SCHRODER MUTUAL FUNDS
2012 IMPORTANT TAX REPORTING INFORMATION
This letter contains important tax information specific to your investment in the Schroder Mutual Funds for use in preparing your 2012 tax return.
If you require further information, please call our Investor Services Representatives at (800) 464-3108.
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the “Act”) extended for two additional years (through
2012) the 15 percent maximum tax rate on long-term capital gains and qualified dividend income.
Qualified Dividend Income
Qualified Dividend Income (“QDI”) is taxed at the lower long-term capital gain rates. QDI is reported to you on Form 1099-DIV, Box 1b. The QDI
amount in box 1b will only apply if you have held the fund for more than 60 days during the 121-day period beginning 60 days before the fund’s exdividend date of the distribution. To assist you in determining whether you have met this holding period requirement, the ex-dividend date for the
applicable funds was December 7, 2012. The Global Quality Fund had two income distributions during the year for which the ex-dividend dates
were September 21, 2012 and December 7, 2012.
The reduced rate does not apply to bond funds. Due to the beneficial tax rate changes affecting both qualifying dividends and capital gains, you will
need to complete the Qualified Dividends and Capital Gain Tax Worksheet in the Instructions for Form 1040 to compute your taxes.
Important State Tax Information
United States Government Interest. Please check with your state or local tax office or your tax advisor to determine whether your state allows you
to exclude some or all of the income you earn from mutual funds that invest in direct U.S. government obligations. If so, multiply the income
percentage listed in the chart below by the amount in box 1a of your Form 1099-DIV to determine the amount of exempt interest. Due to certain
statutory limitations, shareholders of the funds listed in the table below that are residents of California, Connecticut or New York are not permitted to
exclude the portion of ordinary income that represents direct U.S. government obligations from their state income taxes. Data is provided only for
those funds that earned interest from U.S. government obligations during 2012.
FUND
Total Return Fixed Income Fund
FUND
0.98%
Absolute Return EMD and Currency Fund
0.66%
Corporate Dividends Received Deduction
A corporation is entitled to a special deduction from gross income for dividends received from a domestic corporation that is subject to U.S. income
tax. Listed below is the percentage of dividends received that qualifies for the corporate dividends received deduction for each of the respective
funds. This information is for use by corporations with a calendar tax year end.
FUND
Corporate Dividends Received Deduction Percentage
U.S. Opportunities Fund
North American Equity Fund
U.S. Small and Mid Cap Opportunities Fund
Global Quality Fund
100.00%
100.00%
100.00%
43.82%
Foreign Tax Credit and Foreign Source Income
The International Alpha, International Multi-Cap Value, Emerging Market Equity, Global Quality and Absolute Return EMD and Currency Funds
qualified for, and elected to pass through, foreign tax credits to their shareholders. Accordingly, shareholders of those funds are entitled to claim
either a foreign tax credit or take an itemized deduction on your federal income tax return for your share of the taxes indicated in Box 6 of your 2012
Form 1099-DIV. Refer to IRS Publication 514, Foreign Tax Credit for Individuals for additional information.
To be eligible to claim a foreign tax credit, a shareholder must have held shares in the applicable fund for more than 15 days within a 31-day period
that begins 15 days before the shares become ex-dividend. The ex-dividend date for those funds potentially impacted by this provision is December
7, 2012. Thus the 31-day period began on November 22, 2012 and ended on December 22, 2012. In addition to the December distribution, the
Global Quality Fund had a distribution with ex-dividend date of September 21, 2012. The holding period for the September distribution is the 31day period that began on September 6, 2012 and ended on October 6, 2012. If you are unable to use the foreign tax credit, you still may be able to
claim the amount as an itemized deduction.
The enclosed is furnished for information purposes only. Please consult your tax advisor for assistance regarding your 00089286 specific tax situation. SCHRODER MUTUAL FUNDS
2012 IMPORTANT TAX REPORTING INFORMATION
Qualified Interest Income and Qualified Short Term Capital Gain Income
For shareholders that are non-resident aliens, a portion of the dividend distribution attributable to qualified interest income and/or qualified short
term capital gain may be exempted from U.S. withholding tax. The following is the percentage of dividend and short term capital gain distribution
that may be exempted from U.S. withholding tax.
FUND
International Alpha Fund
Emerging Market Equity Fund
U.S. Small and Mid Cap Opportunities Fund
Total Return Fixed Income Fund
Global Quality Fund
International Multi-Cap Value Fund
U.S. Opportunities Fund
North American Equity Fund
Absolute Return EMD and Currency Fund
Qualified Interest
Income %
Qualified Short Term
Capital Gain %
0.00%
0.00%
0.00%
88.83%
0.00%
0.00%
0.00%
0.00%
0.66%
0.00%
0.00%
100.00%
100.00%
0.00%
0.00%
100.00%
0.00%
0.00%
The enclosed is furnished for information purposes only. Please consult your tax advisor for assistance regarding your 00089286 specific tax situation.