<PAGE>
To Our Shareholders:
--------------------------------------------------------------------------------
CGM Capital Development Fund declined -4.6% during the second quarter of 2000
compared to the Standard and Poor's 500 Index which lost -2.7%. For the first
six months of the year, CGM Capital Development Fund declined -0.8% and the S&P
500 lost -0.4%.
Are the six interest rate hikes voted by the Federal Reserve Board since June
1999 sufficient to cool off a red-hot economy? At its meeting on June 28, 2000,
the Fed decided no further rate increases were necessary in light of some
slowing in consumer spending, a decrease in housing starts and a decline in
consumer confidence. However, the economic data is anything but clear cut: new
orders for durable goods dropped sharply in April but rebounded in a big way in
May. The Fed has seven weeks to monitor economic data and then decide if
additional rate increases are needed to achieve the desired slowing without
toppling the economy into recession. In the meantime, the effort to cool the
economy is getting some help from rising energy costs, in particular gasoline
prices which can act somewhat like a rate hike or tax increase siphoning off
funds that could be spent elsewhere.
Aside from looming questions about the economy, the equity market seems to be
operating on a healthier footing now than in early March when speculative
excesses were so prevalent in technology issues. The NASDAQ Composite Index fell
-37% from March 10th to May 23rd of this year and despite some recovery, is
still down -23% from its high. The excitement over "new economy" companies has
dissipated in the shadow of a growing number of dot-com bankruptcies. Instead,
investor attention is reverting to "old economy" companies and also to real
estate investment trusts, which may indicate a broadening market.
Interest rates are not much changed since March 31st of this year with U.S.
Treasury Bills yielding about 5.65% and the Ten-year Treasury bond selling to
yield about 6.10% at June 30. The Ten-year Treasury bond will be closely watched
by investors to gauge the bond market's perception of economic strength as a
clue to future Fed policy. Though equity investors would presumably welcome a
modest economic slowdown, we believe most attention will be focused on
individual issues rather than on any large market moves.
CGM Capital Development Fund holds important positions in independent oil
producers and the steel and electronic component industries. The Fund's three
largest holdings are Micron Technology, Inc., Companhia Siderurgica National
Sponsored ADRs and EOG Resources, Inc.
I would also like to report on June 16, 2000 a French financial-services
company, Caisse des Depots Group, agreed to purchase Nvest Companies L.P. who
holds a passive limited partnership interest in Capital Growth Management. This
transaction will not affect the management of Capital Growth Management or the
CGM Funds.
/s/ Robert L. Kemp
Robert L. Kemp
President
July 5, 2000
<PAGE>
CGM CAPITAL DEVELOPMENT FUND
--------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
(unaudited)
--------------------------------------------------------------------------------
Total Return for Periods Ended June 30, 2000
CGM CAPITAL
DEVELOPMENT S&P 500 THE FUND'S AVERAGE
FUND INDEX ANNUAL TOTAL RETURN
----------- ------- -------------------
10 Years .................... +424.0% +414.0% +18.0%
5 Years .................... +120.4 +190.8 +17.1
1 Year ..................... + 7.0 + 7.2 + 7.0
3 Months ................... - 4.6 - 2.7 --
The percentage figures for the Fund are based upon the beginning net asset
values of $21.43, $24.25, $24.93 and $27.23, respectively, and the June 30,
2000 net asset value of $25.99 per share assuming the reinvestment of income
dividends, capital gains and paid-in capital distributions during such
respective periods.
The S&P 500 Stock Index has also been adjusted for the reinvestment of income
dividends during these periods. Although the S&P 500 Index and the Fund are
not directly comparable, the Index is shown because it is widely used by
investors to measure unmanaged stock market performance. When viewing the
Fund's performance, one should keep in mind the Fund's investment objective
and policies, the characteristics and quality of its portfolio securities, and
the periods selected.
The performance data contained in this report represents past performance,
which is no guarantee of future results. The investment return on, and the
principal value of, an investment in the Fund will fluctuate so that
investors' shares, when redeemed, may be worth more or less than their
original cost.
<PAGE>
CGM CAPITAL DEVELOPMENT FUND
--------------------------------------------------------------------------------
BOARD OF TRUSTEES
PETER O. BROWN
G. KENNETH HEEBNER
ROBERT L. KEMP
ROBERT B. KITTREDGE
LAURENS MACLURE
JAMES VAN DYKE QUEREAU, JR.
J. BAUR WHITTLESEY
OFFICERS
ROBERT L. KEMP, President
G. KENNETH HEEBNER, Vice President
LESLIE A. LAKE, Vice President and Secretary
KATHLEEN S. HAUGHTON, Vice President
MARTHA I. MAGUIRE, Vice President
W. DUGAL THOMAS, Vice President
MARY L. STONE, Assistant Vice President
FRANK N. STRAUSS, Treasurer
INVESTMENT ADVISER
CAPITAL GROWTH MANAGEMENT LIMITED PARTNERSHIP
Boston, Massachusetts 02110
TRANSFER AND DIVIDEND PAYING
AGENT AND CUSTODIAN OF ASSETS
STATE STREET BANK AND TRUST COMPANY
Boston, Massachusetts 02102
SHAREHOLDER SERVICING AGENT
FOR STATE STREET BANK AND
TRUST COMPANY
BOSTON FINANCIAL DATA SERVICES, INC.
P.O. Box 8511
Boston, Massachusetts 02266-8511
<PAGE>
<TABLE>
CGM CAPITAL DEVELOPMENT FUND
---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
25 YEAR INVESTMENT RECORD
DECEMBER 31, 1974 -- JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------------------------------------------------------
IF YOU HAD PURCHASED ONE SHARE OF THE FUND ON DECEMBER 31, 1974
--------------------------------------------------------------------------------------------------------------------------------
--AND HAD TAKEN ALL DIVIDENDS OR -- HAD REINVESTED ALL DIVIDENDS AND CAPITAL
AND DISTRIBUTIONS IN CASH GAINS DISTRIBUTIONS IN ADDITIONAL SHARES
---------------------------------------------------------------------------------------------------------------
During the Year
You Would Have Received Which Would Represent
------------------------------------- ------------------------------------
The Value of A Cumulative
The Net Your Original Change
Asset Value Per Share Per Share Investment An Expressed
On of Your Capital Gains Income At Each Annual As An Index With
December Shares Would Distributions Distributions Year End Total Return December 31,
31 Have Been of of Would Have Been of 1974 = 100.0
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1974 $ 7.78 100.0
1975 9.35 -- $0.15 $ 9.53 + 22.5% 122.5
1976 10.98 -- 0.13 11.35 + 19.1 145.9
1977 10.74 -- 0.18 11.28 - 0.6 145.0
1978 13.05 -- 0.27 14.09 + 24.9 181.1
1979 16.20 -- 0.35 17.95 + 27.4 230.7
1980 20.50 $ 1.65* 0.36 25.65 + 42.9 329.7
1981 17.34 3.38 0.36 26.80 + 4.5 344.5
1982 24.88 2.88 0.41 47.95 + 78.9 616.3
1983 25.21 2.50 0.47 55.43 + 15.6 712.4
1984 17.28 6.15 0.11 50.88 - 8.2 654.0
1985 25.02 -- 0.18 74.39 + 46.2 956.1
1986 23.12 7.46 0.16 95.52 + 28.4 1227.6
1987 16.56 10.09 0.14 110.71 + 15.9 1422.8
1988 15.87 0.02 0.62 110.38 - 0.3 1418.5
1989 18.37 -- 0.34 130.14 + 17.9 1672.4
1990 18.53 -- 0.10 131.96 + 1.4 1695.8
1991 25.80 11.07* 0.06 262.73 + 99.1 3376.3
1992 27.43 2.68* 0.20 308.71 + 17.5 3967.2
1993 27.71 7.51 0.07 397.31 + 28.7 5105.8
1994 20.58 0.71 0.07 306.33 - 22.9 3936.6
1995 27.33 1.68 0.02 432.23 + 41.1 5554.5
1996 29.08 5.87 0.07 553.69 + 28.1 7115.3
1997 26.96 9.08 -- 686.02 + 23.9 8815.9
1998 24.95 4.19 0.11 744.33 + 8.5 9565.3
1999 26.20 0.56 0.11 801.64 + 7.7 10301.8
2000 (6/30) 25.99 -- -- 795.23 - 0.8 10219.4
------ ----- --------
Totals $77.48 $5.04 +10119.4
----------------------------------------------------------------------------------------------------------------------------------
* Includes $0.09, $0.02 and $0.02 per share distributed from paid-in capital.
----------------------------------------------------------------------------------------------------------------------------------
The performance data contained in this report represent past performance, which is no guarantee of future results. The investment
return on, and the principal value of, an investment in the Fund will fluctuate so that investors' shares, when redeemed, may be
worth more or less than the original cost.
</TABLE>
<PAGE>
CGM CAPITAL DEVELOPMENT FUND
--------------------------------------------------------------------------------
INVESTMENTS AS OF JUNE 30, 2000
(unaudited)
COMMON STOCKS -- 99.5% OF TOTAL NET ASSETS
SHARES VALUE(a)
BUSINESS SERVICES -- 0.5%
Arrow Electronics, Inc. (b) ......................... 85,000 $ 2,635,000
------------
CONSUMER DURABLES -- 4.8%
Koninklijke Philips Electronics Sponsored ADR (c) ... 580,000 27,550,000
------------
ELECTRONIC COMPONENTS -- 12.8%
Advanced Micro Devices, Inc. (b) .................... 360,000 27,810,000
Micron Technology, Inc. (b) ......................... 522,000 45,968,625
------------
73,778,625
------------
HEALTH CARE SERVICES -- 11.8%
Oxford Health Plans, Inc. (b) ....................... 1,150,000 27,384,375
PacifiCare Health Systems, Inc. (b) ................. 230,000 13,843,125
UnitedHealth Group Incorporated (b) ................. 314,000 26,925,500
------------
68,153,000
------------
METALS AND MINING -- 4.9%
Inco Limited (b) .................................... 1,850,000 28,443,750
------------
OFFSHORE DRILLING -- 4.7%
Transocean Sedco Forex, Inc. ........................ 510,000 27,253,125
------------
OIL -- INDEPENDENT PRODUCTION -- 22.6%
Anadarko Petroleum Corp. ............................ 505,000 24,902,812
Apache Corporation .................................. 545,000 32,052,813
Devon Energy Corporation ............................ 617,300 34,684,544
EOG Resources, Inc. ................................. 1,155,000 38,692,500
------------
130,332,669
------------
OIL -- REFINING -- 3.9%
Tosco Corporation ................................... 785,000 22,225,313
------------
OIL -- SERVICE -- 5.8%
Tubos De Acero De Mexico ADR (c)(d) ................. 2,430,000 33,716,250
------------
PAPER PRODUCTS/CONSUMER -- 3.8%
Asia Pulp & Paper Company Ltd. ADR (b)(c) ........... 4,350,000 22,021,875
------------
PRINTING -- 5.5%
Aracruz Celulose S.A. ADR (c)(d) .................... 1,650,000 31,865,625
------------
STEEL -- 13.1%
Companhia Siderurgica National Sponsored ADR (c)(d) . 1,417,000 $ 43,661,312
Pohang Iron & Steel Co., Ltd. Sponsored ADR (c) ..... 1,340,000 32,160,000
------------
75,821,312
------------
TELEPHONE -- 5.3%
Telefonos de Mexico, S.A. de C.V. (c)(d) ............ 540,000 30,847,500
------------
TOTAL COMMON STOCKS (Identified Cost $551,862,642) ............. 574,644,044
------------
COMMON STOCK WARRANTS -- 0.0%
Asia Pulp & Paper Company Ltd. Exp. 7/27/00 (b)
(Identified Cost $2,800,000) ...................... 800,000 12,500
------------
SHORT-TERM INVESTMENT -- 1.4% FACE AMOUNT
-----------
American Express Credit Corporation, 6.88%,
7/03/00 (Cost $8,135,000) ......................... $8,135,000 8,135,000
------------
TOTAL INVESTMENTS -- 100.9% (Identified Cost $562,797,642)(e) .. 582,791,544
Cash and Receivables ........................................... 23,153,898
Liabilities .................................................... (28,502,514)
------------
TOTAL NET ASSETS -- 100.0% ..................................... $577,442,928
============
(a) See Note 1A.
(b) Non-income producing security.
(c) An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank
representing the right to receive securities of the foreign issuer
described. The values of ADRs are significantly influenced by trading on
exchanges not located in the United States or Canada.
(d) The Fund has greater than 10% of its assets at June 30, 2000 invested in
ADRs from Brazil and Mexico.
(e) Federal Tax Information: At June 30, 2000 the net unrealized appreciation on
investments based on cost of $562,797,642 for Federal income tax purposes
was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ........ $ 76,702,181
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value ............... (56,708,279)
------------
Net unrealized appreciation ..................................... $ 19,993,902
============
See accompanying notes to financial statements.
<PAGE>
CGM CAPITAL DEVELOPMENT FUND
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
(unaudited)
ASSETS
Investments at value
(Identified cost -- $562,797,642) ............................. $582,791,544
Cash ........................................................... 4,438
Receivable for:
Securities sold ................................ $22,883,941
Shares of the Fund sold ........................ 12,140
Dividends and interest (net of withholding
tax of $26,201) ............................... 246,244
Foreign Tax Reclaim ............................ 7,135 23,149,460
----------- ------------
605,945,442
------------
LIABILITIES
Payable for:
Securities purchased ........................... 27,232,040
Shares of the Fund redeemed .................... 726,302 27,958,342
----------- ------------
Accrued expenses:
Management fees ................................ 471,269
Trustees' fees ................................. 11,254
Accounting and Administration .................. 5,000
Transfer Agent Fees ............................ 25,339
Other expenses ................................. 31,310 544,172
------------
28,502,514
------------
NET ASSETS ...................................................... $577,442,928
============
Net Assets consist of:
Capital paid-in ................................................ $507,245,835
Undistributed net investment income ............................ 1,188,406
Accumulated net realized gain .................................. 49,014,785
Unrealized appreciation on investments -- net .................. 19,993,902
------------
NET ASSETS ...................................................... $577,442,928
============
Shares of beneficial interest outstanding, no par value ........ 22,218,578
============
Net asset value per share* ..................................... $25.99
============
*Shares of the Fund are sold and redeemed at net asset value
($577,442,928 / 22,218,578).
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000
(unaudited)
INVESTMENT INCOME
Income
Dividends (net of withholding tax of $366,260) ................ $ 4,074,207
Interest ...................................................... 127,421
------------
4,201,628
------------
Expenses
Management fees ............................................... 2,959,369
Trustees' fees ................................................ 23,028
Accounting and Administration ................................. 30,000
Custodian ..................................................... 58,815
Transfer agent ................................................ 108,479
Audit and tax services ........................................ 14,700
Legal ......................................................... 38,210
Printing ...................................................... 11,654
Registration .................................................. 9,688
Miscellaneous ................................................. 2,537
------------
3,256,480
------------
Net investment income ......................................... 945,148
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain on investments -- net ............................ 52,995,397
Unrealized depreciation -- net ................................. (58,740,626)
------------
Net loss on investments ........................................ (5,745,229)
------------
NET CHANGE IN ASSETS FROM OPERATIONS ............................ $ (4,800,081)
============
See accompanying notes to financial statements.
<PAGE>
CGM CAPITAL DEVELOPMENT FUND
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------ -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income ................................ $ 945,148 $ 2,865,117
Net realized gain from investments ................... 52,995,397 11,715,570
Unrealized appreciation (depreciation) ............... (58,740,626) 27,062,257
------------ -------------
Change in net assets from operations ............... (4,800,081) 41,642,944
------------ -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................................ -- (2,621,859)
Net realized gain on investments ..................... -- (11,715,570)
In excess of net realized gain on investments ........ -- (1,551,121)
------------ -------------
-- (15,888,550)
------------ -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares ......................... 5,399,646 18,708,382
Net asset value of shares issued in connection with
reinvestment of:
Dividends from net investment income ............... -- 2,246,333
Distributions from net realized gain ............... -- 10,098,811
Distributions in excess of net realized gain on
investments ...................................... -- 1,337,065
------------ -------------
5,399,646 32,390,591
Cost of shares redeemed .............................. (55,693,709) (129,025,877)
------------ -------------
Change in net assets derived from capital share
transactions ..................................... (50,294,063) (96,635,286)
------------ -------------
Total change in net assets ........................... (55,094,144) (70,880,892)
NET ASSETS
Beginning of period .................................. 632,537,072 703,417,964
------------ -------------
End of period (including undistributed net investment
income of $1,188,406 and $243,258, respectively) ... $577,442,928 $ 632,537,072
============ =============
NUMBER OF SHARES OF THE FUND:
Issued from sale of shares ........................... 205,113 772,324
Issued in connection with reinvestment of:
Dividends from net investment income ............... -- 87,048
Distributions from net realized gain ............... -- 391,340
Distributions in excess of net realized gain on
investments ...................................... -- 51,813
------------ -------------
205,113 1,302,525
Redeemed ........................................... (2,126,991) (5,359,335)
------------ -------------
Net change ......................................... (1,921,878) (4,056,810)
============ =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
CGM CAPITAL DEVELOPMENT FUND
--------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 -----------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
For a share of the Fund outstanding
throughout each period:
Net asset value at the beginning
of period ....................... $ 26.20 $ 24.95 $ 26.96 $ 29.08 $ 27.33 $ 20.58
-------- -------- -------- -------- -------- --------
Net investment income (loss) ..... 0.04 0.12 0.11 (0.08)(a) 0.07 0.02
Dividends from net investment
income .......................... -- (0.11) (0.11) -- (0.07) (0.02)
Net realized and unrealized
gain (loss) on investments ...... (0.25) 1.80 2.18 7.04 7.62 8.43
Distribution from net realized gain -- (0.49) (4.12) (9.08) (5.84) (1.68)
Distribution in excess of net
realized gain on investments .... -- (0.07) (0.07) -- (0.03) --
-------- -------- -------- -------- -------- --------
Net increase (decrease) in
net asset value ................. (0.21) 1.25 (2.01) (2.12) 1.75 6.75
-------- -------- -------- -------- -------- --------
Net asset value at end of period .. $ 25.99 $ 26.20 $ 24.95 $ 26.96 $ 29.08 $ 27.33
======== ======== ======== ======== ======== ========
Total Return (%) .................. (0.8) 7.7 8.5 23.9 28.1 41.1
Ratios:
Operating expenses to average
net assets (%) .................. 1.09* 1.08 1.07 1.07 0.82 0.85
Net investment income (loss)
to average net assets (%) ....... 0.32* 0.46 0.39 (0.29) 0.23 0.07
Portfolio turnover(%) ............. 363* 335 335 230 178 271
Net assets at end of period
(in thousands)($) ............... 577,443 632,537 703,418 722,673 631,260 521,248
(a) Per share net investment loss does not reflect the year's reclassification of permanent differences between
book and tax basis net investment loss. See Note 1D.
* Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CGM CAPITAL DEVELOPMENT FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2000
(unaudited)
1. The Fund is organized as a Massachusetts business trust under the laws of
Massachusetts pursuant to an Agreement and Declaration of Trust. The Fund is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. Along with five other funds in a separate
Trust, there are six CGM funds (CGM Funds). The Fund's objective is long-term
capital appreciation. The Fund seeks to attain its objective by investing in
the equity securities of a relatively small but diverse group of companies and
industries.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with generally accepted
accounting principles in the United States requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
A. SECURITY VALUATION -- Equity securities are valued on the basis of
valuations furnished by a pricing service, authorized by the Board of
Trustees, which provides the last reported sale price for securities
listed on a national securities exchange or on the NASDAQ national market
system or, if no sale was reported and in the case of over-the-counter
securities not so listed, the last reported bid price.
Short-term investments having a maturity of sixty days or less are stated
at amortized cost, which
approximates value.
B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed) and dividend income is recorded on the ex-dividend date
net of applicable taxes. Interest income is recorded on the accrual basis.
Net gain or loss on securities sold is determined on the identified cost
basis. Dividend income received by the Fund from its investment in REITs
may be comprised of ordinary income, capital gains, and return of capital.
C. FEDERAL INCOME TAXES -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies, and to distribute to its shareholders all of its
taxable income and net realized capital gains, within the prescribed time
period. Accordingly, no
provision for federal income tax has been made.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions
are recorded by the Fund on the ex-dividend date. The classification of
income and capital gains distributions is determined in accordance with
income tax regulations. Permanent book and tax differences relating to
shareholder distributions may result in reclassifications to paid-in
capital. Undistributed net investment income, accumulated net investment
loss, or distributions in excess of net investment income may include
temporary book and tax differences which will reverse in a subsequent
period. Any taxable income or gain remaining at fiscal year end is
distributed in the following year.
E. INVESTMENT RISK -- There are certain additional risks involved in
investing in foreign securities that are not inherent in investments in
domestic securities. These risks may involve adverse political and
economic developments and the possible imposition of currency exchange
blockages or other foreign governmental laws or restrictions. In addition,
the securities of some foreign companies and securities markets are less
liquid and at times more volatile than securities of comparable U.S.
companies and U.S. securities markets.
2. PURCHASES AND SALES OF SECURITIES -- For the period ended June 30, 2000,
purchases and sales of securities other than United States government
obligations and short-term investments aggregated $1,073,626,463 and
$1,126,430,145, respectively. There were no purchases or sales of United
States government obligations.
3. A. MANAGEMENT FEES -- During the period ended June 30, 2000, the Fund
incurred management fees of $2,959,369 paid or payable to the Fund's
investment adviser, Capital Growth Management Limited Partnership
(CGM), certain officers and directors of which are also officers and
trustees of the Fund. The management agreement provides for a fee at
the annual rate of 1.00% on the first $500 million of the Fund's
average daily net assets, 0.95% of the next $500 million and 0.80% of
such assets in excess of $1 billion.
B. OTHER EXPENSES -- CGM performs certain administrative, accounting and
other services for the Fund. The expenses of those services, which are
paid to CGM by the Fund, include the following:
(i) expenses for personnel performing bookkeeping, accounting, and
financial reporting functions and clerical functions relating to the
Fund; (ii) expenses for services required in connection with the
preparation of registration statements and prospectuses, shareholder
reports and notices, proxy solicitation material furnished to
shareholders of the Fund or regulatory authorities and reports and
questionnaires for SEC compliance; and (iii) registration, filing and
other fees in connection with requirements of regulatory authorities.
The Accounting and Administration expense of $30,000, for the period
ended June 30, 2000, is shown separately in the financial statements.
C. TRUSTEES FEES AND EXPENSES -- The Fund does not pay any compensation
directly to its officers or to any trustees who are directors,
officers or employees of CGM, or any affiliate of CGM, (other than
registered investment companies). Each other trustee is compensated by
the six CGM Funds with an annual fee of $37,000 plus travel expenses
for each meeting attended. Of this amount, each fund was responsible
for $3,000 per trustee plus an annual variable fee calculated based on
the proportion of each fund's average net assets relative to the
aggregate average net assets of the CGM Funds, which for the six month
period ended June 30, 2000 was $2,887 for the Fund.
<PAGE>
CGM
CAPITAL
DEVELOPMENT
FUND
156th Quarterly Report
June 30, 2000
A No-Load Fund
[Logo] Investment Adviser
CAPITAL GROWTH MANAGEMENT
Limited Partnership
INVESTMENT ADVISER
CAPITAL GROWTH MANAGEMENT
LIMITED PARTNERSHIP
Boston, Massachusetts 02110
-----------------------------------
TELEPHONE NUMBERS
For information about:
[] Account Procedures and Status
[] Redemptions
[] Exchanges
Call 800-343-5678
[] New Account Procedures
[] Prospectuses
[] Performance
Call 800-345-4048
----------------------------------
MAILING ADDRESSES
FOR EXISTING ACCOUNTS
Boston Financial Data Services
P.O. Box 8511
Boston, MA 02266-8511
FOR NEW ACCOUNT APPLICATIONS ONLY
The CGM Funds
P.O. Box 449
Boston, MA 02117-0449
----------------------------------
This report has been prepared for the shareholders of the Fund and is not
authorized for distribution to current or prospective investors in the Fund
unless it is accompanied or preceded by a prospectus.
CQR2 00 Printed in U.S.A.
