<PAGE>
[Black and white "strip" ad, e.g., horizontal format, not terribly deep.
Headline in white type reads:]
TOP PERFORMING CGM FUNDS
[Below headline is a grey box divided into four areas with photographs of
fencers between text areas; text in each section left to right is as follows:
#1 Balanced Fund for 15-years
CGM MUTUAL FUND
869.8%
[in smaller italic type:] Total return 10/1/81-9/30/96
#1 Growth Fund for 15-years
CGM CAPITAL DEVELOPMENT FUND
1,897.5%
[in smaller italic type:] Total return 10/1/81-9/30/96
#1 General Bond Fund for 1- and 3-years
CGM FIXED INCOME FUND*
14.1%
[in smaller italic type:] Total return 10/1/95-9/30/96
33.0%
[in smaller italic type:] Total return 10/1/93-9/30/96
#1 Real Estate Fund for 2-years
CGM REALTY FUND
43.5%
[in smaller italic type:] Total return 10/1/94-9/30/96
[Beneath the box in white type are the words:] MANAGED BY KEN HEEBNER*
[In a lightly shaded area which makes up the lower 40% or so of the ad is the
following text which, with the exception of average annual total returns,
appears in small type. The average annual total return numbers, however, are the
same size as the total return numbers in the box above.]
11.0,% 11.5%, 13.0%, and 16.4% are the average annual total returns for CGM
Mutual Fund for the 1, 5, 10, and 15-year periods ended 9/30/96. Ranking
according to Lipper Analytical Services, Inc., which ranks CGM Mutual Fund #1 of
26 balanced funds for 15-year performance, #3 of 32 balanced funds for 10- year
performance, #29 of 72 balanced funds for 5-year performance, and #186 of 265
balanced funds for 1-year performance through 9/30/96. CGM Mutual Fund has been
managed continuously by Ken Heebner since 1981.
25.0%, 16.9%, 18.4%, and 22.1% are the average annual total returns for CGM
Capital Development Fund for the 1, 5, 10, and 15-year periods ended 9/30/96.
Ranking according to Lipper Analytical Services, Inc., which ranks CGM Capital
Development Fund #1 of 111 growth funds for 15-year performance, #6 of 161
growth funds for 10-year performance, #41 of 247 growth funds for 5-year
performance, and #46 of 633 growth funds for 1-year performance through 9/30/96.
CGM Capital Development Fund has been managed continuously by Ken Heebner since
1976. CGM Capital Development Fund is closed to new investors.
12.0%, 14.1%. and 10.0% are the average annual total returns for CGM Fixed
Income Fund from inception (3/17/92) through 9/30/96, and for the 1 and 3-year
periods ended 9/30/96. The Fund's adviser is currently absorbing a portion of
management fees and expenses. Otherwise the total return would be lower. Ranking
according to Lipper Analytical Services, Inc., which ranks CGM Fixed Income Fund
#1 of 21 general bond funds for 3-year performance and #1 of 43 general bond
funds for 1-year performance through 9/30/96. *Ken Heebner co-manages CGM Fixed
Income Fund with Janice Saul.
15.8%, 24.4%, and 19.8% are the average annual total returns for CGM Realty Fund
from inception (5/13/94) through 9/30/96, and for the 1 and 2-year periods ended
9/30/96. The Fund's adviser is currently absorbing a portion of management fees
and expenses. Otherwise the total return would be lower. Ranking according to
Lipper Analytical Services, Inc., which ranks CGM Realty #1 of 18 real estate
funds for 2-year performance and #4 of 44 real estate funds for 1-year
performance through 9/30/96.
This information represents past performance, which is no guarantee of future
results. The investment return and principal value of your shares will fluctuate
and you may have a gain or loss when you sell shares. For more complete
information, including management fees, charges, and expenses, refer to the
appropriate prospectus which is available from the address to the right. Read it
carefully before you invest or send money. Lipper Analytical Services, Inc. is
an independent mutual fund ranking service.
[To the right of the copy appears the logo, which is a black and white line
drawing of a fencer against a lined background within a black and white box. To
the right is the following text:]
THE CGM FUNDS
222 Berkeley Street, Suite 1013
Boston, MA 02116
1-800-598-0741
[The entire ad is surrounded by a decorative border reading:]
NO-LOAD
