<PAGE>
CGM
MUTUAL FUND
261st Quarterly Report
June 30, 1995
A No-Load Fund
[CGM LOGO]
Investment Adviser
CAPITAL GROWTH MANAGEMENT
Limited Partnership
<PAGE>
TO OUR SHAREHOLDERS:
--------------------------------------------------------------------------------
CGM Mutual Fund increased 12.5% during the second quarter of 1995 comparing
favorably to returns of 9.5% for the unmanaged Standard & Poor's 500 Index and
6.2% for the Merrill Lynch Master Bond Index. Returns for the first six months
of the year were 15.2% for CGM Mutual Fund; 20.2% for the unmanaged S&P Index;
and 11.5% for the Merrill Lynch Master Bond Index.
In the first quarter of 1995, evidence of a weakening economy appeared in the
auto and housing sectors. The trend continued throughout the second quarter
spreading to retail sales and cutting construction spending by 1.5% in May to
make the month the worst in four years for construction spending and the
second down month in a row. Signs of weakness also took their toll on consumer
confidence as measured by an index drop from 102 in April to 92.8 in May.
In its attempt to contain inflation, has the Federal Reserve Board engineered
the very first "soft landing" (slowdown without recession), or has it ushered
in a recession? Though the answer remains to be seen, we favor the soft
landing scenario. Lower interest rates will encourage consumer spending in the
months ahead. In fact, signs of an increase in consumer spending were already
evident in late June and employment gains were well above average. Personal
income should continue to rise and the weaker dollar might well stimulate
exports.
Interest rates on long-term government bonds have retraced more than 70% to
6.5% from 8.3% in the fall of 1994. We expect the decline in rates to carry
into 1996 as we experience a slow growth economy with no immediate threat of
higher inflation. In early July, the prospect of continuing low inflation
prompted the Federal Reserve Board to reduce the Federal Funds rate one
quarter of a percent to 5.75%.
While the diminished threat of inflation and weaker business activity helped
bring about lower interest rates for the bond market, the driving force behind
the equity market has been rising corporate profits. One year ago, the
estimate of earnings per share of the S&P Index was $27. The S&P Index was at
444, a price 16.5 times earnings. Today, after an increase of 23%, the S&P
Index has reached 544. However, the current earnings estimate of $34 prices
the market once again at roughly 16 times earnings.
CGM Mutual Fund is 30% invested in government and corporate bonds. The equity
section holds important positions in banks, airlines, and technology. The
largest holdings are Citicorp, Chemical Banking Corporation and Hewlett-
Packard Company.
/s/ Robert L. Kemp
Robert L. Kemp
President
July 10, 1995
<PAGE>
--------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
(unaudited)
--------------------------------------------------------------------------------
Total Return for Periods Ended June 30, 1995
CGM
MUTUAL THE FUND'S AVERAGE
FUND ANNUAL TOTAL RETURN
------ -------------------
10 Years ..................................... +294.9% +14.7%
5 Years ..................................... + 82.4 +12.8
1 Year ...................................... + 12.1 +12.1
3 Months .................................... + 12.5 --
The percentage figures for the Fund are based upon the beginning net asset
values of $19.03, $23.22, $26.60 and $25.65, respectively, and the June 30,
1995 asset value of $28.64 per share assuming the reinvestment of income
dividends, capital gains and paid-in capital distributions during such
respective periods.
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 their
original cost.
<PAGE>
-------------------------------------------------------------------------------
BOARD OF TRUSTEES
PETER O. BROWN
NICHOLAS J. GRANT
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 MUTUAL FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
25 YEAR INVESTMENT RECORD
DECEMBER 31, 1969 -- JUNE 30, 1995 (UNAUDITED)
--------------------------------------------------------------------------------
IF YOU HAD PURCHASED ONE SHARE OF THE FUND ON DECEMBER 31, 1969
--------------------------------------------------------------------------------
<CAPTION>
--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 Share Would Distributions Dividends Year End Total Return December 31,
31 Have Been of of Would Have Been of 1969 = 100.0
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1969 $14.60 -- -- 100.0
1970 13.89 $ 0.60 $ 0.50 $ 15.04 + 3.0 103.0
1971 15.37 0.35 0.41 17.55 + 16.7 120.2
1972 16.20 0.35 0.42 19.46 + 10.9 133.3
1973 14.20 0.42 0.42 18.00 - 7.5 123.3
1974 10.27 -- 0.46 13.54 - 24.8 92.7
1975 12.44 -- 0.43 16.99 + 25.5 116.4
1976 13.96 -- 0.43 19.69 + 15.9 134.9
1977 12.88 -- 0.52 18.88 - 4.1 129.3
1978 12.83 -- 0.65 19.81 + 4.9 135.7
1979 13.81 -- 0.72 22.52 + 13.7 154.3
1980 14.85 -- 0.88 25.86 + 14.8 177.1
1981 13.90 -- 0.97 25.88 + 0.1 177.3
1982 18.16 -- 1.09 36.49 + 41.0 250.0
1983 18.81 -- 1.09 40.11 + 9.9 274.7
1984 17.01 1.86 0.95 42.63 + 6.3 292.0
1985 21.53 -- 1.08 57.34 + 34.5 392.8
1986 22.86 2.75 0.94 71.74 + 25.1 491.3
1987 20.40 4.52 1.06 81.56 + 13.7 558.7
1988 19.94 -- 1.10 84.17 + 3.2 576.5
1989 22.34 0.95 0.93 102.44 + 21.7 701.6
1990 21.64 -- 0.93* 103.57 + 1.1 709.4
1991 26.80 2.64 0.97 145.93 + 40.9 999.5
1992 26.02 1.42 0.93 154.83 + 6.1 1060.5
1993 28.88 1.93 0.86 188.58 + 21.8 1291.6
1994 25.05 -- 1.04 170.29 - 9.7 1166.4
1995(6/30) 28.64 -- 0.20 196.17 + 15.2* 1343.7
------ ------ ------
Totals $17.79 $19.98 +1243.7
-----------------------------------------------------------------------------------------------------------------------------------
*Includes $0.05 per share distributed from paid-in capital.
**Total return for the six months ended June 30, 1995.
The table above covers the period from the end of 1969 to June 30, 1995. Shares were first offered on November 5, 1929; the net
asset value per share, adjusted for stock splits and dividends, was $8.33.
-----------------------------------------------------------------------------------------------------------------------------------
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 their
original cost.
</TABLE>
<PAGE>
CGM MUTUAL FUND
--------------------------------------------------------------------------------
INVESTMENTS AS OF JUNE 30, 1995
(unaudited)
COMMON STOCKS -- 68.1% OF TOTAL NET ASSETS
SHARES VALUE(A)
------ --------
AIRLINES -- 8.7%
AMR Corporation(b) .............. 441,000 $ 32,909,625
Northwest Airlines
Corporation(b) ................ 305,000 10,789,375
UAL Corporation(b) .............. 400,000 56,100,000
--------------
99,799,000
--------------
ALUMINUM -- 5.5%
Aluminum Company of America ..... 1,243,600 62,335,450
--------------
BANKS -- MONEY CENTER -- 20.7%
Chase Manhattan Corporation ..... 1,176,000 55,272,000
Chemical Banking Corporation .... 1,650,000 77,962,500
Citicorp ........................ 1,482,500 85,799,688
First Interstate Bancorp ........ 185,000 14,846,250
Morgan J.P. & Company, Inc. ..... 30,000 2,103,750
--------------
235,984,188
--------------
ELECTRONIC COMPONENTS -- 6.9%
Intel Corporation ............... 960,000 60,780,000
Micron Technology, Inc. ......... 325,000 17,834,375
--------------
78,614,375
--------------
ELECTRONIC & COMPUTER EQUIPMENT -- 6.6%
Hewlett-Packard Company ......... 1,012,000 75,394,000
--------------
ENVIRONMENTAL SERVICES -- 5.9%
Potash Corporation of
Saskatchewan, Inc. .............. 1,210,000 67,608,750
--------------
PAPER PRODUCTS/CONSUMER -- 5.4%
Bowater, Inc. ................... 1,374,200 61,667,225
--------------
REAL ESTATE INVESTMENT TRUSTS -- 4.4%
Beacon Properties Corporation ... 1,469,200 29,200,350
Pacific Gulf Properties, Inc. ... 380,000 5,652,500
Reckson Associates Realty
Corporation ................... 500,000 12,125,000
Starwood Lodging Trust .......... 150,000 3,525,000
--------------
50,502,850
--------------
STEEL -- 4.0%
British Steel PLC ADR(c) .......... 1,636,000 45,399,000
--------------
TOTAL COMMON STOCKS
(Identified Cost $660,339,729) ...... 777,304,838
--------------
See accompanying notes to financial statements
<PAGE>
CGM MUTUAL FUND
----------------------------------------------------------------
INVESTMENTS AS OF JUNE 30, 1995 (CONTINUED)
(unaudited)
BONDS AND BILLS -- 30.5%
FACE
AMOUNT VALUE(A)
------ --------
AIRLINES -- 5.7%
Delta Air Lines, Inc.,
3.23%, 6/15/03 .................. $ 68,000,000 $ 64,600,000
--------------
INDUSTRIAL BONDS -- 3.6%
Kaiser Aluminum & Chemical
Corporation, 12.75%, 2/01/03 .... 20,000,000 21,500,000
Rohr, Inc., 11.625%, 5/15/03 ...... 5,000,000 5,275,000
Stone Container Corporation,
9.875%, 2/01/01 ................. 15,000,000 14,868,750
--------------
41,643,750
--------------
UNITED STATES TREASURY -- 21.2%
United States Treasury Bills,
5.335%, 6/27/96 ................. 20,000,000 18,932,000
United States Treasury Bonds,
7.625%, 2/15/25 ................. 197,000,000 222,485,890
--------------
241,417,890
--------------
TOTAL BONDS AND BILLS
(Identified Cost $332,033,801) .... 347,661,640
--------------
SHORT-TERM INVESTMENT -- 0.9%
Chevron Oil Finance Company,
5.90%, 7/03/95 (Cost $10,815,000) 10,815,000 10,815,000
--------------
TOTAL INVESTMENTS -- 99.5% (Identified
Cost $1,003,188,530)(d) ........... 1,135,781,478
Cash and Receivables ............ 67,812,031
Liabilities ..................... (62,372,466)
--------------
TOTAL NET ASSETS -- 100% ............ $1,141,221,043
==============
(a)See Note 1A.
(b)Non-income producing security.
(c)An American Depository 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)Federal Tax Information: At June 30, 1995, the net unrealized appreciation on
investments based on cost of $1,003,188,530 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.......... $ 136,053,411
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value............. (3,460,463)
-------------
Net unrealized appreciation................................... $ 132,592,948
=============
See accompanying notes to financial statements
<PAGE>
CGM MUTUAL FUND
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(unaudited)
ASSETS
Investments at value (Identified
cost -- $1,003,188,530) ............................... $1,135,781,478
Cash .................................................... 2,454
Receivable for:
Securities sold ......................... $57,838,422
Shares of the Fund sold ................. 309,603
Dividends and interest .................. 9,661,552 67,809,577
----------- --------------
1,203,593,509
--------------
LIABILITIES
Payable for:
Securities purchased .................... $60,067,923
Shares of the Fund redeemed ............. 1,158,900
Foreign dividend tax withheld ........... 269,327 61,496,150
-----------
Accrued expenses:
Management fees ......................... 623,228
Trustees' fees .......................... 16,750
Accounting and
Administration ........................ 6,667
Other expenses .......................... 229,671 876,316
----------- --------------
62,372,466
--------------
NET ASSETS ................................................ $1,141,221,043
==============
Net Assets consist of:
Capital paid-in ....................................... $1,037,214,320
Undistributed net investment
income .............................................. 13,749,972
Accumulated net realized loss ......................... (42,336,197)
Unrealized appreciation on
investments -- net .................................. 132,592,948
--------------
NET ASSETS ................................................ $1,141,221,043
==============
Shares of beneficial interest
outstanding, no par value ............................ 39,849,467
==============
Net asset value per share* .............................. $28.64
==============
*Shares of the Fund are sold and redeemed at net asset value
($1,141,221,043 / 39,849,467).
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1995
(unaudited)
INVESTMENT INCOME
Income
Dividends (net of withholding tax of $294,583) ......... $ 11,778,835
Interest ............................................... 10,305,911
------------
22,084,746
------------
Expenses
Management fees ........................................ 3,637,100
Trustees' fees ......................................... 32,250
Accounting and Administration .......................... 40,000
Custodian .............................................. 86,500
Transfer agent ......................................... 980,000
Audit and tax services ................................. 16,500
Legal .................................................. 27,000
Printing ............................................... 51,500
Registration ........................................... 70,000
Miscellaneous .......................................... 7,857
------------
4,948,707
------------
Net investment income .................................... 17,136,039
------------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS
Realized loss on investments -- net .................... (5,471,432)
Unrealized appreciation -- net ......................... 142,644,767
------------
Net gain on investments ................................ 137,173,335
------------
NET INCREASE IN ASSETS FROM
OPERATIONS ............................................... $154,309,374
============
See accompanying notes to financial statements
<PAGE>
CGM MUTUAL FUND
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
------------------- -------------------
OPERATIONS
Net investment income ........ $ 17,136,039 $ 48,441,302
Net realized loss from
investments ................ (5,471,432) (34,800,339)
Unrealized appreciation
(depreciation) ............. 142,644,767 (129,938,895)
-------------- --------------
Increase (decrease) in net
assets from operations ... 154,309,374 (116,297,932)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ... (8,171,033) (43,781,553)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares 52,047,720 425,388,301
Net asset value of shares
issued in connection with
reinvestment of:
Dividends from net
investment income ....... 7,284,149 39,044,764
-------------- --------------
59,331,869 464,433,065
Cost of shares redeemed ...... (127,624,497) (188,093,510)
-------------- --------------
Increase (decrease) in net
assets derived from
capital share transactions (68,292,628) 276,339,555
-------------- --------------
Total increase in net assets 77,845,713 116,260,070
NET ASSETS
Beginning of period (including
undistributed net investment
income of $4,784,966 and
$2,192,761, respectively) .. 1,063,375,330 947,115,260
-------------- --------------
End of period (including
undistributed net investment
income of $13,749,972 and
$4,784,966, respectively) .. $1,141,221,043 $1,063,375,330
============== ==============
NUMBER OF SHARES OF THE FUND:
Issued from sale of shares ... 2,013,009 15,228,603
Issued in connection with
reinvestment of:
Dividends from net
investment income ...... 278,011 1,506,420
-------------- --------------
2,291,020 16,735,023
Redeemed ................... (4,894,630) (7,079,826)
-------------- --------------
Net change ................. (2,603,610) 9,655,197
============== ==============
See accompanying notes to financial statements
<PAGE>
CGM MUTUAL FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1995 -------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
------------- ---- ---- ---- ---- ----
For a share of the Fund outstanding
throughout each period:
<S> <C> <C> <C> <C> <C> <C>
Net asset value at the beginning of period ................ $25.05 $28.88 $26.02 $26.80 $21.64 $22.34
------ ------ ------ ------ ------ ------
Net investment income ..................................... 0.43 1.09 0.92 0.93 0.97 0.87
Dividends from net investment income ...................... (0.20) (1.04) (0.86) (0.93) (0.97) (0.88)
Net realized and unrealized gain (loss) on investments .... 3.36 (3.88) 4.73 0.64 7.80 (0.64)
Distribution from net realized gain ....................... -- -- (1.81) (1.42) (2.64) --
Distribution in excess of net realized gain ............... -- -- (0.12) -- -- --
Distribution from paid-in capital ......................... -- -- -- -- -- (0.05)
------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset value ................ 3.59 (3.83) 2.86 (0.78) 5.16 (0.70)
------ ------ ------ ------ ------ ------
Net asset value at end of period .......................... $28.64 $25.05 $28.88 $26.02 $26.80 $21.64
====== ====== ====== ====== ====== ======
Total Return (%) .......................................... 15.2 -9.7 21.8 6.1 40.9 1.1
Ratios:
Operating expenses to average net assets (%) 0.93* 0.92 0.93 0.93 0.93 0.97
Net income to average net assets (%) ...................... 3.22* 4.39 3.45 3.74 3.80 4.00
Portfolio turnover (%) .................................... 231* 173 97 121 201 159
Net assets at end of period (in thousands) ................ 1,141,221 1,063,375 947,115 548,630 401,887 295,868
*Computed on an annualized basis
</TABLE>
See accompanying notes to financial statements
<PAGE>
CGM MUTUAL FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 1995
(unaudited)
1. The Fund is a series of CGM Trust which is organized as a Massachusetts
business trust under the laws of Massachusetts pursuant to an Agreement and
Declaration of Trust. The Trust is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Trust
has three other Funds whose financial statements are not presented herein.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
A. SECURITY VALUATION -- Equity securities are valued on the basis of
valuations furnished by a pricing service, authorized by the Board of
Trustees, which service 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.
Corporate debt securities are valued on the basis of valuations furnished
by a pricing service, authorized by the Board of Trustees, which
determines valuations for normal, institutional-size trading units of such
securities using market information, transactions for comparable
securities and various relationships between securities which are
generally recognized by institutional traders. United States government
debt securities are valued at the current closing bid, as last reported by
a pricing service approved by the Board of Trustees. 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.
Interest income is recorded on the accrual basis. Net gain or loss on
securities sold is determined on the identified cost basis.
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. At
December 31, 1994, the capital loss carryover available to offset future
realized gains aggregated approximately $36,907,000 and expires in the
year 2002.
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 will result in reclassifications to paid-in
capital and may affect net investment income per share. 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.
2. PURCHASES AND SALES OF SECURITIES -- For the period ended June 30, 1995,
purchases and sales of securities other than United States government
obligations and short-term investments aggregated
$969,131,425 and $906,502,920, respectively. Purchases and sales of United
States government obligations aggregated $806,348,288 and $530,440,097,
respectively.
<PAGE>
CGM MUTUAL FUND
------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(unaudited)
3. A. MANAGEMENT FEES -- During the period ended June 30, 1995, the Fund
incurred management fees of $3,637,100, 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 between the Fund and
CGM provides for a fee at the annual rate of 0.75% on the first $200
million of the Fund's average daily net assets, 0.70% of the next $300
million and 0.65% of such assets in excess of $500 million.
B. OTHER EXPENSES -- CGM performs certain administrative, accounting and
other services for the Fund. The expense of those services, which were
paid to CGM by the Fund, include the following: (i) expenses for
personnel performing bookkeeping, accounting, internal auditing 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 $40,000 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 Fund at the rate of $10,000 per year plus travel expenses for each
meeting attended. In addition, the chairman of the Independent
Trustees Committee receives an annual retainer of $1,500.
<PAGE>
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.
MQR2 Printed in U.S.A.
