some Service Organizations may impose additional or different conditions on     
their clients, such as requiring to invest more than the minimum investments    
specified by the Fund or charging a direct fee for servicing. If imposed, these 
fees would be in addition to any amounts that might be paid to the Service      
Organization by the Fund. Each Service Organization has agreed to transmit to   
its clients a schedule of any such fees. Shareholders using Service             
Organizations are urged to consult them regarding any such fees or conditions.  

The Glass-Steagall Act and other applicable laws provide that banks may not     
engage in the business of underwriting, selling or distributing securities.     
There currently is no precedent prohibiting banks from performing administrative
and shareholder servicing functions as Service Organizations. However, judicial 
or administrative decisions or interpretations of such laws, as well as changes 
in either federal or state statutes or regulations relating to the permissible  
activities of banks and their subsidiaries or affiliates, could prevent a bank  
service organization from continuing to perform all or a part of its servicing  
activities. If a bank were prohibited from so acting, its shareholder clients   
would be permitted to remain shareholders of the Fund and alternative means for 
continuing the servicing of such shareholders would be sought. In that event,   
changes in the operation of the Fund might occur and a shareholder serviced by  
such a bank might no longer be able to avail itself of any services then being  
provided by the bank. It is not expected that shareholders would suffer any     
adverse financial consequences as a result of any of these occurrences.         

Portfolio Accounting                                                            

Forum Financial Corp. ("FFC"), an affiliate of Forum, performs portfolio        
accounting services for the Fund pursuant to a Fund Accounting Agreement with   
the Trust. The Fund Accounting Agreement will continue in effect only if such   
continuance is specifically approved at least annually by the Board of Trustees 
or by a vote of the shareholders of the Trust and in either case by a majority  
of the Trustees who are not parties to the Fund Accounting Agreement (or        
interested persons of any such party) at a meeting called for the purpose of    
voting on the Fund Accounting Agreement.                                        

Under its agreement, FFC prepares and maintains the books and records of the    
Fund, on behalf of the Trust, that are required to be maintained under the 1940 
Act; calculates the net asset value per share of the Fund, calculates dividends 
and capital gain distributions; and prepares periodic reports to shareholders   
and the Securities and Exchange Commission. For its services to the fund, FFC   
receives from the Trust a fee of $36,000 per year plus, $12,000 per year for    
each class of the Fund above one,. FFC is paid an additional $24,000 per year   
with respect to global and international funds. FFC is also paid an additional  
$12,000 per year with respect to tax-free money market funds, funds with more   
than 25% of their total assets invested in asset backed securities funds, that  
have more than 100 security positions or funds that have a monthly portfolio    
turnover rate of 10% or greater.                                                

FFC is required to use its best judgment and efforts in rendering fund          
accounting services and is not be liable to the Trust for any action or inaction
in the absence of bad faith, willful misconduct or gross negligence. FFC is not 
responsible or liable for any failure or delay in performance of its fund       
accounting obligations arising out of or caused, directly or                    

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indirectly, by circumstances beyond its reasonable control. The Trust has agreed
to indemnify and hold harmless FFC and its employees, agents, officers and      
directors against and from any and all claims, demands, actions, suits,         
judgments, liabilities, losses, damages, costs, charges, counsel fees and all   
other expenses arising out of or in any way related to FFC's actions taken or   
failures to act with respect to a Fund or based, if applicable, upon            
information, instructions or requests with respect to a Fund given or made to   
FFC by an officer of the Trust duly authorized. This indemnification does not   
apply to FFC's actions taken or failures to act in cases of FFC's own bad faith,
willful misconduct or gross negligence.                                         

FFC assumed responsibility for fund accounting on August 15, 1994. Previously,  
these services were performed by SCMI. For the fiscal years ended October 31,   
1994 ; October 31, 1995; and October 31, 1996 1996, the Fund paid fund          
accounting fees of $114,325; $72,000; and $12,000 respectively.                 

Fees and Expenses                                                               

As compensation for the advisory, administrative and management services        
rendered to the Fund, SCMI and Schroder Advisors each earn (before waivers)     
monthly fees at the following annual rates:                                     

                                        Fee Rate
  Portion of average daily value         Advisory               Administrative
of the Fund's net assets              Fee                       Fee 
------------------------------         --------                    ---    
           100%                        0.45%                     0.35%

SCMI and Schroder Advisors have voluntarily undertaken to assume certain        
expenses of the Fund. This undertaking is designed to limit Fund expenses       
(including all fees to be paid to SCMI and Schroder Advisors but excluding      
taxes, interest, brokerage commissions and other portfolio transaction expenses 
and extraordinary expenses) to 0.99 of the Fund's daily net assets. [This       
expense limitation may only be withdrawn by a majority vote of the Trustees of  
the Trust who are not "interested persons" of the trust.] If expense            
reimbursements are required, they will be made on a monthly basis: SCMI will    
reimburse the Fund for four-fifths of the amount required and Schroder Advisors 
will reimburse the Fund for the remaining one-fifth. This undertaking to        
reimburse expenses supplements any applicable state expense limitation. For the 
fiscal year ended October 31, 1996, the Fund's expenses were [0.99]% of its     
average net assets. Without expenses, reimbursements and fee waivers, Management
Fees, Other Expenses and Total Operating Expenses for the fiscal year ended     
October 31, 1996 would be [0.75]%, [0.29]%, and [1.04]%, respectively, except   
for the expenses paid by SCMI or Schroder Advisors, the Fund bears all costs of 
its operations.                                                                 

PORTFOLIO TRANSACTIONS                                                          

Investment Decisions                                                            

Investment decisions for the Fund and for the other investment advisory clients 
of SCMI are made to achieve their respective investment objectives. Investment  
decisions are the product of many factors in                                    

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addition to basic suitability for the particular client involved and a          
particular security may be bought or sold for certain clients and not bought or 
sold for other clients. Likewise, a particular security may be bought for one or
more clients when one or more clients are selling the security. In some         
instances, one client may sell a particular security to another client. It also 
sometimes happens that two or more clients simultaneously purchase or sell the  
same security, in which event each day's transactions in such security are,     
insofar as is possible, averaged as to price and allocated between such clients 
in a manner which in SCMI's opinion is equitable to each and in accordance with 
the amount being purchased or sold by each. There may be circumstances when     
purchases or sales of portfolio securities for one or more clients will have an 
adverse effect on other clients.                                                

Brokerage and Research Services                                                 

Transactions on U.S. stock exchanges and other agency transactions involve the  
payment by the Fund of negotiated brokerage commissions. Such commissions vary  
among brokers. Also, a particular broker may charge different commissions       
according to the difficulty and size of transactions. Transactions in foreign   
securities generally involve the payment of fixed brokerage commissions, which  
are generally higher than those in the United States. Since most brokerage      
transactions for the Fund will be placed with foreign broker-dealers, certain   
portfolio transaction costs for the Fund may be higher than fees for similar    
transactions executed on U.S. securities exchanges. There is generally no stated
commission in the case of securities traded in the over-the-counter markets, but
the price paid by the Fund usually includes an undisclosed dealer commission or 
mark-up. In underwritten offerings, the price paid by the Fund includes a       
disclosed, fixed commission or discount retained by the underwriter or dealer.  
For the years ended October 31, 1994, 1995, and 1996, the Fund paid a total of  
$653,234; $584,429; and $756,181 respectively, in brokerage commissions.        

The Investment Advisory Contract authorizes and directs SCMI to place orders for
the purchase and sale of the Fund's investments with brokers or dealers it      
selects and to seek "best execution" of such portfolio transactions. SCMI places
all such orders for the purchase and sale of portfolio securities and buys and  
sells securities for the Fund through a substantial number of brokers and       
dealers. In so doing, SCMI uses its best efforts to obtain for the Fund the most
favorable price and execution available. The Fund may, however, pay higher than 
the lowest available commission rates when SCM believes it is reasonable to do  
so in light of the value of the brokerage and research services provided by the 
broker effecting the transaction. In seeking the most favorable price and       
execution, SCMI, considers all factors it deems relevant (including price, size 
of transaction, the nature of the market for the security, amount of commission,
the timing of the transaction taking into account market prices and trends, the 
reputation, experience and financial stability of the broker-dealers involved   
and the quality of service rendered by the broker-dealers in other              
transactions).                                                                  

It has for many years been a common practice in the investment advisory business
as conducted in certain countries, including the United States, for advisers of 
investment companies and other institutional investors to receive research      
services from broker-dealers that execute portfolio transactions for the clients
of such advisers. Consistent with this practice, SCMI may receive research      
services from broker-dealers with which SCMI places the Fund's portfolio        
transactions. These services, which in some cases may also be purchased for     
cash, include such items as general economic and security market reviews,       
industry and company reviews, evaluations of securities and recommendations as  
to the purchase and sale of securities. Some of these services are of value to  
SCMI in advising various of its clients (including the Fund), although not all  
of these services are necessarily useful and of value in managing the Fund. The 
management fee paid by the Fund is not reduced because SCMI and its affiliates  
receive such services.                                                          

As permitted by Section 28(e) of the Securities Exchange Act of 1934 (the       
"Act"), SCMI may cause the Fund to pay a broker-dealer which provides with      
"brokerage and research services" (as defined in the Act) to SCMI an amount of  
disclosed commission for effecting a securities transaction for the Fund in     
excess of the commission which another broker-dealer would have charged for     
effecting that transaction.                                                     

Consistent with the Conduct Rules of the National Association of Securities     
Dealers, Inc. and subject to seeking the most favorable price and execution     
available and such other policies as the Trustees may determine, SCMI may       
consider sales of shares of the Fund as a factor in the selection of            
broker-dealers to execute portfolio transactions for the Fund.                  

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Subject to the general policies regarding allocation of portfolio brokerage as  
set forth above, the Trust Board has authorized SCMI to employ Schroder         
Securities Limited and its affiliates (collectively, "Schroder Securities"),    
affiliates of SCMI, to effect securities transactions of the Fund on various    
foreign securities exchanges on which Schroder Securities has trading           
privileges, provided certain other conditions are satisfied as described below. 

Payment of brokerage commissions to Schroder Securities for effecting such      
transactions is subject to Section 17(e) of the 1940 Act, which requires, among 
other things, that commissions for transactions on securities exchanges paid by 
a registered investment company to a broker which is an affiliated person of    
such investment company (or an affiliated person of another person so           
affiliated) not exceed the usual and customary broker's commissions for such    
transactions. It is the Fund's policy that commissions paid to Schroder         
Securities will in SCMI's judgment be (i) at least as favorable as commissions  
contemporaneously charged by Schroder Securities on comparable transactions for 
its most favored unaffiliated customers and (ii) at least as favorable as those 
that would be charged on comparable transactions by other qualified brokers     
having comparable execution capability. The Trust Board, including a majority of
the Trustees who are not interested persons, has adopted procedures pursuant to 
Rule 17e-1 promulgated by the Securities and Exchange Commission under Section  
17(e) to ensure that commissions paid to Schroder Securities by the Fund satisfy
the foregoing standards. The Board will review all transactions at least        
quarterly for compliance with these procedures.                                 

The Fund has no understanding or arrangement to direct any specific portion of  
its brokerage to Schroder Securities and will not direct brokerage to Schroder  
Securities in recognition of research services. The Fund paid no commissions to 
Schroder Securities in the Fund's fiscal years ended October 31, 1994, 1995 or  
1996. For the fiscal year ended October 31, 1995 and 1996, the Fund paid $1,829 
and $________, respectively in brokerage commissions to Schroder, Munchmeyer,   
Hengst & Co., an affiliate of Schroder Securities Limited, representing [0.003]%
of the Fund's aggregate brokerage commissions and [0.005]% of the Fund's        
aggregate dollar amount of transactions involving the payment of commissions.   
[For the fiscal year ended October 31, 1996, the Fund paid $[1,829] in brokerage
commissions to Schroder, Munchmeyer, Hengst & Co., an affiliate of Schroder     
Securities Limited, these commissions represent [0.003]% of the Fund's aggregate
brokerage commissions and [0.005]% and _____% of the Fund's aggregate dollar    
amount of transactions involving the payment of commissions.                    

The annual portfolio turnover rate of the Fund may exceed 50% but will not      
ordinarily exceed 100%.                                                         

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION                                  

Determination of Net Asset Value Per Share                                      

The net asset value per share of the Fund is determined each day the New York   
Stock Exchange (the "Exchange") is open as of 4:00 P.M. New York time that day, 
by dividing the value of the Fund's net assets by the total number of Fund      
shares outstanding. The Exchange's most recent holiday schedule (which is       
subject to change) states that it will close on New Year's Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and    
Christmas Day. It may also close on other days.                                 

The Trust's Board of Trustees has established procedures for the valuation of   
the Fund's securities: (i) equity securities traded on a securities exchange or 
on the NASDAQ National Market System for which last sale information is         
regularly reported are valued at the last reported sales prices on their primary
exchange or the NASDAQ National Market System that day (or, in the absence of   
sales that day, at values based on the last sale prices on the preceding trading
day or closing mid-market prices); (ii) NASDAQ and other unlisted equity        
securities for which last sale prices are not regularly reported but for which  
over-the-counter market quotations are readily available are valued at the most 
recently reported mid-market prices; (iii) securities (including restricted     
securities) not having readily-available market quotations are valued at fair   
value under the Board's procedures; (iv) debt securities having a maturity in   
excess of 60 days are valued at the mid-market prices determined by a portfolio 
pricing service or obtained from active market makers on the basis of reasonable
inquiry; and (v) short-term debt securities (having a remaining maturity of 60  
days or less) are valued at cost, adjusted for amortization of premiums and     
accretion of discount.                                                          

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Puts, calls and Stock Index Futures are valued at the last sales price on the   
principal exchange on which they are traded, or, if there are no transactions,  
in accordance with (i) above. When the Fund writes an option, an amount equal to
the premium received by the Fund is recorded in the Fund's books as an asset,   
and an equivalent deferred credit is recorded as a liability. The deferred      
credit is adjusted ("marked-to-market") to reflect the current market value of  
the option.                                                                     

Detailed information pertaining to the purchase of shares of the Fund,          
redemption of shares and the determination of the net asset value of Fund shares
is set forth in the Prospectus under "Investment in the Fund".                  

Redemption in Kind                                                              

In the event that payment for redeemed shares is made wholly or partly in       
portfolio securities, the shareholder may incur brokerage costs in converting   
the securities to cash. An in kind distribution of portfolio securities will be 
less liquid than cash. The shareholder may have difficulty in finding a buyer   
for portfolio securities received in payment for redeemed shares. Portfolio     
securities may decline in value between the time of receipt by the shareholder  
and conversion to cash. A redemption in kind of the Fund's portfolio securities 
could result in a less diversified portfolio of investments for the Fund and    
could affect adversely the liquidity of the Fund's portfolio.                   

TAXATION                                                                        

The Fund intends to continue to qualify as a regulated investment company under 
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To  
do so the Fund intends to distribute to shareholders at least 90% of its net    
investment income (which includes dividends, interest and the excess of any net 
short-term capital gains over net long-term capital losses), and to meet certain
diversification of assets, source of income, and other requirements of the      
Code.The Fund will therefore not be subject to Federal income tax on its net    
investment income and net realized capital gains (the excess of net long-term   
capital gains over net short-term capital losses) distributed to shareholders.  
If the Fund does not meet all of these Code requirements, it will be taxed as an
ordinary corporation, and its distributions will be taxable to shareholders as  
ordinary income.                                                                

Amounts not distributed on a timely basis (in accordance with a calendar year   
distribution requirement) are subject to a 4% nondeductible excise tax. To      
prevent this, the Fund must distribute for each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income (excluding any capital gains 
or losses) for the calendar year, (2) at least 98% of the excess of its capital 
gains over capital losses realized during the one-year period ending October 31 
of such year, and (3) all such ordinary income and capital gains for previous   
years that were not distributed during such years. A distribution will be       
treated as paid during the calendar year if it is declared by the Fund in       
October, November or December of the year with a record date in such month and  
paid by the Fund during January of the following year. Such distributions will  
be taxable to shareholders in the calendar year in which the distributions are  
declared, rather than the calendar year in which the distributions are received.

Under the Code, gains or losses attributable to fluctuations in foreign exchange
rates occur between the time the Fund accrues interest (or other receivable) or 
accrues expenses (or other liabilities) and the time the Fund actually collects 
such receivable or pays such liabilities are generally treated as ordinary      
income or ordinary loss. Similarly, gains or losses on disposition of debt      
securities denominated in a foreign currency attributable to fluctuations in the
value of the foreign currency between the date of acquisition of the security   
and the date of disposition as well as gains or losses from certain foreign     
currency transactions and options on certain foreign currency transactions, are 
generally treated as ordinary gain or loss. These gains or losses, referred to  
under the Code as "Section 988" gains or losses, may increase or decrease the   
amount of the Fund's net investment income to be distributed to its shareholders
as ordinary income.                                                             

Generally, the hedging transactions undertaken by the Fund may be deemed to be  
"straddles" for Federal income tax purposes. The straddle rules may affect the  
character of gains (or losses) realized by the Fund. In addition, losses        
realized by the Fund on positions that are part of a straddle may be deferred   
under the straddle rules (rather than being taken into account in calculating   
the taxable income for the taxable year in which the losses are realized).      
Because only a few regulations implementing the straddle rules have been        
promulgated, the tax consequences to the Fund of hedging transactions are not   
entirely clear. Hedging transactions may increase the amount of short-term      
capital gain realized by the Fund that is taxed as ordinary income when         
distributed to shareholders.                                                    

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The Fund may make one or more of the elections available under the Code which   
are applicable to straddles. If the Fund makes any of the elections, the amount,
character and timing of the recognition of gains or losses from the affected    
straddle positions will be determined under rules that vary according to the    
election(s) made. The rules applicable under certain of the elections may       
operate to accelerate the recognition of gains or losses from the affected      
straddle positions.                                                             

Because application of the straddle rules may affect the character of gains or  
losses, defer losses and/or accelerate the recognition of gains or losses from  
the affected straddle positions, the amount that must be distributed to         
shareholders (and which will be taxed to shareholders as ordinary income or     
long-term capital gain) may be differenet from fund that did not engage in such 
hedging transactions.                                                           

The requirements applicable to regulated investment companies such as the Fund  
may limit the extent to which the Fund will be able to engage in transactions in
options and forward contracts.                                                  

Distributions of net investment income (including realized net short-term       
capital gain) are taxable to shareholders as ordinary income. It is not expected
that such distributions will be eligible for the dividends received deduction   
available to corporations.                                                      

Distributions of net long-term capital gain are taxable to shareholders as      
long-term capital gain, regardless of the length of time the Fund shares have   
been held by a shareholder, and are not eligible for the dividends received     
deduction. A loss realized by a shareholder on the sale of shares of the Fund   
with respect to which capital gain dividends have been paid will, to the extent 
of such capital gain dividends, be treated as long-term capital loss (even      
though such shares may have been held by the shareholder for one year or less). 
Further, a loss realized on a disposition will be disallowed to the extent the  
shares disposed of are replaced (whether by reinvestment or distributions or    
otherwise) within a period of 61 days beginning 30 days before and ending 30    
days after the shares are disposed of. In such a case, the basis of the shares  
acquired will be adjusted to reflect the disallowed loss.                       

All distributions to shareholders are taxable whether reinvested in additional  
shares or received in cash. Shareholders that reinvest distributions will have  
for federal income tax purposes a cost basis in each share received equal to the
net asset value of a share of the Fund on the reinvestment date. Shareholders   
will be notified annually as to the Federal tax status of distributions.        

Distributions by the Fund reduce the net asset value of the Fund's shares. If a 
distribution reduces the net asset value below a shareholder's cost basis, such 
distribution nevertheless is taxable to the shareholder as ordinary income or   
capital gain as described above, even though, from an investment standpoint, it 
may constitute a partial return of capital. In particular, investors should be  
careful to consider the tax implications of buying shares just prior to a       
distribution. The price of shares purchased at that time includes the amount of 
the forthcoming distribution which will be returned to the investor in the form 
of a taxable distibution.                                                       

Upon redemption or sale of shares, a shareholder will realize a taxable gain or 
which will be treated as capital gain or loss if the shares are capital assets  
in the shareholder's hands. Such gain or loss generally will be long-term or    
short-term depending upon the shareholder's holding period for the shares.      

The Fund intends to minimize foreign income and withholding taxes by investing  
in obligations whose payments will be subject to minimal or no such taxes       
(insofar as this objective is consistent with the Fund's income objective).     
However, since the Fund may incur foreign taxes, it intends, (if it is eligible 
to do so) under Section 853 of the Code to treat each shareholder as having     
received an additional distribution from the Fund (in the amount indicated in a 
notice furnished to the shareholder, as the shareholder's pro rata portion of   
income taxes paid to or withheld by foreign governments with respect to         
interest, dividends and gain on the Fund's foreign portfolio investments.       
Shareholders then may take the amount of such foreign taxes paid or withheld as 
a credit against their Federal income tax, subject to certain limitations.      
Shareholders find it more to their advantage to do so, they may, in the         
alternative, deduct the foreign tax withheld as an itemized deduction in        
computing taxable income. Shareholders are referred to their tax advisers       
regarding to the availability of the foreign tax credit.                        

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The Fund will be required to report to the Internal Revenue Service (the "IRS") 
all distributions and gross proceeds from the redemption of Fund shares (except 
in the case of certain exempt shareholder). All such distributions and proceeds 
generally will be subject to withholding of Federal income tax at a rate of 31% 
("backup withholding") in the case of nonexempt shareholders if (1) the         
shareholder fails to furnish the Fund with and to certify the shareholder's     
correct taxpayer identification number or social security number, (2) the IRS   
notifies the Fund that the shareholder has failed to report properly certain    
interest and dividend income to the IRS and to respond to notices to that       
effect, or (3) when required to do so, the shareholder fails to certify that    
they are not subject to backup withholding. If the withholding provisions are   
applicable, any such distributions or proceeds, whether reinvested in additional
shares or taken in cash, will be reduced by the amount required to be withheld. 
Any amounts withheld may be credited against the shareholder's Federal income   
tax liability. Investors may wish to consult their tax advisers about the       
applicability of the backup withholding provisions.                             

The foregoing discussion relates only to Federal income tax law as applicable to
U.S. persons (i.e., U.S. citizens and residents and U.S. domestic corporations, 
partnerships, trusts and estates). Distributions by the Fund also may be subject
to state and local taxes, and their treatment under state and local income tax  
laws may differ from the Federal income tax treatment. Shareholders should      
consult their tax advisors with respect to particular questions of Federal,     
state and local taxation. Shareholders who are not U.S. persons should consult  
their tax advisors regarding U.S. and foreign tax consequences of ownership of  
shares of the Fund including the likelihood that distributions to them would be 
subject to withholding of U.S. tax at a rate of 30% (or a lower rate under a tax
treaty).                                                                        

OTHER INFORMATION                                                               

Organization                                                                    

The Trust was originally organized as a Maryland corporation on July 30, 1969.  
On February 29, 1988, the Trust was recapitalized to enable the Board to        
establish a series of separately managed investment portfolios, each having     
different investment objectives and policies. At the time of the                
recapitalization, the Trust's name was changed from "The Cheapside Dollar Fund  
Limited" to "Schroder Capital Funds, Inc." On January 9, 1996, the Trust was    
reorganized as a Delaware business trust. At that time, the Trust's name was    
changed from "Schroder Capital Funds, Inc." to its present name. The Trust is   
registered as an open-end management investment company under the Act.          

Delaware law provides that shareholders shall be entitled to the same           
limitations of personal liability extended to stockholders of private           
corporations for profit. The securities regulators of some states, however, have
indicated that they and the courts in their state may decline to apply Delaware 
law on this point. To guard against this risk, the Trust Instrument contains an 
express disclaimer of shareholder liability for the debts, liabilities,         
obligations, and expenses of the Trust. The Trust Instrument provides for       
indemnification out of each series' property of any shareholder or former       
shareholder held personally liable for the obligations of the series. The Trust 
Instrument also provides that each series shall, upon request, assume the       
defense of any claim made against any shareholder for any act or obligation of  
the series and satisfy any judgment thereon. Thus, the risk of a shareholder    
incurring financial loss on account of shareholder liability is limited to      
circumstances in which Delaware law does not apply (or no contractual limitation
of liability was in effect) and the portfolio is unable to meet its obligations.
Forum believes that, in view of the above, there is no risk of personal         
liability to shareholders.                                                      

Capitalization and Voting                                                       

The Trust has an unlimited number of authorized shares of beneficial interest.  
The Board may, without shareholder approval, divide the authorized shares into  
an unlimited number of separate portfolios or series (such as the Fund) and may 
divide such portfolios or series into classes of shares, and the costs of doing 
so will be borne by the Trust. The Trust currently consists of five separate    
portfolios, each of which has separate investment objectives and policies, and  
five classes, two of which pertain to the Schroder International Fund.          

Shares of the Fund are fully paid and nonassessable, and have no preferences as 
to conversion, exchange, dividends, retirement or other features. Shares have no
preemptive rights and have non-cumulative voting rights, which means that the   
holders of more than 50% of the shares voting for the election of Trustees can  
elect                                                                           

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100% of the Trustees if they choose to do so. A shareholder is entitled to one  
vote for each full share held (and a fractional vote for each fractional share  
held. Shares of each class vote separately to approve investment advisory       
agreements or changes in investment objectives and other fundamental policies   
affecting the portfolio to which they pertain, but all classes vote together in 
the election of Trustees and ratification of the selection of independent       
accountants. Shareholders of any particular class are not be entitled to vote on
any matters as to which such class are not directly affected.                   

The Trust will not hold annual meetings of shareholders. The matters considered 
at an annual meeting typically include the reelection of Trustees, approval of  
an investment advisory agreement, and the ratification of the selection of      
independent accountants. These matters will not be submitted to shareholders    
unless a meeting of shareholders is held for some other reason, such as those   
indicated below. Each of the Trustees will serve until death, resignation or    
removal. Vacancies will be filled by the remaining Trustees, subject to the     
provisions of the 1940 Act requiring a meeting of shareholders for election of  
Trustees to fill vacancies when less than a majority of Trustees then in office 
have been elected by shareholders. Similarly, the selection of accountants and  
renewal of investment advisory agreements for future years will be performed    
annually by the Board. Future shareholder meetings will be held to elect        
Trustees if required by the 1940 Act, to obtain shareholder approval of changes 
in fundamental investment policies, to obtain shareholder approval of material  
changes in investment advisory agreements, to select new accountants if the     
employment of the Trust's accountants has been terminated, and to seek any other
shareholder approval required under the 1940 Act. The Trust Board has the power 
to call a meeting of shareholders at any time when it believes it is necessary  
or appropriate. In addition, the Trust Instrument provides that a special       
meeting of shareholders may be called at any time for any purpose by the holders
of at least 10% of the outstanding shares entitled to be voted at such meeting. 

In addition to the foregoing rights, the Trust Instrument provides that holders 
of at least two-thirds of the outstanding shares of the Trust may remove any    
person serving as a Trustee either by declaration in writing or at a meeting    
called for such purpose. Further, the Board is required to call a shareholders  
meeting for the purpose of considering the removal of one or more Trustees if   
requested in writing to do so by the holders of not less than 10% of the        
outstanding shares of the Trust. In addition, the Board is required, if         
requested in writing to do so by ten or more shareholders of record (who have   
been such for at least six months), holding in the aggregate the lesser of      
(i)shares of the Trust having a total net asset value of at least $25,000 or    
(ii) 1% of the outstanding shares of the Trust, to help such holders communicate
with other shareholders of the Trust with a view to obtaining the requisite     
signatures to request a special meeting to consider Trustee removal.            

Principal Shareholders                                                          

As of February 24 1997, the following persons owned (of record or beneficially) 
5% or more of the Fund's shares:                                                

Shareholder                                  Share Balance       Percent of Fund
-----------                                  -------------       ---------------

Boat & Co                                     1,117,877.976           10.78%    
PO Box 14737                                                                    
St Louis, MO 63718                                                              

Union College Pooled Endowment Funds            756,135.770            7.29%    
P.O. Box 3199, Church Street Station                                            
New York, NY 10008                                                              

MAC & CO                                        962,339.663            9.28%    
Mellon Bank, N.A.                                                               
MPNF 5044422                                                                    

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P.O. Box 320                                                                    
Pittsburgh, PA 15230-3198                                                       

MAC & CO                                        796,894.162            7.68%    
Mellon Bank, N.A.                                                               
IWHF5042882                                                                     
P.O. Box 320                                                                    
Pittsburgh, PA 15230-3198                                                       

Custody of Fund Assets                                                          

The Chase Manhattan Bank, N.A., through its Global Custody Division located in  
London, England, acts as custodian of the Fund's assets, but plays no role in   
making decisions as to the purchase or sale of portfolio securities for the     
Fund. Pursuant to rules adopted under the 1940 Act, the Fund may maintain its   
foreign securities and cash in the custody of certain eligible foreign banks and
securities depositories. Selection of these foreign custodial institutions is   
made by the Trust Board following a consideration of a number of factors,       
including (but not limited to) the reliability and financial stability of the   
institution; the ability of the institution to perform capably custodial        
services for the Fund; the reputation of the institution in its national market;
the political and economic stability of the country in which the institution is 
located; and further risks of potential nationalization or expropriation of Fund
assets.                                                                         

Transfer Agent and Dividend Disbursing Agent                                    

Forum Financial Corp., Portland, Maine, serves as the Fund's Transfer and       
Dividend Disbursing Agent.                                                      

Performance Information                                                         

The Fund may, from time to time, include quotations of its average annual total 
return in advertisement or reports to shareholders or prospective investors.    

Quotations of average annual total return will be expressed in terms of the     
average annual compounded rate of return of a hypothetical investment in the    
Fund over periods of 1, 5 and 10 years, calculated pursuant to the following    
formula:                                                                        

 P(1+T)n=ERV

(where P = a hypothetical initial payment of $1,000, T = the average annual     
total return, n= the number of years, and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total     
return figures will reflect the deduction of Fund expenses (net of certain      
reimbursed expenses) on an annual basis, and will assume that all dividends and 
distributions are reinvested when paid.                                         

For the one year, five year and ten year periods ended October 31, 1996, the    
average annual total return of the Fund was 2.08%, 8.56% and 12.51%,            
respectively.                                                                   

Quotations of total return will reflect only the performance of a hypothetical  
investment in the Fund during the particular time period shown. Total return for
the Fund will vary based on changes in market conditions and the level of the   
Fund's expenses, and no reported performance which may be expected in the       
future.                                                                         

In connection with communicating total return to current or prospective         
investors, the Fund also may compare these figures to the performance of other  
mutual funds tracked by mutual fund rating services or to other unmanaged       
indexes which may assume reinvestment of dividends but generally do not reflect 
deductions for administrative and management costs.                             

Investors who purchase and redeem shares of the Fund through a customer account 
maintained at a Service Organization may be charged one or more of the following
types of fees as agreed upon by the Services Organization and the investor, with
respect to the customer services provided by the Service Organization: account  
fees (a fixed amount per month or per year); transaction fees (a fixed amount   
per transaction processed); compensating balance requirements (a minimum dollar 
amount a customer must maintain in order to obtain the services offered); or    
account maintenance fees (a periodic charge                                     

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based upon a percentage of the assets in the account or of the dividends paid on
these assets). Such fees will have the effect of reducing the average annual    
total return of the Fund for those investors.                                   

Independent Accountants                                                         

Coopers & Lybrand L.L.P. serves as independent accountants for the Fund. Coopers
& Lybrand L.L.P. provides audit services and consultation in connection with    
review of U.S. Securities and Exchange Commission filings. Their address is One 
Post Office Square, Boston, Massachusetts 02109.                                

Counsel                                                                         

Jacobs Persinger & Parker, 77 Water Street, New York, New York 10005, counsel to
the Fund, passes upon certain legal matters in connection with the shares       
offered by the Fund.                                                            

Registration Statement                                                          

This SAI and the Prospectus do not contain all the information included in the  
Fund's registration statement filed with the Securities and Exchange Commission 
under the Securities Act of 1933 with respect to the securities offered hereby, 
certain portions of which have been omitted pursuant to the rules and           
regulations of the Securities and Exchange Commission. The registration         
statement, including the exhibits filed therewith, may be examined at the office
of the Securities and Exchange Commission in Washington, D.C.                   

Statements contained herein and in the Prospectus as to the contents of any     
contract or other documents referred to are not necessarily complete, and, in   
each instance, reference is made to the copy of such contract or other documents
filed as an exhibit to the registration statement, each such statement being    
qualified in all respects by such reference.                                    

FINANCIAL STATEMENTS                                                            

The audited Statement of Assets and Liabilities, Statement of Operations,       
Statements of Changes in Net Assets, Statement of Investments, notes thereto,   
and Financial Highlights of the Fund for the fiscal year ended October 31, 1996 
and the Report of Independent Accountants thereon (included in the Annual Report
to shareholders), which are delivered along with this SAI, are incorporated     
herein by reference.                                                            

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SCHRODER EMERGING MARKETS FUND
 INSTITUTIONAL PORTFOLIO

================================================================================

 Statement of Additional Information
 March 1, 1997

--------------------------------------------------------------------------------

 [GRAPHIC OMITTED]

Investment Advisor                                                              

================================================================================

Schroder Capital Management International Inc. ("SCMI") 

Administrator and Distributor                                                   
Schroder Fund Advisors, Inc. ("Schroder Advisors")                              

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company ("Forum")              

Transfer Agent and Dividend Disbursing Agent                                    
Forum Financial Corp. ("FFC")                                                   

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General Information:                (207) 879-8903                              
Account Information:                (800) 344-8332                              
Fax:                                (207) 879-6206                              

Investor Shares of Schroder Emerging Market Fund Institutional Portfolio (the   
"Fund") are offered for sale at net asset value with no sales charge as an      
investment vehicle for individuals, institutions, corporations and fiduciaries. 
Advisor Shares of the Fund are offered to individual investors, in most cases   
through Service Organizations (as defined herein). Advisor Shares incur more    
expenses than Investor Shares.                                                  

This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when preceded or accompanied by the current         
Prospectus for the Fund dated March 1, 1997 (the "Prospectus"). This SAI        
contains additional and more detailed information than that set forth in the    
Prospectus and should be read in conjunction with the Prospectus and retained   
for future reference. You may obtain an additional copy of the Prospectus       
without charge by writing to the Fund at Two Portland Square, Portland, Maine   
04101 or calling the numbers printed above.                                     

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TABLE OF CONTENTS                                                       PAGE  

INTRODUCTION........................................................  
INVESTMENT POLICIES.................................................  
Convertible Securities..............................................  
Debt-to-Equity Conversions..........................................  
U.S. Government Securities..........................................  
Bank Obligations....................................................  
Short-Term Debt Securities..........................................  
Repurchase Agreements...............................................  
Illiquid and Restricted Securities..................................  
Loans of Portfolio Securities.......................................  
Forward Foreign Currency                                              
Exchange Contracts................................................
Options and Hedging.................................................  
Warrants and Stock Rights...........................................  

INVESTMENT RESTRICTIONS.............................................  

MANAGEMENT..........................................................  
Officers and Trustees...............................................  
Investment Adviser..................................................  
Administrative Services.............................................  
Distribution of Fund Shares.........................................  
Service Organizations...............................................  
Portfolio Accounting................................................  
Fees and Expenses...................................................  

PORTFOLIO TRANSACTIONS..............................................  
Investment Decisions................................................  
Brokerage and Research Services.....................................  

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ADDITIONAL PURCHASE AND                                               
REDEMPTION INFORMATION............................................
Determination of Net Asset Value                                      
Per Share.........................................................
Redemption in Kind..................................................  

TAXATION............................................................  

OTHER INFORMATION...................................................  
Organization........................................................  
Capitalization and Voting...........................................  
Principal Shareholders..............................................  
Custodian...........................................................  
Transfer Agent and Dividend Disbursing Agent........................  
Performance Information.............................................  
Legal Counsel.......................................................  
Independent Accountant..............................................  
Registration Statements.............................................  
Financial Statements................................................  

APPENDIX - Ratings of                                                 
Corporate Debt Instruments                                            
and Countries Excluded from                                           
Emerging Markets Category...........................................  

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INTRODUCTION                                                                    

Schroder Emerging Markets Fund Institutional Portfolio (the "Fund") is a        
non-diversified, separately-managed portfolio of Schroder Capital Funds         
(Delaware) (the "Trust"), an open-end management investment company currently   
consisting of eight separate series, each of which has different investment     
objectives and policies.                                                        

The Fund's investment objective is to achieve long-term capital appreciation    
through direct or indirect investment in equity and debt securities of issuers  
domiciled or doing business in emerging market countries in regions such as     
Southeast Asia, Latin America, and Eastern and Southern Europe. There is no     
assurance that the Fund will achieve this objective. Furthermore, investing in  
securities of emerging market issuers involves special risks in addition to     
those associated with investments in securities of U.S. issuers. The Fund       
currently seeks to achieve its investment objective by holding, as its only     
investment securities, the securities of Schroder Emerging Markets Fund         
Institutional Portfolio (the "Portfolio"), a separate series of Schroder Capital
Funds ("Schroder Core").                                                        

INVESTMENT POLICIES                                                             

The Fund's investment objective and policies authorize it to invest in certain  
types of securities and to engage in certain investment techniques as identified
in "Investment Objective" and "Investment Policies" in the Prospectus. The      
following supplements the discussion found in those sections by providing       
additional information or elaborating upon the discussion there. The Fund       
currently seeks to achieve its investment objective by investing all of its     
investable assets in the Portfolio. Since the Fund has the same investment      
objective and policies as the Portfolio and currently invests all of its assets 
in the Portfolio, investment policies are discussed with respect to the         
Portfolio only.                                                                 

Convertible Securities                                                          

The Portfolio may invest in convertible preferred stocks and convertible debt   
securities. A convertible security is a bond, debenture, note, preferred stock  
or other security that may be converted into or exchanged for a prescribed      
amount of common stock of the same or a different issuer within a particular    
period of time at a specified price or formula. Convertible securities rank     
senior to common stocks in a corporation's capital structure and, therefore,    
carry less risk than the corporation's common stock. The value of a convertible 
security is a function of its "investment value" (its value as if it did not    
have a conversion privilege), and its "conversion value" (the security's worth  
if it were to be exchanged for the underlying security, at market value,        
pursuant to its conversion privilege).                                          

Debt-to-Equity Conversions                                                      

The Portfolio may invest up to 5% of its net assets in debt-to-equity           
conversions. Debt-to-equity conversion programs are sponsored in varying degrees
by certain emerging market countries,                                           

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particularly in Latin America, and permit investors to use external debt of a   
country to make equity investments in local companies. Many conversion programs 
relate primarily to investments in transportation, communication, utilities and 
similar infrastructure-related areas. The terms of the programs vary from       
country to country, but include significant restrictions on the application of  
proceeds received in the conversion and on the repatriation of investment       
profits and capital. When inviting conversion applications by holders of        
eligible debt, a government usually specifies the minimum discount from par     
value that it will accept for conversion. SCMI Adviser believes that            
debt-to-equity conversion programs may offer investors opportunities to invest  
in otherwise restricted equity securities that have a potential for significant 
capital appreciation and intends to invest assets of the Portfolio to a limited 
extent in such programs under appropriate circumstances. There can be no        
assurance that debt-to-equity conversion programs will continue or be successful
or that the Portfolio will be able to convert all or any of its emerging market 
debt portfolio into equity investments.                                         

U.S. Government Securities                                                      

The Portfolio may invest in obligations issued or guaranteed by the U.S.        
government (or its agencies or instrumentalities) which have remaining          
maturities not exceeding one year. Agencies and instrumentalities that have been
established or sponsored by the U.S. Government and issue or guarantee debt     
securities include the Bank for Cooperatives, the Export-Import Bank, the       
Federal Farm Credit System, the Federal Home Loan Banks, the Federal Home Loan  
Mortgage Corporation, the Federal Intermediate Credit Banks, the Federal Land   
Banks, the Federal National Mortgage Association, the Government National       
Mortgage Association and the Student Loan Marketing Association. Except for     
obligations issued by the U.S. Treasury and the Government National Mortgage    
Association, none of the obligations of the other agencies or instrumentalities 
referred to above are backed by the full faith and credit of the U.S.           
Government.                                                                     

Bank Obligations                                                                

The Portfolio may invest in obligations of U.S. banks (including certificates of
deposit and bankers' acceptances) whose total assets at the time of purchase    
exceed $1 billion. Such banks must be members of the Federal Deposit Insurance  
Corporation.                                                                    

A certificate of deposit is an interest-bearing negotiable certificate issued by
a bank against funds deposited in the bank. A bankers' acceptance is a          
short-term draft drawn on a commercial bank by a borrower, usually in connection
with an international commercial transaction. Although the borrower is liable   
for payment of the draft, the bank unconditionally guarantees to pay the draft  
at its face value on the maturity date.                                         

Short-Term Debt Securities                                                      

The Portfolio may invest in commercial paper -- short-term unsecured promissory 
notes issued in bearer form by bank holding companies, corporations and finance 
companies. The commercial paper purchased by the Portfolio for temporary        
defensive purposes consists of direct obligations of domestic issuers that at   
the time of investment are rated "P-1" by Moody's Investors Service, Inc.       
("Moody's") or "A-1" by Standard & Poor's ("S&P"), or securities which, if not  

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rated, are issued by companies having an outstanding debt issue currently rated 
Aaa or Aa by Moody's or AAA or AA by S&P. The rating "P-1" is the highest       
commercial paper rating assigned by Moody's and the rating "A-1" is the highest 
commercial paper rating assigned by S&P.                                        

Repurchase Agreements                                                           

The Portfolio may invest in securities subject to repurchase agreements that    
mature in seven days or less with U.S. banks or broker-dealers. In a typical    
repurchase agreement the seller of a security commits itself at the time of the 
sale to repurchase that security from the buyer at a mutually agreed-upon time  
and price. The repurchase price exceeds the sale price, reflecting an           
agreed-upon interest rate effective for the period the buyer owns the security  
subject to repurchase. The agreed-upon rate is unrelated to the interest rate on
that security. SCMI will monitor the value of the underlying security at the    
time the transaction is entered into and at all times during the term of the    
repurchase agreement to insure that the value of the security always equals or  
exceeds the repurchase price. If a seller defaults under a repurchase agreement,
the Portfolio may have difficulty exercising its rights to the underlying       
securities and may incur costs and experience time delays in connection with the
disposition of such securities. To evaluate potential risks, SCMI reviews the   
credit-worthiness of banks and dealers with which the Portfolio enters into     
repurchase agreements.                                                          

Illiquid and Restricted Securities                                              

"Illiquid and Restricted Securities" under "Investment Policies" in the         
Prospectus sets forth the circumstances in which the Portfolio may invest in    
"restricted securities." In connection with the Portfolio's original purchase of
restricted securities, it may negotiate rights with the issuer to have such     
securities registered for sale at a later time. Further, the registration       
expenses of illiquid restricted securities may also be negotiated by the        
Portfolio with the issuer at the time such securities are purchased by the      
Portfolio. When registration is required, however, a considerable period may    
elapse between the decision to sell the securities and the time the Portfolio   
would be permitted to sell such securities. A similar delay might be experienced
in attempting to sell such securities pursuant to an exemption from             
registration. Thus, the Portfolio may not be able to obtain as favorable a price
as that prevailing at the time of the decision to sell.                         

Loans of Portfolio Securities                                                   

The Portfolio may lend its portfolio securities subject to the restrictions     
stated in the Prospectus. Under applicable regulatory requirements (which are   
subject to change), the loan collateral must (a) on each business day, at least 
equal the market value of the loaned securities and (b) consist of cash, bank   
letters of credit, U.S. Government securities, or other cash equivalents in     
which the Portfolio is permitted to invest. To be acceptable as collateral,     
letters of credit must obligate a bank to pay amounts demanded by the Portfolio 
if the demand meets the terms of the letter. Such terms and the issuing bank    
must be satisfactory to the Portfolio. When lending portfolio securities, the   
Portfolio receives from the borrower an amount equal to the interest paid or the
dividends declared on the loaned securities during the term of the loan plus the
interest on the collateral securities (less any finders' or administrative fees 
the Portfolio pays in arranging the loan). The Portfolio may share the interest 
it receives on the collateral securities with the borrower if it realizes at    
least a minimum amount of interest required by the lending                      

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guidelines established by the Trust's Board of Trustees (the "Trust Board"). The
Portfolio will not lend its portfolio securities to any officer, director,      
employee or affiliate of the Portfolio or SCMI. The terms of the Portfolio's    
loans must meet certain tests under the Internal Revenue Code and permit the    
Portfolio to reacquire loaned securities on five business days' notice or in    
time to vote on any important matter.                                           

Portfolio securities purchased with cash collateral are subject to possible     
depreciation. Loans of securities by the Portfolio will be subject to           
termination at the Portfolio's or the borrower's option. The Portfolio may pay  
reasonable negotiated fees in connection with loaned securities, so long as such
fees are set forth in a written contract and approved by Schroder Core's Board  
of Trustees.                                                                    

Forward Foreign Currency Exchange Contracts                                     

To hedge against adverse price movements in the securities held in its portfolio
and the currencies in which they are denominated (as well as in the securities  
it might wish to purchase and their denominated currencies) the Portfolio may   
engage in transactions in forward foreign currency contracts.                   

A forward foreign currency exchange contract ("forward contract") is an         
obligation to purchase or sell a currency at a future date (which may be any    
fixed number of days from the date of the contract agreed upon by the parties)  
at a price set at the time of the contract. The Portfolio may enter into forward
contracts as a hedge against fluctuations in future foreign exchange rates.     

Currently, only a limited market, if any, exists for hedging transactions       
relating to currencies in many emerging market countries or to securities of    
issuers domiciled or principally engaged in business in emerging market         
countries. This may limit the Portfolio's ability to effectively hedge its      
investments in those emerging markets. Hedging against a decline in the value of
a currency does not eliminate fluctuations in the prices of portfolio securities
or prevent losses if the prices of such securities decline. Such transactions   
also limit the opportunity for gain if the value of the hedged currencies should
rise. In addition, it may not be possible for the Portfolio to hedge against a  
devaluation that is so generally anticipated that the Portfolio is not able to  
contract to sell the currency at a price above the devaluation level it         
anticipates.                                                                    

The Portfolio will enter into forward contracts under certain instances. When   
the Portfolio enters into a contract for the purchase or sale of a security     
denominated in a foreign currency, it may, for example, wish to secure the price
of the security in U.S. dollars or some other foreign currency which the        
Portfolio is temporarily holding in its portfolio. By entering into a forward   
contract for the purchase or sale (for a fixed amount of dollars or other       
currency) of the amount of foreign currency involved in the underlying security 
transactions, the Portfolio will be able to protect itself against possible loss
(resulting from adverse changes in the relationship between the U.S. dollar or  
other currency being used for the security purchase and the foreign currency in 
which the security is denominated) during the period between the date on which  
the security is purchased or sold and the date on which payment is made or      
received.                                                                       

In addition, when the Portfolio anticipates purchasing securities at some future
date, and wishes to secure the current exchange rate of the currency in which   
those securities are denominated against the U.S. dollar or some other foreign  
currency, it may enter into a forward contract to purchase an amount            

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of currency equal to part or all of the value of the anticipated purchase, for a
fixed amount of U.S. dollars or other currency.                                 

In all of the above instances, if the currency in which the Portfolio's         
portfolio securities (or anticipated portfolio securities) are denominated rises
in value with respect to the currency which is being purchased, then the        
Portfolio will have realized fewer gains than if the Portfolio had not entered  
into the forward contracts. Furthermore, the precise matching of the forward    
contract amounts and the value of the securities involved will not generally be 
possible, since the future value of such securities in foreign currencies will  
change as a consequence of market movements in the value of those securities    
between the date the forward contract is entered into and the date it matures.  

To the extent that the Portfolio enters into forward foreign currency contracts 
to hedge against a decline in the value of portfolio holdings denominated in a  
particular foreign currency resulting from currency fluctuations, there is a    
risk that the Portfolio may nevertheless realize a gain or loss as a result of  
currency fluctuations after such portfolio holdings are sold should the         
Portfolio be unable to enter into an "offsetting" forward foreign currency      
contract with the same party or another party. The Portfolio may be limited in  
its ability to enter into hedging transactions involving forward contracts by   
the Internal Revenue Code requirements relating to qualifications as a regulated
investment company (see "Taxation").                                            

The Portfolio is not required to enter into such transactions with regard to its
foreign currency-denominated securities and will not do so unless deemed        
appropriate by the Adviser. Generally, the Portfolio will not enter into a      
forward contract with a term of greater than one year.                          

Options and Hedging                                                             

As discussed in the Prospectus, the Portfolio may write covered call options    
against securities held in its portfolio and covered put options on eligible    
portfolio securities and may purchase options of the same series to effect      
closing transactions; and may hedge against potential changes in the market     
value of its investments (or anticipated investments) by purchasing put and call
options on portfolio (or eligible portfolio) securities (and the currencies in  
which they are denominated) and engaging in transactions involving futures      
contracts and options on such contracts.                                        

Call and put options on U.S. Treasury notes, bonds and bills and on various     
foreign currencies are listed on several U.S. and foreign securities exchanges  
and are written in over-the-counter transactions ("OTC Options"). Listed options
are issued or guaranteed by the exchange on which they trade or by a clearing   
corporation such as the Options Clearing Corporation ("OCC"). Ownership of a    
listed call option gives the Portfolio the right to buy from the OCC (in the    
U.S.) or other clearing corporation or exchange, the underlying security or     
currency covered by the option at the stated exercise price (the price per unit 
of the underlying security or currency) by filing an exercise notice prior to   
the expiration date of the option. The writer (seller) of the option would then 
have the obligation to sell, to the OCC (in the U.S.) or other clearing         
corporation or exchange, the underlying security or currency at that exercise   
price prior to the expiration date of the option, regardless of its then current
market price. Ownership of a listed put option would give the Portfolio the     
right to sell the underlying security or currency to the OCC (in the U.S.) or   
other clearing corporation or exchange at the stated exercise price. Upon notice
of exercise of the put option, the writer of the option would have the          
obligation to                                                                   

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purchase the underlying security or currency from the OCC (in the               
U.S.) or other clearing corporation or exchange at the exercise price.          

The OCC or other clearing corporation or exchange that issues listed options    
ensures that all transactions in such options are properly executed. OTC options
are purchased from or sold (written) to dealers or financial institutions which 
have entered into direct agreements with the Portfolio. With OTC options,       
variables such as expiration date, exercise price and premium will be agreed    
between the Portfolio and the transacting dealer. If the transacting dealer     
fails to make or take delivery of the securities or amount of foreign currency  
underlying an option it has written, the Portfolio would lose the premium paid  
for the option as well as any anticipated benefit of the transaction. The       
Portfolio will engage in OTC option transactions only with member banks of the  
Federal Reserve System or primary dealers in U.S. Government securities or with 
affiliates of such banks or dealers which have capital of at least $50 million  
or whose obligations are guaranteed by an entity having capital of at least $50 
million.                                                                        

Options on Foreign Currencies. The Portfolio may purchase and write options on  
foreign currencies for purposes similar to those involved with investing in     
forward foreign currency exchange contracts. For example, in order to protect   
against declines in the dollar value of portfolio securities which are          
denominated in a foreign currency, the Portfolio may purchase put options on an 
amount of such foreign currency equivalent to the current value of the portfolio
securities involved. As a result, the Portfolio would be able to sell the       
foreign currency for a fixed amount of U.S. dollars, thereby securing the dollar
value of the portfolio securities (less the amount of the premiums paid for the 
options). Conversely, the Portfolio may purchase call options on foreign        
currencies in which securities it anticipates purchasing are denominated to     
secure a set U.S. dollar price for such securities and protect against a decline
in the value of the U.S. dollar against such foreign currency. The Portfolio may
also purchase call and put options to close out written option positions.       

The Portfolio may also write covered call options on foreign currency to protect
against potential declines in its portfolio securities which are denominated in 
foreign currencies. If the U.S. dollar value of the portfolio securities falls  
as a result of a decline in the exchange rate between the foreign currency in   
which it is denominated and the U.S. dollar, then a loss to the Portfolio       
occasioned by such value decline would be ameliorated by receipt of the premium 
on the option sold. At the same time, however, the Portfolio gives up the       
benefit of any rise in value of the relevant portfolio securities above the     
exercise price of the option and, in fact, only receives a benefit from the     
writing of the option to the extent that the value of the portfolio securities  
falls below the price of the premium received. The Portfolio may also write     
options to close out long call option positions. A covered put option on a      
foreign currency would be written by the Portfolio for the same reason it would 
purchase a call option, namely, to hedge against an increase in the U.S. dollar 
value of a foreign security which the Portfolio anticipates purchasing. Here,   
the receipt of the premium would offset, to the extent of the size of the       
premium, any increased cost to the Portfolio resulting from an increase in the  
U.S. dollar value of the foreign security. However, the Portfolio could not     
benefit from any decline in the cost of the foreign security which is greater   
than the price of the premium received. The Portfolio may also write options to 
close out long put option positions.                                            

Markets in foreign currency options are relatively new and the Portfolio's      
ability to establish and close out positions on such options is subject to the  
maintenance of a liquid secondary market. Although the Portfolio will not       
purchase or write such options unless and until, in the opinion of the          

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SCMI, the market for them has developed sufficiently to ensure that their risks 
are not greater than the risks in connection with the underlying currency, there
can be no assurance that a liquid secondary market will exist for a particular  
option at any specific time. In addition, options on foreign currencies are     
affected by all of those factors that influence foreign exchange rates and      
investments generally.                                                          

The value of a foreign currency option depends upon the value of the underlying 
currency relative to the U.S. dollar: as a result, the price of the option      
position may vary with changes in the value of either or both currencies and may
have no relationship to the investment merits of a foreign security, including  
foreign securities held in a "hedged" investment portfolio. Because foreign     
currency transactions occurring in the interbank market involve substantially   
larger amounts than those that may be involved in the use of foreign currency   
options, investors may be disadvantaged by having to deal in an odd lot market  
(generally consisting of transactions of less than $1 million) for the          
underlying foreign currencies at prices that are less favorable than for round  
lots.                                                                           

There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirement that quotations available through dealers or other
market sources be firm or revised on a timely basis. Quotation information      
available is generally representative of very large transactions in the         
interbank market and thus may not reflect relatively smaller transactions (i.e.,
less than $1 million) where rates may be less favorable. The interbank market in
foreign currencies is a global, around-the-clock market. To the extent that the 
U.S. options markets are closed while the markets for the underlying currencies 
remain open, significant price and rate movements may take place in the         
underlying markets that are not reflected in the options market.                

Covered Call Writing. The Portfolio is permitted to write covered call options  
on portfolio securities and on the U.S. dollar and foreign currencies in which  
they are denominated, without limit. Generally, a call option is "covered" if   
the Portfolio owns (or has the right to acquire without additional cash         
consideration (or for additional cash consideration held for the Portfolio by   
its Custodian in a segregated account) the underlying security (currency)       
subject to the option. In the case of call options on U.S. Treasury Bills,      
however, the Portfolio might own U.S. Treasury Bills of a different series from 
those underlying the call option, but with a principal amount and value         
corresponding to the exercise price and a maturity date no later than that of   
the security (currency) deliverable under the call option. A call option is also
covered if the Portfolio holds a call on the same security as the underlying    
security (currency) of the written option, where the exercise price of the call 
used for coverage is equal to or less than the exercise price of the call or    
greater than the exercise price of the call written if the mark to market       
difference is maintained by the Portfolio in cash, U.S. Government securities or
other high grade debt obligations which the Portfolio holds in a segregated     
account maintained with its custodian.                                          

The Portfolio will receive a premium from the purchaser in return for a call it 
has written. Receipt of such premiums may enable the Portfolio to earn a higher 
level of current income than it would earn from holding the underlying          
securities (currencies) alone. Moreover, the premium received will offset a     
portion of the potential loss incurred by the Portfolio if the securities       
(currencies) underlying the option are ultimately sold (exchanged) by the       
Portfolio at a loss. Furthermore, a premium received on a call written on a     
foreign currency will ameliorate any potential loss of value on the portfolio   
security due to a decline in the value of the currency. However, during the     
option period, the covered call writer has, in return for the premium, given up 
the                                                                             

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opportunity for capital appreciation above the exercise price should the market 
price of the underlying security (or the exchange rate of the currency in which 
it is denominated) increase, but has retained the risk of loss should the price 
of the underlying security (or the exchange rate of the currency in which it is 
denominated) decline. The premium received will fluctuate with varying economic 
market conditions. If the market value of the portfolio securities (or the      
currencies in which they are denominated) upon which call options have been     
written increases, the Portfolio may receive a lower total return from the      
portion of its portfolio upon which calls have been written than it would have  
had such calls not been written.                                                

With respect to listed options and certain OTC options, during the option period
the Portfolio may be required, at any time, to deliver the underlying security  
(currency) against payment of the exercise price on any calls it has written    
(exercise of certain listed and OTC options may be limited to specific          
expiration dates). This obligation is terminated upon the expiration of the     
option period or at such earlier time when the writer effects a closing purchase
transaction. A closing purchase transaction is accomplished by purchasing an    
option of the same series as the option previously written. However, once the   
Portfolio has been assigned an exercise notice, the Portfolio will be unable to 
effect a closing purchase transaction.                                          

Closing purchase transactions are ordinarily effected to realize a profit on an 
outstanding call option, to prevent an underlying security (currency) from being
called, to permit the sale of an underlying security (or the exchange of the    
underlying currency) or to enable the Portfolio to write another call option on 
the underlying security (currency) with either a different exercise price or    
expiration date or both. The Portfolio may realize a net gain or loss from a    
closing purchase transaction depending upon whether the amount of the premium   
received on the call option is more or less than the cost of effecting the      
closing purchase transaction. Any loss incurred in a closing purchase           
transaction may be wholly or partially offset by unrealized appreciation in the 
market value of the underlying security (currency). Conversely, a gain resulting
from a closing purchase transaction could be offset in whole or in part or      
exceeded by a decline in the market value of the underlying security (currency).

If a call option expires unexercised, the Portfolio realizes a gain in the      
amount of the premium on the option less the commission paid. Such a gain,      
however, may be offset by depreciation in the market value of the underlying    
security (currency) during the option period. If a call option is exercised, the
Portfolio realizes a gain or loss from the sale of the underlying security      
(currency) equal to the difference between the purchase price of the underlying 
security (currency) and the proceeds of the sale of the security (currency) plus
the premium received on the option less the commission paid.                    

Options written by the Portfolio will normally have expiration dates of up to   
eighteen months from the date written. The exercised price of a call option may 
be below, equal to or above the current market value of the underlying security 
at the time the option is written.                                              

Covered Put Writing. As a writer of a covered put option, the Portfolio would   
incur an obligation to buy the security underlying the option from the purchaser
of the put, at the option's exercise price at any time during the option period,
at the purchaser's election (certain listed and OTC put options written by the  
Portfolio will be exercisable by the purchaser only on a specific date). A put  
is "covered" if at all times the Portfolio maintains with its custodian (in a   
segregated account) cash, U.S. Government securities or other high grade        
obligations in an amount equal to at least the exercise price of the option.    
Similarly, a short put                                                          

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position could be covered by the Portfolio by its purchase of a put option on   
the same security (currency) as the underlying security of the written option,  
where the exercise price of the purchased option is equal to or more than the   
exercise price of the put written or less than the exercise price of the put    
written if the marked to market difference is maintained by the Portfolio in    
cash, U.S. Government securities or other high grade debt obligations which the 
Portfolio holds in a segregated account maintained at its custodian. In writing 
puts, the Portfolio assumes the risk of loss should the market value of the     
underlying security (currency) decline below the exercise price of the option   
(any loss being decreased by the receipt of the premium on the option written). 
In the case of listed options, during the option period the Portfolio may be    
required, at any time, to make payment of the exercise price against delivery of
the underlying security (currency). The operation of and limitations on covered 
put options in other respects are substantially identical to those of call      
options.                                                                        

The Portfolio will write put options for three purposes: (1) to receive the     
income derived from the premiums paid by purchasers; (2) when the investment    
adviser wishes to purchase the security (or a security denominated in the       
currency underlying the option) underlying the option at a price lower than its 
current market price (in which case it will write the covered put at an exercise
price reflecting the lower purchase price sought); and (3) to close out a long  
put option position. The potential gain on a covered put option is limited to   
the premium received on the option (less the commissions paid on the            
transaction) while the potential loss equals the differences between the        
exercise price of the option and the current market price of the underlying     
securities (currencies) when the put is exercised, offset by the premium        
received (less the commissions paid on the transaction).                        

Purchasing Call and Put Options. The Portfolio may purchase listed and OTC call 
and put options in amounts equaling up to 5% of its total assets. The Portfolio 
may purchase a call option in order to close out a covered call position (see   
"Covered Call Writing" above), to protect against an increase in price of a     
security it anticipates purchasing or, in the case of a call option on foreign  
currency, to hedge against an adverse exchange rate move of the currency in     
which the security it anticipates purchasing is denominated vis-++-vis the      
currency in which the exercise price is denominated. The purchase of the call   
option to effect a closing transaction on a call written over-the-counter may be
a listed or an OTC option. In either case, the call purchased is likely to be on
the same securities (currencies) and have the same terms as the written option. 
If purchased over-the-counter, the option would generally be acquired from the  
dealer or financial institution which purchased the call written by the         
Portfolio.                                                                      

The Portfolio may purchase put options on securities (currencies) which it holds
in its portfolio to protect itself against a decline in the value of the        
security and to close out written put option positions. If the value of the     
underlying security (currency) were to fall below the exercise price of the put 
purchased in an amount greater then the premium paid for the option, the        
Portfolio would incur no additional loss. In addition, the Portfolio may sell a 
put option it has previously purchased prior to the sale of the securities      
(currencies) underlying such option. Such a sale would result in a net gain or  
loss depending upon whether the amount received on the sale is more or less than
the premium and other transaction costs paid on the put option that is sold. Any
such gain or loss could be offset in whole or in part by a change in the market 
value of the underlying security (currency). If a put option purchased by the   
Portfolio expired without being sold or exercised, the premium would be lost.   

Risks of Options Transactions. During the option period, the covered call writer
has, in return for the premium on the option, given up the opportunity for      
capital appreciation above the exercise price if the market price of the        
underlying security (or the value of its denominated currency)                  

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increases, but has retained the risk of loss if the price of the underlying     
security (or the value of its denominated currency) declines. The writer has no 
control over the time when it may be required to fulfill its obligation as a    
writer of the option. Once an option writer has received an exercise notice, it 
cannot effect a closing purchase transaction in order to terminate its          
obligation under the option and must deliver or receive the underlying          
securities at the exercise price.                                               

Prior to exercise or expiration, an option position can only be terminated by   
entering into a closing purchase or sale transaction. If a covered call option  
writer is unable to effect a closing purchase transaction or to purchase an     
offsetting OTC option, it cannot sell the underlying security until the option  
expires or the option is exercised. Accordingly, a covered call option writer   
may not be able to sell an underlying security at a time when it might otherwise
be advantageous to do so. A covered put option writer who is unable to effect a 
closing purchase transaction or to purchase an offsetting OTC option would      
continue to bear the risk of decline in the market price of the underlying      
security until the option expires or is exercised. In addition, a covered put   
writer would be unable to utilize the amount held in cash or U.S. Government or 
other high grade short-term obligations as security for the put option for other
investment purposes until the exercise or expiration of the option.             

The Portfolio's ability to close out its position as a writer of an option is   
dependent upon the existence of a liquid secondary market on option exchanges.  
There is no assurance that such a market will exist, particularly in the case of
OTC options, since such options will generally only be closed out by entering   
into a closing purchase transaction with the purchasing dealer. However, the    
Portfolio may be able to purchase an offsetting option that does not close out  
its position as a writer but constitutes an asset of equal value to the         
obligation under the option written. If the Portfolio is not able to either     
enter into a closing purchase transaction or purchase an offsetting position, it
will be required to maintain the securities subject to the call, or the         
collateral underlying the put, even though it might not be advantageous to do   
so, until a closing transaction can be entered into (or the option is exercised 
or expires).                                                                    

Among the possible reasons for the absence of a liquid secondary market on an   
exchange are: (i) insufficient trading interest in certain options; (ii)        
restrictions on transactions imposed by an exchange; (iii) trading halts,       
suspensions or other restrictions imposed with respect to particular classes or 
series of options or underlying securities; (iv) interruption of the normal     
operations on an exchange; (v) inadequacy of the facilities of an exchange or   
the OCC to handle current trading volume; or (vi) a decision by one or more     
exchanges to discontinue the trading of options (or a particular class or series
of options), in which event the secondary market on that exchange (or in that   
class or series of options) would cease to exist.                               

In the event of the bankruptcy of a broker through which the Portfolio engages  
in transactions in options, the Portfolio could experience delays and/or losses 
in liquidating open positions purchased or sold through the broker and/or incur 
a loss of all or part of its margin deposits with the broker. Similarly, in the 
event of the bankruptcy of the writer of an OTC option purchased by the         
Portfolio, the Portfolio could experience a loss of all or part of the value of 
the option. Transactions will be entered into by the Portfolio only with brokers
or financial institutions deemed creditworthy by SCMI.                          

Exchanges have established limitations governing the maximum number of options  
on the same underlying security or futures contract (whether or not covered)    
that may be written by a single                                                 

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investor, whether acting alone or in concert with others (regardless of whether 
such options are written on the same or different exchanges or are held or      
written on one or more accounts or through one or more brokers). An exchange may
order the liquidation of positions found to be in violation of these limits and 
it may impose other sanctions or restrictions. These position limits may        
restrict the number of listed options which the Portfolio may write.            

The hours of trading for options may not conform to the hours during which the  
underlying securities are traded. If the option markets close before the markets
for the underlying securities, significant price and rate movements can take    
place in the underlying markets that cannot be reflected in the option markets. 

The extent to which the Portfolio may enter into transactions involving options 
may be limited by the Internal Revenue Code's requirements for qualification as 
a regulated investment company and the Portfolio's intention to qualify as such 
(see "Taxation").                                                               

Futures Contracts. The Portfolio may purchase and sell interest rate, currency, 
and index futures contracts ("futures contracts") that are traded on U.S. and   
foreign commodity exchanges, on such underlying securities as U.S. Treasury     
bonds, notes and bills, and/or any foreign government fixed-income security     
("interest rate" futures), on various currencies ("currency futures") and on    
such indices of U.S. and foreign securities as may exist or come into being     
("index futures").                                                              

The Portfolio will purchase or sell interest rate futures contracts for the     
purpose of hedging some or all of the value of its portfolio securities (or     
anticipated portfolio securities) against changes in prevailing interest rates. 
If the investment adviser anticipates that interest rates may rise and,         
concomitantly, the price of certain of its portfolio securities fall, the       
Portfolio may sell an interest rate futures contract. If declining interest     
rates are anticipated, the Portfolio may purchase an interest rate futures      
contract to protect against a potential increase in the price of securities the 
Portfolio intends to purchase. Subsequently, appropriate securities may be      
purchased by the Portfolio in an orderly fashion; as securities are purchased,  
corresponding futures positions would be terminated by offsetting sales of      
contracts.                                                                      

The Portfolio will purchase or sell index futures contracts for the purpose of  
hedging some or all of its portfolio (or anticipated portfolio) securities      
against changes in their prices. If it anticipates that the prices of securities
it holds may fall, the Portfolio may sell an index futures contract. Conversely,
if the Portfolio wishes to hedge against anticipated price rises in those       
securities which it intends to purchase, the Portfolio may purchase an index    
futures contract.                                                               

The Portfolio will purchase or sell currency futures on currencies in which its 
portfolio securities (or anticipated portfolio securities) are denominated for  
the purposes of hedging against anticipated changes in currency exchange rates. 
The Portfolio will enter into currency futures contracts for the same reasons as
set forth above for entering into forward foreign currency exchange contracts;  
namely, to secure the value of a security purchased or sold in a given currency 
vis-a-vis a different currency or to hedge against an adverse currency exchange 
rate movement of a portfolio security's (or anticipated portfolio security's)   
denominated currency vis-++-vis a different currency.                           

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In addition to the above, interest rate, index and currency futures will be     
bought or sold in order to close out short or long positions maintained by the  
Portfolio in corresponding futures contracts.                                   

Although most interest rate futures contracts call for actual delivery or       
acceptance of securities, the contracts usually are closed out before the       
settlement date without making or taking delivery. A futures contract sale is   
closed out by effecting a futures contract purchase for the same aggregate      
amount of the specific type of security (currency) and the same delivery date.  
If the sale price exceeds the offsetting purchase price, the seller would be    
paid the difference and would realize a gain. If the offsetting purchase price  
exceeds the sale price, the seller would pay the difference and would realize a 
loss. Similarly, a futures contract purchase is closed out by effecting a       
futures contract sale for the same aggregate amount of the specific type of     
security (currency) and the same delivery date. If the offsetting sale price    
exceeds the purchase price, the purchaser would realize a gain, whereas if the  
purchase price exceeds the offsetting sale price, the purchaser would realize a 
loss. There is no assurance that the Portfolio will be able to enter into a     
closing transaction.                                                            

Interest Rate Futures Contracts. When the Portfolio enters into an interest rate
futures contract, it is initially required to deposit with the Portfolio's      
custodian (in a segregated account in the name of the broker performing the     
transaction) an "initial margin" of cash or U.S. Government securities or other 
high grade short-term obligations equal to approximately 2% of the contract     
amount. Initial margin requirements are established by the exchanges on which   
futures contracts trade and may change. In addition, brokers may establish      
margin deposit requirements in excess of those required by the exchanges.       

Initial margin in futures transactions is different from margin in securities   
transactions in that initial margin does not involve the borrowing of money by a
brokers' client but is, rather, a good faith deposit on the futures contract    
that will be returned to the Portfolio upon the proper termination of the       
futures contract. The margin deposits made are marked to market daily and the   
Portfolio may be required to make subsequent deposits of cash or U.S. Government
securities (called "variation margin") with the Portfolio's futures contract    
clearing broker, which are reflective of price fluctuations in the futures      
contract.                                                                       

Currency Futures. Generally, foreign currency futures provide for the delivery  
of a specified amount of a given currency, on the exercise date, for a set      
exercise price denominated in U.S. dollars or other currency. Foreign currency  
futures contracts would be entered into for the same reason and under the same  
circumstances as forward foreign currency exchange contracts. SCMI will assess  
such factors as cost spreads, liquidity and transaction costs in determining    
whether to use futures contracts or forward contracts in its foreign currency   
transactions and hedging strategy.                                              

Purchasers and sellers of foreign currency futures contracts are subject to the 
same risks that apply generally to the buying and selling of futures. In        
addition, there are risks associated with foreign currency futures contracts and
their use as a hedging device similar to those associated with options on       
foreign currencies described above. Further, settlement of a foreign currency   
futures contract must occur within the country issuing the underlying currency. 
Thus, the Portfolio must accept or make delivery of the underlying foreign      
currency in accordance with any U.S. or foreign restrictions or regulations     
regarding the maintenance of foreign banking arrangements by U.S. residents and 
may be required to pay any fees, taxes or charges associated with such delivery 
which are assessed in the issuing country.                                      

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Index Futures Contracts. The Portfolio may invest in index futures contracts. An
index futures contract sale creates an obligation by the Portfolio, as seller,  
to deliver cash at a specified future time. An index futures contract purchase  
would create an obligation by the Portfolio, as purchaser, to take delivery of  
cash at a specified future time. Futures contracts on indices do not require the
physical delivery of securities, but provide for a final cash settlement on the 
expiration date that reflects accumulated profits and losses credited or debited
to each party's account.                                                        

The Portfolio is required to maintain margin deposits with brokerage firms      
through which it effects index futures contracts in a manner similar to that    
described above for interest rate futures contracts. In addition, due to current
industry practice, daily variations in gains and losses on open contracts are   
required to be reflected in cash in the form of variation margin payments. The  
Portfolio may be required to make additional margin payments during the term of 
the contract.                                                                   

At any time prior to expiration of the futures contract, the Portfolio may elect
to close the position by taking an opposite position, which will operate to     
terminate the Portfolio's position in the futures contract. A final             
determination of variation margin is then made, additional cash is required to  
be paid by or released to the Portfolio and the Portfolio realizes a loss or    
gain.                                                                           

Options on Futures Contracts. The Portfolio may purchase and write call and put 
options on futures contracts traded on an exchange and may enter into closing   
transactions with respect to such options to terminate an existing position. An 
option on a futures contract gives the purchaser the right (in return for the   
premium paid) to assume a position in a futures contract (a long position if the
option is a call and a short position if the option is a put) at a specified    
exercise price at any time during the term of the option. Upon exercise of the  
option, the delivery of the futures position by the writer of the option to the 
holder of the option is accompanied by delivery of the accumulated balance in   
the writer's futures margin account, which represents the amount by which the   
market price of the futures contract at the time of exercise exceeds, in case of
a call, or is less than, in the case of a put, the exercise price of the option 
on the futures contract.                                                        

The Portfolio will purchase and write options on futures contracts for purposes 
identical to those set forth above for the purchase of a futures contract       
(purchase of a call option or sale of a put option) and the sale of a futures   
contract (purchase of a put option or sale of a call option), or to close out a 
long or short position in futures contracts. If, for example, the investment    
adviser wished to protect against an increase in interest rates and the         
resulting negative impact on the value of a portion of its fixed-income         
portfolio, it might write a call option on an interest rate futures contract,   
the underlying security of which correlates with the portion of the portfolio   
the Adviser seeks to hedge. Any premiums received in the writing of options on  
futures contracts may provide a further hedge against losses resulting from     
price declines in portions of the Portfolio's investment portfolio.             

Options on foreign currency futures contracts may involve certain additional    
risks. Trading options on foreign currency futures contracts is relatively new. 
The ability to establish and close out positions on such options is subject to  
the maintenance of a liquid secondary market. To reduce this risk, the Portfolio
will not purchase or write options on foreign currency futures contracts unless 
and until, in SCMI's opinion, the market for such options has developed         
sufficiently that the risks in connection with them are not greater than the    
risks in connection with transactions in the underlying foreign currency futures
contracts.                                                                      

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Limitations on Futures Contracts and Options on Futures. The Portfolio may not  
enter into futures contracts or purchase related options thereon if, immediately
thereafter, the amount committed to margin plus the amount paid for premiums for
unexpired options on futures contracts exceeds 5% of the value of the           
Portfolio's total assets, after taking into account unrealized gains and        
unrealized losses on such contracts it has entered into, provided, however, that
in the case of an option that is in-the-money (the exercise price of the call   
(put) option is less (more) than the market price of the underlying security) at
the time of purchase, the in-the-money amount may be excluded in calculating the
5%. However, there is no overall limitation on the percentage of the Portfolio's
assets which may be subject to a hedge position. In addition, in accordance with
the regulations of the Commodity Futures Trading Commission ("CFTC") under which
the Portfolio is exempted from registration as a commodity pool operator, the   
Portfolio may only enter into futures contracts and options on futures contracts
transactions for purposes of hedging a part or all of its portfolio. Except as  
described above, there are no other limitations on the use of futures and       
options thereon by the Portfolio.                                               

The writer of an option on a futures contract is required to deposit initial and
variation margin pursuant to requirements similar to those applicable to futures
contracts. Premiums received from the writing of an option on a futures contract
are included in initial margin deposits.                                        

Risks of Transactions in Futures Contracts and Related Options. The Portfolio   
may sell a futures contract to protect against the decline in the value of      
securities (or the currency in which they are denominated) held by the          
Portfolio. However, it is possible that the futures market may advance and the  
value of the Portfolio's securities (or the currency in which they are          
denominated) may decline. If this occurs, the Portfolio will lose money on the  
futures contract and also experience a decline in value of its portfolio        
securities. While this might occur for only a very brief period or to a very    
small degree, over time the value of a diversified portfolio will tend to move  
in the same direction as the futures contracts.                                 

If the Portfolio purchases a futures contract to hedge against the increase in  
value of securities it intends to buy (or the currency in which they are        
denominated), and the value of such securities (currencies) decreases, then the 
Portfolio may determine not to invest in the securities as planned and will     
realize a loss on the futures contract that is not offset by a reduction in the 
price of the securities.                                                        

If the Portfolio has sold a call option on a futures contract, it will cover    
this position by holding (in a segregated account maintained at its Custodian)  
cash, U.S. Government Securities or other high grade debt obligations equal in  
value (when added to any initial or variation margin on deposit) to the market  
value of the securities (currencies) underlying the futures contract or the     
exercise price of the option. Such a position may also be covered by owning the 
securities (currencies) underlying the futures contract, or by holding a call   
option permitting the Portfolio to purchase the same contract at a price no     
higher than the price at which the short position was established.              

In addition, if the Portfolio holds a long position in a futures contract it    
will hold cash, U.S. Government Securities or other high grade debt obligations 
equal to the purchase price of the contract (less the amount of initial or      
variation margin on deposit) in a segregated account maintained for the         
Portfolio by its Custodian. Alternatively, the Portfolio could cover its long   
position by purchasing a put option on the same futures contract with an        
exercise price as high or higher than the price of the contract held by the     
Portfolio.                                                                      

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Exchanges limit the amount by which the price of a futures contract may move on 
any day. If the price moves equal the daily limit on successive days, then it   
may prove impossible to liquidate a futures position until the daily limit moves
have ceased. In the event of adverse price movements, the Portfolio would       
continue to be required to make daily cash payments of variation margin on open 
futures positions. In such situations, if the Portfolio has insufficient cash,  
it may have to sell portfolio securities to meet daily variation margin         
requirements at a time when it may be disadvantageous to do so. In addition, the
Portfolio may be required to take or make delivery of the instruments underlying
interest rate futures contracts it holds at a time when it is disadvantageous to
do so. The inability to close out options and futures positions could also have 
an adverse impact on the Portfolio's ability to effectively hedge its portfolio.

Futures contracts and options thereon that are purchased or sold on foreign     
commodities exchanges may have greater price volatility than their U.S.         
counterparts. Furthermore, foreign commodities exchanges may be less regulated  
and under less governmental scrutiny than U.S. exchanges and brokerage          
commissions, clearing costs and other transaction costs may be higher. Greater  
margin requirements may limit the Portfolio's ability to enter into certain     
commodity transactions on foreign exchanges. Moreover, differences in clearance 
and delivery requirements on foreign exchanges may cause delays in the          
settlement of the Portfolio's foreign exchange transactions.                    

In the event of the bankruptcy of a broker through which the Portfolio engages  
in transactions in futures or options thereon, the Portfolio could experience   
delays and/or losses in liquidating open positions purchased or sold through the
broker and/or incur a loss of all or part of its margin deposits with the       
broker. Similarly, in the event of the bankruptcy of the writer of an OTC option
purchased by the Portfolio, the Portfolio could experience a loss of all or part
of the value of the option. Transactions are entered into by the Portfolio only 
with brokers or financial institutions deemed creditworthy by SCMI.             

While the futures contracts and options transactions to be engaged in by the    
Portfolio for the purpose of hedging its portfolio securities are not           
speculative in nature, there are risks inherent in the use of such instruments. 
One such risk which may arise in employing futures contracts to protect against 
the price volatility of portfolio securities (and the currencies in which they  
are denominated) is that the prices of securities and indices subject to futures
contracts (and thereby the futures contract prices) may correlate imperfectly   
with the behavior of the cash prices of the Portfolio's portfolio securities    
(and the currencies in which they are denominated). Another such risk is that   
prices of interest rate futures contracts may not move in tandem with the       
changes in prevailing interest rates against which the Portfolio seeks a hedge. 
A correlation may also be distorted by the fact that the futures market is      
dominated by short-term traders seeking to profit from the difference between a 
contract or security price objective and their cost of borrowed funds. Such     
distortions are generally minor and would diminish as the contract approached   
maturity.                                                                       

There may exist an imperfect correlation between the price movements of futures 
contracts purchased by the Portfolio and the movements in the prices of the     
securities (currencies) which are the subject of the hedge. If participants in  
the futures market elect to close out their contracts through offsetting        
transactions rather than meet margin deposit requirements, distortions in the   
normal relationship between the debt securities or currency markets and futures 
markets could result. Price distortions                                         

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could also result if investors in futures contracts choose to make or take      
delivery of underlying securities rather than engage in closing transactions due
to the resultant reduction in the liquidity of the futures market. In addition, 
because the deposit requirements in the futures markets are less onerous than   
margin requirements in the cash market, increased participation by speculators  
in the futures market can be anticipated with the resulting speculation causing 
temporary price distortions. Due to the possibility of price distortions in the 
futures market and because of the imperfect correlation between movements in the
prices of securities and movements in the prices of futures contracts, a correct
forecast of interest rate trends may still not result in a successful hedging   
transaction.                                                                    

There is no assurance that a liquid secondary market will exist for futures     
contracts and related options in which the Portfolio may invest. In the event a 
liquid market does not exist, it may not be possible to close out a futures     
position, and in the event of adverse price movements, the Portfolio would      
continue to be required to make daily cash payments of variation margin. In     
addition, limitations imposed by an exchange or board of trade on which futures 
contracts are traded may compel or prevent the Portfolio from closing out a     
contract, which may result in reduced gain or increased loss to the Portfolio.  
The absence of a liquid market in futures contracts might cause the Portfolio to
make or take delivery of the underlying securities (currencies) at a time when  
it may be disadvantageous to do so.                                             

The extent to which the Portfolio may enter into transactions involving futures 
contracts and options thereon may be limited by the Internal Revenue Code's     
requirements for qualification as a regulated investment company and the        
Portfolio's intention to qualify as such (see "Taxation").                      

Warrants and Stock Rights. The Portfolio may invest in warrants, which are      
options to purchase an equity security at a specified price (usually            
representing a premium over the applicable market value of the underlying equity
security at the time of the warrant's issuance). The Portfolio may not invest   
more than 5% of its net assets (at the time of investment) in warrants (other   
than those that have been acquired in units or attached to other securities). No
more than 2% of the Portfolio's net assets (at the time of investment) may be   
invested in warrants that are not listed on the New York or American Stock      
Exchanges. Investments in warrants involve certain risks, including the possible
lack of a liquid market for the resale of the warrants, potential price         
fluctuations as a result of speculation or other factors and failure of the     
price of the underlying security to reach a level at which the warrant can be   
prudently exercised (in which case the warrant may expire without being         
exercised, resulting in the loss of the Portfolio's entire investment therein). 
The prices of warrants do not necessarily move parallel to the prices of the    
underlying securities. Warrants have no voting rights, receive no dividends and 
have no rights with respect to the assets of the issuer.                        

In addition, the Portfolio may invest up to 5% of its assets (at the time of    
investment) in stock rights. A stock right is an option given to a shareholder  
to buy additional shares at a predetermined price during a specified time       
period.                                                                         

INVESTMENT RESTRICTIONS                                                         

The Portfolio's significant investment restrictions are described in the        
Prospectus. The following investment restrictions, except where stated to be    
non-fundamental policies, are also fundamental policies of the Portfolio and,   
together with the fundamental policies and investment objective described in the
Prospectus, cannot be changed without the vote of a "majority" of the           
Portfolio's outstanding                                                         

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shares. Under the Investment Company Act of 1940, such a "majority" vote is     
defined as the vote of the holders of the lesser of : (i) 67% of more of the    
shares present or represented by proxy at a meeting of shareholders, if the     
holders of more than 50% of the outstanding shares are present, or (ii) more    
than 50% of the outstanding shares. Under these additional restrictions, the    
Portfolio cannot:                                                               

(a) Underwrite securities of other companies (except insofar as the 
Portfolio might be deemed to be an underwriter in the resale of any securities  
held in its portfolio);                                                         

(b) Invest in commodities or commodity contracts (other than Hedging
Instruments, which it may use as permitted by any of its other fundamental      
policies, whether or not any such Hedging Instrument is considered to be a      
commodity or a commodity contract);                                             

     (c) Purchase securities on margin; however, the Portfolio may make margin
deposits in connection with any Hedging Instruments which it may use as         
permitted by any of its other fundamental policies;                             

 (d) Purchase or write puts or calls except as permitted by any of its
other fundamental policies;                                                     

(e) Lend money except in connection with the acquisition of debt    
securities that the Portfolio's investment policies and restrictions permit it  
to purchase (see "Investment Objective" and "Investment Policies" in the        
Prospectus). The Portfolio may make loans of portfolio securities (see "Loans of
Portfolio Securities") and enter into repurchase agreements (see "Repurchase    
Agreements");                                                                   

(f) As a non-fundamental policy, invest in or hold securities of any
issuer if officers or Trustees of the Trust or SCMI individually owning more    
than 0.5% of the securities of such issuer together own more than 5% of the     
securities of such issuer;                                                      

    (g) As a non-fundamental policy, invest more than 5% of the value of its
total assets in securities of issuers having a record, together with            
predecessors, of less than three years of continuous operation;                 

(h) Make short sales of securities;                                 

(i) Invest in interests in oil, gas or other mineral exploration or 
development programs (but may purchase readily marketable securities of         
companies which operate, invest in, or sponsor such programs);                  

      (j) Invest in real estate or in interests in real estate (but may purchase
readily marketable securities of companies holding real estate or interests     
therein).                                                                       

MANAGEMENT                                                                      

Officers and Trustees                                                           

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The following information relates to the principal occupations during the past  
five years of each Trustee and executive officer of the Trust and shows the     
nature of any affiliation with SCMI. Each of these individuals currently serves 
in the same capacity for Schroder Core.                                         

Peter E. Guernsey, Oyster Bay, New York - Trustee of the Trust - Insurance      
Consultant since August 1986; prior thereto Senior Vice President, Marsh &      
McLennan, Inc., insurance brokers.                                              

Ralph E. Hansmann (Honorary), 40 Wall Street, New York, New York - Honorary     
Trustee of the Trust - Private investor; Director, First Eagle Fund of America, 
Inc.; Director, Verde Exploration, Ltd.; Trustee Emeritus, Institute for        
Advanced Study; Trustee and Treasurer, New York Public Library; Life Trustee,   
Hamilton College.                                                               

John I. Howell, 7 Riverside Road, Greenwich, Connecticut - Trustee of the Trust 
- Private Consultant since February 1987; Director, American International      
Group, Inc.; Director, American International Life Assurance Company of New     
York.                                                                           

Clarence F. Michalis, 44 East 64th Street, New York, New York - Trustee of the  
Trust - Chairman of the Board of Directors, Josiah Macy, Jr. Foundation         
(charitable foundation).                                                        

Hermann C. Schwab, 787 Seventh Avenue, New York, New York - Chairman (Honorary) 
and Trustee of the Trust - retired since March, 1988; prior thereto, consultant 
to SCMI since February 1, 1984.                                                 

Mark J. Smith(a) (b), 33 Gutter Lane, London, England - a Vice President and    
Trustee of the Trust - First Vice President of SCMI since April 1990; Director  
and Vice President, Schroder Advisors since 1989.                               

Robert G. Davy, 787 Seventh Avenue, New York, New York - a Vice-President of the
Trust - Director of SCMI and Schroder Capital Management International Ltd.     
since 1994; First Vice President of SCMI since July, 1992; prior thereto,       
employed by various affiliates of Schroders plc in various positions in the     
investment research and portfolio management areas since 1986.                  

Margaret H. Douglas-Hamilton(b) (c), 787 Seventh Avenue, New York, New York -   
Secretary of the Trust - Secretary of SCM since July 1995; Secretary of Schroder
Advisers since April 1990; First Vice President and General Counsel of Schroders
Incorporated(b) since May 1987; prior thereto, partner of Sullivan & Worcester, 
a law firm.                                                                     

Richard R. Foulkes, 787 Seventh Avenue, New York, New York - a Vice President of
the Trust; Deputy Chairman of SCMI since October 1995; Director and Executive   

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Vice President of Schroder Capital Management International Ltd. since 1989.    

David I. Goldstein, 2 Portland Square, Portland, Maine - Assistant Treasurer and
Assistant Secretary of the Trust Counsel, Forum Financial Services, Inc. Since  
1991; prior thereto, associate at Kirkpatrick & Lockhart, Washington, D.C.      

Barbara Gottlieb(c), 787 Seventh Avenue, New York, New York - Assistant         
Secretary of the Trust - Assistant Vice President of SWIS since July 1995 prior 
thereto held various positions with SWIS affiliates.                            

Robert Jackowitz(b) (c), 787 Seventh Avenue, New York, New York - Treasurer of  
the Trust - Vice President of SCM since September 1995; Treasurer of SCM and    
Schroder Advisers since July 1995; Vice President of SCMI since June 1995; and  
Assistant Treasurer of Schroders Incorporated since January 1993.               

John Y. Keffer, 2 Portland Square, Portland, Maine - Vice President of the      
Trust. President of Forum Financial Services, Inc., the Fund's                  
sub-administrator, and Forum Financial Corp., the Fund's transfer and dividend  
disbursing agent and fund accountant.                                           

Jane P. Lucas, (c) 787 Seventh Avenue, New York, New York - Vice President of   
the Trust - Director and Senior Vice President SCMI; Director of SCM since      
September 1995; Assistant Director Schroder Investment Management Ltd. since    
June 1991.                                                                      

Gerardo Machado, 787 Seventh Avenue, New York, New York - Assistant Secretary of
the Trust - Associate, SCMI.                                                    

Catherine A. Mazza, 787 Seventh Avenue, New York, New York - Vice President of  
the Trust - President of Schroder Advisors since 1997; First Vice President of  
SCMI and SCM since 1996; prior thereto, held various marketing positions at     
Alliance Capital, an investment adviser, since July 1985.                       

Thomas G. Sheehan, 2 Portland Square, Portland, Maine - Assistant Treasurer and 
Assistant Secretary of the Trust - Counsel, Forum Financial Services, Inc. since
1993; prior thereto, Special Counsel, U.S. Securities and Exchange Commission,  
Division of Investment Management, Washington, D.C.                             

Fariba Talebi, 787 Seventh Avenue, New York, New York - Vice President of the   
Trust - First Vice President of SCMI since April 1993, employed in various      
positions in the investment research and portfolio management areas since 1987. 

John A. Troiano(b), 787 Seventh Avenue, New York, New York - Vice President of  
the Trust - Managing Director and Senior Vice President of SCMI since October   
1995; Director of Schroder Advisors since October 1992; Director of SCMI since  
1991; prior thereto, employed by various affiliates of SCMI in various positions
in the investment research and portfolio management areas since 1981.           

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Ira L. Unschuld, 787 Seventh Avenue, New York, New York - Vice President of the 
Trust - Vice President of SCMI since April, 1993 and an Associate from July,    
1990 to April, 1993; prior to July, 1990, employed by various financial         
institutions as a securities or financial analyst.                              

(a)  Interested Trustee of the Trust within the meaning of the 1940 Act.        

(b)  Schroder Fund Advisors, Inc. ("Schroder Advisors") is a wholly-owned       
subsidiary of SCMI, which is a wholly-owned subsidiary of Schroders   
     Incorporated, which in turn is an indirect, wholly-owned U.S. subsidiary of
Schroders plc.                                                        

(c)  Schroder Capital Management, Inc. ("SCM") is a wholly-owned subsidiary of  
    Schroder Wertheim Holdings Incorporated which is a wholly-owned subsidiary
    of Schroders, Incorporated, which in turn is an indirect wholly-owned U.S.
subsidiary of Schroders plc.                                          

Officers and Trustees who are interested persons of the Trust receive no salary,
fees or compensation from the Fund. Independent Trustees of the Trust receive an
annual fee of $1,000 and a fee of $250 for each meeting of the Board attended by
them except in the case of Mr. Schwab, who receives an annual fee of $1,500 and 
a fee of $500 for each meeting attended. The Fund has no bonus, profit sharing, 
pension or retirement plans.                                                    

The following table provides the fees paid to each Trustee of the Trust for the 
fiscal year ended October 31, 1996.                                             

                                                        [Enlarge/Download Table]

Name of Trustee                     Aggregate           Pension or      Estimated Annual               Total
                            Compensation From           Retirement         Benefits Upon   Compensation From
                                        Trust     Benefits Accrued            Retirement      Trust And Fund
                                                  As Part of Trust                           Complex Paid To
                                                          Expenses                                  Trustees
------------------------------------------------------------------------------------------------------------

                                                                                                            

Mr. Guernsey                           $1,750                   $0                    $0              $1,750
Mr. Hansmann                            1,375                    0                     0               1,375
Mr. Howell                              1,750                    0                     0               1,750
Mr. Michalis                            1,750                    0                     0               1,750
Mr. Schwab                              3,000                    0                     0               3,000
Mr. Smith                                   0                    0                     0                   0

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As of February 15, 1997, the officers and Trustees of the Trust owned, in the   
aggregate, less than 1% of the Fund's outstanding shares.                       

Although the Trust is a Delaware business trust, certain of its Trustees or     
officers are residents of the United Kingdom and substantially all of their     
assets may be located outside of the U.S. As a result it may be difficult for   
U.S. investors to effect service upon such persons within the U.S., or to       
realize U.S. civil judgments against them. Civil remedies and criminal penalties
under U.S. federal securities law may be unenforceable in the U.K. Extradition  
treaties now in effect between the U.S. and the United Kingdom might not subject
such persons to effective enforcement of the criminal penalties of such acts.   

Investment Adviser                                                              

Schroder Capital Management International Inc. ("SCMI"), 787 Seventh Avenue, New
York, New York 10019, serves as Investment Adviser to the Portfolio pursuant to 
an Investment Advisory Contract between the Trust and SCMI dated. SCMI is a     
wholly-owned U.S. subsidiary of Schroders Incorporated, the wholly-owned U.S.   
holding company subsidiary of Schroders plc. Schroders plc is the holding       
company parent of a large worldwide group of banks and financial service        
companies (referred to as the "Schroder Group"), with associated companies and  
branch and representative offices in eighteen countries. The Schroder Group     
specializes in providing investment management services.                        

Pursuant to the Investment Advisory Contract, SCMI is responsible for managing  
the investment and reinvestment of the Fund's assets and continuously reviews,  
supervises and administers its investments. In this regard, it is the           
responsibility of SCMI to make decisions relating to the Fund's investments and 
to place purchase and sale orders regarding such investments with brokers or    
dealers it selected. SCMI also furnishes to the Trust Board periodic reports on 
the investment performance of the Fund. Under the terms of the Investment       
Advisory Contract, SCMI is required to manage the Portfolio's investment        
portfolio in accordance with applicable laws and regulations. In making its     
investment decisions, SCMI does not use material inside information that may be 
in its possession or in the possession of its affiliates.                       

The Investment Advisory Contract will continue in effect provided such          
continuance is approved annually (i) by the holders of a majority of the        
outstanding voting securities of the Fund or by the Trust Board and (ii) by a   
majority of the Trustees who are not parties to such Contract or "interested    
persons" (as defined in the 1940 Act) of any such party. The Investment Advisory
Contract may be terminated without penalty by vote of the Trustees or the       
shareholders of the Fund on 60 days' written notice to the Adviser, or by the   
Adviser on 60 days' written notice to the Trust, and it will terminate          
automatically if assigned. The Investment Advisory Contract also provides that, 
with respect to the Fund, neither SCMI nor its personnel shall be liable for any
error of judgment or mistake of law or for any act or omission in the           
performance of its or their duties to the Fund, except for willful misfeasance, 

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bad faith or gross negligence in the performance of the its or their duties or  
by reason of reckless disregard of its or their obligations and duties under the
Investment Advisory Contract.                                                   

Under the terms of the Investment Advisory Contract, SCMI receives a monthly fee
equal on an annual basis to 1.00% of its average daily net assets. For the      
period from commencement of operations through October 31, 1995 and for the     
fiscal year ended October 31, 1996, SCMI received an advisory fee of $19,326 and
$___________, respectively.                                                     

The Fund currently invests all of its assets in the Portfolio. SCMI will not    
receive an investment advisory fee with respect to the Fund so long as the Fund 
remains completely invested in the Portfolio (or any other investment company). 
The Fund may withdraw its investment from the Portfolio at any time if the Board
determines that it is in the best interests of the Fund and its shareholders to 
do so. Accordingly, the Fund retains SCMI as its investment adviser to manage   
the Fund's assets in the event the Fund so withdraws its investment.            

The investment advisory contract between Schroder Core and SCMI with respect to 
the Portfolio is the same in all material respects as the Fund's Investment     
Advisory Contract (except as to the parties, the circumstances under which fees 
will be paid and the jurisdiction whose laws govern the agreement).             

Administrative Services                                                         

The Trust has entered into an Administrative Services Contract with Schroder    
Fund Advisors Inc. ("Schroder Advisors"), 787 Seventh Avenue, New York, New York
10019, pursuant to which Schroder Advisors provides management and              
administrative services necessary for the operation of the Fund, other than     
those provided by SCMI, including, (i) preparation of shareholder reports and   
communications, (ii) regulatory compliance, such as reports to and filings with 
the Securities and Exchange Commission and state securities commissions, and    
(iii) general supervision of the operation of the Fund, including coordination  
of the services performed by the Fund's investment adviser, transfer agent,     
custodian, independent accountants, legal counsel and others. Schroder Advisors 
is a wholly-owned subsidiary of SCMI, and is a registered broker-dealer         
organized to act as administrator and distributor of mutual funds. Effective    
July 5, 1995, Schroder Advisors changed its name from Schroder Capital          
Distributors Inc.                                                               

For these services, Schroder Advisors will receive from the Fund a fee, payable 
monthly, at the annual rate of 0.10% of the Fund's average daily net assets.    
From commencement of operations through October 31, 1995, Schroder Advisors     
received an administrative fee of $19,591.                                      

The Administrative Services Contract is terminable with respect to the Fund     
without penalty, at any time, by vote of a majority of the Trustees who are not 
"interested persons" of the Trust and who have no direct or indirect financial  
interest in the operation of the Fund's Distribution Plan or in the             
Administrative Services Contract, upon not more than 60 days' written notice to 
Schroder Advisors or by vote of the holders of a majority of the shares of the  
Fund, or upon 60 days' notice by Schroder Advisors. The Administrative Services 
Contract will terminate automatically in the event of its assignment.           

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The Trust and Schroder Advisors have entered into a Sub-Administration Agreement
with Forum Financial Services, Inc. ("Forum"). Pursuant to the                  
Sub-Administration Agreement, Forum assists Schroder Advisors with certain of   
its responsibilities under the Administrative Services Agreement, including     
shareholder reporting and regulatory compliance. Payment for Forum's services is
made by Schroder Advisors and is not a separate expense of the Fund.            

The Sub-Administration Agreement is terminable with respect to the Fund without 
penalty, at any time, by the Board, Schroder Advisors and the Adviser upon 60   
days' written notice to Forum or by Forum upon 60 days' written notice to the   
Fund and Schroder Advisors, and the Adviser, as appropriate.                    

Schroder Advisors and Forum provide similar services to the Portfolio pursuant  
to administrative services agreements between Schroder Core and each of these   
entities, for which Schroder Advisors and Forum are separately compensated at an
annual rate of 0.075% of the average daily net assets of the Portfolio. The     
administrative services agreements are the same in all material respects as the 
Fund's respective agreements except as to the parties, the circumstances under  
which fees will be paid, the fees payable thereunder and the jurisdiction whose 
laws govern the agreements.                                                     

The fees paid by the Fund to SCMI and Schroder Advisors may equal up to 1.25% of
the Fund's average daily net assets. Such fees as a whole are higher than       
advisory and management fees charged to mutual funds which invest primarily in  
U.S. securities but not necessarily higher than those charged to funds with     
investment objectives similar to that of the Fund.                              

Distribution of Fund Shares                                                     

Under a Distribution Plan (the "Plan") adopted by the Fund, with respect to     
Adviser Shares only, the Trust may pay directly or may reimburse the Investment 
Adviser or a broker-dealer registered under the Securities Exchange Act of 1934 
(the Investment Adviser or such registered broker-dealer, if so designated,     
being a "Distributor" of the Fund's shares) monthly (subject to a limit of 0.50%
per annum of the Fund's average daily net assets) for the sum of (a) advertising
expenses including advertising by radio, television, newspapers, magazines,     
brochures, sales literature or direct mail, (b) costs of printing prospectuses  
and other materials to be given or sent to prospective investors, (c) expenses  
of sales employees or agents of the Distributor, including salary, commissions, 
travel, and related expenses in connection with the distribution of Fund shares,
and (d) payments to broker-dealers (other than the Distributor) or other        
organizations (other than banks) for services rendered in the distribution of   
the Fund's shares, including payments in amounts based on the average daily     
value of Fund shares owned by shareholders in respect of which the broker-dealer
or organization has a distributing relationship. Any payment or reimbursement   
made pursuant to the Plan is contingent upon the Board's approval. The Fund will
not be liable for distribution expenditures made by the Distributor in any given
year in excess of the maximum amount (0.50% per annum of the Fund's average     
daily net assets) payable under the Plan in that year. Salary expenses of sales 
staff responsible for marketing shares of the Fund may be allocated among       
various portfolios of the Trust that have adopted a Plan similar to that of the 
Fund on the basis of average net assets; travel expenses are allocated among the
portfolios of the Trust. The Board has concluded that there is a reasonable     
likelihood that the Plan will benefit the Fund and its shareholders.            

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Without shareholder approval, the Plan may not be amended to increase materially
the costs that the Fund may bear. Other material amendments to the Plan must be 
approved by the Board, and by the Trustees who are not "interested persons" (as 
defined in the 1940 Act) of the Trust and who have no direct or indirect        
financial interest in the operation of the Plan or in any related agreement, by 
vote cast in person at a meeting called for the purpose of considering such     
amendments. The selection and nomination of the Trustees of the Trust has been  
committed to the discretion of the Trustees who are not "interested persons" of 
the Trust. The Plan has been approved, and is subject to annual approval, by the
Trust Board and by the Trustees who are not "interested persons" and have no    
direct or indirect financial interest in the operation of the Plan, by vote cast
in person at a meeting called for the purpose of voting on the Plan. The Fund   
will make no payments under the Distribution Plan until the Board specifically  
so authorizes. The Plan is terminable with respect to the Fund at any time by a 
vote of a majority of the Trustees who are not "interested persons" of the Trust
and who have no direct or indirect financial interest in the operation of the   
Plan or by vote of the holders of a majority of the shares of the Fund.         

Schroder Advisors acts as Distributor of the Fund's shares.                     

During the periods indicated below the Fund spent pursuant to the Plan the      
following amounts on:                                                           

                                                        Period Ended
                                                         October 31,
                                                         1996           1995
                                                         ----           ----

  advertising                                            $ -0-         $ -0-

  printing and mailing of prospectuses to other than     $ -0-         $ -0-
current shareholders                                                

  compensation to underwriters                           $ -0-         $ -0-

  compensation to dealers                                $ -0-         $ -0-

  compensation to sales personnel                        $ -0-         $ -0-

  interest, carrying, or other financing charges         $ -0-         $ -0-

Service Organizations                                                           

The Fund may also contract with banks, trust companies, broker-dealers or other 
financial organizations ("Service Organizations") to provide certain            
administrative services for the Fund. The Fund may pay fees (which vary         
depending upon the services provided) to Service Organizations in amounts up to 
an annual rate of 0.25% of the daily net asset value of the Fund's shares owned 
by shareholders with whom the Service Organization had a servicing relationship.
Services provided by Service Organizations may include                          

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: providing personnel and facilities necessary to establish and maintain certain
shareholder accounts and records; assisting in processing purchase and          
redemption transactions; arranging for the wiring of funds; transmitting and    
receiving funds in connection with client orders to purchase or redeem shares;  
verifying and guaranteeing client signatures in connection with redemption      
orders, transfers among and changes in client-designated accounts; providing    
periodic statements of a client's account balances and, to the extent           
practicable, integrating such information with other client transactions;       
furnishing periodic and annual statements and confirmations of all purchases and
redemptions of shares in a client's account; transmitting proxy statements,     
annual reports, and updating prospectuses and other communications from the Fund
to clients; and such other services as the Fund or a client reasonably may      
request, to the extent permitted by applicable statute, rule or regulation.     
Neither SCMI nor Schroder Advisors will be a Service Organization or receive    
fees for servicing. The Fund has no intention of making any such payments to    
Service Organizations with respect to accounts of institutional investors, and  
in any event will make no such payments until the Board specifically so         
authorizes.                                                                     

Some Service Organizations could impose additional or different conditions on   
their clients, such as requiring them to invest more than the minimum           
investments specified by the Fund or charging a direct fee for servicing. If    
imposed, these fees would be in addition to any amounts that might be paid to   
the Service Organization by the Fund. Each Service Organization would agree to  
transmit to its clients a schedule of any such fees. Shareholders using Service 
Organizations would be urged to consult them regarding any such fees or         
conditions.                                                                     

The Glass-Steagall Act and other applicable laws provide that banks may not     
engage in the business of underwriting, selling or distributing securities.     
There currently is no precedent prohibiting banks from performing administrative
and shareholder servicing functions as Service Organizations. However, judicial 
or administrative decisions or interpretations of such laws, as well as changes 
in either federal or state statutes or regulations relating to the permissible  
activities of banks and their subsidiaries or affiliates, could prevent a bank  
service organization from continuing to perform all or a part of its servicing  
activities. If a bank were prohibited from so acting, its shareholder clients   
would be permitted to remain shareholders of the Fund and alternative means for 
continuing the servicing of such shareholders would be sought. In that event,   
changes in the operation of the Fund might occur and a shareholder serviced by  
such a bank might no longer be able to avail itself of any services then being  
provided by the bank. It is not expected that shareholders would suffer any     
adverse financial consequences as a result of any of these occurrences.         

Portfolio Accounting                                                            

Forum Financial Corp. ("FFC"), an affiliate of Forum, performs portfolio        
accounting services for the Fund pursuant to a Fund Accounting Agreement with   
the Trust. The Fund Accounting Agreement will continue in effect only if such   
continuance is specifically approved at least annually by the Board of Trustees 
or by a vote of the shareholders of the Trust and in either case by a majority  
of the Trustees who are not parties to the Fund Accounting Agreement (or        
interested persons of any such party), at a meeting called for the purpose of   
voting on the Fund Accounting Agreement.                                        

Under its agreement, FFC prepares and maintains the books and records of the    
Fund, on behalf of the Trust, that are required to be maintained under the 1940 
Act; calculates the net asset value per share of the Fund; calculates dividends 
and capital gain distributions; and prepares periodic reports to                

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shareholders and the Securities and Exchange Commission. For its services to the
Fund, FFC receives from the Trust a fee of $36,000 per year plus $12,000 per    
year for each class of the Fund above one. FFC is paid an additional $24,000 per
year with respect to global and international funds. In addition, FFC is also   
paid an additional $12,000 per year with respect to tax-free money market funds,
funds with more than 25% of their total assets invested in asset backed         
securities, funds that have more than 100 security positions or funds that have 
a monthly portfolio turnover rate of 10% or greater.                            

FFC is required to use its best judgment and efforts in rendering fund          
accounting services and is not be liable to the Trust for any action or inaction
in the absence of bad faith, willful misconduct or gross negligence. FFC is not 
responsible or liable for any failure or delay in performance of its fund       
accounting obligations arising out of or caused, directly or indirectly, by     
circumstances beyond its reasonable control. The Trust has agreed to indemnify  
and hold harmless FFC and its employees, agents, officers and directors against 
and from any and all claims, demands, actions, suits, judgments, liabilities,   
losses, damages, costs, charges, counsel fees and all other expenses arising out
of or in any way related to FFC's actions taken or failures to act with respect 
to a Fund or based, if applicable, upon information, instructions or requests   
with respect to a Fund given or made to FFC by an officer of the Trust duly     
authorized. This indemnification does not apply to FFC's actions taken or       
failures to act in cases of FFC's own bad faith, willful misconduct or gross    
negligence.                                                                     

For the fiscal years ended October 31, 1995 and 1996, the Fund paid fund        
accounting fees of $35,667 and $12,000 respectively.                            

Fees and Expenses                                                               

As compensation for the advisory, administrative and management services        
rendered to the Fund, SCMI and Schroder Advisors will each earn monthly fees at 
the following annual rates:                                                     

                                  Fee Rate
  Portion of average daily value       Advisory                 Administrative
of the Fund's net assets             Fee                         Fee
------------------------             ---                         ---
           100%                      1.00%                       0.25%

SCMI and Schroder Advisors have voluntarily undertaken to assume certain        
expenses of the Fund. This undertaking is designed limit Fund expenses          
(including all fees to be paid to SCMI and Schroder Advisors but excluding      
taxes, interest, brokerage commissions and other portfolio transaction expenses 
and extraordinary expenses) to 1.45% and 1.60% with respect to Investor Shares  
and Advisor Shares, respectively, of the Fund's daily net assets. This expense  
limitation may be withdrawn by a majority vote of the Trustees of the Trust who 
are not "interested persons". If expense reimbursements are required, they will 
be made on a monthly basis. SCMI will reimburse the Fund for four-fifths of the 
amount required and Schroder Advisors, the remaining one-fifth. This undertaking
to reimburse expenses supplements any applicable state expense limitation.      

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The Fund bears all costs of its operations other than expenses specifically     
assumed by Schroder Advisors or SCMI, including those expenses it indirectly    
bears through its investment in the Portfolio. The costs borne by the Fund      
include legal and accounting expenses; Trustees' fees and expenses; insurance   
premiums, custodian and transfer agent fees and expenses; brokerage fees and    
expenses; expenses of registering and qualifying the Fund's shares for sale with
the SEC and with various state securities commissions; expenses of obtaining    
quotations on portfolio securities and pricing of the Fund's shares; a portion  
of the expenses of maintaining the Fund's legal existence and of shareholders'  
meetings; and expenses of preparation and distribution to existing shareholders 
of reports, proxies and prospectuses. Trust expenses directly attributed to the 
Fund are charged to the Fund; other expenses are allocated proportionately among
all the portfolios of the Trust in relation to the net assets of each portfolio.

PORTFOLIO TRANSACTIONS                                                          

Investment Decisions                                                            

Investment decisions for the Fund and for the other investment advisory clients 
of SCMI are made to achieve their respective investment objectives. Investment  
decisions are the product of many factors in addition to basic suitability for  
the particular client involved and, a particular security may be bought or sold 
for certain clients and not bought or sold for other clients. Likewise, a       
particular security may be bought for one or more clients when one or more      
clients are selling the security. In some instances, one client may sell a      
particular security to another client. It also sometimes happens that two or    
more clients simultaneously purchase or sell the same security, in which event  
each day's transactions in such security are, insofar as is possible, averaged  
as to price and allocated between such clients in a manner which in SCMI's      
opinion is equitable to each and in accordance with the amount being purchased  
or sold by each. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients.

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Brokerage and Research Services                                                 

Transactions on U.S. stock exchanges and other agency transactions involve the  
payment by the Fund of negotiated brokerage commissions. Such commissions vary  
among brokers. Also, a particular broker may charge different commissions       
according to the difficulty and size of the transaction; for example,           
transactions in foreign securities generally involve the payment of fixed       
brokerage commissions, which are generally higher than those in the U.S. Since  
most brokerage transactions for the fund will be placed with foreign            
broker-dealers, certain portfolio transaction costs for the Fund may be higher  
than fees for similar transactions executed on U.S. securities exchanges.       
However, the Fund will seek to achieve the best net results in effecting its    
portfolio transactions. There is generally less governmental supervision and    
regulation of foreign stock exchanges and brokers than in the United States.    
There is generally no stated commission in the case of securities traded in the 
over-the-counter markets, but the price paid by the Fund usually includes an    
undisclosed dealer commission or mark-up. In underwritten offerings, the price  
paid by the Fund includes a disclosed, fixed commission or discount retained by 
the underwriter or dealer.                                                      

The Investment Advisory Contract authorizes and directs SCMI to place orders for
the purchase and sale of the Fund's investments with brokers or dealers it      
selects and to seek "best execution" of such portfolio transactions. SCMI places
all such orders for the purchase and sale of portfolio securities and buys and  
sells securities for the Fund through a substantial number of brokers and       
dealers. In so doing, SCMI uses its best efforts to obtain for the Fund the most
favorable price and execution available. The Fund may, however, pay higher than 
the lowest available commission rates when SCMI believes it is reasonable to do 
so in light of the value of the brokerage and research services provided by the 
broker effecting the transaction. In seeking the most favorable price and       
execution, SCMI considers all factors it may deem relevant (including price,    
transaction size, the nature of the market for the security, the commission     
amount, the timing of the transaction (taking into account market prices and    
trends), the reputation, experience and financial stability of the              
broker-dealers involved, and the quality of service rendered by the             
broker-dealers in other transactions). For the period from commencement of      
operations through October 31, 1996, the Fund paid a total of $101,087 in       
brokerage commissions.                                                          

It has for many years been a common practice in the investment advisory business
for advisers of investment companies and other institutional investors to       
receive research services from broker-dealers that execute portfolio            
transactions for the clients of such advisers. Consistent with this practice,   
SCMI may receive research services from broker-dealers with which SCMI places   
the Fund's portfolio transactions. These services, which in some cases may also 
be purchased for cash, include such items as general economic and security      
market reviews, industry and company reviews, evaluations of securities and     
recommendations as to the purchase and sale of securities. Some of these        
services are of value to SCMI in advising various of its clients (including the 
Fund), although not all of these services are necessarily useful and of value in
managing the Fund. The investment advisory fee paid by the Fund is not reduced  
because SCMI and its affiliates receive such services.                          

As permitted by Section 28(e) of the Securities Exchange Act of 1934, SCMI may  
cause the Fund to pay a broker-dealer that provides SCMI with "brokerage and    
research services" (as                                                          

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defined in the Act) an amount of disclosed commission for effecting a securities
transaction for the Fund in excess of the commission which another broker-dealer
would have charged for effecting that transaction. In addition, SCMI may        
allocate brokerage transactions to broker-dealers who have entered into         
arrangements under which the broker-dealer allocates a portion of the           
commissions paid by the Fund toward payment of Fund expenses, such as custodian 
fees.                                                                           

Consistent with the Conduct Rules of the National Association of Securities     
Dealers, Inc. and subject to seeking the most favorable price and execution     
available and such other policies as the Trustees may determine, SCMI may       
consider sales of shares of the Fund as a factor in the selection of            
broker-dealers to execute portfolio transactions for the Fund.                  

Subject to the general policies of the Fund regarding allocation of portfolio   
brokerage as set forth above, the Trust Board has authorized SCMI to employ (a) 
Schroder Wertheim & Company, Incorporated ("Schroder Wertheim") an affiliate of 
SCMI, to effect securities transactions of the Fund on the New York Stock       
Exchange only, and (b) Schroder Securities Limited and its affiliates           
(collectively, "Schroder Securities"), affiliates of SCMI, to effect securities 
transactions of the Fund on various foreign securities exchanges on which       
Schroder Securities has trading privileges, provided certain other conditions   
are satisfied as described below.                                               

Payment of brokerage commissions to Schroder Wertheim or Schroder Securities for
effecting such transactions is subject to Section 17(e) of the 1940 Act, which  
requires, among other things, that commissions for transactions on a securities 
exchange paid by a registered investment company to a broker which is an        
affiliated person of such investment company (or an affiliated person of another
person so affiliated) not exceed the usual and customary broker's commissions   
for such transactions. It is the Fund's policy that commissions paid to Schroder
Wertheim or Schroder Securities will in SCMI's be (i) at least as favorable as  
commissions contemporaneously charged by Schroder Wertheim or Schroder          
Securities, as the case may be, on comparable transactions for their most       
favored unaffiliated customers and (ii) at least as favorable as those which    
would be charged on comparable transactions by other qualified brokers having   
comparable execution capability. The Trust Board, including a majority of the   
non-interested Trustees, has adopted procedures pursuant to Rule 17e-1          
promulgated by the Securities and Exchange Commission under Section 17(e) to    
ensure that commissions paid to Schroder Wertheim or Schroder Securities by the 
Fund satisfy the foregoing standards. Such procedures will be reviewed at least 
annually by the Board, including a majority of the non-interested Trustees. The 
Board will also review all transactions at least quarterly for compliance with  
such procedures.                                                                

It is further a policy of the Fund that all such transactions effected for the  
Fund by Schroder Wertheim on the New York Stock Exchange be in accordance with  
Rule 11a2-2(T) promulgated under the 1934 Act, which requires in substance that 
a member of such exchange not associated with Schroder Wertheim actually execute
the transaction on the exchange floor or through the exchange facilities. Thus, 
while Schroder Wertheim will bear responsibility for determining important      
elements of execution such as timing and order size, another firm will actually 
execute the transaction.                                                        

Schroder Wertheim will pay a portion of the brokerage commissions it receives   
from the Fund to the brokers executing the Fund's transactions on the New York  
Stock Exchange. In accordance with Rule 11a2-2(T), the Trust has entered into an
agreement with Schroder Wertheim permitting it to retain a                      

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portion of the brokerage commissions paid to it by the Fund. This agreement has 
been approved by the Board, including a majority of the non-interested Trustees.

The Fund has no understanding or arrangement to direct any specific portion of  
its brokerage to Schroder Wertheim or Schroder Securities and will not direct   
brokerage to Schroder Wertheim or Schroder Securities in recognition of research
services.                                                                       

From time to time, the Fund may purchase securities of a broker or dealer       
through which its regularly engages in securities transactions. During the      
fiscal year ended October 31, 1996, the Fund purchased securities of Global     
Securities, one of its regular broker-dealers. Such securities had a value of   
$110,979 as of the end of the Fund's fiscal year.                               

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION                                  

Determination of Net Asset Value Per Share                                      

The net asset value per share of the Fund is determined each day the New York   
Stock Exchange (the "Exchange") is opens as of 4:00 p.m. (Eastern Time), by     
dividing the value of the Fund's net assets by the total number of Fund shares  
outstanding. Any assets or liabilities initially expressed in terms of non-U.S. 
dollar currencies are translated into U.S. dollars at the prevailing market     
rates as quoted by one or more banks or dealers on the afternoon of valuation.  
The Exchange's most recent holiday schedule (which is subject to change) states 
that it will close on New Year's Day, President's Day, Good Friday, Memorial    
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.           

The Trust Board has established procedures for the valuation of the Fund's      
securities: (i) equity securities listed or traded on the New York or American  
Stock Exchange or other domestic or foreign stock exchange are valued at their  
latest sale prices on such exchange that day prior to the time when assets are  
valued; in the absence of sales that day, such securities are valued at the     
mid-market prices (in cases where securities are traded on more than one        
exchange, the securities are valued on the exchange designated as the primary   
market by the Fund's investment adviser); (ii) unlisted equity securities for   
which over-the-counter market quotations are readily available are valued at the
latest available mid-market prices prior to the time of valuation; (iii)        
securities (including restricted securities) not having readily-available market
quotations are valued at fair value under the Board's procedures; (iv) debt     
securities having a maturity in excess of 60 days are valued at the mid-market  
prices determined by a portfolio pricing service or obtained from active market 
makers on the basis of reasonable inquiry; and (v) short-term debt securities   
(having a remaining maturity of 60 days or less) are valued at cost, adjusted   
for amortization of premiums and accretion of discount.                         

When the Fund writes an option, an amount equal to the premium received by the  
Fund is recorded in the Fund's books as an asset, and an equivalent deferred    
credit is recorded as a liability. The deferred credit is adjusted              
("marked-to-market") to reflect the current market value of the option. Options 
purchased by the Fund are valued at their mid-market prices in the case of      
exchange-traded options or, in the case of options traded in the                
over-the-counter market, the average of the last bid price as obtained from two 
or more dealers unless there is only one dealer, in which case that dealer's    
price is used. Futures contracts and related options are stated at market value.

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Redemption In Kind                                                              

In the event that payment for redeemed shares is made wholly or partly in       
portfolio securities, shareholders may incur brokerage costs in converting the  
securities to cash. An in kind distribution of portfolio securities will be less
liquid than cash. The shareholder may have difficulty finding a buyer for       
portfolio securities received in payment for redeemed shares. Portfolio         
securities may decline in value between the time of receipt by the shareholder  
and conversion to cash. A redemption in kind of the Fund's portfolio securities 
could result in a less diversified portfolio of investments for the Fund and    
could affect adversely the liquidity of the Fund's portfolio.                   

TAXATION                                                                        

Under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund and  
each other portfolio established from time to time by the Board will be treated 
as a separate taxpayer for Federal income tax purposes with the result that: (a)
each such portfolio must meet separately the income and distribution            
requirements for qualification as a regulated investment company, and (b) the   
amounts of investment income and capital gains earned will be determined on a   
portfolio-by-portfolio (rather than on a Trust-wide) basis.                     

The Fund intends to qualify as a regulated investment company under Subchapter M
of the Code. To do so, the Fund intends to distribute to shareholders at least  
90% of its "investment company taxable income" as defined in the Code (which    
includes dividends, interest and the excess of any net short-term capital gains 
over net long-term capital losses), and to meet certain diversification of      
assets, source of income, and other requirements of the Code. The Fund will     
therefore not be subject to Federal income tax on its investment company taxable
income and "net capital gains" (the excess of net long-term capital gains over  
net short-term capital losses) distributed to shareholders. If the Fund does not
meet all of these Code requirements, it will be taxed as an ordinary            
corporation, and its distributions will be taxable to shareholders as ordinary  
income.                                                                         

Amounts not distributed on a timely basis (in accordance with a calendar year   
distribution requirement) are subject to a 4% nondeductible excise tax. To      
prevent this, the Fund must distribute for each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income (excluding any capital gains 
or losses) for the calendar year, (2) at least 98% of the excess of its capital 
gains over capital losses realized during the one-year period ending October 31 
of such year, and (3) all such ordinary income and capital gains for previous   
years that were not distributed during such years. A distribution will be       
treated as paid during the calendar year if it is declared by the Fund in       
October, November or December of the year with a record date in such month and  
paid by the Fund during January of the following year. Such distributions will  
be taxable to shareholders in the calendar year in which the distributions are  
declared, rather than the calendar year in which the distributions are received.

Distributions of investment company taxable income (including realized net      
short-term capital gain) are taxable to shareholders as ordinary income.        
Generally, it is not expected that such distributions                           

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will be eligible for the dividends received deduction available to corporations.
However, if the Fund acquires at least 10% of the stock of a foreign corporation
that has U.S. source income, a portion of the Fund's ordinary income dividends  
attributable to such income may be eligible for such deduction, if certain      
requirements are met.                                                           

Distributions of net long-term capital gain are taxable to shareholders as      
long-term capital gain, regardless of the length of time the Fund shares have   
been held by a shareholder, and are not eligible for the dividends received     
deduction. A loss realized by a shareholder on the sale of shares of the Fund   
with respect to which capital gain dividends have been paid will, to the extent 
of such capital gain dividends, be treated as long-term capital loss (even      
though such shares may have been held by the shareholder for one year or less). 
Further, a loss realized on a disposition will be disallowed to the extent the  
shares disposed of are replaced (whether by reinvestment or distributions or    
otherwise) within a period of 61 days beginning 30 days before and ending 30    
days after the shares are disposed of. In such a case, the basis of the shares  
acquired will be adjusted to reflect the disallowed loss.                       

All distributions to shareholders are taxable whether reinvested in additional  
shares or received in cash. Shareholders that reinvest distributions will have  
for federal income tax purposes a cost basis in each share received equal to the
net asset value of a share of the Fund on the reinvestment date. Shareholders   
will be notified annually as to the Federal tax status of distributions.        

Distributions by the Fund reduce the net asset value of the Fund's shares. If a 
distribution reduces the net asset value below a shareholder's cost basis, such 
distribution nevertheless would be taxable to the shareholder as ordinary income
or capital gain as described above, even though, from an investment standpoint, 
it may constitute a partial return of capital. In particular, investors should  
be careful to consider the tax implications of buying shares just prior to a    
distribution. The price of shares purchased at that time includes the amount of 
the forthcoming distribution which will be returned to the investor in the form 
of a taxable distribution.                                                      

Upon redemption or sale of shares, a shareholder will realize a taxable gain or 
loss, which will be treated as capital gain or loss if the shares are capital   
assets in the shareholder's hands. Such gain or loss generally will be long-term
or short-term depending upon the shareholder's holding period for the shares.   

Ordinary income dividends paid by the Fund to shareholders who are nonresident  
aliens will be subject to a 30% U.S. withholding tax under existing provisions  
of the Code applicable to foreign individuals and entities unless a reduced rate
of withholding or a withholding exemption is provided under applicable treaty   
law. Nonresident shareholders are urged to consult their own tax advisers       
concerning the applicability of the U.S. withholding tax.                       

Dividends and interest received (and, in certain circumstances, capital gains   
realized) by the Fund may give rise to withholding and other taxes imposed by   
foreign countries. Tax conventions between certain countries and the U.S. may   
reduce or eliminate such taxes. If more than 50% in value of the Fund's total   
assets at the close of its taxable year consists of securities of foreign       
corporations, the Fund will be eligible and intends to file an election with the
Internal Revenue Service ("IRS") pursuant to which shareholders of the Fund will
be required to include their proportionate                                      

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share of such withholding taxes in their U.S. income tax returns as gross       
income; treat such proportionate share as taxes paid by them; and, subject to   
certain limitations, deduct such proportionate share in computing their taxable 
incomes or, alternatively, use them as foreign tax credits against their U.S.   
income taxes. No deductions for foreign taxes, however, may be claimed by       
noncorporate shareholders who do not itemize deductions. A shareholder that is a
nonresident alien individual or a foreign corporation may be subject to U.S.    
withholding tax on the income resulting from the Fund's election described in   
this paragraph but may not be able to claim a credit or deduction against such  
U.S. tax for the foreign taxes treated as having been paid by such shareholder. 
The Fund will report annually to its shareholders the amount per share of such  
withholding taxes.                                                              

Due to investment laws in certain emerging market countries, it is anticipated  
that the Fund's investments in equity securities in such countries will consist 
primarily of shares of investment companies (or similar investment entities)    
organized under foreign law or of ownership interests in special accounts,      
trusts or partnerships. If the Fund purchases shares of an investment company   
(or similar investment entity) organized under foreign law, the Fund will be    
treated as owning shares in a passive foreign investment company ("PFIC") for   
U.S. Federal income tax purposes. The Fund may be subject to U.S. Federal income
tax, and an additional tax in the nature of interest, on a portion of           
distributions from such company and on gain from the disposition of such shares 
(collectively referred to as "excess distributions"), even if such excess       
distributions are paid by the Fund as a dividend to its shareholders. The Fund  
may be eligible to make an election with respect to certain PFICs in which it   
owns shares that will allow it to avoid the taxes on excess distributions.      
However, such election may cause the Fund to recognize income in a particular   
year in excess of the distributions received from such PFICs.                   

The Fund may write, purchase or sell options or futures contracts. Unless the   
Fund is eligible to make and does make a special election, such options and     
futures contracts that are "Section 1256 contracts" will be "marked to market"  
for Federal income tax purposes at the end of each taxable year (i.e., each     
option or futures contract will be treated as sold for its fair market value on 
the last day of the taxable year). In general, unless such special election is  
made, gain or loss from transactions in options and futures contracts will be   
60% long-term and 40% short-term capital gain or loss.                          

Code Section 1092, which applies to certain "straddles," may affect the taxation
of the Fund's transactions in options and futures contracts. Under Section 1092,
the Fund may be required to postpone recognition for tax purposes of losses     
incurred in certain closing transactions in options and futures.                

One of the requirements for qualification as a regulated investment company is  
that less than 30% of the Fund's gross income may be derived from gains from the
sale or other disposition of securities held for less than three months.        
Accordingly, the Fund may be restricted in effecting closing transactions within
three months after entering into an option or futures contract.                 

In general, gains from "foreign currencies" and from foreign currency options,  
foreign currency futures and forward foreign exchange contracts relating to     
investments in stock, securities or foreign currencies will be qualifying income
for purposes of determining whether the Fund qualifies as a regulated investment
company. It is currently unclear, however, who will be treated as the issuer of 
a foreign currency instrument or how foreign currency options, futures or       
forward foreign currency contracts will                                         

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be valued for purposes of the regulated investment company diversification      
requirements applicable to the Fund.                                            

Under Code Section 988 special rules are provided for certain transactions in a 
foreign currency other than the taxpayer's functional currency (i.e., unless    
certain special rules apply, currencies other than the U.S. dollar). In general,
foreign currency gains or losses from certain forward contracts not traded in   
the interbank market, from futures contracts that are not "regulated futures    
contracts," and from unlisted options will be treated as ordinary income or loss
under Code Section 988. In certain circumstances, the Fund may elect capital    
gain or loss treatment for such transactions. In general, however, Code Section 
988 gains or losses will increase or decrease the amount of the Fund's          
investment company taxable income available to be distributed to shareholders as
ordinary income. Additionally, if Code Section 988 losses exceed other          
investment company taxable income during a taxable year, the Fund would not be  
able to make any ordinary dividend distributions, and any distributions made    
before the losses were realized but in the same taxable year would be           
recharacterized as a return of capital to shareholders, thereby reducing each   
shareholder's basis in his Fund shares.                                         

The Trust will be required to report to the IRS all distributions and gross     
proceeds from the redemption of Fund shares (except in the case of certain      
exempt shareholders). All such distributions and proceeds generally will be     
subject to the withholding of Federal income tax at a rate of 31% ("backup      
withholding") in the case of non-exempt shareholders if (1) the shareholder     
fails to furnish the Trust with and to certify the shareholder's correct        
taxpayer identification number or social security number, (2) the IRS notifies  
the Trust that the shareholder has failed to report properly certain interest   
and dividend income to the IRS and to respond to notices to that effect, or (3) 
when required to do so, the shareholder fails to certify that they are not      
subject to backup withholding. If the withholding provisions are applicable, any
such distributions or proceeds, whether reinvested in additional shares or taken
in cash, will be reduced by the amount required to be withheld. Any amounts     
withheld may be credited against the shareholder's Federal income tax liability.
Investors may wish to consult their tax advisers about the applicability of the 
backup withholding provisions.                                                  

Distributions by the Fund also may be subject to state and local taxes, and     
their treatment under state and local income tax laws may differ from the       
Federal income tax treatment. Shareholders should consult their tax advisers    
with respect to particular questions of Federal, foreign, state and local       
taxation.                                                                       

OTHER INFORMATION                                                               

Organization                                                                    

The Trust was originally organized as a Maryland corporation on July 30, 1969.  
On February 29, 1988, the Trust was recapitalized to enable its Board to        
establish a series of separately managed investment portfolios, each having     
different investment objectives and policies. At the time of the                
recapitalization, the Trust's name was changed from "The Cheapside Dollar Fund  
Limited" to "Schroder Capital Funds, Inc." On January 9, 1996, the Trust was    
reorganized as a Delaware business trust. At that time, the Trust's name was    
changed from "Schroder Capital Funds, Inc." to its present name. The Trust is   
registered as an open-end management investment company under the Act.          

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Delaware law provides that shareholders shall be entitled to the same           
limitations of personal liability extended to stockholders of private           
corporations for profit. The securities regulators of some states, however, have
indicated that they and the courts in their state may decline to apply Delaware 
law on this point. To guard against this risk, the Trust Instrument contains an 
express disclaimer of shareholder liability for the debts, liabilities,         
obligations, and expenses of the Trust. The Trust Instrument provides for       
indemnification out of each series' property of any shareholder or former       
shareholder held personally liable for the obligations of the series. The Trust 
Instrument also provides that each series shall, upon request, assume the       
defense of any claim made against any shareholder for any act or obligation of  
the series and satisfy any judgment thereon. Thus, the risk of a shareholder    
incurring financial loss on account of shareholder liability is limited to      
circumstances in which Delaware law does not apply (or no contractual limitation
of liability was in effect) and the portfolio is unable to meet its obligations.
Forum believes that, in view of the above, there is no risk of personal         
liability to shareholders.                                                      

Capitalization and Voting                                                       

The Trust has an unlimited number of authorized shares of beneficial interest.  
The Board may, without shareholder approval, divide the authorized shares into  
an unlimited number of separate portfolios or series (such as the Fund) and may 
divide such portfolios or series into classes of shares, and the costs of doing 
so will be borne by the Trust. The Trust currently consists of five separate    
portfolios, each of which has separate investment objectives and policies, and  
five classes, two of which pertains to Schroder International Fund.             

Shares of the Fund are fully paid and nonassessable, and have no preferences as 
to conversion, exchange, dividends, retirement or other features. Shares have no
preemptive rights and have non-cumulative voting rights, which means that the   
holders of more than 50% of the shares voting for the election of Trustees can  
elect 100% of the Trustees if they choose to do so. Each shareholder of record  
is entitled to one vote for each full share held (and a fractional vote for each
fractional share held). Shares of each class vote separately to approve         
investment advisory agreements or changes in investment objectives and other    
fundamental policies affecting the portfolio to which they pertain, but all     
classes vote together in the election of Trustees and ratification of the       
selection of independent accountants. Shareholders of any particular class are  
not entitled to vote on any matters as to which such class are not affected.    

The Trust will not hold annual meetings of shareholders. The matters considered 
at an annual meeting typically include the reelection of Trustees, approval of  
an investment advisory agreement, and the ratification of the selection of      
independent accountants. These matters will not be submitted to shareholders    
unless a meeting of shareholders is held for some other reason, such as those   
indicated below. Each of the Trustees will serve until death, resignation or    
removal. Vacancies will be filled by the remaining Trustees, subject to the     
provisions of the 1940 Act requiring a meeting of shareholders for election of  
Trustees to fill vacancies when less than a majority of Trustees then in office 
have been elected by shareholders. Similarly, the selection of accountants and  
renewal of investment advisory agreements for future years will be performed    
annually by the Board. Future shareholder meetings will be held to elect        
Trustees if required by the 1940 Act, to obtain shareholder approval of changes 
in fundamental investment policies, to obtain shareholder approval of material  
changes in investment advisory agreements, to select new accountants if the     
employment of the Trust's accountants has been                                  

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terminated, and to seek any other shareholder approval required under the 1940  
Act. The Trust Board has the power to call a meeting of shareholders at any time
when it believes it is necessary or appropriate. In addition, the Trust         
Instrument provides that a special meeting of shareholders may be called at any 
time for any purpose by the holders of at least 10% of the outstanding shares   
entitled to be voted at such meeting.                                           

In addition to the foregoing rights, the Trust Instrument provides that holders 
of at least two-thirds of the outstanding shares of the Trust may remove any    
person serving as a Trustee either by declaration in writing or at a meeting    
called for such purpose. Further, the Trust Board is required to call a         
shareholders meeting for the purpose of considering the removal of one or more  
Trustees if requested in writing to do so by the holders of not less than 10% of
the outstanding shares of the Trust. In addition, the Trust Board is required,  
if requested in writing to do so by ten or more shareholders of record (who have
been such for at least six months), holding in the aggregate the lesser of (i)  
shares of the Trust having a total net asset value of at least $25,000 or (ii)  
1% of the outstanding shares of the Trust, to help such holders communicate with
other shareholders of the Trust with a view to obtaining the requisite          
signatures to request a special meeting to consider Trustee removal.            

Principal Shareholders                                                          

As of February 24, 1997, the following persons owned of record or beneficially  
5% or more of the Fund's shares:                                                

Shareholder                                    Share Balance     Percent of Fund
-----------                                    -------------     ---------------

Investor Shares                                                                 

The Robert Wood Johnson Foundation              4,917,050.504         30.17%    
P.O. Box 2316                                                                   
College Road at Route One                                                       
Princeton, NJ 08543                                                             

University of Chicago                           3,388,253.056         20.79%    
450 North Cityfront Plaza Drive                                                 
Chicago, IL 60611                                                               

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GOOSS & CO                                      1,116,866.431          6.85%    
c/o Chase Manhattan Bank                                                        
1211 6th Ave, 35th Floor                                                        
New York, NY 10036                                                              

Saxon & Co                                      1,604,506.853          6.53%    
PO Box 7780-1888                                                                
Philadelphia, PA 19182                                                          

Northwest Area Foundation                         822,372.923          5.05%    
E-12-01 First National Bank Building                                            
332 Minnesota Street                                                            
St Paul, MN 55101-1373                                                          

Advisor Shares                                                                  

Montgomery Securities                           1,116,871.724        100.00%    
600 Montgomery St., 4th Floor                                                   
San Francisco, CA 94111                                                         

Custodian                                                                       

The Chase Manhattan Bank, N.A., through its Global Custody Division located in  
London, England, acts as custodian of the Fund's assets, but plays no role in   
making decisions as to the purchase or sale of portfolio securities for the     
Fund. Pursuant to rules adopted under the 1940 Act, the Fund may maintain its   
foreign securities and cash in the custody of certain eligible foreign banks and
securities depositories. Selection of these foreign custodial institutions is   
made by the Trust Board following a consideration of a number of factors,       
including (but not limited to) the reliability and financial stability of the   
institution; the ability of the institution to perform capably custodial        
services for the Fund; the reputation of the institution in its national market;
the political and economic stability of the country in which the institution is 
located; and further risks of potential nationalization or expropriation of Fund
assets.                                                                         

Transfer Agent and Dividend Disbursing Agent                                    

Forum Financial Corp., Portland, Maine, acts as the Fund's transfer agent and   
dividend disbursing agent.                                                      

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Performance Information                                                         

The Fund may, from time to time, include quotations of its average annual total 
return in advertisements or reports to shareholders or prospective investors.   

Quotations of average annual total return will be expressed in terms of the     
average annual compounded rate of return of a hypothetical investment in the    
Fund over periods of 1, 5 and 10 years (up to the life of the Fund), calculated 
pursuant to the following formula:                                              

P (1+T)n = ERV

(where P = a hypothetical initial payment of $1,000, T = the average annual     
total return, n = the number of years, and ERV = the ending redeemable value of 
a hypothetical $1,000 payment made at the beginning of the period). All total   
return figures will reflect the deduction of Fund expenses (net of certain      
reimbursed expenses) on an annual basis, and will assume that all dividends and 
distributions are reinvested when paid.                                         

For the one year, and since inception periods ended October 31, 1996, the       
average annual total return of the Fund with respect to Investor Shares was     
4.22% and 6.66%, respectively.                                                  

Quotations of total return will reflect only the performance of a hypothetical  
investment in the Fund during the particular time period shown. Total return for
the Fund will vary based on changes in market conditions and the level of the   
Fund's expenses, and no reported performance figure should be considered an     
indication of performance which may be expected in the future.                  

In connection with communicating total return to current or prospective         
investors, the Fund also may compare these figures to the performance of other  
mutual funds tracked by mutual fund rating services or to other unmanaged       
indexes which may assume reinvestment of dividends but generally do not reflect 
deductions for administrative and management costs.                             

Investors who purchase and redeem shares of the Fund through a customer account 
maintained at a Service Organization may be charged one or more of the following
types of fees as agreed upon by the Service Organization and the investor, with 
respect to the customer services provided by the Service Organization: account  
fees (a fixed amount per month or per year); transaction fees (a fixed amount   
per transaction processed); compensating balance requirements (a minimum dollar 
amount a customer must maintain in order to obtain the services offered); or    
account maintenance fees (a periodic charge based upon a percentage of the      
assets in the account or of the dividends paid on these assets). Such fees will 
have the effect of reducing the average annual total return of the Fund for     
those investors.                                                                

Legal Counsel                                                                   

Jacobs Persinger & Parker, 77 Water Street, New York, New York 10005, counsel to
the Fund, passes upon certain legal matters in connection with the shares       
offered by the Fund.                                                            

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Independent Accountants                                                         

Coopers & Lybrand L.L.P. serves as independent accountants for the Fund. Coopers
& Lybrand L.L.P. provides audit services and consultation in connection with    
review of U.S. Securities and Exchange Commission filings. Their address is One 
Post Office Square, Boston, Massachusetts 02109.                                

Registration Statement                                                          

This SAI and the Prospectus do not contain all the information included in the  
Fund's registration statement filed with the Securities and Exchange Commission 
under the Securities Act of 1933 with respect to the securities offered hereby, 
certain portions of which have been omitted pursuant to the rules and           
regulations of the Securities and Exchange Commission. The registration         
statement, including the exhibits filed therewith, may be examined at the office
of the Securities and Exchange Commission in Washington, D.C.                   

Statements contained herein and in the Prospectus as to the contents of any     
contract or other documents referred to are not necessarily complete, and, in   
each instance, reference is made to the copy of such contract or other documents
filed as an exhibit to the registration statement, each such statement being    
qualified in all respects by such reference.                                    

FINANCIAL STATEMENTS                                                            

The audited Statement of Assets and Liabilities, Statement of Operations,       
Statements of Changes in Net Assets, Statement of Investments, notes thereto,   
and Financial Highlights of the Fund for the period from commencement of        
operations through October 31, 1996 and the Report of Independent Accountants   
thereon (included in the Annual Report to shareholders), which are delivered    
along with this SAI, are incorporated herein by reference.                      

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SCHRODER U.S. SMALLER COMPANIES FUND

 Statement of Additional Information
 March 1, 1997

--------------------------------------------------------------------------------

 [GRAPHIC OMITTED]

Investment Advisor                                                              
Schroder Capital Management International Inc. ("SCMI")                         

Administrator and Distributor                                                   
Schroder Fund Advisors, Inc. ("Schroder Advisors")                              

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company ("Forum")              

Transfer Agent and Dividend Disbursing Agent                                    
Forum Financial Corp. ("FFC")                                                   

================================================================================

General Information:                (207) 879-8903                              
Account Information:                (800) 344-8332                              
Fax:                                (207) 879-6206                              

================================================================================

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Investor Shares of Schroder U.S. Smaller Companies Fund (the "Fund") are offered
for sale at net asset value with no sales charge as an investment vehicle for   
individuals, institutions, corporations and fiduciaries. Advisor Shares of the  
Fund are offered to individual investors, in most cases through Service         
Organizations (as defined herein). Advisor Shares incur more expenses than      
vestor Shares.                                                                  

This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when preceded or accompanied by the current         
Prospectus for the Fund dated March 1, 1997 (the "Prospectus"). This SAI        
contains additional and more detailed information than that set forth in the    
Prospectus and should be read in conjunction with the Prospectusand retained for
future reference. You may obtain an additional copy of the Prospectus without   
charge by writing to the Fund at Two Portland Square, Portland, Maine 04101 or  
calling the numbers printed above.                                              

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     TABLE OF CONTENTS                                                      PAGE
--------------------------------------------------------------------------------

INVESTMENT POLICIES                                     
     Introduction.................................................
     U.S. Government Securities...................................
     Bank Obligations.............................................
     Short-Term Debt Securities...................................
     Repurchase Agreements........................................
     High Yield/Junk Bonds .......................................
     Illiquid and Restricted Securities...........................
     Loans of Portfolio Securities................................
     Covered Calls and Hedging....................................
     Short Sales Against-the-Box..................................

     INVESTMENT RESTRICTIONS......................................

     MANAGEMENT...................................................
     Trustees and Officers........................................
     Investment Adviser...........................................
     Administrative Services......................................
     Distribution of Fund Shares..................................
     Service Organizations........................................

     Portfolio Accounting.........................................
     Fees and Expenses............................................

     PORTFOLIO TRANSACTIONS.......................................
     Investment Decisions.........................................
     Brokerage and Research Services..............................

ADDITIONAL PURCHASE AND                                 
     REDEMPTION INFORMATION.......................................
     Determination of Net Asset Value Per Share...................
     Redemption in Kind...........................................

     TAXATION.....................................................

     OTHER INFORMATION............................................
     Organization.................................................
     Capitalization and Voting....................................
     Principal Shareholders.......................................
     Performance Information......................................
     Custodian....................................................
     Transfer Agent and Dividend Disbursing Agent.................

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     Legal Counsel................................................
     Independent Accountants......................................

     FINANCIAL STATEMENTS.........................................

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INTRODUCTION                                                                    

Schroder U.S. Smaller Companies Fund (the "Fund") is a diversified, 
separately-managed series of Schroder Capital Funds (Delaware) (the "Trust"), an
open-end management investment company currently consisting of eight separate   
series, each of which has different investment objectives and policies.         

The Fund's investment objective is to seek capital appreciations by 
investing primarily in equity securities of companies domiciled in the U.S. that
have market capitalizations, at the time of purchase of $1.5 billion or less.   
There can be no assurance that the Fund's investment objective will be achieved.

INVESTMENT POLICIES                                                             

The Fund's investment objective and policies authorize it to invest in certain  
types of securities and to engage in certain investment techniques as identified
in " MethodInvestment Objective" and "Investment Policies" in the Prospectus.   
The following supplements the discussion found in those sections by providing   
additional information or elaborating upon the discussion with respect to       
certain of those securities and techniques.                                     

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U.S. Government Securities                                                      

The Fund may invest in obligations issued or guaranteed by the United States    
government (or its agencies or instrumentalities) that have remaining maturities
not exceeding one year. Agencies and instrumentalities that have been           
established or sponsored by the United States government and issue or guarantee 
debt securities include the Bank for Cooperatives, the Export-Import Bank, the  
Federal Farm Credit System, the Federal Home Loan Banks, the Federal Home Loan  
Mortgage Corporation, the Federal Intermediate Credit Banks, the Federal Land   
Banks, the Federal National Mortgage Association, the Government National       
Mortgage Association and the Student Loan Marketing Association. Except for     
obligations issued by the United States Treasury and the Government National    
Mortgage Association, none of the obligations of the other agencies or          
instrumentalities referred to above are backed by the full faith and credit of  
the United States government.                                                   

Bank Obligations                                                                

The Fund may invest in obligations of U.S. banks (including certificates of     
deposit and bankers' acceptances) havingwhose total assets at the time of       
purchase in exceed $1 billion. Such banks must be members of the Federal Deposit
Insurance Corporation.                                                          

A certificate of deposit is an interest-bearing negotiable certificate issued by
a bank against funds deposited in the bank. A bankers' acceptance is a          
short-term draft drawn on a commercial bank by a borrower, usually in connection
with an international commercial transaction. Although the borrower is liable   
for payment of the draft, the bank unconditionally guarantees to pay the draft  
at its face value on the maturity date.                                         

Short-Term Debt Securities                                                      

The Fund may invest in commercial paper -- short-term unsecured promissory notes
issued in bearer form by bank holding companies, corporations and finance       
companies. The commercial paper purchased by the Fund for temporary defensive   
purposes consists of direct obligations of domestic issuers that at the time of 
investment are rated "P-1" by Moody's Investors Service, Inc. ("Moody's") or    
"A-1" by Standard & Poor's ("S&P"), or securities which, if not rated, are      
issued by companies having an outstanding debt issue currently rated Aa by      
Moody's or AAA or AA by S&P. The rating "P-1" is the highest commercial paper   
rating assigned by Moody's and the rating "A-1" is the highest commercial paper 
rating assigned by S&P.                                                         

Repurchase Agreements                                                           

The Fund may invest in securities subject to repurchase agreements that mature  
in seven days or less with U.S. banks or broker- dealers. In a typical          
repurchase agreement the seller of a security commits itself at the time of the 
sale to repurchase that security from the buyer at a mutually agreed-upon time  
and price. The repurchase price exceeds the sale price, reflecting an           
agreed-upon interest rate effective for the period the buyer owns the security  
subject to repurchase. The agreed-upon rate is unrelated to the interest rate on
that security. SCMI will monitor the value of the underlying security at the    
time the transaction is entered into and at                                     

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all times during the term of the repurchase agreement to insure that the value  
of the security always equals or exceeds the repurchase price. If a seller      
defaults under a repurchase agreement, the Fund may have difficulty exercising  
its rights to the underlying securities and may incur costs and experience time 
delays in connection with the disposition of such securities. To evaluate       
potential risks, SCMI reviews the credit-worthiness of banks and dealers with   
which the Fund enters into repurchase agreements.                               

High Yield/Junk Bonds                                                           

The Fund may invest up to 5% of its assets in bonds rated below Baa by Moody's  
or BBB by S&P (commonly known as "high yield/high risk securities" or "junk     
bonds"). Securities rated lower than Baa by Moody's or BBB by S&P are classified
as non-investment grade securities and are considered speculative. Junk bonds   
may be issued as a consequence of corporate restructurings (such as leveraged   
buyouts, mergers, acquisitions, debt recapitalizations, or similar events) or by
smaller or highly leveraged companies. Although the growth of the high yield    
securities market in the 1980's paralleled a long economic expansion, recently  
many issuers have been affected by adverse economic and market conditions. It   
should be recognized that an economic downturn or increase in interest rates is 
likely to have a negative effect on (i) the high yield bond market, (ii) the    
value of high yield securities and (iii) the ability of the securities' issuers 
to service their principal and interest payment obligations, to meet their      
projected business goal, or to obtain additional financing. In addition, the    
market for high yield securities, which is concentrated in relatively few market
makers, may not be as liquid as the market for investment grade securities.     
Under adverse market or economic conditions, the market for high yield          
securities could contract further, independent of any specific adverse changes  
in the condition of a particular issuer. As a result, the Fund could find it    
more difficult to sell these securities or may be able to sell the securities   
only at prices lower than if such securities were widely traded. Prices realized
upon the sale of such lower rated or unrated securities, under these            
circumstances, may be less than the prices used in calculating the Fund's net   
asset value.                                                                    

In periods of reduced market liquidity, junk bond prices may become more        
volatile and may experience sudden and substantial price declines. Also, there  
may be significant disparities in the prices quoted for junk bonds by various   
dealers. Under such conditions, a Fund may have to use subjective rather than   
objective criteria to value its junk bond investments accurately and rely more  
heavily on the judgment of the Fund's investment adviser.                       

Prices for junk bonds also may be affected by legislative and regulatory        
developments. For example, new federal laws require the divestiture by federally
insured savings and loans associations of their investments in high yield bonds.
Also, from time to time, Congress has considered legislation to restrict or     
eliminate the corporate tax deduction for interest payments or to regulate      
corporate restructurings such as takeovers, mergers or leveraged buyouts. These 
laws could adversely affect the                                                 

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Fund's net asset value and investment practices, the market for high yield      
securities, the financial condition of issuers of these securities, and the     
value of outstanding high yield securities.                                     

Lower rated or unrated debt obligations also present risks based on payment     
expectations. If an issuer calls the obligation for redemption, the Fund may    
have to replace the security with a lower yielding security, resulting in a     
decreased return for investors. If the Fund experiences unexpected net          
redemptions, it may be forced to sell its higher rated securities, resulting in 
a decline in the overall credit quality of the Fund's portfolio and increasing  
the exposure of the Fund to the risks of high yield securities.                 

Illiquid and Restricted Securities                                              

"Illiquid and Restricted Securities" under "Investment Policies" in the         
Prospectus sets forth the circumstances in which the Fund may invest in         
"restricted securities". In connection with the Fund's original purchase of     
restricted securities it may negotiate rights with the issuer to have such      
securities registered for sale at a later time. Further, the registration       
expenses of illiquid restricted securities may also be negotiated by the Fund   
with the issuer at the time such securities are purchased by the Fund. When     
registration is required, however, a considerable period may elapse between the 
decision to sell the securities and the time the Fund would be permitted to sell
such securities. A similar delay might be experienced in attempting to sell such
securities pursuant to an exemption from registration. Thus, the Fund may not be
able to obtain as favorable a price as that prevailing at the time of the       
decision to sell.                                                               

Loans of Portfolio Securities                                                   

The Fund may lend its portfolio securities subject to the restrictions stated in
the Prospectus. Under applicable regulatory requirements (which are subject to  
change), the loan collateral must (a) on each business day, at least equal the  
market value of the loaned securities and (b) must consist of cash, bank letters
of credit, U.S. Government securities, or other cash equivalents in which the   
Fund is permitted to invest. To be acceptable as collateral, letters of credit  
must obligate a bank to pay amounts demanded by the Fund if the demand meets the
terms of the letter. Such terms and the issuing bank must be satisfactory to the
Fund. When lending portfolio securities, the Fund receives from the borrower an 
amount equal to the interest paid or the dividends declared on the loaned       
securities during the term of the loan plus the interest on the collateral      
securities.(less any finders' or administrative fees the Fund pays in arranging 
the loan). The Fund may share the interest it receives on the collateral        
securities with the borrower as long as it realizes at least a minimum amount of
interest required by the lending guidelines established by the Trust's Board of 
Trustees (the "Trust Board"). The Fund will not lend its portfolio securities to
any officer, director, employee or affiliate of the Fund or SCMI. The terms of  
the Fund's loans must meet certain tests under the Internal Revenue Code and    
permit the Fund to reacquire loaned securities on five business days' notice or 
in time to vote on any important matter.                                        

Covered Calls and Hedging                                                       

As described in the Prospectus, the Fund may write covered calls on up to 100%  
of its total assets or employ one or more types of Hedging Instruments. When    
hedging to attempt to protect against declines in the market value of the Fund's
portfolio, to permit the Fund to retain unrealized gains in the                 

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value of portfolio securities which have appreciated, or to facilitate selling  
securities for investment reasons, the Fund may: (i) sell Stock Index Futures;  
(ii) purchase puts on such Futures or securities; or (iii) write covered calls  
on securities or on Stock Index Futures. When hedging to establish a position in
the equities markets as a temporary substitute for purchasing particular equity 
securities (which the Fund will normally purchase and then terminate the hedging
position), the Fund may: (i) purchase Stock Index Futures, or (ii) purchase     
calls on such Futures or on securities. The Fund's strategy of hedging with     
Stock Index Futures and options on such Futures will be incidental to the Fund's
activities in the underlying cash market.                                       

Writing Covered Call Options. The Fund may write (i.e., sell) call options      
("calls") if: (i) the calls are listed on a domestic securities or commodities  
exchange, and (ii) the calls are "covered" (i.e., the Fund owns the securities  
subject to the call or other securities acceptable for applicable escrow        
arrangements) while the call is outstanding. A call written on a Stock Index    
Future must be covered by deliverable securities or segregated liquid assets. If
a call written by the Fund is exercised, the Fund forgoes any profit from any   
increase in the market price above the call price of the underlying investment  
on which the call was written.                                                  

When the Fund writes a call on a security, it receives a premium and agrees to  
sell the underlying securities to a purchaser of a corresponding call on the    
same security during the call period (usually not more than nine months) at a   
fixed exercise price (which may differ from the market price of the underlying  
security), regardless of market price changes during the call period. The risk  
of loss will have been retained by the Fund if the price of the underlying      
security should decline during the call period, which may be offset to some     
extent by the premium.                                                          

To terminate its obligation on a call it has written, the Fund may purchase a   
corresponding call in a "closing purchase transaction". A profit or loss will be
realized, depending upon whether the net of the amount of option transaction    
costs and the premium previously received on the call written was more or less  
than the price of the call subsequently purchased. A profit may also be realized
if the call lapses unexercised, because the Fund retains the underlying security
and the premium received. Any such profits are considered short-term capital    
gains for Federal income tax purposes, and when distributed by the Fund are     
taxable as ordinary income. If the Fund could not effect a closing purchase     
transaction due to the lack of a market, it would have to hold the callable     
securities until the call lapsed or was exercised.                              

The Fund may also write calls on Stock Index Futures without owning a futures   
contract or a deliverable bond, provided that at the time the call is written,  
the Fund covers the call by segregating in escrow an equivalent dollar amount of
liquid assets. The fund will segregate additional liquid assets if the value of 
the escrowed assets drops below 100% of the current value of the Stock Index    
Future. In no circumstances would an exercise notice require the Fund to deliver
a futures contract; it would simply put the Fund in a short futures position,   
which is permitted by the Fund's hedging policies.                              

Purchasing Calls and Puts. The Fund may purchase put options ("puts") that      
relate to: (i) securities it holds, (ii) Stock Index Futures (whether or not it 
holds such Stock Index Futures in its portfolio), or (iii) broadly-based stock  
indices. The Fund may not sell puts other than those it previously purchased,   
nor purchase puts on securities it does not hold. The fund may purchase calls:  
(a) as to securities, broadly-based stock indices or Stock Index Futures, or (b)
to effect a "closing purchase transaction" to terminate its obligation on a call
it has previously written. A call or put may                                    

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be purchased only if, after such purchase, the value of all put and call options
held by the Fund would not exceed 5% of the Fund's total assets.                

When the Fund purchases a call (other than in a closing purchase transaction),  
it pays a premium and, except as to calls on stock indices, has the right to buy
the underlying investment from a seller of a corresponding call on the same     
investment during the call period at a fixed exercise price. The Fund benefits  
only if the call is sold at a profit or if, during the call period, the market  
price of the underlying investment is above the sum of the call price plus the  
transaction costs and the premium paid for the call and the call is exercised.  
If the call is not exercised or sold (whether or not at a profit), it will      
become worthless at its expiration date and the Fund will lose its premium      
payments and the right to purchase the underlying investment. When the Fund     
purchases a call on a stock index, it pays a premium, but settlement is in cash 
rather than by delivery of an underlying investment.                            

When the Fund purchases a put, it pays a premium and, except as to puts on stock
indices, has the right to sell the underlying investment to a seller of a       
corresponding put on the same investment during the put period at a fixed       
exercise price. Buying a put on a security or Stock Index Future the Fund owns  
enables the Fund to attempt to protect itself during the put period against a   
decline below he excercise price in the value of the underlying investment by   
selling the underlying investment at the exercise price to a seller of a        
corresponding put. If the market price of the underlying investment is equal to 
or exceeds the exercise price and, as a result, the put is not exercised or     
resold, the put will become worthless at its expiration date and the Fund will  
lose its premium payment and the right to sell the underlying investment; the   
put may, however, be sold prior to expiration (whether or not at a profit).     

Purchasing a put on either a stock index or on a Stock Index Future not held by 
the Fund permits the Fund either to resell the put or to buy the underlying     
investment and sell it at the exercise price. The resale price of the put will  
vary inversely with the price of the underlying investment. If the market price 
of the underlying investment is above the exercise price and, as a result, the  
put is not exercised, the put will become worthless on its expiration date. In  
the event of a decline in price of the underlying investment, the Fund could    
exercise or sell the put at a profit to attempt to offset some or all of its    
loss on its portfolio securities. When the Fund purchases a put on a stock      
index, or on a Stock Index Future not held by it, the put protects the Fund to  
the extent that the index moves in a similar pattern to the securities held. In 
the case of a put on a stock index or Stock Index Future, settlement is in cash 
rather than by the Fund's delivery of the underlying investment.                

Stock Index Futures. The Fund may buy and sell futures contracts only if they   
relate to broadly-based stock indices ("Stock Index Futures"). A stock index is 
"broadly-based" if it includes stocks that are not limited to issuers in any    
particular industry or group of industries. Stock Index Futures obligate the    
seller to deliver (and the purchaser to take) cash to settle the futures        
transaction, or to enter into an offsetting contract. No physical delivery of   
the underlying stocks in the index is made.                                     

No price is paid or received upon the purchase or sale of a Stock Index Future. 
Upon entering into a Futures transaction, the Fund will be required to deposit  
an initial margin payment in cash or U.S. Treasury bills with a futures         
commission merchant (the "futures broker"). The initial margin will be deposited
with the Fund's Custodian in an account registered in the futures broker's name;
the futures broker can gain access to that account only under specified         
conditions. As the Future is marked-to-market to reflect changes in its market  
value, subsequent margin payments                                               

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(called variation margin) will be paid to or by the futures broker on a daily   
basis. Prior to expiration of the Future, if the Fund elects to close out its   
position by taking an opposite position, a final determination of variation     
margin is made, additional cash is required to be paid by or released to the    
Fund, and any loss or gain is realized for tax purposes. Although Stock Index   
Futures by their terms call for settlement by the delivery of cash, in most     
cases the obligation is fulfilled without such delivery, by entering into an    
offsetting transaction. All futures transactions are effected through a         
clearinghouse associated with the exchange on which the contracts are traded.   

Puts and calls on broadly-based stock indices or Stock Index Futures are similar
to puts and calls on securities or futures contracts except that all settlements
are in cash and gain or loss depends on changes in the index in question (and   
thus on price movements in the stock market generally) rather than on price     
movements in individual securities or futures contracts. When the Fund buys a   
call on a stock index or Stock Index Future, it pays a premium. During the call 
period, upon exercise of a call by the Fund, a seller of a corresponding call on
the same index will pay the Fund an amount of cash to settle the call if the    
closing level of the stock index or Stock Index Future upon which the call is   
based is greater than the exercise price of the call; that cash payment is equal
to the difference between the closing price of the index and the exercise price 
of the call times a specified multiple (the "multiplier") which determines the  
total dollar value for each point of difference. When the Fund buys a put on a  
stock index or Stock Index Future, it pays a premium and has the right during   
the put period to require a seller of a corresponding put, upon the Fund's      
exercise of its put, to deliver to the Fund an amount of cash to settle the put 
if the closing level of the stock index or Stock Index Future upon which the put
is based is less than the exercise price of the put; that cash payment is       
determined by the multiplier, in the same manner as described above as to calls.

Additional Information About Hedging Instruments and their Use. The Fund's      
Custodian, or a securities depository acting for the Custodian, will act as the 
Fund's escrow agent, through the facilities of the Options Clearing Corporation 
("OCC"), as to the securities on which the Fund has written options(or as to    
other acceptable escrow securities) so that no margin will be required for such 
transactions. OCC will release the securities on the expiration of the option or
upon the Fund's entering into a closing transaction. An option position may be  
closed out only on a market that provides secondary trading for options of the  
same series, and there is no assurance that a liquid secondary market will exist
for any particular option.                                                      

The Fund's option activities may affect its portfolio turnover rate and         
brokerage commissions. The exercise of calls written by the Fund may cause the  
Fund to sell related portfolio securities, thus increasing its turnover rate in 
a manner beyond the Fund's control. The exercise by the Fund of puts on         
securities or Stock Index Futures may cause the sale of related investments,    
also increasing portfolio turnover. Although such exercise is within the Fund's 
control, holding a put might cause the Fund to sell the underlying investment   
for reasons that would not exist in the absence of the put. The Fund will pay a 
brokerage commission each time it buys or sells a call, a put or an underlying  
investment in connection with the exercise of a put or call. Such commissions   
may be higher than those which would apply to direct purchases or sales of the  
underlying investments. Premiums paid for options are small in relation to the  
market value of such investments and consequently, put and call options offer   
large amounts of leverage. The leverage offered by trading in options could     
result in the Fund's net asset value being more sensitive to changes in the     
value of the underlying investment.                                             

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Regulatory Aspects of Hedging Instruments and Covered Calls. The Fund must      
operate within certain restrictions as to its long and short positions in Stock 
Index Futures and options thereon under a rule (the "CFTC Rule") adopted by the 
Commodity Futures Trading Commission (the "CFTC") under the Commodity Exchange  
Act (the "CEA"), which excludes the Fund from registration with the CFTC as a   
"commodity pool operator" (as defined in the CEA) if it complies with the CFTC  
Rule. Under these restrictions the Fund will not, as to any positions, whether  
short, long or a combination thereof, enter into Stock Index Futures and options
thereon for which the aggregate initial margins and premiums exceed 5% of the   
fair market value of its total assets, with certain exclusions as defined in the
CFTC Rule. Under the restrictions, the Fund also must, as to its short          
positions, use Stock Index Futures and options thereon solely for bona-fide     
hedging purposes within the meaning and intent of the applicable provisions     
under the CEA.                                                                  

Transactions in options by the Fund are subject to limitations established by   
each of the exchanges governing the maximum number of options that may be       
written or held by a single investor or group of investors acting in concert,   
regardless of whether the options were written or purchased on the same or      
different exchanges or are held in one or more accounts or through one or more  
exchanges or brokers. Thus, the number of options which the Fund may write or   
hold may be affected by options written or held by other entities(including     
other investment companies having the same or an affiliated investment adviser).
Position limits also apply to Stock Index Futures. An exchange may order the    
liquidation of positions found to be in violation of those limits and may impose
certain other sanctions. Due to requirements under the 1940 Act, when the Fund  
purchases a Stock Index Future, the Fund will maintain, in a segregated account 
or accounts with its custodian bank, cash or readily-marketable, short-term     
(maturing in one year or less) debt instruments in an amount equal to the market
value of the securities underlying such Stock Index Future, less the margin     
deposit applicable to it.                                                       

Tax Aspects of Hedging Instruments. The Fund intends to qualify as a "regulated 
investment company" under the Internal Revenue Code of 1986 (the "Code"). One of
the tests for such qualification is that less than 30% of its gross income must 
be derived from gains realized on the sale of securities held for less than     
three months. Due to this limitation, the Fund will limit the extent to which it
engages in the following activities, but will not be precluded from them: (i)   
selling investments, including Stock Index Futures, held for less than three    
months, whether or not they were purchased on the exercise of a call held by the
Fund; (ii) purchasing calls or puts that expire in less than three months; (iii)
effecting closing transactions with respect to calls or puts purchased less than
three months previously; (iv) exercising puts held by the Fund for less than    
three months; and (v) writing calls on investments held for less than three     
months.                                                                         

Possible Risk Factors in Hedging. In addition to the risks discussed above,     
there is a risk in using short hedging by selling Stock Index Futures or        
purchasing puts on stock indices that the prices of the applicable index (thus  
the prices of the Hedging Instruments) will correlate imperfectly with the      
behavior of the cash (i.e., market value) prices of the Fund's equity           
securities. The ordinary spreads between prices in the cash and futures markets 
are subject to distortions due to differences in the natures of those markets.  
First, all participants in the futures markets are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit         
requirements, investors may close futures contracts through offsetting          
transactions which could distort the normal relationship between the cash and   
futures markets. Second, the liquidity of the futures markets depends on        
participants entering into offsetting transactions rather than making or taking 
delivery. To the extent                                                         

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participants decide to make or take delivery, liquidity in the futures markets  
could be reduced, thus producing distortion. Third, from the point of view of   
speculators, the deposit requirements in the futures markets are less onerous   
than margin requirements in the securities markets. Therefore, increased        
participation by speculators in the futures markets may cause temporary price   
distortions.                                                                    

The risk of imperfect correlation increases as the composition of the Fund's    
portfolio diverges from the securities included in the applicable index. To     
compensate for the imperfect correlation of movements in the price of the equity
securities being hedged and movements in the price of the Hedging Instruments,  
the Fund may use Hedging Instruments in a greater dollar amount than the dollar 
amount of equity securities being hedged if the historical volatility of the    
prices of such equity securities being hedged is more than the historical       
volatility of the applicable index. It is also possible that where the Fund has 
used Hedging Instruments in a short hedge, the market may advance and the value 
of equity securities held in the Fund's portfolio may decline. If this occurred,
the Fund would lose money on the Hedging Instruments and also experience a      
decline in value in its equity securities. However, while this could occur for a
very brief period or to a very small degree, the value of a diversified         
portfolio of equity securities will tend to move over time in the same direction
as the indices upon which the Hedging Instruments are based.                    

If the Fund uses Hedging Instruments to establish a position in the equities    
markets as a temporary substitute for the purchase of individual equity         
securities (long hedging) by buying Stock Index Futures and/or calls on such    
Futures, on securities or on stock indices, it is possible that the market may  
decline; if the Fund then concludes not to invest in equity securities at that  
time because of concerns as to possible further market decline or for other     
reasons, the Fund will realize a loss on the Hedging Instruments that is not    
offset by a reduction in the price of the equity securities purchased.          

Short Sales Against-the-Box                                                     

After the Fund makes a short sale against-the-box, while the short position is  
open, the Fund must own an equal amount of the securities sold short; or by     
virtue of ownership of securities have the right, without payment of further    
consideration, to obtain an equal amount of the securities sold short. Short    
sales against-the-box may be made to defer, for Federal income tax purposes,    
recognition of gain or loss on the sale of securities "in the box" until the    
short position is closed out.                                                   

INVESTMENT RESTRICTIONS                                                         

The Fund's significant investment restrictions are described in the Prospectus. 
The following investment restrictions, except where stated to be non-fundamental
policies, are also fundamental policies of the Fund and, together with the      
fundamental policies and investment objective described in the Prospectus,      
cannot be changed without the vote of a "majority" of the Fund's outstanding    
shares. Under the Investment Company Act of 1940, such a "majority" vote is     
defined as the vote of the holders of the lesser of: (i) 67% or more of the     
shares present or represented by proxy at a meeting of shareholders, if the     
holders of more than 50% of the outstanding shares are present, or (ii) more    
than 50% of the outstanding shares. Under these additional restrictions, the    
Fund cannot:                                                                    

      (a)   Underwrite securities of other companies (except insofar as the Fund
            might be deemed to be an underwriter in the resale of any securities
held in its portfolio);                                 

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  (b)   Invest in commodities or commodity contracts (other than Hedging
     Instruments which it may use as permitted by any of its other
           fundamental policies, whether or not any such Hedging Instrument is
considered to be a commodity or a commodity contract);  

  (c)   Purchase securities on margin; however, the Fund may make margin
            deposits in connection with any Hedging Instruments which it may use
as permitted by any of its other fundamental policies;  

   (d)   Purchase or write puts or calls except as permitted by any of its
other fundamental policies;                             

      (e)   Lend money except in connection with the acquisition of that portion
           of publicly-distributed debt securities which the Fund's investment
        policies and restrictions permit it to purchase (see "Investment
    Objective" and "Investment Policies" in the Prospectus); the
            Portfolio may also make loans of portfolio securities (see "Loans of
        Portfolio Securities") and enter into repurchase agreements (see
"Repurchase Agreements");                               

      (f)   Pledge, mortgage or hypothecate its assets to an extent greater than
            10% of the value of the total assets of the Fund; however, this does
        not prohibit the escrow arrangements contemplated by the put and
 call activities of the Fund or other collateral or margin
            arrangements in connection with any of the Hedging Instruments which
         it may use as permitted by any of its other fundamental policies;

  (g)   As a non-fundamental policy, invest in or hold securities of any
          issuer if officers or Trustees of the Company or SCMI individually
           owning more than 0.5% of the securities of such issuer together own
more than 5% of the securities of such issuer;          

(h)   Invest in companies for the purpose of acquiring control or   
management thereof;                                     

 (i)   Invest in interests in oil, gas or other mineral exploration or
            development programs (but may purchase readily marketable securities
            of companies which operate, invest in, or sponsor such programs); or

(j)   Invest in real estate or in interests in real estate, but may 
        purchase readily marketable securities of companies holding real
estate or interests therein.                            

MANAGEMENT                                                                      

Trustees and Officers                                                           

The following information relates to the principal occupations during the past  
five years of each Trustee and executive officer of the Trust and shows the     
nature of                                                                       

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any affiliation with SCMI. Each of these individuals currently serves in the    
same capacity for Schroder Core.                                                

Peter E. Guernsey, Oyster Bay, New York - Trustee of the Trust - Insurance      
Consultant since August 1986; prior thereto Senior Vice President, Marsh &      
McLennan, Inc., insurance brokers.                                              

Ralph E. Hansmann (Honorary), 40 Wall Street, New York, New York - Honorary     
Trustee of the Trust - Private investor; Director, First Eagle Fund of America, 
Inc.; Director, Verde Exploration, Ltd.; Trustee Emeritus, Institute for        
Advanced Study; Trustee and Treasurer, New York Public Library; Life Trustee,   
Hamilton College.                                                               

John I. Howell, 7 Riverside Road, Greenwich, Connecticut - Trustee of the Trust 
- Private Consultant since February 1987; Director, American International      
Group, Inc.; Director, American International Life Assurance Company of New     
York.                                                                           

Clarence F. Michalis, 44 East 64th Street, New York, New York - Trustee of the  
Trust - Chairman of the Board of Directors, Josiah Macy, Jr. Foundation         
(charitable foundation).                                                        

Hermann C. Schwab, 787 Seventh Avenue, New York, New York - Chairman (Honorary) 
and Trustee of the Trust - retired since March, 1988; prior thereto, consultant 
to SCMI since February 1, 1984.                                                 

Mark J. Smith(a) (b), 33 Gutter Lane, London, England - a Vice President and    
Trustee of the Trust - First Vice President of SCMI since April 1990; Director  
and Vice President, Schroder Advisors since 1989.                               

Robert G. Davy, 787 Seventh Avenue, New York, New York - a Vice-President of the
Trust - Director of SCMI and Schroder Capital Management International Ltd.     
since 1994; First Vice President of SCMI since July, 1992; prior thereto,       
employed by various affiliates of Schroders plc in various positions in the     
investment research and portfolio management areas since 1986.                  

Margaret H. Douglas-Hamilton(b) (c), 787 Seventh Avenue, New York, New York -   
Secretary of the Trust - Secretary of SCM since July 1995; Secretary of Schroder
Advisers since April 1990; First Vice President and General Counsel of Schroders
Incorporated(b) since May 1987; prior thereto, partner of Sullivan & Worcester, 
a law firm.                                                                     

Richard R. Foulkes, 787 Seventh Avenue, New York, New York - a Vice President of
the Trust; Deputy Chairman of SCMI since October 1995; Director and Executive   
Vice President of Schroder Capital Management International Ltd. since 1989.    

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David I. Goldstein, 2 Portland Square, Portland, Maine - Assistant Treasurer and
Assistant Secretary of the Trust Counsel, Forum Financial Services, Inc. Since  
1991; prior thereto, associate at Kirkpatrick & Lockhart, Washington, D.C.      

Barbara Gottlieb(c), 787 Seventh Avenue, New York, New York - Assistant         
Secretary of the Trust - Assistant Vice President of SWIS since July 1995 prior 
thereto held various positions with SWIS affiliates.                            

Robert Jackowitz(b) (c), 787 Seventh Avenue, New York, New York - Treasurer of  
the Trust - Vice President of SCM since September 1995; Treasurer of SCM and    
Schroder Advisers since July 1995; Vice President of SCMI since June 1995; and  
Assistant Treasurer of Schroders Incorporated since January 1993.               

John Y. Keffer, 2 Portland Square, Portland, Maine - Vice President of the      
Trust. President of Forum Financial Services, Inc., the Fund's                  
sub-administrator, and Forum Financial Corp., the Fund's transfer and dividend  
disbursing agent and fund accountant.                                           

Jane P. Lucas, (c) 787 Seventh Avenue, New York, New York - Vice President of   
the Trust - Director and Senior Vice President SCMI; Director of SCM since      
September 1995; Assistant Director Schroder Investment Management Ltd. since    
June 1991.                                                                      

Gerardo Machado, 787 Seventh Avenue, New York, New York - Assistant Secretary of
the Trust - Associate, SCMI.                                                    

Catherine A. Mazza, 787 Seventh Avenue, New York, New York - Vice President of  
the Trust - President of Schroder Advisors since 1997; First Vice President of  
SCMI and SCM since 1996; prior thereto, held various marketing positions at     
Alliance Capital, an investment adviser, since July 1985.                       

Thomas G. Sheehan, 2 Portland Square, Portland, Maine - Assistant Treasurer and 
Assistant Secretary of the Trust - Counsel, Forum Financial Services, Inc. since
1993; prior thereto, Special Counsel, U.S. Securities and Exchange Commission,  
Division of Investment Management, Washington, D.C.                             

Fariba Talebi, 787 Seventh Avenue, New York, New York - Vice President of the   
Trust - First Vice President of SCMI since April 1993, employed in various      
positions in the investment research and portfolio management areas since 1987. 

John A. Troiano(b), 787 Seventh Avenue, New York, New York - Vice President of  
the Trust - Managing Director and Senior Vice President of SCMI since October   
1995; Director of Schroder Advisors since October 1992; Director of SCMI since  
1991; prior thereto, employed by various affiliates of SCMI in various positions
in the investment research and portfolio management areas since 1981.           

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Ira L. Unschuld, 787 Seventh Avenue, New York, New York - Vice President of the 
Trust - Vice President of SCMI since April, 1993 and an Associate from July,    
1990 to April, 1993; prior to July, 1990, employed by various financial         
institutions as a securities or financial analyst.                              

(a)   Interested Trustee of the Trust within the meaning of the 1940 Act.       

(b)   Schroder Advisors is a wholly-owned subsidiary of SCMI, which is a        
  wholly-owned subsidiary of Schroders Incorporated, which in turn is an
indirect, wholly-owned                                              

subsidiary of Schroders plc.                                        

Officers and Trustees who are interested persons of the Trust receive no salary,
fees or compensation from the Fund. Independent Trustees of the Trust receive an
annual fee of $1,000 and a fee of $250 for each meeting of the Board attended by
them except in the case of Mr. Schwab, who receives an annual fee of $1,500 and 
a fee of $500 for each meeting attended. The Fund has no bonus, profit sharing, 
pension or retirement plans.                                                    

The following table provides the fees paid to each Trustee of the Trust for the 
fiscal year ended October 31, 1996.                                             

                                                        [Enlarge/Download Table]


Name of Trustee                           Aggregate            Pension or     Estimated Annual    Total Compensation 
                                  Compensation From   Retirement Benefits        Benefits Upon   From Trust And Fund 
                                              Trust    Accrued As Part of           Retirement       Complex Paid To 
                                                           Trust Expenses                                   Trustees 
---------------------------------------------------------------------------------------------------------------------

                                                                                                                     
Mr. Guernsey                                 $1,750                    $0                   $0                $1,750 
Mr. Hansmann                                  1,375                     0                    0                 1,375 
Mr. Howell                                    1,750                     0                    0                 1,750 
Ms. Luckyn-Malone                                 0                     0                    0                     0 
Mr. Michalis                                  1,750                     0                    0                 1,750 
Mr. Schwab                                    3,000                     0                    0                 3,000 
Mr. Smith                                         0                     0                    0                     0 

As of February 15, 1997, the officers and Trustees of the Trust owned, in the   
aggregate, less than 1% of the Fund's outstanding shares.                       

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Although the Trust is a Delaware business trust, certain of its Trustees or     
officers are residents of the United Kingdom and substantially all of their     
assets may be located outside of the U.S. As a result it may be difficult for   
U.S. investors to effect service upon such persons within the U.S., or to       
realize U.S. civil judgments against them. Civil remedies and criminal penalties
under U.S. federal securities law may be unenforceable in the U.K. Extradition  
treaties now in effect between the U.S. and the United Kingdom might not subject
such persons to effective enforcement of the criminal penalties of such acts.   

Investment Adviser                                                              

Schroder Capital Management International Inc. ("SCMI"), 787 Seventh Avenue, New
York, New York 10019, serves as Investment Adviser to the Fund pursuant to an   
Investment Advisory Contract between the Trust and SCMI dated. SCMI is a        
wholly-owned United States subsidiary of Schroders Incorporated, the            
wholly-owned United States holding company subsidiary of Schroders plc.         
Schroders plc is the holding company parent of a large worldwide group of banks 
and financial service companies (referred to as the "Schroder Group"), with     
associated companies and branch and representative offices in eighteen          
countries. The Schroder Group specializes in providing investment management    
services.                                                                       

Pursuant to the Investment Advisory Contracts, SCMI manages the investment and  
reinvestment of the Fund's assets and continuously reviews, supervises and      
administers its investments. In this regard, it is the responsibility of SCMI to
make decisions relating to the Fund's investments and to place purchase and sale
orders regarding such investments with brokers or dealers selected by it in its 
discretion. SCMI also furnishes to the Trust Board, which has overall           
responsibility for the business and affairs of the Trust, periodic reports on   
the investment performance of the Fund.                                         

Under the terms of the Investment Advisory Contract, SCMI is required to manage 
the Fund's portfolio in accordance with applicable laws and regulations. In     
making its investment decisions, SCMI does not use material inside information  
that may be in its possession or in the possession of its affiliates.           

The Investment Advisory Contract will continue in effect provided such          
continuance is approved annually (i) by the holders of a majority of the        
outstanding voting securities of the Fund or by the Trust Board and (ii) by a   
majority of the Trustees who are not parties to such Contract or "interested    
persons" (as defined in the 1940 Act) of any such party. The Investment Advisory
Contract may be terminated without penalty by vote of the Trustees or the       
shareholders of the Fund on 60 days' written notice to the Adviser, or by the   
Adviser on 60 days' written notice to the Trust and it will terminate           
automatically if assigned. The Investment Advisory Contract also provides that, 
with respect to the Fund, neither SCMI nor its personnel shall be liable for any
error of judgment or mistake of law or for any act or omission in the           
performance of its or their duties to the Fund, except for willful misfeasance, 
bad faith or gross negligence in the performance of its or their duties or by   
reason of reckless disregard of its or their obligations and duties under the   
Investment Advisory Contract.                                                   

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For its services, the Fund pays SCMI a monthly fee equal on an annual basis to  
0.50% of its average daily net assets for the first $100 million of the Fund's  
net assets; 0.40% of the next $150 million of average daily assets; and 0.35% of
the Fund's average daily net assets in excess of $250 million. For the fiscal   
years ended October 31, 1994, 1995 and 1996, SCMI received fees of $63,210,     
$71,188 and $58,914 respectively.                                               

Administrative Services                                                         

On behalf of the Fund, the Trust has entered into an Administrative Services    
Contract with Schroder Fund Advisors Inc. ("Schroder Advisors"), 787 Seventh    
Avenue, New York, New York 10019. The Trust and Schroder Advisors have entered  
into a Sub-Administration Agreement with Forum Financial Services, Inc.         
("Forum"). Pursuant to their agreements, Schroder Advisors and Forum provide    
management and administrative services other than those provided to the Fund by 
SCMI pursuant to the Investment Advisory Contract, including, (i) preparation of
shareholder reports and communications, (ii) regulatory compliance, such as     
reports to and filings with the Securities and Exchange Commission and state    
securities commissions, and (iii) general supervision of the operation of the   
Fund, including coordination of the services performed by the Fund's investment 
adviser, transfer agent, custodian, independent accountants, legal counsel and  
others. Schroder Advisors is a wholly-owned subsidiary of SCMI, and is a        
registered broker-dealer organized to act as administrator and distributor of   
mutual funds. Effective July 5, 1995, Schroder Advisors changed its name from   
Schroder Capital Distributors Inc.                                              

For these services, Schroder Advisors will receive from the Fund a fee, payable 
monthly, at the annual rate of 0.25% of the Fund's average daily net assets for 
the first $100 million of the Fund's average daily net assets; 0.20% of the next
$150 million of average daily net assets; and 0.175% of the Fund's average daily
net assets in excess of $250 million. The fees paid by the Fund to SCMI and     
Schroder Advisors may equal up to 0.75% of the Fund's average daily net assets. 
For the fiscal years ended October 31, 1994, 1995 and 1996, Schroder Advisors   
received fees of $31,690, $35,594 and $24,923 respectively. Payment for Forum's 
services is made by Schroder Advisors and is not a separate expense of the Fund.

The Administrative Services Contract and Sub-Administration Agreement are       
terminable with respect to the Fund without penalty, at any time, by vote of a  
majority of the Trustees who are not "interested persons" of the Trust and who  
have no direct or indirect financial interest in the operation of the Fund's    
Distribution Plan or in the Administrative Services Contract or                 
Sub-Administration Agreement, upon not more than 60 days' written notice to     
Schroder Advisors or Forum, as appropriate, or by vote of the holders of a      
majority of the shares of the Fund; or upon 60 days' notice by Schroder Advisors
or Forum. The Administrative Services Contract will terminate automatically in  
the event of its assignment.                                                    

Schroder Advisors and Forum provide similar services to the Portfolio pursuant  
to administrative services agreements between Schroder Core and each of these   
entities, for which Schroder Advisors and Forum are separately compensated at an
annual rate of 0.075% of the average daily net assets of the Portfolio. The fees
paid by the Fund to SCMI and Schroder Advisors may equal up to [0.80]% of       

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the Fund's average daily net assets. The administrative services agreements are 
the same in all material respects as the Fund's respective agreements except as 
to the parties, the circumstances under which fees will be paid, the fees       
payable thereunder and the jurisdiction whose laws govern the agreement.        

Distribution of Fund Shares                                                     

Under a Distribution Plan (the "Plan") adopted by the Fund, with respect to     
Adviser Shares only, the Trust may pay directly or may reimburse the Investment 
Adviser or a broker-dealer registered under the Securities Exchange Act of 1934 
(the Investment Adviser or such registered broker-dealer, if so designated,     
being a "Distributor" of the Fund's shares) monthly (subject to a limit of 0.50%
per annum of the Fund's average daily net assets) for the sum of (a) advertising
expenses including advertising by radio, television, newspapers, magazines,     
brochures, sales literature or direct mail, (b) costs of printing prospectuses  
and other materials to be given or sent to prospective investors, (c) expenses  
of sales employees or agents of the Distributor, including salary, commissions, 
travel, and related expenses in connection with the distribution of Fund shares,
and (d) payments to broker-dealers (other than the Distributor) or other        
organizations (other than banks) for services rendered in the distribution of   
the Fund's shares, including payments in amounts based on the average daily     
value of Fund shares owned by shareholders in respect of which the broker-dealer
or organization has a distributing relationship. Any payment or reimbursement   
made pursuant to the Plan is contingent upon the Board of Trustees' approval.   
The Fund will not be liable for distribution expenditures made by the           
Distributor in any given year in excess of the maximum amount (0.50% per annum  
of the Fund's average daily net assets) payable under the Plan in that year.    
Salary expenses of sales staff responsible for marketing shares of the Fund may 
be allocated among various portfolios of the Trust that have adopted a Plan     
similar to that of the Fund on the basis of average net assets; travel expense s
are allocated among the portfolios of the Trust. The Board of Trustees has      
concluded that there is a reasonable likelihood that the Plan will benefit the  
Fund and its shareholders.                                                      

Schroder Advisors was appointed Distributor of the Fund's shares under the Plan 
pursuant to an agreement approved by the Board of Trustees of the Trust at a    
meeting held on November 2, 1992. Under such agreement, Schroder Advisors is not
obligated to sell any specific amount of Fund shares.                           

Without shareholder approval the Plan provides may not be amended to increase   
materially the costs that the Fund may bear. Other material amendments to the   
Plan must be approved by the Trust Board, and by the Trustees who are neither   
"interested persons" (as defined in the 1940 Act) of the Trust nor have any     
direct or indirect financial interest in the operation of the Plan or in any    
related agreement, by vote cast in person at a meeting called for the purpose of
considering such amendments. The selection and nomination of the Trustees of the
Trust has been committed to the discretion of the Trustees who are not          
"interested persons" of the Trust. The Plan has been approved, and is subject to
annual approval, by the Trust and by the Trustees who are neither "interested   
persons" nor have any direct or indirect financial interest in the operation of 
the Plan, by vote cast in person at a meeting called for the purpose of voting  
on the Plan. The Trust Board and the Trustees who are not "interested persons"  
and who have no direct or indirect financial interest in the operation of the   
Plan voted to approve the Plan at a meeting held on November 2, 1992. The Plan  
was approved by the                                                             

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initial shareholders of the Fund at a meeting held on July 27, 1993. At a       
meeting held on November 21, 1994, the Trust Board and the Trustees who are not 
"interested persons" and who have no direct or indirect financial interest in   
the operation of the Plan voted to continue the Plan for the one-year period    
ending February 1, 1996. The Plan is terminable with respect to the Fund at any 
time by a vote of a majority of the Trustees who are not "interested persons" of
the Trust and who have no direct or indirect financial interest in the operation
of the Plan or by vote of the holders of a majority of the shares of the Fund.  

During the period from commencement of operations through October 31, 1996, the 
Fund spent, respectively, pursuant to the Plan, the following amounts on:       

                                                            Period Ended
                                                             October 31,
                                                           1996         1995
                                                           ----         ----

     advertising                                            $ -0-        $ -0-

     printing and mailing of prospectuses to other than     $ -0-        $ -0-

current shareholders                                                

     compensation to underwriters                           $ -0-        $ -0-

     compensation to dealers                                $ -0-        $ -0-

     compensation to sales personnel                        $ -0-        $ -0-

     interest, carrying, or other financing charges         $ -0-        $ -0-

Service Organizations                                                           

The Fund may also contract with banks, trust companies, broker-dealers or other 
financial organizations ("Service Organizations") to provide certain            
administrative services for the Fund. The Fund could pay fees (which will vary  
depending upon the service provided) to Service Organizations in amounts up to  
an annual rate of 0.25% of the daily net asset value of the Fund's shares owned 
by shareholders with whom the Service Organization had a servicing relationship.
Services provided by Service Organizations may include providing personnel and  
facilities necessary to establish and maintain certain shareholder accounts and 
records; assisting in processing purchase and redemption transactions; arranging
for the wiring of funds; transmitting and receiving funds in connection with    
client orders to purchase or redeem shares; verifying and guaranteeing client   
signatures in connection with redemption orders, transfers among and changes in 
client-designated accounts; providing periodic statements of a client's account 
balances and, to the extent practicable, integrating such information with other
client transactions; furnishing periodic and annual statements and confirmations
of all purchases                                                                

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and redemptions of shares in a client's account; transmitting proxy statements, 
annual reports, and updating prospectuses and other communications from the Fund
to clients; and such other services as the Fund or a client reasonably may      
request, to the extent permitted by applicable statute, rule or regulation.     
Neither SCMI nor Schroder Advisors will be a Service Organization or receive    
fees for servicing.                                                             

Some Service Organizations could impose additional or different conditions on   
their clients, such as requiring them clients to invest more than the minimum   
investments specified by the Fund or charging a direct fee for servicing. If    
imposed, these fees would be in addition to any amounts that might be paid to   
the Service Organization by the Fund. Each Service Organization would agree to  
transmit to its clients a schedule of any such fees. Shareholders using Service 
Organizations would be urged to consult them regarding any such fees or         
conditions.                                                                     

The Glass-Steagall Act and other applicable laws provide that banks may not     
engage in the business of underwriting, selling or distributing securities.     
There currently is no precedent prohibiting banks from performing administrative
and shareholder servicing functions as Service Organizations. However, judicial 
or administrative decisions or interpretations of such laws, as well as changes 
in either federal or state statutes or regulations relating to the permissible  
activities of banks and their subsidiaries or affiliates, could prevent a bank  
service organization from continuing to perform all or a part of its servicing  
activities. If a bank were prohibited from so acting, its shareholder clients   
would be permitted to remain shareholders of the Fund and alternative means for 
continuing the servicing of such shareholders would be sought. In that event,   
changes in the operation of the Fund might occur and a shareholder serviced by  
such a bank might no longer be able to avail itself of any services then being  
provided by the bank. It is not expected that shareholders would suffer any     
adverse financial consequences as a result of any of these occurrences.         

Portfolio Accounting                                                            

Forum Financial Corp. ("FFC"), an affiliate of Forum, performs portfolio        
accounting services for the Fund pursuant to a Fund Accounting Agreement with   
the Trust. The Fund Accounting Agreement will continue in effect only if such   
continuance is specifically approved at least annually by the Board of Trustees 
or by a vote of the shareholders of the Trust and in either case by a majority  
of the Trustees who are not parties to the Fund Accounting Agreement (or        
interested persons of any such party), at a meeting called for the purpose of   
voting on the Fund Accounting Agreement.                                        

Under its agreement, FFC prepares and maintains the books and records of the    
Fund, on behalf of the Trust, that are required to be maintained under the 1940 
Act; calculates the net asset value per share of the Fund;calculates dividends  
and capital gain distributions; and prepares periodic reports to shareholders   
and the Securities and Exchange Commission. For its services to the Fund, FFC   
receives from the Trust a fee of $36,000 per year plus $12,000 per year also for
each class of the Fund above one. FFC is paid an additional $24,000 per year    
with respect to global and international funds. In addition, FFC is paid an     
additional $12,000 per year with respect to tax-free money market funds, funds  
with more than 25% of their total assets invested in asset backed securities,   
funds that have more than 100 security positions, or that have a monthly        
portfolio turnover rate of 10% or greater.                                      

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FFC is required to use its best judgment and efforts in rendering fund          
accounting services and is not be liable to the Trust for any action or inaction
in the absence of bad faith, willful misconduct or gross negligence. FFC is not 
responsible or liable for any failure or delay in performance of its fund       
accounting obligations arising out of or caused, directly or indirectly, by     
circumstances beyond its reasonable control. The Trust has agreed to indemnify  
and hold harmless FFC and its employees, agents, officers and directors against 
and from any and all claims, demands, actions, suits, judgments, liabilities,   
losses, damages, costs, charges, counsel fees and all other expenses arising out
of or in any way related to FFC's actions taken or failures to act with respect 
to a Fund or based, if applicable, upon information, instructions or requests   
with respect to a Fund given or made to FFC by an officer of the Trust duly     
authorized. This indemnification does not apply to FFC's actions taken or       
failures to act in cases of FFC's own bad faith, willful misconduct or gross    
negligence.                                                                     

FFC assumed responsibility for fund accounting on August 15, 1994. Previously,  
these services were performed by Schroders Incorporated, the parent company of  
SCMI. For the fiscal years ended October 31, 1994 and October 31, 1995, the Fund
paid fund accounting fees of $28,797 and $36,000, respectively.                 

Fees and Expenses                                                               

As compensation for the advisory, administrative and management services        
rendered to the Fund, SCMI and Schroder Advisors will each earn monthly fees at 
the following annual rates:                                                     

Portion of average daily value            Fee Rate                              
of the Fund's net assets                    SCMI            Schroder Advisors   
------------------------------            --------          -----------------   

up to $100 million                          0.50%                 0.25%         
$100 million to $250 million                0.40%                 0.20%         
over $250 million                           0.35%                0.175%         

The Fund bears all costs of its operations other than expenses specifically     
assumed by Schroder Advisors or SCMI, including those expenses it indirectly    
bears through its investment in the                                             

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Portfolio. The costs borne by the Fund include legal and accounting expenses;   
Trustees' fees and expenses; insurance premiums, custodian and transfer agent   
fees and expenses; brokerage fees and expenses; expenses of registering and     
qualifying the Fund's shares for sale with the SEC and with various state       
securities commissions; expenses of obtaining quotations on portfolio securities
and pricing of the Fund's shares; a portion of the expenses of maintaining the  
Fund's legal existence and of shareholders' meetings; and expenses of           
preparation and distribution to existing shareholders of reports, proxies and   
prospectuses. Trust expenses directly attributed to the Fund are charged to the 
Fund; other expenses are allocated proportionately among all the portfolios of  
the Trust in relation to the net assets of each portfolio.                      

PORTFOLIO TRANSACTIONS                                                          

Investment Decisions                                                            

Investment decisions for the Fund and for the other investment advisory clients 
of SCMI are made to achieve their respective investment objectives. Investment  
decisions are the product of many factors in addition to basic suitability for  
the particular client involved and a particular security may be bought or sold  
for certain clients and not bought or sold for other clients. Likewise, a       
particular security may be bought for one or more clients when one or more      
clients are selling the security. In some instances, one client may sell a      
particular security to another client. It also sometimes happens that two or    
more clients simultaneously purchase or sell the same security, in which event  
each day's transactions in such security are, insofar as is possible, averaged  
as to price and allocated between such clients in a manner which in SCMI's      
opinion is equitable to each and in accordance with the amount being purchased  
or sold by each. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients.

Brokerage and Research Services                                                 

Transactions on U.S. stock exchanges and other agency transactions involve the  
payment by the Fund of negotiated brokerage commissions. Such commissions vary  
among brokers. Also, a particular broker may charge different commissions       
according to the difficulty and size of the transaction, for example. There is  
generally no stated commission in the case of securities traded in the          
over-the-counter markets, but the price paid by the Fund usually includes an    
undisclosed dealer commission or mark-up. In underwritten offerings, the price  
paid by the Fund includes a disclosed, fixed commission or discount retained by 
the underwriter or dealer. For fiscal years ended October 31, 1993, 1994 and    
1995, the Fund paid total brokerage commissions of $13,174, $29,224 and $34,391,
respectively.                                                                   

The Investment Advisory Contract authorizes and directs SCMI to place orders for
the purchase and sale of the Fund's investments with brokers or dealers it      
selects and to seek "best execution" of such portfolio transactions. SCMI places
all such orders for the purchase and sale of portfolio securities and buys and  
sells securities for the Fund through a substantial number of brokers and       
dealers. In so doing, SCMI uses its best efforts to obtain for the Fund the most
favorable price and execution available. The Fund may, however, pay higher than 
the lowest available commission rates when SCMI believes it is reasonable to do 
so in light of the value of the brokerage and research services provided by the 
broker effecting the transaction. In seeking the most favorable                 

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price and execution, SCMI, considers all factors it deems relevant (including,  
by way of illustration, price, transaction size, the nature of the market for   
the security, commission amount, the timing of the transaction (taking into     
account market prices and trends), the reputation, experience and financial     
stability of the broker-dealers involved, and the quality of service rendered by
the broker-dealers in other transactions).                                      

It has for many years been a common practice in the investment advisory business
for advisers of investment companies and other institutional investors to       
receive research services from broker-dealers that execute portfolio            
transactions for the clients of such advisers. Consistent with this practice,   
SCMI may receive research services from broker-dealers with which SCMI places   
the Fund's portfolio transactions. These services, which in some cases may also 
be purchased for cash, include such items as general economic and security      
market reviews, industry and company reviews, evaluations of securities and     
recommendations as to the purchase and sale of securities. Some of these        
services are of value to SCMI in advising various of its clients (including the 
Fund), although not all of these services are necessarily useful and of value in
managing the Fund. The management fee paid by the Fund is not reduced because   
SCMI and its affiliates receive such services.                                  

As permitted by Section 28(e) of the Securities Exchange Act of 1934 , SCMI may 
cause the Fund to pay a broker-dealer that provides "brokerage and research     
services" (as defined in the Act) to SCMI with an amount of disclosed commission
for effecting a securities transaction for the Fund in excess of the commission 
which another broker-dealer would have charged for effecting that transaction.  

Consistent with the Rules of Fair Practice of the National Association of       
Securities Dealers, Inc. and subject to seeking the most favorable price and    
execution available and such other policies as the Trustees may determine, SCMI 
may consider sales of shares of the Fund as a factor in the selection of        
broker-dealers to execute portfolio transactions for the Fund.                  

Subject to the general policies of the Fund regarding allocation of portfolio   
brokerage as set forth above, the Trust Board has authorized the Fund to employ 
Schroder Wertheim & Company, Incorporated ("Schroder Wertheim") an affiliate of 
SCMI, to effect securities transactions of the Fund on the New York Stock       
Exchange only, provided certain other conditions are satisfied as described     
below.                                                                          

Payment of brokerage commissions to Schroder Wertheim for effecting such        
transactions is subject to Section 17(e) of the 1940 Act, which requires, among 
other things, that commissions for transactions on a national securities        
exchange paid by a registered investment company to a broker which is an        
affiliated person of such investment company (or an affiliated person of another
person so affiliated) not exceed the usual and customary broker's commissions   
for such transactions. It is the Fund's policy that commissions paid to Schroder
Wertheim will in SCMI's judgment be (i) at least as favorable as commissions    
contemporaneously charged by Schroder Wertheim on comparable transactions for   
its most favored unaffiliated customers and (ii) at least as favorable as those 
which would be charged on comparable transactions by other qualified brokers    
having comparable execution capability. The Trust Board , including a majority  
of the non-interested Trustees, has adopted procedures pursuant to Rule 17e-1   
promulgated by the Securities and Exchange Commission under                     

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Section 17(e) to ensure that commissions paid to Schroder Wertheim by the Fund  
satisfy the foregoing standards. The Trust Board will review all transactions at
least quarterly for compliance with such procedures.                            

The Fund has no understanding or arrangement to direct any specific portion of  
its brokerage to Schroder Wertheim and will not direct brokerage to Schroder    
Wertheim in recognition of research services. The Fund paid no commissions to   
Schroder Wertheim during the fiscal yeras ended October 31, 1993, 1994 and 1995.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION                                  

Determination of Net Asset Value Per Share                                      

The net asset value per share of the Fund is determined each day the New York   
Stock Exchange (the "Exchange") is open, as of 4:00 P.M.(Eastern Time), by      
dividing the value of the Fund's net assets by the total number of Fund shares  
outstanding. The Exchange's most recent holiday schedule (which is subject to   
change) states that it will close on New Year's Day, President's Day, Good      
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and         
Christmas Day.                                                                  

The Trust Board has established procedures for the valuation of the Fund's      
securities: (i) equity securities traded on a securities exchange or on the     
NASDAQ National Market System for which last sale information is regularly      
reported are valued at the last reported sales prices on their primary exchange 
or the NASDAQ National Market System that day (or, in the absence of sales that 
day, at values based on the last sale prices on the preceding trading day or    
closing mid-market prices); (ii) NASDAQ and other unlisted equity securities for
which last sale prices are not regularly reported but for which over-the-counter
market quotations are readily available are valued at the most recently reported
mid-market prices; (iii) securities (including restricted securities) not having
readily-available market quotations are valued at fair value under the Board's  
procedures; (iv) debt securities having a maturity in excess of 60 days are     
valued at the mid-market prices determined by a portfolio pricing service or    
obtained from active market makers on the basis of reasonable inquiry; and (v)  
short-term debt securities (having a remaining maturity of 60 days or less) are 
valued at cost, adjusted for amortization of premiums and accretion of discount.

Puts, calls and Stock Index Futures are valued at the last sales price on the   
principal exchange on which they are traded, or, if there are no transactions,  
in accordance with (i) above. When the Fund writes an option, an amount equal to
the premium received by the Fund is recorded in the Fund's books as an asset,   
and an equivalent deferred credit is recorded as a liability. The deferred      
credit is adjusted ("marked-to-market") to reflect the current market value of  
the option.                                                                     

Redemption in Kind                                                              

In the event that payment for redeemed shares is made wholly or partly in       
portfolio securities, the shareholder may incur brokerage costs in converting   
the securities to cash. An in kind distribution of portfolio securities will be 
less liquid than cash. The shareholder may have difficulty finding a buyer for  
portfolio securities received in payment for redeemed shares. Portfolio         
securities may decline in value between the time of receipt by                  

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the shareholder and conversion to cash. A redemption in kind of the Fund's      
portfolio securities could result in a less diversified portfolio of investments
for the Fund and could affect adversely the liquidity of the Fund's portfolio.  

TAXATION                                                                        

Under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund and  
each other portfolio established from time to time by the Board of Trustees of  
the Trust will be treated as a separate taxpayer for Federal income tax purposes
with the result that: (a) each such portfolio must meet separately the income   
and distribution requirements for qualification as a regulated investment       
company, and (b) the amounts of investment income and capital gains earned will 
be determined on a portfolio-by-portfolio (rather than on Trust-wide) basis.    

The Fund intends to qualify as a regulated investment company under Subchapter M
of the Code. To do so, the Fund intends to distribute to shareholders at least  
90% of its "investment company taxable income" as defined in the Code (which    
includes, dividends, interest and the excess of any net short-term capital gains
over net long-term capital losses), and to meet certain diversification of      
assets, source of income, and other requirements of the Code. The Fund will     
therefore not be subject to Federal income tax on its investment company taxable
income and "net capital gains" (the excess of net long-term capital gains over  
net short-term capital losses) distributed to shareholders. If the Fund does not
meet all of these Code requirements, it will be taxed as an ordinary            
corporation, and its distributions will be taxable to shareholders as ordinary  
income.                                                                         

Amounts not distributed on a timely basis (in accordance with a calendar year   
distribution requirement) are subject to a 4% nondeductible excise tax. To      
prevent this, the Fund must distribute for each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income (excluding any capital gains 
or losses) for the calendar year, (2) at least 98% of the excess of its capital 
gains over capital losses realized during the one-year period ending October 31 
of such year, and (3) all such ordinary income and capital gains for previous   
years that were not distributed during such years. A distribution will be       
treated as paid during the calendar year if it is declared by the Fund in       
October, November or December of the year with a record date in such month and  
paid by the Fund during January of the following year. Such distributions will  
be taxable to shareholders in the calendar year in which the distributions are  
declared, rather than the calendar year in which the distributions are received.

Distributions of investment company taxable income (including realized net      
short-term capital gain) are taxable to shareholders as ordinary income.        
Generally, dividends of investment income (but not capital gain) from the Fund  
will qualify for the Federal dividends-received deduction for corporate         
shareholders to the extent such dividends do not exceed the aggregate amount of 
dividends received by the Fund from domestic corporations, provided the Fund    
shares are held by said shareholders for more than 45 days. If securities held  
by the Fund are considered to be "debt-financed" (generally, acquired with      
borrowed funds), are held by the Fund for less than 46 days (91 days in the case
of certain preferred stock), or are subject to certain forms of hedges or short 
sales, the portion of the dividends paid by the Fund that corresponds to the    
dividends paid with respect to such securities will not be eligible for the     
corporate dividends-received deduction.                                         

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Distributions of net long-term capital gain are taxable to shareholders as      
long-term capital gain, regardless of the length of time the Fund shares have   
been held by a shareholder, and are not eligible for the dividends received     
deduction. A loss realized by a shareholder on the sale of shares of the Fund   
with respect to which capital gain dividends have been paid will, to the extent 
of such capital gain dividends, be treated as long-term capital loss (even      
though such shares may have been held by the shareholder for one year or less). 
Further, a loss realized on a disposition will be disallowed to the extent the  
shares disposed of are replaced (whether by reinvestment of distributions or    
otherwise) within a period of 61 days beginning 30 days before and ending 30    
days after the shares are disposed of. In such a case, the basis of the shares  
acquired will be adjusted to reflect the disallowed loss.                       

All distributions to shareholders are taxable whether reinvested in additional  
shares or received in cash. Shareholders that reinvest distributions in         
additional shares will have a cost basis for federal income tax purposes in each
share received equal to the net asset value of a share of the Fund on the       
reinvestment date. Shareholders will be notified annually as to the Federal tax 
status of distributions.                                                        

Distributions by the Fund reduce the net asset value of the Fund's shares. If a 
distribution reduces the net asset value below a shareholder's cost basis, such 
distribution nevertheless would be taxable to the shareholder as ordinary income
or capital gain as described above, even though, from an investment standpoint, 
it may constitute a partial return of capital. In particular, investors should  
be careful to consider the tax implications of buying shares just prior to a    
distribution. The price of shares purchased at that time includes the amount of 
the forthcoming distribution which will be returned to the investor in the form 
of a taxable distribution.                                                      

Upon redemption or sale of shares, a shareholder will realize a taxable gain or 
loss which generally will be treated as capital gain or loss if the shares are  
capital assets in the shareholder's hands. Such gain or loss generally will be  
long-term or short-term depending upon the shareholder's holding period for the 
shares.                                                                         

The Trust will be required to report to the IRS all distributions and gross     
proceeds from the redemption of Fund shares (except in the case of certain      
exempt shareholders). All such distributions and proceeds generally will be     
subject to the withholding of Federal income tax at a rate of 31% ("backup      
withholding") in the case of non-exempt shareholders if (1) the shareholder     
fails to furnish the Trust with and to certify the shareholder's correct        
taxpayer identification number or social security number, (2) the IRS notifies  
the Trust that the shareholder has failed to report properly certain interest   
and dividend income to the IRS and to respond to notices to that effect, or (3) 
when required to do so, the shareholder fails to certify that they are not      
subject to backup withholding. If the withholding provisions are applicable, any
such distributions or proceeds, whether reinvested in additional shares or taken
in cash, will be reduced by the amount required to be withheld. Any amounts     
withheld may be credited against the shareholder's Federal income tax liability.
Investors may wish to consult their tax advisers about the applicability of the 
backup withholding provisions.                                                  

The foregoing discussion relates only to Federal income tax law as applicable to
U.S. persons (i.e., U.S. citizens and residents and U.S. domestic corporations, 
partnerships, trusts and estates). Distributions by the Fund also may be subject
to state and local taxes, and their treatment under state                       

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and local income tax laws may differ from the Federal income tax treatment.     
Shareholders should consult their tax advisers with respect to particular       
questions of Federal, state and local taxation. Shareholders who are not U.S.   
persons should consult their tax advisers regarding U.S. and foreign tax        
consequences of ownership of shares of the Fund including the likelihood that   
distributions to them would be subject to withholding of U.S. tax at a rate of  
30% (or a lower rate under a tax treaty).                                       

OTHER INFORMATION                                                               

Organization                                                                    

The Trust was originally organized as a Maryland corporation on July 30, 1969.  
On February 29, 1988, the Trust was recapitalized to enable its Board to        
establish a series of separately managed investment portfolios, each having     
different investment objectives and policies. At the time of the                
recapitalization, the Trust's name was changed from "The Cheapside Dollar Fund  
Limited" to "Schroder Capital Funds, Inc." On January 9, 1996, the Trust was    
reorganized as a Delaware business trust. At that time, the Trust's name was    
changed from "Schroder Capital Funds, Inc." to its present name. The Trust is   
registered as an open-end management investment company under the Act.          

Delaware law provides that shareholders shall be entitled to the same           
limitations of personal liability extended to stockholders of private           
corporations for profit. The securities regulators of some states, however, have
indicated that they and the courts in their state may decline to apply Delaware 
law on this point. To guard against this risk, the Trust Instrument contains an 
express disclaimer of shareholder liability for the debts, liabilities,         
obligations, and expenses of the Trust. The Trust Instrument provides for       
indemnification out of each series' property of any shareholder or former       
shareholder held personally liable for the obligations of the series. The Trust 
Instrument also provides that each series shall, upon request, assume the       
defense of any claim made against any shareholder for any act or obligation of  
the series and satisfy any judgment thereon. Thus, the risk of a shareholder    
incurring financial loss on account of shareholder liability is limited to      
circumstances in which Delaware law does not apply (or no contractual limitation
of liability was in effect) and the portfolio is unable to meet its obligations.
Forum believes that, in view of the above, there is no risk of personal         
liability to shareholders.                                                      

Capitalization and Voting                                                       

The Trust has an unlimited number of authorized shares of beneficial interest.  
The Board may, without shareholder approval, divide the authorized shares into  
an unlimited number of separate portfolios or series (such as the Fund) and may 
divide such portfolios or series into classes of shares, and the costs of doing 
so will be borne by the Trust. The Trust currently consists of five separate    
portfolios, each of which has separate investment objectives and policies, and  
five classes, two of which pertains to the Schroder Fund.                       

The Shares of the Fund are fully paid and nonassessable, and have no preferences
as to conversion, exchange, dividends, retirement or other features. The Shares 
have no preemptive rights and have non-cumulative voting rights, which means    
that the holders of more than 50% of the shares voting for the election of      
Trustees can elect 100% of the Trustees if they choose to do so. Each           
shareholder of record is entitled to one vote for each full share held (and a   
fractional vote for each fractional share held). Shares of each class vote      
separately to approve investment advisory agreements or changes in investment   
objectives and other fundamental policies affecting the portfolio to which they 
pertain, but all classes                                                        

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vote together in the election of Trustees and ratification of the selection of  
independent accountants. Shareholders of any particular class are not be        
entitled to vote on any matters as to which such class are not affected.        

The Trust will not hold annual meetings of shareholders. The matters considered 
at an annual meeting typically include the reelection of Trustees, approval of  
an investment advisory agreement, and the ratification of the selection of      
independent accountants. These matters will not be submitted to shareholders    
unless a meeting of shareholders is held for some other reason, such as those   
indicated below. Each of the Trustees will serve until death, resignation or    
removal. Vacancies will be filled by the remaining Trustees, subject to the     
provisions of the 1940 Act requiring a meeting of shareholders for election of  
Trustees to fill vacancies when less than a majority of Trustees then in office 
have been elected by shareholders. Similarly, the selection of accountants and  
renewal of investment advisory agreements for future years will be performed    
annually by the Board. Future shareholder meetings will be held to elect        
Trustees if required by the 1940 Act, to obtain shareholder approval of changes 
in fundamental investment policies, to obtain shareholder approval of material  
changes in investment advisory agreements, to select new accountants if the     
employment of the Trust's accountants has been terminated, and to seek any other
shareholder approval required under the 1940 Act. The Trust Board has the power 
to call a meeting of shareholders at any time when it believes it is necessary  
or appropriate. In addition, Trust Instrument provides that a special meeting of
shareholders may be called at any time for any purpose by the holders of at     
least 10% of the outstanding shares entitled to be voted at such meeting.       

In addition to the foregoing rights, the Trust Instrument provides that holders 
of at least two-thirds of the outstanding shares of the Trust may remove any    
person serving as a Trustee either by declaration in writing or at a meeting    
called for such purpose. Further, the Board is required to call a shareholders  
meeting for the purpose of considering the removal of one or more Trustees if   
requested in writing to do so by the holders of not less than 10% of the        
outstanding shares of the Trust. In addition, the Trust Board is required:, if  
requested in writing to do so by ten or more shareholders of record (who have   
been such for at least six months), holding in the aggregate the lesser of (i)  
shares of the Trust having a total net asset value of at least $25,000 or (ii)  
1% of the outstanding shares of the Trust, to help such holders communicate with
other shareholders of the Trust with a view to obtaining the requisite          
signatures to request a special meeting to consider Trustee removal.            

Principal Shareholders                                                          

As of February 24, 1997, the following persons owned of record or beneficially  
5% or more of the Fund's shares:                                                

Shareholder                              Share Balance          Percent of Fund 
-----------                              -------------          --------------- 

Donaldson Lufkin & Jenrette                3,240.042                62.02%      

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P O Box 2052                                                                    
Jersey City, NJ  07303                                                          

National Investors Services Corp.          1,983.927                37.98%      
75 Wall Street                                                                  
New York, NY 10265                                                              

Performance Information                                                         

The Fund may, from time to time, include quotations of its average annual total 
return in advertisements or reports to shareholders or prospective investors.   

Quotations of average annual total return will be expressed in terms of the     
average annual compounded rate of return of a hypothetical investment in the    
Fund over periods of 1, 5 and 10 years (up to the life of the Fund), calculated 
pursuant to the following formula:                                              

  P(1+T)^n = ERV

(where P = a hypothetical initial payment of $1,000, T = the average annual     
total return, n = the number of years, and ERV = the ending redeemable value of 
a hypothetical $1,000 payment made at the beginning of the period). All total   
return figures will reflect the deduction of Fund expenses (net of certain      
reimbursed expenses) on an annual basis, and will assume that all dividends and 
distributions are reinvested when paid.                                         

For the one year, and since inception periods ended October 31, 1996, the       
average annual total return of the Fund with respect to Investor Shares was     
29.35% and 24.60%, respectively.                                                

Quotations of total return will reflect only the performance of a hypothetical  
investment in the Fund during the particular time period shown. Total return for
the Fund will vary based on changes in market conditions and the level of the   
Fund's expenses, and no reported performance figure should be considered an     
indication of performance which may be expected in the future.                  

In connection with communicating total return to current or prospective         
investors, the Fund also may compare these figures to the performance of other  
mutual funds tracked by mutual fund rating services or to other unmanaged       
indexes which may assume reinvestment of dividends but generally do not reflect 
deductions for administrative and management costs.                             

Investors who purchase and redeem shares of the Fund through a customer account 
maintained at a Service Organization may be charged one or more of the following
types of fees as agreed upon by the Service Organization and the investor, with 
respect to the customer services provided by the Service Organization: account  
fees (a fixed amount per month or per year); transaction fees (a fixed amount   
per transaction processed); compensating balance requirements (a minimum dollar 
amount a customer must maintain in order to obtain the services offered); or    
account maintenance fees (a periodic charge                                     

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based upon a percentage of the assets in the account or of the dividends paid on
these assets). Such fees will have the effect of reducing the average annual    
total return of the Fund for those investors.                                   

Custodian                                                                       

All securities and cash of the Fund are held by The Chase Manhattan Bank, N.A., 
Chase MetroTech Center, Brooklyn, New York 11245.                               

Transfer Agent and Dividend Disbursing Agent                                    

Forum Financial Corp., Portland, Maine, acts as the Fund's transfer agent and   
dividend disbursing agent.                                                      

Legal Counsel                                                                   

Jacobs Persinger & Parker, 77 Water Street, New York, New York 10005, counsel to
the Fund, passes upon certain legal matters in connection with the shares       
offered by the Fund.                                                            

Independent Accountant                                                          

Coopers & Lybrand L.L.P. ("Coopers & Lybrand") serves as independent accountants
for the Fund. Coopers & Lybrand provides audit services and consultation in     
connection with review of U.S. Securities and Exchange Commission filings. Their
address is One Post Office Square, Boston, Massachusetts 02109.                 

FINANCIAL STATEMENTS                                                            

The audited Statement of Assets and Liabilities, Statement of Operations,       
Statements of Changes in Net Assets, Statement of Investments, notes thereto,   
and Financial Highlights of the Fund for the fiscal year ended October 31, 1996 
and the Report of Independent Accountants thereon (included in the Annual Report
to shareholders), which are delivered along with this SAI, are incorporated     
herein by reference.                                                            

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 SCHRODER U.S. EQUITY FUND

 Statement of Additional Information
 March 1, 1997

--------------------------------------------------------------------------------

 [GRAPHIC OMITTED]

Investment Advisor                                                              
Schroder Capital Management International Inc. ("SCMI")                         

Administrator and Distributor                                                   
Schroder Fund Advisors, Inc. ("Schroder Advisors")                              

Sub-Administrator                                                               
Forum Administrative Services, Limited Liability Company ("Forum")              

Transfer Agent and Dividend Disbursing Agent                                    
Forum Financial Corp. ("FFC")                                                   

General Information:                (207) 879-8903                              
Account Information:                (800) 344-8332                              
Fax:                                (207) 879-6206                              

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Investor Shares of the Fund are offered for sale at net asset value with no     
sales charge as an investment vehicle for individuals, institutions,            
corporations and fiduciaries. Advisor Shares of the Fund are offered to         
individual investors, in most cases through Service Organizations (as defined   
herein). Advisor Shares incur more expenses than Investor Shares.               

This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when preceded or accompanied by the current         
Prospectus for the Fund dated March 1, 1997 (the "Prospectus"). This SAI        
contains additional and more detailed information than that set forth in the    
Prospectus and should be read in conjunction with the Prospectus and retained   
for future reference. You may obtain an additional copy of the Prospectus       
without charge by writing to the Fund at Two Portland Square, Portland, Maine   
04101 or calling the numbers listed above.                                      

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    TABLE OF CONTENTS                                                     PAGE
--------------------------------------------------------------------------------

INVESTMENT POLICIES                                           
Introduction                                                  
Primary Investments                                           
Temporary Defensive and Operating Investments                 
Restricted Securities                                         
Leverage                                                      

INVESTMENT RESTRICTIONS                                       

MANAGEMENT                                                    
Trustees and Officers                                         
Investment Adviser                                            
Sub-Administrator                                             
Distribution of Fund Shares                                   
Portfolio Accounting                                          

PORTFOLIO TRANSACTIONS                                        
Investment Decisions                                          
Portfolio Brokerage                                           

SHARE OWNERSHIP                                               

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ADDITIONAL PURCHASE AND                                       

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REDEMPTION INFORMATION                                        
Determination of Net Asset Value                              
Redemption in Kind                                            

TAXATION                                                      

OTHER INFORMATION                                             
Organization                                                  
Capitalization and Voting                                     
Performance Information                                       
Custodian                                                     
Transfer Agent and Dividend Disbursing Agent                  
Legal Counsel                                                 
Independent Accountants                                       

FINANCIAL STATEMENTS                                                            

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INTRODUCTION                                                                    

Schroder U.S. Equity Fund (the "Fund") is a separately-managed, diversified,    
no-load portfolio of Schroder Capital Funds (Delaware) (the "Trust"), an        
open-end management investment company currently consisting of seven separate   
portfolios, each of which has different investment objectives and policies.     
Schroder U.S. Equity Fund is described herein.                                  

The Fund's primary investment objective is to seek growth of capital. Income,   
while a factor in portfolio selection, is secondary to the principal objective. 
There is no assurance that these objectives will be achieved. The Fund invests  
substantially all its assets in common stocks and securities convertible into   
common stock and may also invest in warrants or other rights to purchase common 
stock, and to a lesser extent in non-convertible preferred and debt securities. 

INVESTMENT POLICIES                                                   

Introduction                                                                    

The following information supplements the discussion found under "The Fund -    
Investment Objectives and Investment Policies" in the Prospectus.               

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The Fund is a "diversified" portfolio and, as such, at least 75% of the Fund's  
total assets must be represented by cash and cash items, Government securities  
and securities limited in respect of any one issuer to not more than 5% of the  
Fund's total assets and to not more than 10% of the voting securities of such   
issuer. The classification of the Fund as diversified under the Investment      
Company Act of 1940 (the "1940 Act") cannot be changed without the majority     
approval of the Fund's shareholders. As used in this SAI, "majority approval of 
the Fund's shareholders" means approval of the lesser of (i) 67% or more of the 
Fund's shares present at a meeting if the holders of more than 50% of the       
outstanding shares of the Fund are present or represented by proxy, and (ii)    
more than 50% of the outstanding shares of the Fund.                            

The investment objectives of the Fund set forth in the Prospectus are           
fundamental policies of the Fund, meaning that they cannot be changed without   
majority approval of the Fund's shareholders. A non-fundamental policy could be 
changed by the Trust's Board of Trustees without such prior shareholder         
approval. Unless otherwise indicated, all of the investment policies of the Fund
described below are also fundamental policies.                                  

Primary Investments                                                             

The Fund will generally purchase securities which are believed to have potential
for capital appreciation. Securities, however, will be disposed of in situations
where the Fund believes that such potential is no longer feasible or the risk of
decline in market price is too great. Pursuant to this policy, the Fund has     
invested and normally will invest substantially all its assets in common stock  
and securities convertible into common stock. The Fund may also invest in other 
securities with common stock purchase warrants attached, or in such warrants or 
other rights to purchase common stock. The Fund may also invest to a limited    
degree in non-convertible preferred and debt securities. Such investments might 
be made at such times as in the opinion of management substantially greater     
yields could be earned on such securities of investment grade than on U.S.      
Government securities and bank certificates of deposit. As a non-fundamental    
policy, the Fund will not invest more than 15% of its total assets in such      
non-convertible preferred and debt securities.                                  

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Temporary Defensive and Operating Investments                                   

For temporary defensive purposes, the Fund may invest all or any portion of its 
assets in investment grade corporate bonds or debentures (meaning for these     
purposes bonds or debentures rated "A" or better by Standard & Poor's ("S&P") or
the equivalent thereof), preferred stock, U.S. Government securities or bank    
certificates of deposit. (According to S&P, bonds rated "A" have a strong       
capacity to pay principal and interest although they are somewhat more          
susceptible to the adverse effect of changes in circumstances and economic      
conditions.) The conditions under which the Fund may so invest all or any       
portion of its assets for temporary defensive purposes will be at such times as 
in the opinion of management the market appears relatively fully priced or at   
such times as in the opinion of management uncertain economic conditions        
indicate the advisability of assuming such a temporary defensive position.      

As an operating, non-fundamental policy, the Fund may also invest temporarily in
certain short-term fixed income securities. Such securities may be used to      
invest uncommitted cash balances, or to maintain liquidity to meet shareholder  
redemptions or other Fund obligations. Such securities might include U.S.       
Government securities, commercial paper, bank certificates of deposit and       
bankers acceptances, and repurchase agreements collateralized by such           
securities. The Fund will limit its total investment at any time in these       
securities for this operating purpose to not more than 25% of its total assets. 

Certain of the securities in which the Fund may invest for either of the        
foregoing temporary purposes are more fully described as follows:               

   1. U.S. Government Securities - These securities consist of obligations
issued or guaranteed by the United States Government or its agencies or         
instrumentalities. Agencies and instrumentalities which issue or guarantee debt 
securities and which have been established or sponsored by the United States    
Government include the Bank for Cooperatives, the Export-Import Bank, the       
Federal Farm Credit System, the Federal Home Loan Banks, the Federal Home Loan  
Mortgage Corporation, the Federal Intermediate Credit Banks, the Federal Land   
Banks, the Federal National Mortgage Association, the Government National       
Mortgage Association, and the Student Loan Marketing Association.               

     2. Bank Obligations - These securities consist of certificates of deposit
and bankers' acceptances issued by U.S. banks having total assets at the time of
purchase in excess of $1 billion. Such banks must be members of the Federal     
Deposit Insurance Corporation. A certificate of deposit is an interest-bearing  
negotiable certificate issued by a bank against funds deposited in the bank. A  
bankers' acceptance is a short-term draft drawn on a commercial bank by a       
borrower, usually in connection with an international commercial transaction.   
Although the borrower is liable for payment of the draft, the bank              
unconditionally guarantees to pay the draft at its face value on the maturity   
date.                                                                           

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The foregoing limitation as to banks in whose obligations the Fund may invest is
a non-fundamental policy of the Fund.                                           

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      3. Commercial Paper - These securities are short-term unsecured promissory
notes issued in bearer form by bank holding companies, corporations and finance 
companies. The commercial                                                       

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paper which may be purchased by the Fund for temporary purposes would consist of
direct obligations of domestic issuers which, at the time of investment, are    
rated "P-1" by Moody's Investors Services, Inc. ("Moody's") or "A-1" by S&P, or 
securities which, if not rated, are issued by companies having an outstanding   
debt issue currently rated Aa by Moody's or AAA or AA by S&P. The rating "P-1"  
is the highest commercial paper rating assigned by Moody's and the rating "A-1" 
is the highest commercial paper ratings assigned by S&P. Such limitations with  
respect to commercial paper constitute a non-fundamental policy of the Fund.    

   4. Repurchase Agreements - The Fund may invest in securities subject to
repurchase agreements maturing in seven days or less (normally one day) with    
member banks of the Federal Reserve System or certain dealers listed on the     
Federal Reserve Bank of New York's list of reporting dealers. In a typical      
repurchase agreement the seller of a security commits itself at the time of the 
sale to repurchase such security from the buyer at a mutually agreed-upon time  
and price. The repurchase price exceeds the sale price, reflecting an           
agreed-upon interest rate effective for the period the buyer owns the security  
subject to repurchase. The agreed-upon rate is unrelated to the interest rate on
the underlying security. The value of the underlying security is monitored by   
the Fund's investment adviser at the time the transaction is entered into and at
all times during the term of the repurchase agreement to insure that the value  
of the security always equals or exceeds the repurchase price. In the event of  
default by the seller under the repurchase agreement, the Fund may have         
difficulties in exercising its rights to the underlying securities and may incur
costs and experience time delays in connection with the disposition of such     
securities. To evaluate potential risks, the investment adviser reviews the     
creditworthiness of those banks and dealers with which the Fund enters into     
repurchase agreements. The foregoing policy with respect to repurchase          
agreements is a non-fundamental policy of the Fund.                             

Restricted Securities                                                           

The Fund may from time to time acquire securities which are subject to legal or 
contractual restrictions on resale. The Fund may invest up to 10% of the value  
of its total assets in such restricted securities and should changes in market  
values result in more than 10% being so invested, management will take such     
action as it deems appropriate to reduce such assets to the 10% limit. A        
considerable period might elapse between the time a decision is made to sell    
such securities and the time the Fund might be permitted to sell all or part of 
such securities publicly under an effective registration statement or an        
exemption from registration, or the time the Fund might find a suitable         
purchaser willing to accept such securities subject to restrictions. Such delay 
might adversely affect the price obtainable by the Fund for such securities. The
Fund may be required to pay the registration expenses of restricted securities  
held by it.                                                                     

Leverage                                                                        

The Fund is authorized to borrow money from a bank on its promissory note or    
other evidence of indebtedness. Monies borrowed would be invested and any       
appreciation thereon, to the extent it exceeded interest paid on the loan, would
cause the net assets value of Fund shares to rise faster than it would          
otherwise. If, however, the investment performance of additional monies failed  
to cover the Fund's interest charges, the net asset value would decrease faster 
than would otherwise be the case. This is the speculative feature known as      
"leverage". Any such borrowing (i) would not exceed one-third of the value of   
the Fund's total assets after borrowing, (ii) if at any time it exceeded such   
one-                                                                            

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third limitation, the Fund would within three days thereafter (not including    
Sundays or holidays) or such longer period as the Securities and Exchange       
Commission may prescribe by rules and regulations, reduce its borrowings to the 
limitation and (iii) might or might not be secured and, if secured, all or any  
part of the Fund's assets could be pledged. To comply with such limitations, the
Fund might be required to dispose of certain of its assets when it might be     
disadvantageous to do so. Any such borrowings would be subject to Federal       
Reserve Board regulations. The Fund has not borrowed money for investment or any
other purpose during the last ten years and, as a non-fundamental policy, will  
not borrow for investment in the future.                                        

INVESTMENT RESTRICTIONS                                                         

The following investment restrictions restate or are in addition to those       
described under "The Fund - Investment Restrictions" in the Prospectus. These   
restrictions, which are fundamental policies (except as set forth), provide that
the Fund:                                                                       

      1. Will not issue senior securities except that it may borrow money from a
bank on its promissory note or other evidence of indebtedness. Any such         
borrowing (i) would not exceed one-third of the value of the Fund's total assets
after the borrowing, (ii) if at any time it exceeded such one-third limitation, 
the Fund would within three days thereafter (not including Sundays or holidays) 
or such longer period as the Securities and Exchange Commission may prescribe by
rules and regulations, reduce its borrowings to the limitation and (iii) might  
or might not be secured and, if secured, all or any part of the Fund's assets   
could be pledged. To comply with such limitations, the Fund might be required to
dispose of certain of its assets when it might be disadvantageous to do so. Any 
such borrowings would be subject to Federal Reserve Board regulations. (As a    
non-fundamental policy, the Fund will not borrow for investment purposes).      

    2. Will not effect short sales, purchase any security on margin or write
or purchase put and call options.                                               

 3. Will not acquire more than 10% of the voting securities of any one
issuer.                                                                         

      4. Will not invest 25% or more of the value of its total assets in any one
industry.                                                                       

     5. Will not engage in the purchase and sale of illiquid interests in real
estate, including illiquid interests in real estate investment trusts.          

   6. Will not engage in the purchase and sale of commodities or commodity
contracts.                                                                      

    7. Will not invest in companies for the purpose of exercising control or
management.                                                                     

    8. Will not underwrite securities of other issuers, except that the Fund
may acquire portfolio securities, not in excess of 10% of the value of its total
assets, under circumstances where if sold it might be deemed to be an           
underwriter for the purposes of the Securities Act of 1933.                     

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9. Will not make loans to other persons except that it may purchase 
evidences of indebtedness of a type distributed privately to financial          
institutions but not in excess of 10% of the value of its total assets.         

   10. Will not acquire securities described in 8 and 9 above which in the
aggregate exceed 10% of the value of the Fund's total assets.                   

11. Will not invest in other investment companies.                  

As non-fundamental policies, the Fund (a) will not invest more than 10% of its  
total assets in illiquid securities, including securities described in items 8  
and 9 above and repurchase agreements maturing more than seven days after they  
are entered into and (b) will not engage in writing, buying or selling of stock 
index futures, options on stock index futures, financial futures contracts or   
options thereon.                                                                

MANAGEMENT                                                                      

Trustees and Officers                                                           

The following information relates to the principal occupations of each Trustee  
and executive officer of the Trust during the past five years and shows the     
nature of any affiliation with SCMI.                                            

Robert G. Davy, 787 Seventh Avenue, New York, New York - a Vice-President of the
Trust - Director of SCMI and Schroder Capital Management International Ltd.     
since 1994; First Vice President of SCMI since July, 1992; prior thereto,       
employed by various affiliates of Schroders plc in various positions in the     
investment research and portfolio management areas since 1986.                  

Margaret H. Douglas-Hamilton(b) (c), 787 Seventh Avenue, New York, New York -   
Secretary of the Trust - Secretary of SCMI since July 1995; Secretary of        
Schroder Advisers since April 1990; First Vice President and General Counsel of 
Schroders Incorporated(b) since May 1987; prior thereto, partner of Sullivan &  
Worcester, a law firm.                                                          

Richard R. Foulkes, 787 Seventh Avenue, New York, New York - a Vice President of
the Trust; Deputy Chairman of SCMI since October 1995; Director and Executive   
Vice President of Schroder Capital Management International Ltd. since 1989.    

David I. Goldstein, 2 Portland Square, Portland, Maine - Assistant Treasurer and
Assistant Secretary of the Trust Counsel, Forum Financial Services, Inc. Since  
1991; prior thereto, associate at Kirkpatrick & Lockhart, Washington, D.C.      

Barbara Gottlieb(c), 787 Seventh Avenue, New York, New York - Assistant         
Secretary of the Trust - Assistant Vice President of SWIS since July 1995 prior 
thereto held various positions with SWIS affiliates.                            

Peter E. Guernsey, Oyster Bay, New York - Trustee of the Trust - Insurance      
Consultant since August 1986; prior thereto Senior Vice President, Marsh &      
McLennan, Inc., insurance brokers.                                              

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Ralph E. Hansmann (Honorary), 40 Wall Street, New York, New York - Honorary     
Trustee of the Trust - Private investor; Director, First Eagle Fund of America, 
Inc.; Director, Verde Exploration, Ltd.; Trustee Emeritus, Institute for        
Advanced Study; Trustee and Treasurer, New York Public Library; Life Trustee,   
Hamilton College.                                                               

John I. Howell, 7 Riverside Road, Greenwich, Connecticut - Trustee of the Trust 
- Private Consultant since February 1987; Director, American International      
Group, Inc.; Director, American International Life Assurance Company of New     
York.                                                                           

Robert Jackowitz(b) (c), 787 Seventh Avenue, New York, New York - Treasurer of  
the Trust - Vice President of SCMI since September 1995; Treasurer of SCMI and  
Schroder Advisers since July 1995; Vice President of SCMI since June 1995; and  
Assistant Treasurer of Schroders Incorporated since January 1993.               

John Y. Keffer, 2 Portland Square, Portland, Maine - Vice President of the      
Trust. President of Forum Financial Services, Inc., the Fund's                  
sub-administrator, and Forum Financial Corp., the Fund's transfer and dividend  
disbursing agent and fund accountant.                                           

Jane P. Lucas, (c) 787 Seventh Avenue, New York, New York - Vice President of   
the Trust - Director and Senior Vice President SCMI; Director of SCMI since     
September 1995; Assistant Director Schroder Investment Management Ltd. since    
June 1991.                                                                      

Gerardo Machado, 787 Seventh Avenue, New York, New York - Assistant Secretary of
the Trust - Associate, SCMI.                                                    

Catherine A. Mazza, 787 Seventh Avenue, New York, New York - Vice President of  
the Trust - President of Schroder Advisors since 1997; First Vice President of  
SCMI and SCMI since1996; Vice President of SCMI since 1994; prior thereto, held 
various marketing positions at Alliance Capital, an investment adviser, since   
July 1985.                                                                      

Clarence F. Michalis, 44 East 64th Street, New York, New York - Trustee of the  
Trust - Chairman of the Board of Directors, Josiah Macy, Jr. Foundation         
(charitable foundation).                                                        

Hermann C. Schwab, 787 Seventh Avenue, New York, New York - Chairman (Honorary) 
and Trustee of the Trust - retired since March, 1988; prior thereto, consultant 
to SCMI since February 1, 1984.                                                 

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Thomas G. Sheehan, 2 Portland Square, Portland, Maine - Assistant Treasurer and 
Assistant Secretary of the Trust - Counsel, Forum Financial Services, Inc. since
1993; prior thereto, Special Counsel, U.S. Securities and Exchange Commission,  
Division of Investment Management, Washington, D.C.                             

Mark J. Smith(a) (b), 33 Gutter Lane, London, England - a Vice President and    
Trustee of the Trust - First Vice President of SCMI since April 1990; Director  
and Vice President, Schroder Advisors since 1989.                               

Fariba Talebi, 787 Seventh Avenue, New York, New York - Vice President of the   
Trust - First Vice President of SCMI since April 1993, employed in various      
positions in the investment research and portfolio management areas since 1987. 

John A. Troiano(b), 787 Seventh Avenue, New York, New York - Vice President of  
the Trust - Managing Director and Senior Vice President of SCMI since October   
1995; Director of Schroder Advisors since October 1992; Director of SCMI since  
1991; prior thereto, employed by various affiliates of SCMI in various positions
in the investment research and portfolio management areas since 1981.           

Ira L. Unschuld, 787 Seventh Avenue, New York, New York - Vice President of the 
Trust - Vice President of SCMI since April, 1993 and an Associate from July,    
1990 to April, 1993; prior to July, 1990, employed by various financial         
institutions as a securities or financial analyst.                              

(a)   Interested Trustee of the Trust within the meaning of the 1940 Act.       

(b)   Schroder Fund Advisors, Inc. ("Schroder Advisors") is a wholly-owned      
subsidiary of SCMI, which is a wholly-owned subsidiary of Schroders 
    Incorporated, which in turn is an indirect, wholly-owned U.S. subsidiary
of Schroders plc.                                                   

(c)   Schroder Capital Management, Inc. ("SCMI") is a wholly-owned subsidiary of
      Schroder Wertheim Holdings Incorporated which is a wholly-owned subsidiary
      of Schroders, Incorporated, which in turn is an indirect wholly-owned U.S.
subsidiary of Schroders plc.                                        

Officers and Trustees who are interested persons of the Trust receive no salary,
fees or compensation from the Fund. Independent Trustees of the Trust receive an
annual fee of $1,000 and a fee of $250 for                                      

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each meeting of the Board attended by them except in the case of Mr. Schwab, who
receives an annual fee of $1,500 and a fee of $500 for each meeting attended.   
The Fund has no bonus, profit sharing, pension or retirement plans.             

The following table provides the fees paid to each Trustee of the Trust for the 
fiscal year ended October 31, 1996.                                             

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                                                        [Enlarge/Download Table]


Name of Trustee                           Aggregate            Pension or     Estimated Annual    Total Compensation 
                                  Compensation From   Retirement Benefits        Benefits Upon   From Trust And Fund 
                                              Trust    Accrued As Part of           Retirement       Complex Paid To 
                                                           Trust Expenses                                   Trustees 
---------------------------------------------------------------------------------------------------------------------

                                                                                                                     
Mr. Guernsey                                 $1,750                    $0                   $0                $1,750 
Mr. Hansmann                                  1,375                     0                    0                 1,375 
Mr. Howell                                    1,750                     0                    0                 1,750 
Ms. Luckyn-Malone                                 0                     0                    0                     0 
Mr. Michalis                                  1,750                     0                    0                 1,750 
Mr. Schwab                                    3,000                     0                    0                 3,000 
Mr. Smith                                         0                     0                    0                     0 

As of February 15, 1997, the officers and Trustees of the Trust owned, in the   
aggregate, less than 1% of the Fund's outstanding shares.                       

While the Trust is a Delaware business trust, certain of its Trustees or        
officers are residents of the United Kingdom and substantially all of their     
assets may be located outside of the U.S. As a result it may be difficult for   
U.S. investors to effect service upon such persons within the U.S., or to       
realize judgments of courts of the U.S. predicated upon civil liabilities of    
such persons under the Federal securities laws of the U.S. The Trust has been   
advised that there is substantial doubt as to the enforceability in the United  
Kingdom of such civil remedies and criminal penalties as are afforded by the    
Federal securities laws of the U.S. Also it is unclear if extradition treaties  
now in effect between the U.S. and the United Kingdom would subject such persons
to effective enforcement of the criminal penalties of such acts.                

Investment Adviser                                                              

Schroder Capital Management International Inc. ("SCMI"), 787 Seventh Avenue, New
York, New York 10019, serves as Investment Adviser to the Fund pursuant to an   
Investment Advisory Contract between the Trust and SCMI. SCMI is a wholly-owned 
United States subsidiary of Schroders Incorporated, the wholly-owned United     
States holding company subsidiary of Schroders plc. Schroders plc is the holding
company parent of a large world-wide group of banks and financial service       
companies (referred to as the "Schroder Group"), with associated companies and  
branch and representative offices located in eighteen countries. The Schroder   
Group specializes in providing investment management services, with Group funds 
under management currently in excess of $130 billion.                           

Under the Investment Advisory Contract, SCMI regularly provides the Fund with   
investment research, advice and supervision and furnishes continuously an       
investment program for the Fund's investments consistent with the Fund's        
investment objectives. SCMI recommends what securities shall be bought or sold  
by the Fund, and what portion of the Fund's assets shall be held uninvested.    
SCMI advises and assists the officers of the Trust in taking such steps as are  
necessary or appropriate to carry out the decisions of its Board of Trustees    
regarding the foregoing matters and general conduct of the                      

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investment business of the Fund. SCMI pays directly any office rent of the Fund 
and furnishes or causes to be furnished without expense to the Fund, the        
services of such of its officers and employees and employees of its corporate   
affiliates as may be duly elected officers or Trustees of the Trust. In         
addition, SCMI provides investment advisory, research and statistical facilities
and all clerical services relating to research, statistical and investment work.
The Fund pays all of its other costs and expenses, including without limitation:
brokers' commissions; legal, auditing or accounting expenses, taxes or          
governmental fees; cost of preparing share certificates or any other expenses   
(including clerical expenses) of issue (not including sales or promotion        
expenses unless the Fund shall in the future duly adopt a plan pursuant to Rule 
12b-1 under the 1940 Act), distribution, redemption or repurchase of shares of  
the Fund; registration expenses; the cost of preparing and distributing reports 
and notices to shareholders; fees or disbursements of the custodian of the      
Fund's assets, of the Fund's dividend disbursing agent and of the Fund's        
transfer agent. To the extent employees of SCMI or its affiliates devote their  
time to the affairs of the Fund, other than as officers or Trustees, the Fund   
will reimburse SCMI or such affiliates the pro rate share of such individuals'  
salaries or wages and expenses.                                                 

Under the Investment Advisory Contract, SCMI receives a fee for its services,   
computed daily and payable monthly, at the annual rate of 0.75% of the Fund's   
average daily net assets of the first $100 million and 0.50% of the Fund's      
average daily net assets in excess of $100 million.. It is the Trust's          
understanding that although other mutual funds pay investment advisory fees at  
annual rates of 0.75% or more of their average net assets (or a portion         
thereof), the majority of other mutual funds, regardless of size, pay advisory  
fees at rates lower than 0.75% of any portion of their average net assets. For  
the fiscal years ended October 31, 1994, 1995 and 1996, SCMI earned an aggregate
of $144,539, $140,988 and $139,483, respectively, in advisory fees from the     
Fund.                                                                           

The Investment Advisory Contract will continue in effect provided such          
continuance is approved annually (i) by the holders of a majority of the        
outstanding voting securities of the Fund or by the Board and (ii) by a majority
of the Trustees who are not parties to such Contract or "interested persons" (as
defined in the 1940 Act) of any such party. The Investment Advisory Contract may
be terminated without penalty by vote of the Trustees or the shareholders of the
Fund on 60 days' written notice to the Adviser, or by the Adviser on 60 days'   
written notice to the Trust and it will terminate automatically if assigned. The
Investment Advisory Contract also provides that, with respect to the Fund,      
neither SCMI nor its personnel shall be liable for any error of judgment or     
mistake of law or for any act or omission in the performance of its or their    
duties to the Fund, except for willful misfeasance, bad faith or gross          
negligence in the performance of the SCMI's or their duties or by reason of     
reckless disregard of its or their obligations and duties under the Investment  
Advisory Contract.                                                              

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Sub-Administrator                                                               

On behalf of the Fund, the Trust and SCMI have entered into a Sub-Administration
Agreement with Forum Financial Services, Inc. ("Forum"). Pursuant to its        
agreement, Forum provides certain management and administrative services        
necessary for the Fund's operations, other than the investment management and   
administrative services provided to the Fund by SCMI pursuant to the            

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Investment Advisory Contract, including among other things, (i) preparation of  
shareholder reports and communications, (ii) regulatory compliance, such as     
reports to and filings with the Securities and Exchange Commission and state    
securities commissions, and (iii) general supervision of the operation of the   
Fund, including coordination of the services performed by the Fund's investment 
adviser, transfer agent, custodian, independent accountants, legal counsel and  
others.                                                                         

The Sub-Administration Agreement is terminable with respect to the Fund without 
penalty, at any time, by the Board of Trustees and SCMI upon 60 days' written   
notice to Forum or by Forum upon 60 days' written notice to the Fund and the    
Adviser.                                                                        

Distribution of Fund Shares                                                     

Schroder Fund Advisors Inc. ("Schroder Advisors"), 787 Seventh Avenue, New York,
New York 10019, was appointed Distributor of the Fund shares pursuant to an     
agreement approved by the Board of Trustees of the Trust at a meeting held on   
November 2, 1992. The renewal of the distribution agreement for the one year    
period ending February 1, 1996 was approved by the Board of Trustees at a       
meeting held on November 21, 1994 (which approval included the approval of a    
majority of the Trustees who are not interested persons). Schroder Advisors is a
wholly-owned subsidiary of Schroders Incorporated, the parent company of SCMI,  
and is a registered broker-dealer organized to act as administrator and/or      
distributor of mutual funds. Effective July 5, 1995, Schroder Advisors changed  
its name from Schroder Capital Distributors Inc.                                

Under the distribution agreement, Schroder Advisors has agreed to use its best  
efforts to secure purchases of Fund shares in jurisdictions in which such shares
may be legally offered for sale. Schroder Advisors is not obligated to sell any 
specific amount of Fund shares. Further, Schroder Advisors has agreed in the    
distribution agreement to serve without compensation and to pay from its own    
resources all costs and expenses incident to the sale and distribution of Fund  
shares including expenses of printing and distribution to prospective investors 
of prospectuses and other sales materials and advertising expenses, and the     
salaries and expenses of its employees or agents in connection with the         
distribution of Fund shares.                                                    

Portfolio Accounting                                                            

Forum Financial Corp. ("FFC"), an affiliate of Forum, performs portfolio        
accounting services for the Fund pursuant to a Fund Accounting Agreement with   
the Trust. The Fund Accounting Agreement will continue in effect only if such   
continuance is specifically approved at least annually by the Board of Trustees 
or by a vote of the shareholders of the Trust and in either case by a majority  
of the Trustees who are not parties to the Fund Accounting Agreement or         
interested persons of any such party, at a meeting called for the purpose of    
voting on the Fund Accounting Agreement.                                        

Under its agreement, FFC prepares and maintains books and records of the Fund on
behalf of the Trust that are required to be maintained under the 1940 Act,      
calculates the net asset value per share of the Fund and dividends and capital  
gain distributions and prepares periodic reports to shareholders and the        
Securities and Exchange Commission. For its services, FFC receives from the     
Trust with respect to the Fund a fee of $36,000 per year plus, for each class of
the Fund above one, $12,000 per year. FFC is                                    

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paid an additional $24,000 per year with respect to global and international    
funds. In addition, FFC is paid an additional $12,000 per year with respect to  
tax-free money market funds and funds with more than 25% of their total assets  
invested in asset backed securities, that have more than 100 security positions 
or that have a monthly portfolio turnover rate of 10% or greater.               

FFC is required to use its best judgment and efforts in rendering fund          
accounting services and is not be liable to the Trust for any action or inaction
in the absence of bad faith, willful misconduct or gross negligence. FFC is not 
responsible or liable for any failure or delay in performance of its fund       
accounting obligations arising out of or caused, directly or indirectly, by     
circumstances beyond its reasonable control and the Trust has agreed to         
indemnify and hold harmless FFC, its employees, agents, officers and directors  
against and from any and all claims, demands, actions, suits, judgments,        
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising out of or in any way related to FFC's actions
taken or failures to act with respect to a Fund or based, if applicable, upon   
information, instructions or requests with respect to a Fund given or made to   
FFC by an officer of the Trust duly authorized. This indemnification does not   
apply to FFC's actions taken or failures to act in cases of FFC's own bad faith,
willful misconduct or gross negligence.                                         

FFC assumed responsibility for fund accounting on August 15, 1994. Previously,  
these services were performed by Schroders Incorporated, the parent company of  
SCMI. For the fiscal years ended October 31, 1994, 1995 and 1996, the Fund paid 
fund accounting fees of $31,596, $38,000 and $36,000, respectively.             

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PORTFOLIO TRANSACTIONS                                                          

Investment Decisions                                                            

Investment decisions for the Fund and for the other investment advisory clients 
of SCMI are made with a view to achieving their respective investment           
objectives. Investment decisions are the product of many factors in addition to 
basic suitability for the particular client involved. Thus, a particular        
security may be bought or sold for other clients at the same time. Likewise, a  
particular security may be bought for one or more clients when one or more      
clients are selling the security. In some instances, one client may sell a      
particular security to another client. It also sometimes happens that two or    
more clients simultaneously purchase or sell the same security, in which event  
each day's transactions in such security are, insofar as is possible, averaged  
as to price and allocated between such clients in a manner which in SCMI's      
opinion is equitable to each and in accordance with the amount being purchased  
or sold by each. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients.

Portfolio Brokerage                                                             

Decisions with respect to allocation of portfolio brokerage are made by the     
Trust's President, a Vice President or Treasurer.                               

It is the Fund's policy, consistent with the best execution, to secure the      
highest possible price on sales and the lowest possible price on purchases of   
securities. Over- the-counter purchases and sales are transacted directly with  
principal market makers except in those circumstances where in the opinion of   
the Trust's officers better prices and executions are available elsewhere.      
Portfolio transactions are frequently placed with broker-dealers who provide    
SCMI with research and statistical assistance. The assistance may include advice
as to the advisability of investing in securities, security analysis and        
reports, economic studies, industry studies, receipt of quotations for portfolio
valuations and similar services.                                                

Give equal price and comparable execution of the transaction, it is the policy  
of the Fund to select a broker or dealer primarily on the basis of the          
furnishing of such services to SCMI by the broker or dealer. Although no fixed  
formula is used in placing such transactions, an attempt is made to allocate    
such brokerage in proportion to the services rendered to SCMI. SCMI may thus be 
able to supplement its own information, and to consider the views and           
information of other research organizations in arriving at its investment       
recommendations. If such information is received, and if it is in fact useful to
SCMI, it may tend to reduce SCMI's cost; however, the dollar value of any       
information received is indeterminable and may in fact be negligible and does   
not tend to reduce SCMI's normal and customary research activities. The research
services furnished by brokers or dealers through whom the Fund effects          
securities transactions may be used by SCMI in servicing all of its accounts,   
and not all such services may be used by SCMI in connection with the Fund.      
Portfolio transactions are also frequently placed with broker-dealers acting as 
principals in the "third market".                                               

Subject to the general policies of the Fund regarding allocation of portfolio   
brokerage as set forth above, the Board of Trustees has authorized the Fund to  
employ Schroder Wertheim & Company, Incorporated ("Schroder Wertheim"), an      
affiliate of SCMI, to effect securities transactions of the Fund,               

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on the New York Stock Exchange only, provided certain other conditions are      
satisfied as described below.                                                   

Payment of brokerage commissions to Schroder Wertheim for effecting such        
transactions is subject to Section 17(e) of the 1940 Act, which requires, among 
other things, that commissions for transactions on a national securities        
exchange paid by a registered investment company to a broker which is an        
affiliated person of such investment company or an affiliated person of another 
person so affiliated not exceed the usual and customary broker's commissions for
such transactions. It is the Fund's policy that commissions paid to Schroder    
Wertheim will in the judgment of the officers of the Trust responsible for      
making portfolio decisions and selecting brokers, be (i) at least as favorable  
as commissions contemporaneously charged by Schroder Wertheim on comparable     
transactions for its most favored unaffiliated customers and (ii) at least as   
favorable as those which would be charged on comparable transactions by other   
qualified brokers having comparable execution capability. The Board of Trustees 
of the Trust, including a majority of the non-interested Trustees, has adopted  
procedures pursuant to Rule 17e-1 promulgated by the Securities and Exchange    
Commission under Section 17(e) to ensure that commissions paid to Schroder      
Wertheim by the Fund satisfy the foregoing standards. The Board will review all 
transactions at least quarterly for compliance with these procedures.           

The Fund has no understanding or arrangement to direct any specific portion of  
its brokerage to Schroder Wertheim and will not direct brokerage to Schroder    
Wertheim in recognition of research services.                                   

During the fiscal years ended October 31, 1994, 1995 and 1996 the total         
brokerage commissions paid by the Fund on portfolio transactions were $23,579,  
$31,381and $31,868 respectively. These amounts do not include any spreads or    
concessions on principal transactions on a net trade basis. Substantially all of
such commissions were paid to firms which provided SCMI with research and       
statistical assistance. No commissions were paid to Schroder Wertheim during any
of the fiscal years ended October 31, 1994, 1995 and 1996.                      

SHARE OWNERSHIP                                                                 

As of February 24, 1997, the following persons owned of record or beneficially  
5% or more of the Fund's shares:w                                               

Shareholder                                  Share Balance       Percent of Fund
--------------------------------------------------------------------------------

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Gracechurch Co.                               191,211.439            11.22%     
75 Wall Street                                                                  
New York, NY 10265                                                              

Schroder Nominees Limited                     152,044.768             8.93%     
120 Cheapside                                                                   
London EC2V 6DS England                                                         

Wendel & Co.                                  110,983.024             6.52%     
c/o The Bank of New York                                                        
Wall Street Station                                                             
New York, NY 10268                                                              

Fox & Co.                                     101,539.373             5.96%     
P.O. Box 976                                                                    
New York, NY 10268                                                              

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION                                  

Determination of Net Asset Value                                                

The net asset value per share of the Fund is calculated at 4:00 p.m. (New York  
City time), Monday through Friday, on each day that the New York Stock Exchange 
is open for trading (which excludes the following national business holidays:   
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,   
Labor Day, Thanksgiving Day and Christmas Day). Net asset value per share is    
calculated by dividing the aggregate value of the Fund's assets less all        
liabilities by the number of shares of the Fund outstanding.                    

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Portfolio securities listed on the New York Stock Exchange are valued on the    
basis of the last sale on that date on the basis of information obtained from   
authoritative sources at the end of the business day. Lacking any sales, they   
are valued at the average of the closing bid and asked prices. Securities not   
listed on such exchange are valued by the use of quotations on any other        
national stock exchange on which the securities are listed, or if unlisted,     
published quotations in common use and/or quotations from a market maker or     
makers in the security, in each case on the basis of information obtained from  
authoritative sources, or if securities for which no quotations are available,  
including restricted securities, by such other method as the Board of Trustees, 
in good faith, shall deem to reflect their fair value. If securities are listed 
on more than one national stock exchange (other than the New York Stock         
Exchange), they are valued on the basis of quotations on the national stock     
exchange in which the primary market for the securities exists.                 

Redemption in Kind                                                              

In the event that payment for redeemed shares is made wholly or partly in       
portfolio securities, brokerage costs may be incurred by the shareholder in     
converting the securities to cash. An in kind distribution of portfolio         
securities will be less liquid than cash. The shareholder may have difficulty in
finding a buyer for portfolio securities received in payment for redeemed       
shares. Portfolio securities may decline in value between the time of receipt by
the shareholder and conversion to cash. A redemption in kind of the Fund's      
portfolio securities could result in a less diversified portfolio of investments
for the Fund and could affect adversely the liquidity of the Fund's portfolio.  

TAXATION                                                                        

Under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund and  
each other portfolio established from time to time by the Board of Trustees of  
the Trust will be treated as a separate taxpayer for Federal income tax purposes
with the result that: (a) each such portfolio must meet separately the income   
and distribution requirements for qualification as a regulated investment       
company, and (b) the amounts of investment income and capital gains earned will 
be determined on a portfolio-by-portfolio (rather than on a Trust-wide) basis.  

The Fund intends to continue to qualify as a regulated investment company under 
Subchapter M of the Code. To qualify as a regulated investment company the Fund 
intends to distribute to shareholders at least 90% of its "investment company   
taxable income" as defined in the Code (which includes, among other items,      
dividends, interest and the excess of any net short-term capital gains over net 
long-term capital losses), and to meet certain diversification of assets, source
of income, and other requirements of the Code. By so doing, the Fund will not be
subject to Federal income tax on its investment company taxable income and "net 
capital gains" (the excess of net long-term capital gains over net short-term   
capital losses) distributed to shareholders. If the Fund does not meet all of   
these Code requirements, it will be taxed as an ordinary corporation, and its   
distributions will be taxable to shareholders as ordinary income.               

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Amounts not distributed on a timely basis in accordance with a calendar year    
distribution requirement are subject to a 4% nondeductible excise tax. To       
prevent imposition of the excise tax, the Fund must distribute for each calendar
year an amount equal to the sum of (1) at least 98% of its ordinary income      
(excluding any capital gains or losses) for the calendar year, (2) at least 98% 
of the excess of its capital gains over capital losses realized during the      
one-year period ending October 31 of such year, and (3) all such ordinary income
and capital gains for previous years that were not distributed during such      
years. A distribution will be treated as paid during the calendar year if it is 
declared by the Fund in October, November or December of the year with a record 
date in such month and paid by the Fund during January of the following year.   
Such distributions will be taxable to shareholders in the calendar year in which
the distributions are declared, rather than the calendar year in which the      
distributions are received.                                                     

Distributions of investment company taxable income (including realized net      
short-term capital gain) are taxable to shareholders as ordinary income.        
Generally, dividends of investment income (but not capital gain) from the Fund  
will qualify for the Federal 70% dividends-received deduction for corporate     
shareholders to the extent such dividends do not exceed the aggregate amount of 
dividends received by the Fund from domestic corporations, provided the Fund    
shares are held by said shareholders for more than 45 days. If securities held  
by the Fund are considered to be "debt-financed" (generally, acquired with      
borrowed funds), are held by the Fund for less than 46 days (91 days in the case
of certain preferred stock), or are subject to certain forms of hedges or short 
sales, the portion of the dividends paid by the Fund which corresponds to the   
dividends paid with respect to such securities will not be eligible for the     
corporate dividends-received deduction.                                         

Distributions of net long-term capital gain are taxable to shareholders as      
long-term capital gain, regardless of the length of time the Fund shares have   
been held by a shareholder, and are not eligible for the dividends received     
deduction. A loss realized by a shareholder on the sale of shares of the Fund   
with respect to which capital gain dividends have been paid will, to the extent 
of such capital gain dividends, be treated as long-term capital loss although   
such shares may have been held by the shareholder for one year or less. Further,
a loss realized on a disposition will be disallowed to the extent the shares    
disposed of are replaced (whether by reinvestment of distributions or otherwise)
within a period of 61 days beginning 30 days before and ending 30 days after the
shares are disposed of. In such a case, the basis of the shares acquired will be
adjusted to reflect the disallowed loss.                                        

All distributions are taxable to the shareholder whether reinvested in          
additional shares or received in cash. Shareholders receiving distributions in  
the form of additional shares will have a cost basis for Federal income tax     
purposes in each share received equal to the net asset value of a share of the  
Fund on the reinvestment date. Shareholders will be notified annually as to the 
Federal tax status of distributions.                                            

Distributions by the Fund reduce the net asset value of the Fund's shares.      
Should a distribution reduce the net asset value below a shareholder's cost     
basis, such distribution nevertheless would be taxable to the shareholder as    
ordinary income or capital gain as described above, even though, from an        
investment standpoint, it may constitute a partial return of capital. In        
particular, investors should be careful to consider the tax implications of     
buying shares just prior to a distribution. The price of shares purchased at    
that time includes the amount of the forthcoming distribution. Those purchasing 
just prior to a distribution will receive a distribution which will nevertheless
be taxable to them.                                                             

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Upon redemption or sale of his shares, a shareholder will realize a taxable gain
or loss depending upon his basis in his shares. Such gain or loss generally will
be treated as capital gain or loss if the shares are capital assets in the      
shareholder's hands. Such gain or loss generally will be long-term or short-term
depending upon the shareholder's holding period for the shares.                 

The Trust will be required to report to the Internal Revenue Service (the "IRS")
all distributions as well as gross proceeds from the redemption of the Fund     
shares, except in the case of certain exempt shareholders. All such             
distributions and proceeds generally will be subject to withholding of Federal  
income tax at a rate of 31% ("backup withholding") in the case of non-exempt    
shareholders if (1) the shareholder fails to furnish the Trust with and to      
certify the shareholder's correct taxpayer identification number or social      
security number, (2) the IRS notifies the Trust that the shareholder has failed 
to report properly certain interest and dividend income to the IRS and to       
respond to notices to that effect, or (3) when required to do so, the           
shareholder fails to certify that he is not subject to backup withholding. If   
the withholding provisions are applicable, any such distributions or proceeds,  
whether reinvested in additional shares or taken in cash, will be reduced by the
amount required to be withheld. Any amounts withheld may be credited against the
shareholder's Federal income tax liability. Investors may wish to consult their 
tax advisers about the applicability of the backup withholding provisions.      

The foregoing discussion relates only to Federal income tax law as applicable to
U.S. persons (i.e., U.S. citizens and residents and U.S. domestic corporations, 
partnerships, trusts and estates). Distributions by the Fund also may be subject
to state and local taxes, and their treatment under state and local income tax  
laws may differ from the Federal income tax treatment. Shareholders should      
consult their tax advisers with respect to particular questions of Federal,     
state and local taxation. Shareholders who are not U.S. persons should consult  
their tax advisers regarding U.S. and foreign tax consequences of ownership of  
shares of the Fund including the likelihood that distributions to them would be 
subject to withholding of U.S. tax at a rate of 30% (or a lower rate under a tax
treaty).                                                                        

OTHER INFORMATION                                                               

Organization                                                                    

The Trust was originally organized as a Maryland corporation on July 30, 1969.  
On February 29, 1988, the Trust was recapitalized to enable the Board to        
establish a series of separately managed investment portfolios, each having     
different investment objectives and policies. At the time of the                
recapitalization, the Trust's name was changed from "The Cheapside Dollar Fund  
Limited" to                                                                     

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"Schroder Capital Funds, Inc." On January 9, 1996, the Trust was reorganized as 
a Delaware business trust. At that time, the Trust's name was changed from      
"Schroder Capital Funds, Inc." to its present name. The Trust is registered as  
an open-end management investment company under the Act.                        

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Delaware law provides that shareholders shall be entitled to the same           
limitations of personal liability extended to stockholders of private           
corporations for profit. The securities regulators of some states, however, have
indicated that they and the courts in their state may decline to apply Delaware 
law on this point. To guard against this risk, the Trust Instrument contains an 
express disclaimer of shareholder liability for the debts, liabilities,         
obligations, and expenses of the Trust. The Trust Instrument provides for       
indemnification out of each series' property of any shareholder or former       
shareholder held personally liable for the obligations of the series. The Trust 
Instrument also provides that each series shall, upon request, assume the       
defense of any claim made against any shareholder for any act or obligation of  
the series and satisfy any judgment thereon. Thus, the risk of a shareholder    
incurring financial loss on account of shareholder liability is limited to      
circumstances in which Delaware law does not apply (or no contractual limitation
of liability was in effect) and the portfolio is unable to meet its obligations.
Forum believes that, in view of the above, there is no risk of personal         
liability to shareholders.                                                      

Capitalization and Voting                                                       

The Trust has an unlimited number of authorized shares of beneficial interest.  
The Board may, without shareholder approval, divide the authorized shares into  
an unlimited number of separate portfolios or series (such as the Fund) and may 
divide portfolios or series into classes of shares, and the costs of doing so   
will be borne by the Trust. The Trust currently consists of five separate       
portfolios, each of which has separate investment objectives and policies, and  
five classes, one of which pertains to the Fund.                                

The shares of the Trust are fully paid and nonassessable, and have no           
preferences as to conversion, exchange, dividends, retirement or other features.
The shares have no preemptive rights. They have non-cumulative voting rights,   
which means that the holders of more than 50% of the shares voting for the      
election of Trustees can elect 100% of the Trustees if they choose to do so. A  
shareholder is entitled to one vote for each full share held (and a fractional  
vote for each fractional share held), then standing in his name on the books of 
the Trust. Shares of each class would vote separately to approve investment     
advisory agreements or changes in investment objectives and other fundamental   
policies affecting the portfolio to which they pertain, but all classes would   
vote together in the election of Trustees and ratification of the selection of  
independent accountants. Shareholders of any particular class would not be      
entitled to vote on any matters as to which such class were not affected.       

The Trust will not hold annual meetings of shareholders. The matters considered 
at an annual meeting typically include the reelection of Trustees, approval of  
an investment advisory agreement, and the ratification of the selection of      
independent accountants. These matters will not be submitted to shareholders    
unless a meeting of shareholders is held for some other reason, such as those   

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indicated below. Each of the Trustees will serve until death, resignation or    
removal. Vacancies will be filled by the remaining Trustees, subject to the     
provisions of the 1940 Act requiring a meeting of shareholders for election of  
Trustees to fill vacancies when less than a majority of Trustees then in office 
have been elected by shareholders. Similarly, the selection of accountants and  
renewal of investment advisory agreements for future years will be performed    
annually by the Board. Future shareholder meetings will be held to elect        
Trustees if required by the 1940 Act, to obtain shareholder approval of changes 
in fundamental investment policies, to obtain shareholder approval of material  
changes in investment advisory agreements, to select new accountants if the     
employment of the Trust's accountants has been terminated, and to seek any other
shareholder approval required under the 1940 Act. The Board has the power to    
call a meeting of shareholders at any time when it believes it is necessary or  
appropriate. In addition, Trust Instrument provides that a special meeting of   
shareholders may be called at any time for any purpose by the holders of at     
least 10% of the outstanding shares entitled to be voted at such meeting.       

In addition to the foregoing rights, the Trust Instrument provides that holders 
of at least two-thirds of the outstanding shares of the Trust may remove any    
person serving as a Trustee either by declaration in writing or at a meeting    
called for such purpose. Further, the Board is required to call a shareholders  
meeting for the purpose of considering the removal of one or more Trustees if   
requested in writing to do so by the holders of not less than 10% of the        
outstanding shares of the Trust. In addition, the Board is required to provide  
certain assistance if requested in writing to do so by ten or more shareholders 
of record (who have been such for at least six months), holding in the aggregate
the lesser of shares of the Trust having a total net asset value of at least    
$25,000 or 1% of the outstanding shares of the Trust, for                       

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the purpose of enabling such holders to communicate with other shareholders of  
the Trust with a view to obtaining the requisite signatures to request a special
meeting to consider such removal.                                               

Performance Information                                                         

The Fund may, from time to time, include quotations of total return data in     
advertisements, sales literature or reports to shareholders or prospective      
investors.                                                                      

Quotations of average annual total return will be expressed in terms of the     
average annual compounded rate of return of a hypothetical investment in the    
Fund over periods of 1, 5 and 10 years, calculated pursuant to the following    
formula:                                                                        

  P(1+T)^n = ERV

(where P = a hypothetical initial payment of $1,000, T = the average annual     
total return, n = the number of years, and ERV = the ending redeemable value of 
a hypothetical $1,000 payment made at the beginning of the period). All total   
return figures will reflect the deduction of Fund expenses on an annual basis,  
and will assume that all dividends and distributions are reinvested when paid.  

For the one year, five year and ten year periods ended October 31, 1995, the    
average annual total returns of the Fund were 17.68%, 17.50% and 13.09%,        
respectively.                                                                   

Quotations of total return will reflect only the performance of a hypothetical  
investment in the Fund during the particular time period shown. Total return for
the Fund will vary based on changes in market conditions and the level of the   
Fund's expenses, and no reported performance figure should be considered an     
indication of performance which may be expected in the future.                  

In connection with communicating total return to current or prospective         
investors, the Fund also may compare these figures to the performance of other  
mutual funds tracked by mutual fund rating services or to other unmanaged       
indexes which may assume reinvestment of dividends but generally do not reflect 
deductions for administrative and management costs.                             

Custodian                                                                       

All securities and cash of the Fund are held by The Chase Manhattan Bank, N.A., 
Chase MetroTech Center, Brooklyn, New York 11245.                               

Transfer Agent and Dividend Disbursing Agent                                    

Forum Financial Corp., Portland, Maine, acts as the Fund's transfer agent and   
dividend disbursing agent.                                                      

Legal Counsel                                                                   

Jacobs Persinger & Parker, 77 Water Street, New York, New York 10005, counsel to
the Fund, passes upon certain legal matters in connection with the shares       
offered by the Fund.                                                            

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Independent Accountants                                                         

Coopers & Lybrand L.L.P. ("Coopers & Lybrand") serves as independent accountants
for the Fund. Coopers & Lybrand provides audit services and consultation in     
connection with review of U.S. Securities and Exchange Commission filings.      
Coopers & Lybrand's address is One Post Office Square, Boston, Massachusetts    
02109.                                                                          

FINANCIAL STATEMENTS                                                            

The audited Statement of Assets and Liabilities, Statement of Operations,       
Statements of Changes in Net Assets, Statement of Investments, notes thereto,   
and Financial Highlights of the Fund for the fiscal year ended October 31, 1995 
and the Report of Independent Accountants thereon (included in the Annual Report
to shareholders), which are delivered along with this SAI, are incorporated     
herein by reference.                                                            

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PART C
 OTHER INFORMATION

ITEM 24. Financial Statements and Exhibits.                                     

(a) Financial Statements                                                        

Included in the Prospectus:                                                     

Financial Highlights.                                                           

Incorporated by reference in the Statement of Additional Information for each   
Fund:                                                                           

      For the fiscal year ended October 31, 1996 - Statement of Assets and
    Liabilities, Statement of Operations, Statements of Changes in Net
         Assets; Statement of Investments, Notes to Financial Statements, Report
      of Independent Accountants (for each Fund, filed with the Securities
    and Exchange Commission on January 6, 1997 as part of Registrant's
         Annual Report for such Fund pursuant to Rule 30b-1 under the Investment
        Company Act of 1940, as amended, and incorporated herein by reference)

(b) Exhibits:                                                                   

(1) Trust Instrument of Schroder Capital Funds (Delaware) (the "Trust") (filed  
as Exhibit 1 to Registrant's Post-Effective Amendment No. 46 and incorporated   
herein by reference).                                                           

(2) None.                                                                       

(3) None.                                                                       

(4) (a) Sections 2.04 and 2.06 of Registrant's Trust Instrument provide as      
follows:                                                                        

Section 2.04 Transfer of Shares. Except as otherwise provided by the Trustees,  
Shares shall be transferable on the records of the Trust only by the record     
holder thereof or by his agent thereunto duly authorized in writing, upon       
delivery to the Trustees or the Trust's transfer agent of a duly executed       
instrument of transfer and such evidence of the genuineness of such execution   
and authorization and of such other matters as may be required by the Trustees. 
Upon such delivery the transfer shall be recorded on the register of the Trust. 
Until such record is made, the Shareholder of record shall be deemed to be the  
holder of such Shares for all purposes hereunder and neither the Trustees nor   
the Trust, nor any transfer agent or registrar nor any officer, employee or     
agent of the Trust shall be affected by any notice of the proposed transfer.    

Section 2.06 Establishment of Series. The Trust created hereby shall consist of 
one or more Series and separate and distinct records shall be maintained by the 
Trust for each Series and the assets associated with any such Series shall be   
held and accounted for separately from the assets of the Trust or any           

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other Series. The Trustees shall have full power and authority, in their sole   
discretion, and without obtaining any prior authorization or vote of the        
Shareholders of any Series of the Trust, to establish and designate and to      
change in any manner any such Series of Shares or any classes of initial or     
additional Series and to fix such preferences, voting powers, rights and        
privileges of such Series or classes thereof as the Trustees may from time to   
time determine, to divide or combine the Shares or any Series or classes thereof
into a greater or lesser number, to classify or reclassify any issued Shares or 
any Series or classes thereof into one or more Series or classes of Shares, and 
to take such other action with respect to the Shares as the Trustees may deem   
desirable. The establishment and designation of any Series shall be effective   
upon the adoption of a resolution by a majority of the Trustees setting forth   
such establishment and designation and the relative rights and preferences of   
the Shares of such Series. A Series may issue any number of Shares and need not 
issue shares. At any time that there are no Shares outstanding of any particular
Series previously established and designated, the Trustees may by a majority    
vote abolish that Series and the establishment and designation thereof.         

All references to Shares in this Trust Instrument shall be deemed to be Shares  
of any or all Series, or classes thereof, as the context may require. All       
provisions herein relating to the Trust shall apply equally to each Series of   
the Trust, and each class thereof, except as the context otherwise requires.    

Each Share of a Series of the Trust shall represent an equal beneficial interest
in the net assets of such Series. Each holder of Shares of a Series shall be    
entitled to receive his pro rata share of all distributions made with respect to
such Series. Upon redemption of his Shares, such Shareholder shall be paid      
solely out of the funds and property of such Series of the Trust."              

(5) (a) Form of Investment Advisory Contract between the Trust and Schroder     
Capital Management International Inc. (filed as Exhibit 5 to Registrant's       
Post-Effective Amendment No. 46 and incorporated herein by reference).          

(6) Form of Master Distribution Contract and Supplement to be between the Trust 
and Schroder Fund Advisors Inc. (filed as Exhibit 6 to Registrant's             
Post-Effective Amendment No. 46 and incorporated herein by reference).          

(8) Form of Global Custody Agreement to be between the Trust and The Chase      
Manhattan Bank, N.A. (filed as Exhibit 8 to Registrant's Post-Effective         
Amendment No. 46 and incorporated herein by reference).                         

(9) (a) Form of Administration Agreement with Schroder Fund Advisors Inc. (filed
as Exhibit to Registrant's Post-Effective Amendment No. 46 and incorporated     
herein by reference).                                                           

(9) (b) Form of Sub-Administration Agreement with Forum Financial Services, Inc.
(filed as Exhibit 9(b) to Registrant's Post - Effective Amendment No. 46 and    
incorporated herein by reference).                                              

(9) (c) Form of Transfer Agency Agreement with Forum Financial Corp. (filed as  
Exhibit 9(c) to Registrant's Post-Effective Amendment No. 46 and incorporated   
herein by reference).                                                           

(9) (d) Form of Fund Accounting Agreement with Forum Financial Corp. (filed as  
Exhibit 9(d) to Registrant's Post-Effective Amendment No. 46 and incorporated   
herein by reference).                                                           

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(10) Opinion of Jacobs Persinger & Parker as to legality of shares to be issued 
by the Trust (filed as Exhibit 10(d) to Registrant's Post - Effective Amendment 
No. 46 and incorporated herein by reference).                                   

(11) Consent of Coopers & Lybrand L.L.P. (filed herewith).                      

(15) (a) Form of Master Distribution Plan adopted by Registrant (filed as       
   Exhibit 15(a) to Registrant's Post-Effective Amendment No. 46 and
incorporated herein by reference).                            

(b) Form of Distribution Plan Supplement (filed as Exhibit 15(b) to   
Registrant's Post- Effective Amendment No. 46 and incorporated
herein by reference).                                         

Other Exhibits:                                                                 

Copies of Powers of Attorney pursuant to which Trustees have signed this        
Post-Effective Amendment (filed as Other Exhibits to Post-Effective Amendment   
No. 45 and incorporated herein by reference).                                   

Copy of Power of Attorney pursuant to which Mr. Jackowitz has signed this       
Post-Effective Amendment (filed as an Other Exhibit to Post-Effective Amendment 
No. 45 and incorporated herein by reference).                                   

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.         

None.                                                                           

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.                                       

                                                          Number of Record
                                                       Holders as of
      Title of Class                                      January 31, 1997
      --------------                                      ----------------

Schroder U.S. Equity Fund                                           610         

Schroder International Fund                                       1,099         

Schroder U.S. Smaller Companies Fund                                 90         

Schroder Emerging Markets Fund Institutional Portfolio                2         

Schroder International Smaller Companies Fund                         3         

Schroder Latin America Fund                                           2         

Schroder Global Asset Allocation Fund                               N/A         

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ITEM 27. INDEMNIFICATION.                                                       

In accordance with Section 3803 of the Delaware Business Trust Act, SECTION 5.2 
of the Registrant's Trust Instrument provides as follows:                       

"5.2. Indemnification.                                                          

"(a) Subject to the exceptions and limitations contained in Section (b) below:  

"(i) Every Person who is, or has been, a Trustee or officer of the Trust        
(hereinafter referred to as a "Covered Person") shall be indemnified by the     
Trust to the fullest extent permitted by law against liability and against all  
expenses reasonably incurred or paid by him in connection with any claim,       
action, suit or proceeding in which he becomes involved as a party or otherwise 
by virtue of being or having been a Trustee or officer and against amounts paid 
or incurred by him in the settlement thereof;                                   

"(ii) The words "claim," "action," "suit," or "proceeding" shall apply to all   
claims, actions, suits or proceedings (civil, criminal or other, including      
appeals), actual or threatened while in office or thereafter, and the words     
"liability" and "expenses" shall include, without limitation, attorneys' fees,  
costs, judgments, amounts paid in settlement, fines, penalties and other        
liabilities.                                                                    

"(b)  No indemnification shall be provided hereunder to a Covered Person:       

"(i) Who shall have been adjudicated by a court or body before which the        
proceeding was brought (A) to be liable to the Trust or its Holders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the   
duties involved in the conduct of the Covered Person's office or (B) not to have
acted in good faith in the reasonable belief that Covered Person's action was in
the best interest of the Trust; or                                              

"(ii) In the event of a settlement, unless there has been a determination that  
such Trustee or officer did not engage in willful misfeasance, bad faith, gross 
negligence or reckless disregard of the duties involved in the conduct of the   
Trustee's or officer's office,                                                  

"(A) By the court or other body approving the settlement;                       

"(B) By at least a majority of those Trustees who are neither Interested Persons
of the Trust nor are parties to the matter based upon a review of readily       
available facts (as opposed to a full trial-type inquiry); or                   

"(C) By written opinion of independent legal counsel based upon a review of     
readily available facts (as opposed to a full trial-type inquiry); provided,    
however, that any Holder may, by appropriate legal proceedings, challenge any   
such determination by the Trustees or by independent counsel.                   

"(c) The rights of indemnification herein provided may be insured against by    
policies maintained by the Trust, shall be severable, shall not be exclusive of 
or affect any other rights to which any Covered Person may now or hereafter be  
entitled, shall continue as to a person who has ceased to be a Covered Person   
and shall inure to the benefit of the heirs, executors and administrators of    
such a person.                                                                  

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Nothing contained herein shall affect any rights to indemnification to which    
Trust personnel, other than Covered Persons, and other persons may be entitled  
by contract or otherwise under law.                                             

"(d) Expenses in connection with the preparation and presentation of a defense  
to any claim, action, suit or proceeding of the character described in paragraph
(a) of this Section 5.2 may be paid by the Trust or Series from time to time    
prior to final disposition thereof upon receipt of an undertaking by or on      
behalf of such Covered Person that such amount will be paid over by him to the  
Trust or Series if it is ultimately determined that he is not entitled to       
indemnification under this Section 5.2; provided, however, that either (a) such 
Covered Person shall have provided appropriate security for such undertaking,   
(b) the Trust is insured against losses arising out of any such advance payments
or (c) either a majority of the Trustees who are neither Interested Persons of  
the Trust nor parties to the matter, or independent legal counsel in a written  
opinion, shall have determined, based upon a review of readily available facts  
(as opposed to a trial-type inquiry or full investigation), that there is reason
to believe that such Covered Person will be found entitled to indemnification   
under this Section 5.2.                                                         

"(e) Conditional advancing of indemnification monies under this Section 5.2 for 
actions based upon the 1940 Act may be made only on the following conditions:   
(i) the advances must be limited to amounts used, or to be used, for the        
preparation or presentation of a defense to the action, including costs         
connected with the preparation of a settlement; (ii) advances may be made only  
upon receipt of a written promise by, or on behalf of, the recipient to repay   
that amount of the advance which exceeds that amount which it is ultimately     
determined that he is entitled to receive from the Trust by reason of           
indemnification; and (iii) (a) such promise must be secured by a surety bond,   
other suitable insurance or an equivalent form of security which assures that   
any repayments may be obtained by the Trust without delay or litigation, which  
bond, insurance or other form of security must be provided by the recipient of  
the advance, or (b) a majority of a quorum of the Trust's disinterested,        
non-party Trustees, or an independent legal counsel in a written opinion, shall 
determine, based upon a review of readily available facts, that the recipient of
the advance ultimately will be found entitled to indemnification.               

"(f) In case any Holder or former Holder of any Series shall be held to be      
personally liable solely by reason of the Holder or former Holder being or      
having been a Holder of that Series and not because of the Holder or former     
Holder acts or omissions or for some other reason, the Holder or former Holder  
(or the Holder or former Holder's heirs, executors, administrators or other     
legal representatives, or, in the case of a corporation or other entity, its    
corporate or other general successor) shall be entitled out of the assets       
belonging to the applicable Series to be held harmless from and indemnified     
against all loss and expense arising from such liability. The Trust, on behalf  
of the affected Series, shall, upon request by the Holder, assume the defense of
any claim made against the Holder for any act or obligation of the Series and   
satisfy any judgment thereon from the assets of the Series."                    

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.                  

The following are the directors and principal officers of SCMI, including their 
business connections of a substantial nature. The address of each company       
listed, unless otherwise noted, is 33 Gutter Lane, London EC2V 8AS, United      
Kingdom. Schroder Capital Management International Limited ("Schroder Ltd.") is 
a United Kingdom affiliate of SCMI which provides investment management services
international clients located principally in the United States.                 

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 David M. Salisbury. Chief Executive Officer, Director and Chairman of
Schroder Capital; Joint Chief Executive and Director of Schroder.   

Richard R. Foulkes. Senior Vice President and Managing Director of  
Schroder Capital.                                                   

     John A. Troiano. Managing Director and Senior Vice President. Mr. Troiano
is also a Director of Schroder Ltd.                                 

 David Gibson. Senior Vice President and Director of Schroder Capital.
Director of Schroder Wertheim Investment Services Inc.              

 John S. Ager. Senior Vice President and Director of Schroder Capital.

    Sharon L. Haugh. Senior Vice President and Director of Schroder Capital,
Director and Chairman of Schroder Advisors Inc.                     

Gavin D.L. Ralston. Senior Vice President and Director of Schroder  
Capital.                                                            

  Mark J. Smith. Senior Vice President and Director of Schroder Capital.

 Robert G. Davy. Senior Vice President. Mr. Davy is also a Director of
   Schroder Ltd. and an officer of open end investment companies for which
SCMI and/or its affiliates provide investment services.             

  Jane P. Lucas. Senior Vice President and Director of Schroder Capital;
Director of Schroder Advisors Inc.; Director of Schroder Wertheim   
Investment Services, Inc.                                           

    C. John Govett. Director of Schroder Capital; Group Managing Director of
Schroder Investment Management Ltd. And Director of Schroders plc.  

      Phillipa J. Gould. Senior Vice President and Director of Schroder Capital.

 Louise Croset. First Vice President and Director of Schroder Capital.

Abdallah Nauphal, Group Vice President and Director.                

ITEM 29. PRINCIPAL UNDERWRITERS.                                                

(A) Schroder Fund Advisors Inc., the Registrant's principal underwriter, also   
serves as principal underwriter for WSIS Series Trust.                          

(B) Following is information with respect to each officer and director of       
Schroder Fund Advisors Inc., the Distributor of the shares of Schroder          
International Fund, Schroder U.S. Equity Fund, Schroder U.S. Smaller Companies  
Fund, Schroder Emerging Markets Fund Institutional Portfolio, Schroder          
International Smaller Companies Fund, Schroder International Bond Fund and      
Schroder Latin America Fund (each a series of the Registrant):                  

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Catherine A. Mazza, President                                                   

Mark J. Smith, Director and Vice President.                                     

John A. Troiano, Director and Vice President                                    

Sharon L. Haugh, Director                                                       

Robert Jackowitz, Treasurer                                                     

Margaret H. Douglas-Hamilton, Secretary                                         

* Address for each is 787 Seventh Avenue, New York, New York 10019 except for   
John A. Troiano and Mark J. Smith each of whose address is 33 Gutter Lane,      
London, England.                                                                

(C)  Inapplicable.                                                              

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.                                      

The accounts, books and other documents required to be maintained by Registrant 
with respect to Schroder Cash Reserves Fund pursuant to Section 31(a) of the    
Investment Company Act of 1940 and the Rules thereunder will be maintained at   
the offices of Schroder Capital Management International Inc. and Schroder Fund 
Advisors Inc., 787 Seventh Avenue, New York, New York 10019, except that certain
items will be maintained at the following locations:                            

(a) Forum Financial Corp., Two Portland Square, Portland, Maine 04101           
(shareholder records).                                                          

(B) Forum Financial Services, Inc., Two Portland Square, Portland, Maine 04101  
(corporate minute book).                                                        

ITEM 31. MANAGEMENT SERVICES.                                                   

Inapplicable.                                                                   

ITEM 32. UNDERTAKINGS.                                                          

(i)   Registrant undertakes to file a post-effective amendment, using financial 
      statements which need not be certified, within four to six months from the
latter of the effective date of Registrant's Securities Act of 1933 
     Registration Statement relating to the prospectuses offering those shares
or the commencement of public shares of the respective shares; and, 

(ii)  Registrant undertakes to furnish each person to whom a prospectus is      
      delivered with a copy of Registrant's latest annual report to shareholders
      relating to the portfolio or class thereof to which the prospectus relates
upon request and without charge.                                    

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment   
Company Act of 1940, the Registrant certifies that it meets all of the          
requirements for effectiveness of this Registration Statement pursuant to Rule  
485(b) under the Securities Act of 1933 and has duly caused this amendment to   
its Registration Statement to be signed on its behalf by the undersigned,       
thereto duly authorized, in the City of New York, and State of New York on the  
17th day of January, 1997.                                                      

                             SCHRODER CAPITAL FUNDS (DELAWARE)

                 By: /s/ Mark J. Smith
                                   -------------------------------
                 Mark J. Smith
             President

Pursuant to the requirements of the Securities Act of 1933, this Registration   
Statement amendment has been signed below by the following persons on the 17th  
day of January, 1997.                                                           

Signatures                                                 Title  
----------                                                 -----  

(a)    Principal Executive Officer                                              

   /s/ Mark J. Smith                                         President
--------------------------------------------                      
Mark J. Smith                                                     

(b)    Principal Financial and                                                  
Accounting Officer                                                

  ROBERT JACKOWITZ*                                          Treasurer

*By: /s/ Thomas G. Sheehan                                        
----------------------------------------                  
Thomas G. Sheehan, Attorney-in-Fact             

(c)    Majority of the Trustees                                                 

PETER E. GUERNSEY*                                         Trustee
JOHN I. HOWELL*                                            Trustee
HERMANN C. SCHWAB*                                         Trustee
CLARENCE F. MICHALIS*                                      Trustee

*By: /s/ Thomas G. Sheehan                                        
----------------------------------------                  
Thomas G. Sheehan, Attorney-in-Fact                     

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SIGNATURES

On behalf of Schroder Capital Funds, being duly authorized, I have duly caused  
this amendment to the Registration Statement of Schroder Capital Funds          
(Delaware) to be signed in the City of New York, State of New York on the 17th  
day of January, 1997.                                                           

                          SCHRODER CAPITAL FUNDS

                         By: /s/ Mark J. Smith
                                       ---------------------------
                         Mark J. Smith
                     President

This amendment to the Registration Statement of Schroder Capital Funds          
(Delaware) has been signed below by the following persons in the capacities     
indicated on the 17th day of January, 1997.                                     

Signatures                                                 Title  
----------                                                 -----  

(a)    Principal Executive Officer                                              

   /s/ Mark J. Smith                                         President
--------------------------------------------                      
Mark J. Smith                                                     

(b)    Principal Financial and                                                  
Accounting Officer                                                

  ROBERT JACKOWITZ*                                          Treasurer

*By: /s/ Thomas G. Sheehan                                        
----------------------------------------                  
Thomas G. Sheehan, Attorney-in-Fact             

(c)    Majority of the Trustees                                                 

PETER E. GUERNSEY*                                         Trustee
JOHN I. HOWELL*                                            Trustee
HERMANN C. SCHWAB*                                         Trustee
CLARENCE F. MICHALIS*                                      Trustee

*By: /s/ Thomas G. Sheehan                                        
----------------------------------------                  
Thomas G. Sheehan, Attorney-in-Fact             

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 Index to Exhibits

                                                                    Sequential
Exhibit                                                              Page Number
-------                                                              -----------

(11)                  Consent of Coopers & Lybrand L.L.P.