<PAGE>
CGM CAPITAL DEVELOPMENT FUND
SUPPLEMENT DATED SEPTEMBER 24, 1996 TO
PROSPECTUS DATED MAY 1, 1996
On August 30, 1996, a new advisory agreement between CGM and CGM Capital
Development Fund became effective in connection with the merger of New England
Mutual Life Insurance Company into Metropolitan Life Insurance Company. The new
agreement, which is identical to the prior agreement (other than the date of
effectiveness and termination), was approved by shareholders of CGM Capital
Development Fund on December 29, 1995.
In addition, on August 13, 1996, the Board of Trustees of CGM Capital
Development Fund approved a proposed advisory agreement between CGM Capital
Development Fund and CGM that would increase the advisory fee payable by CGM
Capital Development Fund to CGM to an annual percentage rate of 1.00% of the
first $500 million of CGM Capital Development Fund's average daily net asset
value, 0.95% of the next $500 million of such value, and 0.80% of such value in
excess of $1 billion. The proposed advisory agreement is subject to shareholder
approval. A special meeting of shareholders of CGM Capital Development Fund to
vote on the proposed advisory agreement will be held on December 12, 1996.
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CGM CAPITAL DEVELOPMENT FUND
SUPPLEMENT DATED NOVEMBER 5, 1996 TO
PROSPECTUS DATED MAY 1, 1996
Residents of South Dakota who seek to exchange shares of CGM Capital
Development Fund for shares of CGM Realty Fund should note that effective as of
October 22, 1996, shares of CGM Realty Fund are available for sale to residents
of South Dakota.
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CGM CAPITAL DEVELOPMENT FUND
SUPPLEMENT DATED NOVEMBER 5, 1996 TO
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1996
Residents of South Dakota who seek to exchange shares of CGM Capital
Development Fund for shares of CGM Realty Fund should note that effective as of
October 22, 1996, shares of CGM Realty Fund are available for sale to residents
of South Dakota.
