<PAGE>
[Black and white print ad. Headline in white type reads:]
TOP PERFORMING CGM FUNDS
[Below headline is a grey box divided into three areas with separate headlines,
fund names, total returns, and total return dates for each of three funds in
each section. Below the type described above are three photographs of fencers of
varying poses; headline, fund name, etc, in each section from left to right is
as follows:
#1 Balanced Fund for 15-years
CGM MUTUAL FUND
955.9%
[in smaller italic type:] Total return 7/1/82-6/30/97
#1 Real Estate Fund for 3-years
CGM REALTY FUND
87.2%
[in smaller italic type:] Total return 7/1/94-6/30/97
#1 General Bond Fund for 3- and 5-years
CGM FIXED INCOME FUND*
45.6%
[in smaller italic type:] Total return 7/1/94-6/30/97
71.7%
[in smaller italic type:] Total return 7/1/92-6/30/97
[At the bottom of the box in black type are the words:] MANAGED BY KEN HEEBNER*
[In a lightly shaded area which makes up the lower 50% 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.]
27.9,% 15.1%, 12.5% and 17.0% are the average annual total returns for CGM
Mutual Fund for the 1, 5, 10, and 15-year periods ended 6/30/97. Ranking
according to Lipper Analytical Services, Inc., which ranks CGM Mutual Fund #1 of
27 balanced funds for 15-year performance, #5 of 39 balanced funds for 10-year
performance, #11 of 87 balanced funds for 5-year performance, and #7 of 303
balanced funds for 1-year performance through 6/30/97. CGM Mutual Fund has been
managed continuously by Ken Heebner since 1981.
22.1%, 43.8% and 23.3% are the average annual total returns for CGM Realty Fund
from inception on 5/13/94 through 6/30/97, and for the 1- and 3-year periods
ended 6/30/97. Ranking according to Lipper Analytical Services, Inc., which
ranks CGM Realty #1 of 17 real estate funds in total return for 3-year
performance and #2 of 54 real estate funds in total return for 1-year
performance through 6/30/97. The Fund's adviser is currently absorbing a portion
of management fees and expenses. Otherwise the total return would be lower.
11.6%, 8.8%, 13.4%, and 11.4% are the average annual total returns for CGM Fixed
Income Fund from inception on 3/17/92 through 6/30/97, and for the 1-, 3-, and
5-year periods ended 6/30/97. Ranking according to Lipper Analytical Services,
Inc., which ranks CGM Fixed Income #1 of 11 general bond funds for 5-year
performance, #1 of 16 general bond funds for 3-year performance, and #27 of 33
general bond funds for 1-year performance through 6/30/97.The Fund's adviser is
currently absorbing a portion of management fees and expenses. Otherwise the
total return would be lower. *Ken Heebner co-manages CGM Fixed Income Fund with
Janice Saul.
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 below. Read it
carefully before you invest or send money. Lipper Analytical Services, Inc. is
an independent mutual fund ranking service.
[Below 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
www.CGMFunds.com
[The entire ad is surrounded by a decorative border reading:]
NO-LOAD
