Rule 497(e)
File Nos. 2-80886
811-3626
Supplement dated July 14, 1998 to the Prospectus of Citizens Trust dated
December 8, 1997, as amended April 21, 1998:
On page 1, the following statement should be added:
Effective July 2, 1998, the name of Citizens Investment Trust has been changed
to "Citizens Funds" and all references herein to Citizens Investment Trust or
Citizens Trust shall hereinafter refer to Citizens Funds.
On page 1, the address for Citizens Trust should be deleted and replaced by the
following:
230 Commerce Way, Suite 300
Portsmouth, NH 03801
On page 1, the following statement should also be added:
Effective July 2, 1998, the name of each individual fund has been changed such
that the word, "Portfolio", has been stricken from the name of each fund and
the word, "Fund", has been substituted therefor. All references herein to the
individual funds shall hereinafter refer to the following: Working Assets Money
Market Fund; Citizens Income Fund; Citizens Index Fund; Citizens Emerging
Growth Fund; and Citizens Global Equity Fund.
On page 6, under the heading, "Commercial Paper," the third sentence of the
first paragraph is deleted in its entirety and is replaced by the following
sentence:
If a security is rated by only one agency, it must be rated in the highest
rating category by that agency.
On page 9, under the heading "Organization and Management of the Trust", the
first sentence in the second paragraph is deleted in its entirety and is
replaced by the following sentence:
In order to manage the Trust on a day-to-day basis, we have signed a Management
Agreement with Citizens Advisers, with offices at 230 Commerce Way, Suite 300,
Portsmouth, NH 03801.
<PAGE>
December 8, 1997, as amended April 21, 1998
Dear Friend,
Since our inception in 1982, our goal has been to earn money for our
shareholders by investing in companies that show both strong financial promise
and corporate responsibility.
We believe there is a revolution going on in business today and only
certain companies will thrive in this new, faster paced, environmentally
concerned and diverse global business environment. At Citizens Trust, we
identify and invest in these companies - businesses with the potential to
produce strong financial results today as well as create the world we want to
live in tomorrow.
We hope you will read this prospectus carefully and retain it for future
reference. We look forward to serving you at Citizens Trust.
Sincerely,
Sophia Collier
President
Our Portfolios
Working Assets Money Market Portfolio's objective is current income consistent
with safety and liquidity. We seek to maintain a stable $1.00 Net Asset Value
per share at all times, although there is no assurance we will be able to do
so. Shares are neither insured nor guaranteed by the U.S. Government.
Citizens Income Portfolio invests in fixed-income securities with the objective
of generating current income and paying a dividend each month.
Citizens Index Portfolio invests in a market-weighted portfolio of stocks of
300 companies with the objective of long-term capital appreciation.
Citizens Emerging Growth Portfolio invests primarily in promising small- and
medium-sized companies with the objective of aggressive growth.
Citizens Global Equity Portfolio invests in U.S. and foreign stocks with the
objective of capital appreciation.
Our Statement of Additional Information, dated October 3, 1997, as amended
December 8, 1997, and incorporated by reference, is filed with the Securities
<PAGE>
and Exchange Commission and is available on their website (http:\\www.sec.gov).
If you would like a printed copy, please call us toll-free.
All portfolios are no load and subject to 12b-1 fees. The minimum initial
investment in each portfolio is $2,500.
These Securities have not been approved or disapproved by the Securities and
Exchange Commission, or by any state securities commission, nor has the
Securities and Exchange Commission, or any state securities commission, passed
on the accuracy or adequacy of this Prospectus. Any representation to the
contrary is a criminal offense.
FEE INFORMATION
<TABLE>
<CAPTION>
WORKING CITIZENS CITIZENS
ASSETS CITIZENS CITIZENS EMERGING GLOBAL
MONEY INCOME INDEX GROWTH EQUITY
MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
Annual Portfolio Operating
Expenses (as a percentage of Average Net Assets)
Shareholder Transaction Expenses None None None None None
Management Fees .35% .65% .50% 1.00% 1.00%
Distribution Expenses (12b-1 Fees) .20% .25% .25% .25% .25%
Other Expenses(after waiver and reimbursement) .65%+ .55% .84% .82% .88%
Total Portfolio Operating Expenses 1.20%* 1.45%* 1.59%* 2.07%* 2.13%*
</TABLE>
*Restated to reflect current fees and expenses.
+The Adviser waived certain fees and reimbursed certain expenses. The ratio
prior to reimbursement for the year ended June 30, 1997, for the Working Assets
Money Market Portfolio was 1.39%.
EXAMPLE: You would have paid the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each period:
<TABLE>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
Working Assets Money Market Portfolio++ $12 $38 $66 $145
Citizens Income Portfolio 15 46 79 174
Citizens Index Portfolio 16 50 87 189
Citizens Emerging Growth Portfolio 21 65 111 240
Citizens Global Equity Portfolio 22 67 114 246
</TABLE>
The example should not be considered a representation of past or future
expenses or past or future return. Actual expenses and actual return may be
greater or less than those included in the example above.
++Expenses reflect fee waiver, without which the expenses would have been $14,
$44, $76 and $167 respectively.
<PAGE>
<TABLE>
<S> <C>
Costs For Other Services
Returned checks $15.00
Returned Electronic Purchase/Payment - ACH $15.00
Outgoing wire transfer $10.00
International wire transfer $20.00
Per check fee (waived with the E.fund Account) $0.50
Stop payments $10.00
Checks first 20 free
Box of 200 checks for the E.fund Account $15.95
ATM cost $0.65 each/cash advance: $2.50
Annual fee for the E.fund Account $35.00
Debit Card replacement for the E.fund Account $10.00
Copies of statements, checks and tax forms $2.00
Below $2,500.00 minimum balance fee (except for the E.fund Account) $3.00 each month
</TABLE>
ESCROW AND ACCOUNT POLICIES
We reserve the right to wait up to 7 business days to redeem any investments
made by check, and 5 business days for purchases made by ACH transfer. We also
reserve the right to close your account for any lawful reason, including, but
not limited to, reasonable suspicion of fraud or other illegal activity in
connection with the account. PLEASE MAKE ALL CHECKS PAYABLE TO "CITIZENS
TRUST." WE ARE UNABLE TO ACCEPT THIRD-PARTY CHECKS.
How We Select Our Investments
Financially Sound and Socially Responsible
Our investment strategy is to invest in companies we believe are
financially attractive and managed in a socially responsible manner. To find
them, we favor companies that make good and useful products and have positive
environmental, community and workplace records. We avoid companies that engage
in workplace discrimination or union busting; whose primary business is the
manufacture of alcohol, tobacco, firearms or nuclear power; and those that use
animals to test personal-care products or otherwise treat animals in an
inhumane manner.
Citizens Trust has certain policies we consider fundamental, such as
consistently applying both social and financial screens to all our investment
decisions. These, together with each portfolio's investment objective and other
technical investment policies described in the Statement of Additional
Information, cannot be changed without the approval of a majority of the
outstanding shares of each portfolio that would be affected by the change. In
addition to the specific policies for each portfolio, we also have some general
policies for all our portfolios.
General Investment Policies
We try not to put all our eggs in one basket. This means that 75% of a
portfolio's assets will never hold more than 5% of any one company. We do not
<PAGE>
invest more than 25% of the value of any one portfolio in one industry, with
the exception of securities of U.S. Government agencies or enterprises, or in
our money market portfolio, domestic banks.
Citizens Trust's role is to be a conscientious and alert investor, not a
controlling manager; therefore, across all our portfolios, we will not
accumulate more than 10% of the voting securities of any one company.
We sometimes purchase securities issued by companies that do not trade in
the public market. To maintain a good investment balance, we will limit these
and all other illiquid securities to a total of no more than 10% of each
portfolio's assets.
Each of our portfolios may, from time to time, invest in money market
securities such as the ones we use in our money market funds.
Each portfolio may temporarily borrow money from banks (and pledge its
assets to secure such borrowing) to meet redemption requests or for other
purposes. We will keep this borrowing down to no more than 10% of the value of
each portfolio's total assets and make no purchases while we have any
outstanding loans.
Repurchase Agreements
Sometimes we invest our surplus cash in repurchase agreements with
financially strong stockbrokers or banks that are members of the Federal
Reserve. We require all vendors of repurchase agreements to set aside
collateral in our name in the form of government securities equal to 102% of
the value of any repurchase agreement. However, it is important to note that
while repurchase agreements are a useful tool in managing the portfolio, they
do have some greater risk than direct investing in securities. If a bank or
stockbroker becomes bankrupt, or otherwise defaults after selling us a
repurchase agreement, we may suffer some delay and expense in liquidating our
collateral or have a loss of principal or interest.
<PAGE>
FINANCIAL HIGHLIGHTS
PER SHARE DATA
<TABLE>
<CAPTION>
Income (Loss) From Investment Operations Less Distributions
Net Gains
(Losses) on
Net Asset Securities Distributions
Year Average Value, Net (both Total from Dividends (from Net Net Asset
Ended Broker Beginning Income Realized & Investment (from Net Realized Total Value, End
June 30 Commission of Period (Loss) Unrealized) Operations Income) Gain) Distribution of Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WORKING ASSETS MONEY MARKET PORTFOLIO
1988 N/A 1.00 0.06 0.00 0.06 (0.06) 0.00 (0.06) 1.00
1989 N/A 1.00 0.08 0.00 0.08 (0.08) 0.00 (0.08) 1.00
1990 N/A 1.00 0.08 0.00 0.08 (0.08) 0.00 (0.08) 1.00
1991 N/A 1.00 0.07 0.00 0.07 (0.07) 0.00 (0.07) 1.00
1992 N/A 1.00 0.04 0.00 0.04 (0.04) 0.00 (0.04) 1.00
1993 N/A 1.00 0.02 0.00 0.02 (0.02) 0.00 (0.02) 1.00
1994 N/A 1.00 0.02 0.00 0.02 (0.02) 0.00 (0.02) 1.00
1995 N/A 1.00 0.04 0.00 0.04 (0.04) 0.00 (0.04) 1.00
1996 N/A 1.00 0.05 0.00 0.05 (0.05) 0.00 (0.05) 1.00
1997 N/A 1.00 0.04 0.00 0.04 (0.04) 0.00 (0.04) 1.00
CITIZENS INCOME PORTFOLIO
1992(1) N/A 10.00 0.01 0.07 0.08 (0.01) 0.00 (0.01) 10.07
1993 N/A 10.07 0.46 0.54 1.00 (0.47) 0.00 (0.47) 10.60
1994 N/A 10.60 0.55 (0.54) 0.01 (0.55) (0.02) (0.57) 10.04
1995 N/A 10.04 0.65 0.36 1.01 (0.65) (0.02) (0.67) 10.38
1996 N/A 10.38 0.66 (0.10) 0.56 (0.66) 0.00 (0.66) 10.28
1997 N/A 10.28 0.67 0.28 0.95 (0.67) 0.00 (0.67) 10.56
CITIZENS INDEX PORTFOLIO
1995(4) N/A 10.00 0.01 0.93 0.94 0.00 0.00 0.00 10.94
1996 N/A 10.94 0.08 2.47 2.55 (0.03) (0.05) (0.08) 13.41
1997 .0443 13.41 0.00 4.78 4.78 (0.06) (0.09) (0.15) 18.04
CITIZENS EMERGING GROWTH PORTFOLIO
1994(2) N/A 10.00 0.01 (0.08) (0.07) 0.00 0.00 0.00 9.93
1995 N/A 9.93 0.07 2.18 2.25 (0.09) (0.22) (0.31) 11.87
1996 N/A 11.87 (0.13) 4.72 4.59 0.00 (1.59) (1.59) 14.87
1997 .0222 14.87 (0.16) 0.68 0.52 0.00 (1.25) (1.25) 14.14
CITIZENS GLOBAL EQUITY PORTFOLIO
1994(2) N/A 10.00 0.01 (0.21) (0.20) 0.00 0.00 0.00 9.80
1995 N/A 9.80 (0.01) 0.96 0.95 0.00 (0.06) (0.06) 10.69
1996 N/A 10.69 (0.10) 1.43 1.33 0.00 (0.13) (0.13) 11.89
1997 .0204 11.89 (0.07) 2.65 2.58 0.00 0.00 0.00 14.47
(1) Period from June 10, 1992 (commencement of operations) (3) Annualized
(2) Period from February 8, 1994 (commencement of operations) (4) Period from March 3, 1995 (commencement of operations)
</TABLE>
<PAGE>
RATIOS AND SUPPLEMENTAL DATA
<TABLE>
<CAPTION>
Ratio of Ratio of
Expenses Ratio of Net Income
Net Ratio of to Average Net Income (Loss) to
Portfolio Assets Expenses Net Assets (Loss) to Average Net
Turnover End of Period to Average Prior to Average Net Assets Prior to Total
Rate (in 000's) Net Assets Reimbursement Assets Reimbursement Return
<S> <C> <C> <C> <C> <C> <C>
N/A 123,861 1.15% 1.15% 5.98% 5.98% 6.19%
N/A 166,285 1.13% 1.13% 7.74% 7.74% 8.02%
N/A 214,603 1.05% 1.05% 7.50% 7.50% 7.81%
N/A 243,194 1.02% 1.02% 6.47% 6.47% 6.67%
N/A 223,951 1.07% 1.07% 4.09% 4.09% 4.16%
N/A 152,625 1.11% 1.11% 2.41% 2.41% 2.43%
N/A 103,766 1.16% 1.16% 2.31% 2.31% 2.35%
N/A 97,611 1.16% 1.16% 4.39% 4.39% 4.51%
N/A 78,326 1.21% 1.21% 4.56% 4.56% 4.60%
N/A 85,179 1.27% 1.39% 4.23% 4.12% 4.30%
0.00% 1,030 1.75%(3) 1.75%(3) 4.38%(3) 4.38%(3) 0.80%
22.35% 12,601 1.42% 2.38% 4.98% 4.02% 10.08%
52.62% 24,410 1.25% 2.01% 5.43% 4.68% 0.04%
46.03% 30,122 1.35% 1.48% 6.47% 6.34% 10.45%
41.36% 32,276 1.43% 1.48% 6.26% 6.21% 5.48%
64.56% 33,230 1.47% 1.47% 6.44% 6.44% 9.57%
64.95% 106,096 1.75%(3) 1.75%(3) 0.98%(3) 0.98%(3) 9.40%
6.44% 136,980 1.82% 1.82% 0.68% 0.68% 23.41%
18.64% 211,116 1.59% 1.59% 0.02% 0.02% 35.88%
33.35% 3,754 1.89%(3) 3.81%(3) 0.63%(3) (1.29%)(3) (0.70%)
231.30% 10,638 1.90% 2.93% 0.53% (0.50%) 23.24%
337.41% 36,409 2.10% 2.34% (1.64%) (1.88%) 42.43%
228.66% 60,341 2.01% 2.01% (1.32%) (1.32%) 4.03%
0.00% 5,639 2.50%(3) 3.16%(3) 0.25%(3) (0.41%)(3) (2.00%)
22.10% 9,503 2.50% 2.99% 0.00% (0.49%) 9.77%
85.92% 15,595 2.72% 2.72% (1.01%) (1.01%) 12.52%
69.34% 29,573 2.33% 2.33% (0.70%) (0.70%) 21.70%
</TABLE>
Working Assets Money Market Portfolio
Objective: Current income consistent with safety and liquidity
In our money market portfolio, we only invest in short-term money market
instruments (short-term debt issued by branches of the government,
corporations, banks or other financial institutions) that we believe present
minimal risk, and we maintain a weighted average maturity of 90 days or less
for the portfolio as a whole. Checking services are available.
U.S. Government Securities
When we look at government securities, we only buy those that are issued
or guaranteed, as to both interest and principal, by agencies or other
enterprises of the United States Government.
<PAGE>
Commercial Paper
We will also buy high quality "commercial paper," which is short-term
debt issued by well-established corporations. One hundred percent of this
short-term debt must be rated A-1 by Standard & Poor's Rating Services or have
a comparably high rating by another nationally recognized rating service. If a
security is rated by only one agency, it must be rated in one of the two
highest ratings by that agency. If a security is not rated, it must be as good
as A-1 in our judgment. We also use our own research and experience to help
assure our money market securities have only a minimal credit risk.
Banks sometimes issue other types of debt that offer us a yield
advantage. These include certificates of deposit, time deposits and bankers'
acceptances of U.S. banks or thrift institutions.
Risk Factors
The shares of Working Assets Money Market Portfolio are neither insured
nor guaranteed by the U.S. Government, and there is no assurance the portfolio
will be able to maintain a stable Net Asset Value of $1.00 per share, despite
our care and caution.
Citizens Income Portfolio
Objective: Current income
Citizens Income Portfolio lends money to the agencies and enterprises of the
government and to companies in exchange for interest payments. The Citizens
Income Portfolio invests most of its money in bonds or mortgages that are due
within 2 to 30 years, although at times it will hold short-term securities as
well. Our average maturity in the Citizens Income Portfolio is usually between
5 and 15 years. By committing money for this longer period, we generally can
earn higher interest than in the money market portfolio.
At least 65% of the Citizens Income Portfolio's assets are invested in
securities rated "investment grade" (BBB or above). Up to 35% may be invested
in bonds or other debt instruments rated as below investment grade. Although
bonds rated below BBB are considered speculative (and are referred to as "junk
bonds") and therefore add risk, we believe by limiting the overall portfolio
exposure to a maximum level of 35%, the higher yield usually available in these
securities can benefit the portfolio and more than compensate for the greater
risk.
Occasionally we buy securities that are not rated. In these cases, the
security must be of comparable quality, in our judgment, to the rated
<PAGE>
securities we buy for the applicable portfolio. In our Statement of Additional
Information, we give more detailed information about each rating agency and its
system of ratings.
Risk Factors
Bond prices, like stock prices, go up and down in value. These market
price fluctuations will be reflected in the value of the Citizens Income
Portfolio. When interest rates rise, the market value of our Income Portfolio
will decline, and when interest rates fall, the market value of our Income
Portfolio will rise.
Citizens Index Portfolio
Objective: Long-term capital appreciation
The Citizens Index Portfolio is invested in 300 companies that make up the
Citizens Index. We believe these companies best represent their industries.
Approximately 200 of these are very large companies that also are included in
the S&P 500. The others are companies selected in order to provide industry
diversity, which we believe is essential to a sound investment program.
On a day-to-day basis, the portfolio is run by purchasing and holding
common stock of all the companies in the Index in a percentage, as closely as
possible, equal to each security's total market value divided by the total
market value of all the companies in the Index. In addition, under normal
circumstances the portfolio will usually hold a small amount of cash or money
market instruments (no more than 5%) resulting from shareholder purchase and
redemption activity and as a provision for operating expenses. Holding this
cash, together with the costs of operations, will prevent us from ever
perfectly tracking the theoretical performance of the underlying Index. Payment
of our operating expenses will reduce returns. Our small allocation to cash
will improve returns when the market is heading down and hurt them when the
market is moving up.
Companies will be deleted from the Index and divested from the portfolio
if they fail our annual social responsibility review. If a company is removed,
we will replace it with another company from the same industry that meets all
social criteria. In addition, from time to time we may make other small changes
in the Index to include, for example, exceptional companies, or to reflect
changes in the composition of the S&P 500. We do not expect these changes to
exceed 10% of the members of the Index on an annual basis.
<PAGE>
Risk Factors
Like all stock funds, the Net Asset Value of the Citizens Index Portfolio
will fluctuate based on market and economic conditions, or other factors that
affect particular companies or industries.
We are always pleased to send interested investors a current list of the
members of our Index.
Citizens Emerging Growth Portfolio
Objective: Aggressive growth
Our Citizens Emerging Growth Portfolio looks for aggressive gains with
long-term investing in mid-cap companies. During normal market conditions, at
least 65% of this portfolio's assets will be invested in the common or
preferred stock of companies that average at least $2 billion in market
capitalization.
Risk Factors
While many of these companies will have strong businesses, some still
will be unseasoned and therefore may have some speculative characteristics.
Investing in smaller companies is a long-term process with the potential for
significant gains. However, the value of this portfolio can have significant
fluctuation, because smaller companies have unique risks. They may be dependent
on individual managers or have a harder time obtaining financing and market
share. Further, their shares are more volatile and thinly traded. To moderate
this risk, we typically plan to hold between 30 and 50 companies in the
portfolio.
Since most of the companies we will purchase for the Citizens Emerging
Growth Portfolio are relatively new, we don't expect much, if any, dividend
income. At times, we may also buy short-term, fixed-income securities for the
portfolio.
Citizens Global Equity Portfolio
Objective: Capital appreciation
In the Citizens Global Equity Portfolio, we invest primarily in common stocks
of both U.S. domestic and foreign companies. We seek companies with growing
sustainable earnings; innovative products, services and business strategies;
revised corporate strategies; or those which are beneficiaries of political or
economic conditions. We plan to allocate more than half our assets to foreign
markets, in most circumstances in a minimum of three countries. From time to
<PAGE>
time, we also may buy other securities, such as convertible or preferred stocks
and short-term debt securities.
Risk Factors
Foreign stock markets are generally less efficient and more volatile than
those in the United States. This creates opportunities, but also risk.
Settlement and trading costs are generally higher on foreign exchanges than in
the U.S. The economies and governments of some countries the portfolio may
invest in may be less mature and stable than those of the U.S., and when
political or economic changes occur, there can be an adverse impact on the
portfolio. Adverse impacts may come from exchange control regulation,
expropriation, confiscatory taxation and political or social instability. The
risks of investing in emerging market countries are even greater and can
involve risk of higher inflation, high sensitivity to commodity prices and
economic dependence on a few industries or government-owned industries.
To moderate these risks and gain potential benefits, we use a number of
investment techniques. One of these is country selection. We restrict our
investments in riskier emerging nations (such as Argentina or Singapore) to no
more than 25% of the assets of the Citizens Global Equity Portfolio.
When we invest in securities listed on foreign exchanges, we buy them in
the currency of the local country. Often the local currency will fluctuate
against the U.S. dollar. To moderate this risk, we sometimes use currency
"hedging." We do this by entering into arrangements to buy or sell a particular
currency, security or securities index for a stated value against the U.S.
dollar at a given time. While there is a cost involved in hedging, as well as a
risk that our hedging strategy may not work and will add cost or reduce our
potential gains, we still think hedging can be a valuable tool.
Organization and Management of the Trust
Citizens Investment Trust commenced operations on November 24, 1982; up
until August 1995, it was known as Working Assets Common Holdings. Today, it's
affectionately known as Citizens Trust. We are a Massachusetts business trust
and an open-end investment company registered under the Investment Company Act
of 1940 as a diversified management company. The Trust is also a "series"
company, which means we can have several portfolios, each with its own
investment objective, assets and liabilities. A board of trustees supervises
the Trust.
In order to manage the Trust on a day-to-day basis, we have signed a
Management Agreement with Citizens Advisers, with offices at One Harbour Place,
<PAGE>
Portsmouth, NH, 03801. Citizens Advisers has managed the Trust's assets since
the Trust's inception in 1982. Citizens Securities, a subsidiary of Citizens
Advisers, serves as the Trust's distributor.
Both Citizens Advisers and Citizens Securities are California
corporations. Sophia Collier is the 60% beneficial owner. Fellow shareholders
are three brothers, John P. Dunfey, Robert J. Dunfey, Sr. and Gerald F. Dunfey,
who own 12% each; and William B. Hart, who owns 4%.
The Role of Investment Adviser
In its role as investment adviser to the Trust, Citizens Advisers
determines which companies meet the Trust's investment criteria and will be
carried on our "Approved List." It also selects which securities will be bought
and sold for the Working Assets Money Market Portfolio. To assist with
portfolio management for the other portfolios, Citizens Advisers has retained,
at its own expense, three sub-advisers.
Seneca Capital Management LLC
Our sub-adviser for the Citizens Income and Emerging Growth Portfolios,
Seneca Capital Management LLC, is a registered investment adviser established
in 1990. It is the successor to our prior sub-adviser, GMG/Seneca Capital
Management, 74.9% of which was purchased by Phoenix, Duff and Phelps in 1997.
Seneca Capital Management LLC manages more than $3 billion from its offices at
909 Montgomery Street, San Francisco, CA.
Clemente Capital, Inc.
Our sub-adviser for the Citizens Global Equity Portfolio, Clemente
Capital, Inc., is a registered investment adviser organized in 1979. It is
owned by Lilia Clemente, with 61.15%; Wilmington Trust of Wilmington, DE, with
24%; and Diaz-Verson Capital Investments, Inc., of Columbus, GA, with 14.85%.
Clemente also manages the First Philippine and Clemente Global Growth Funds,
two closed-end funds traded on the New York Stock Exchange. Its headquarters
are at Carnegie Hall Tower, 152 West 57th Street, New York, NY.
RhumbLine Advisers, Inc.
The Citizens Index Portfolio is sub-advised by RhumbLine Advisers, Inc.,
a registered investment adviser established in 1990 with offices at 30 Rowes
Wharf, Boston, MA. RhumbLine manages $2 billion for institutional clients and
is 97% owned by J.D. Nelson, who is also an interested trustee of the Trust.
<PAGE>
Citizens Trust's Management Agreement
Citizens Trust's Management Agreement with Citizens Advisers specifies
fees as follows (based on average annual net assets of the respective
portfolios):
<TABLE>
TRUST ADVISER
PAYS PAYS
PORTFOLIO ADVISER* SUB-ADVISER
<S> <C> <C>
Working Assets
Money Market Portfolio .35% -
Income Portfolio .65% .17%
Index Portfolio .50% .10%
Emerging Growth Portfolio 1.00% .35%
Global Equity Portfolio 1.00% .35%
</TABLE>
*For the year ended June 30, 1997 the adviser reimbursed a portion of the fee
on the Working Assets Money Market Portfolio for a net fee of .23%. All other
portfolios paid the fee specified under the management agreement.
Citizens Advisers also has a separate administrative contract for
providing general administrative services; shareholder servicing and
sub-accounting; telephone services; and services related to federal and state
regulatory filings. The fees paid by the Trust under this contract are set by
the Trustees based upon the services required. Citizens Advisers sometimes will
contract to have specialized services provided by third parties, such as
investment advisers for pension funds or other institutions which maintain
omnibus accounts with the Trust. Under the administrative contract for the year
ending June 30, 1997, we paid $1,711,524 to Citizens Advisers for its
administrative services.
The individual portfolios pay all expenses not expressly assumed by
Citizens Advisers. These include interest, taxes, audit and legal fees,
custodian and transfer agent charges, shareholder service and administration,
insurance premiums, cost of registering shares under federal and state laws,
dues and any litigation costs, as well as the cost of typesetting, printing and
distributing shareholder reports and prospectuses sent to shareholders. When a
cost is shared by several portfolios, the staff at Citizens Advisers will
allocate the expense in a reasonable manner under the supervision of the board
of trustees. For the year ended June 30, 1997, the following expense ratios
were paid by the portfolios (based on average annual net assets of the
respective portfolios): Working Assets Money Market Portfolio, 1.25%; Income
Portfolio, 1.41%; Index Portfolio, 1.59%; Emerging Growth Portfolio, 1.99%;
Global Equity Portfolio, 2.10%.
<PAGE>
For the Working Assets Money Market Portfolio and Citizens Income
Portfolio, Citizens Advisers has agreed to reimburse the Trust if costs exceed
a specified limit in the ordinary course of business. Please see the Statement
of Additional Information for a full description.
12b-1 Fees
Citizens Trust has a 12b-1 plan which allows us to reimburse Citizens
Securities and other distributors of the Trust's shares for sales-related
costs. These costs include the printing of prospectuses and reports not sent to
current shareholders, as well as other sales material, advertising and salaries
for salespeople and other personnel. We also will pay commissions to outside
brokers or service organizations for similar services.
Amounts paid fiscal year ended June 30, 1997:
Working Assets Money Market Portfolio $162,353
Income Portfolio 83,851
Index Portfolio 414,701
Emerging Growth Portfolio 125,797
Global Equity Portfolio 51,646
Sometimes Citizens Securities makes additional promotional expenditures
that are not reimbursed by the 12b-1 plan, such as expense reimbursements to
non-dealers for meetings, advertising and other valid promotional purposes.
How to Purchase and Redeem Shares
How to Buy Shares
It's easy to buy shares in Citizens Trust portfolios. Just fill out an
application and send in your payment by check, wire transfer, exchange from
another portfolio or through arrangement with your investment dealer. All
checks must be made payable to Citizens Trust. Foreign checks drawn in U.S.
dollars are accepted but must be held in escrow for at least 20 days.
Shares in Working Assets Money Market Portfolio cost $1.00 per share. For
all other portfolios, your cost will be the Net Asset Value next determined
after your payment is received. You can purchase both full and fractional
shares, which will be rounded to the nearest 1/1000th of a share. If your
payment is returned for any reason, you will be assessed a fee of $15.00.
Investment Minimums
We encourage every investor to make a minimum investment of $2,500 per
portfolio ($1,000 for the E.fund Account holders). Shareholders who sign up for
our Automatic Investment Plan can start with an investment balance as low as
<PAGE>
$250, with an automatic investment of $50.00 per month. If your account falls
below the minimum per portfolio, you will be assessed a monthly fee of $3.00
until you bring your balance back up over the minimum. If you do not bring your
balance up to the minimum, we may close your account by sending you a check for
your balance.
Automatic Investment Plan
To enroll in our Automatic Investment Plan, simply check off that box on
the account application and provide us with your bank information, as well as
the amount and frequency of your investment into your chosen portfolio. We will
do the rest.
Payroll Deduction
Setting up direct payroll deposit is very easy. Call us for the necessary
information and steps to follow. If you or your payroll administrator have any
questions, please call our Shareholder Service Department.
Funds will be deposited into your account using the Electronic Funds
Transfer System. We will provide the account number. Your payroll department
will let you know the date of the pay period when your investment begins.
How to Redeem Shares
We offer you several convenient ways to redeem your shares in any of the
Citizens Trust Portfolios.
Call Us
We have a Telephone Exchange and Redemption option on your account
application. Under this option, you can call us and tell us how much you want
us to redeem. Depending upon your instructions, we will then deposit your
redemption into another Citizens Trust portfolio account, mail you a check or
electronically transfer your redemption to your pre-designated account. One-day
wired funds cost $10, or we offer free two-day service via the Automated
Clearing House (ACH). You will earn dividends up to and including the date when
we receive your redemption request.
If you do select the Telephone Exchange and Redemption option, you should
be aware it may increase the risk of error or of an unauthorized party gaining
access to your account. For added security you may provide us with a Personal
Identification Number (PIN) which must be verified before processing your
telephone transactions. To keep these problems to a minimum, we record all
<PAGE>
telephone calls. But please remember, neither the Trust, our Adviser nor our
Transfer Agent will be responsible if we properly act on telephone instructions
we reasonably believe to be genuine. Normally, we will send you your redemption
on the next business day after we receive your request.
Write a Check
When you open an account in the Working Assets Money Market Portfolio, we
will send you a free book of 20 checks. Although these checks are payable
through a banking agent of Citizens Trust, your account is not FDIC insured,
and your shares are subject to fluctuations in value. You may write a check for
any amount. There is a $0.50 fee per check written in the Working Assets Money
Market Portfolio. There will be a $15.00 charge for any checks returned for any
reason. Remember, if you attempt to write a check against unavailable shares,
your check may be returned for uncollected funds.
The Working Assets Money Market Portfolio offers the E.fund as an account
option. The Eofund Account offers enhanced transactional features, including
free check writing and a debit card.
Written Request for Redemption
If you do not use the Telephone Exchange and Redemption, you can still
redeem your shares at any time, although the process will take longer. Send us
a written request together with a medallion signature guarantee. We may require
further documentation from corporations, fiduciaries, retirement plans and/or
institutional investors.
Redeem Your Shares in Person
You may also redeem your shares through participating broker-dealers (who
may charge a fee for this service). Certain broker-dealers may have
arrangements with the Trust that permit them to order redemption of shares by
telephone or other electronic communication.
However, in rare cases, payments for the redemption of non-money market
accounts may take up to five business days.
We also reserve the right to wait up to seven business days to redeem any
investments made by check and five business days for purchases made by ACH
transfer. Therefore, if you need your redemption proceeds within seven business
days of your purchase, please invest by wire.
Shareholder Services and Policies
Exchange Privilege
Since people's investment needs change over time, we provide for easy
exchanges among our portfolios at no charge. You may make an exchange at any
time and to any portfolio. Just call us or write us with your request.
<PAGE>
Excessive Exchanges and Market Timing
Because excessive trading can lower a portfolio's performance and harm
shareholders, we reserve the right to temporarily suspend or permanently
terminate, with or without advance notice, the exchange privilege of any
investor who makes excessive use of the privilege (e.g. more than five
exchanges within a one year period). Your exchanges may also be restricted or
refused if we perceive a pattern of simultaneous orders affecting significant
portions of a portfolio's assets. In particular, a pattern of exchanges or
other transactions evidencing a so-called "market timer" investment strategy,
because they may be particularly disruptive to a portfolio, will likely result
in a termination of exchange privileges or closure of your account. You may
still redeem your shares or purchase new shares in the event that your exchange
privileges are suspended or terminated.
Systematic Withdrawal Plan
You can send us a written request to automatically redeem a portion of
your shares and make a regular monthly, quarterly or annual payment on your
behalf.
Making a Change in Your Account
After your account is set up, you may want to make a change in one of the
options or in the account title. We are pleased to assist, but to protect both
you and Citizens Trust from fraud, we may require a medallion signature
guarantee from all registered owners of the accounts.
Tax-Sheltered Retirement Plans
Our distributor, Citizens Securities, has arranged for shareholders to
have access to qualified Individual Retirement Accounts (IRAs) and 403(b) plans
(non-profit employees). Our portfolios are also suitable for other types of
retirement plans as well.
Dividends, Distributions and Taxes
Unless you give us other instructions, we will automatically reinvest
your dividends and distributions at the net asset value, calculated on the
payable date.
We also can pay your dividends and distributions to you by check or
electronic transfer through the Automated Clearing House to your bank account.
The details of your dividends and other distributions will be included
<PAGE>
on your statement. Payments of dividends and distribution of capital gains, if
any, are declared and paid on the following schedule:
<TABLE>
<CAPTION>
DIVIDEND CAPITAL GAINS PAID
Declared Paid Long-term Short-term
<S> <C> <C> <C> <C>
Working Assets
Money Market Portfolio Daily Monthly None None
Citizens Income Portfolio Monthly Monthly Annually Annually
Citizens Emerging
Growth Portfolio Annually Annually Annually Annually
Citizens Index Portfolio Annually Annually Annually Annually
Citizens Global Equity Portfolio Annually Annually Annually Annually
</TABLE>
How We Report Yields
There are a number of ways of reporting performance, and we'll walk you
through each one we use; when you look at any mutual fund's past performance,
remember actual mileage may vary.
Working Assets Money Market Yield
Every business day, the Working Assets Money Market Portfolio quotes a
"7-day yield" and a "7-day effective yield." To calculate the 7-day yield, we
take our net investment income per share for the most recent 7 days, annualize
it and then divide by the net asset value per share (expected always to be
$1.00) to get a percentage. The "effective yield" assumes you have reinvested
your dividends.
Citizens Income Portfolio's Yield
To calculate yield, we start with net investment income per share for the
most recent 30 days and divide it by the maximum offering price per share on
the 30th day, then annualize the result assuming a semi-annual compounding.
Total Return and Other Quotations
For all portfolios except the Working Assets Money Market Portfolio, we
start with the total number of shares you can buy for $1,000 at the beginning
of the period. We then add all the additional shares you would have purchased
within the period with reinvested dividends and distributions (this takes into
account the portfolio's income, if any). Finally, we multiply the number of
these shares by the net asset value on the last day of the period and divide
the result by the initial $1,000 investment to see our percentage gain or loss.
For periods of more than one year, we adjust the cumulative total return to get
an average annual total return.
When we quote our investment results, we sometimes will compare them to
unmanaged market indices such as the Dow Jones Industrial Average and Standard
& Poor's 500, as well as other data and rankings from recognized independent
<PAGE>
publishers or sources such as Donoghue's Money Fund Report, Money Magazine,
Mutual Funds Magazine, Kiplinger's Personal Finance Magazine, Co-Op America
Quarterly, The Green Money Journal, Bloomberg News, Morningstar, Inc. and
Lipper Analytical Services.
Valuation of Shares
To calculate our net asset value, we add up the total assets of the
portfolio, subtract all liabilities, then divide by the number of shares
outstanding. To value money market securities, we use an accounting system
called the amortized cost method. This system is described in the Statement of
Additional Information.
In our non-money market portfolios, we value our holdings at the most
recent closing price or, if there is no closing sale price, halfway between the
bid and asked price. If no market quotation is available for a given security,
our adviser will fairly value that security in good faith pursuant to the
policies established by the Trust's board of trustees. Securities maturing
within 60 days normally are valued at amortized cost, which approximates market
value.
Tax Matters
The dividends you receive generally will be subject to federal income tax
(and any applicable state or local taxes) unless you are otherwise exempt from
such taxes. Some dividends received from non-money market portfolios may
qualify for the dividends received deduction for corporate shareholders. We
will send you a complete statement each January as to the federal tax status of
dividends and distributions paid by each portfolio during the previous calendar
year.
Distributions of non-money market portfolios will reduce the portfolio's
Net Asset Value per share. If you purchase shares just before a portfolio makes
a distribution, therefore, you will pay the full purchase price for the shares
and then receive a portion of the purchase price back as a taxable
distribution.
A redemption of shares or an exchange for shares of another Citizens
Trust portfolio ordinarily will be a taxable event and will give rise to a
taxable gain or loss.
Please consult your own tax adviser for further information regarding the
federal, state and local tax consequences of an investment in the Trust.
Trustee Profiles
Azie Taylor Morton, chair of the board of trustees, operates an investment
management firm and was the 36th Treasurer of the United States.
*Sophia Collier is the Trust's president and principal owner of our investment
adviser, Citizens Advisers.
Lokelani Devone is assistant general counsel at DFS Group Limited, an
international retail business group.
<PAGE>
Juliana Eades is the executive director of the New Hampshire Community Loan
Fund, one of the country's oldest local community economic development
institutions.
William D. Glenn II is the executive director of Continuum HIV Day Services in
San Francisco.
Mitchell Johnson is president of M.A.J. Capital Management, a money management
firm. Previously, he spent 21 years in a variety of executive positions at the
Student Loan Marketing Association (Sallie Mae).
*J.D. Nelson is the chief executive officer of RhumbLine Advisers, an
investment advisory firm specializing in institutional and pension assets.
*Robert Reich is a University Professor at Brandeis University and was the 22nd
United States Secretary of Labor.
Ada Sanchez is the former director of the Public Service and Social Change
Program at Hampshire College.
*Interested person (inside trustee)
<PAGE>
PAGE 1 SIDEBAR
Citizens Trust
One Harbour Place Portsmouth, NH
03801
603-436-5152
For Broker-Dealer Sales & Service:
800-982-7200
Table of Contents
Fee Information 2
How We Select Our
Investments 3
Financial Highlights 4
Working Assets Money
Market Portfolio 6
Citizens
Income Portfolio 6
Citizens
Index Portfolio 7
Citizens Emerging
Growth Portfolio 8
Citizens Global Equity
Portfolio 8
Organization and
Management of
the Trust 9
How to Purchase and
Redeem Shares 11
Shareholder Services
and Policies 13
Dividends, Distributions
and Taxes 13
Mailing Address
Wiring Instructions 14
<PAGE>
Trustee Profiles 15
[CITIZENS TRUST LOGO]
800-223-7010
www.citizensfunds.com
AMA LOGO
PAGE 3 SIDEBAR
[PHOTO]
Joseph Keefe, Secretary to the Trust, explains the table on the next page:
On the next pages you will find detailed financial information on the
portfolios described in this prospectus, including the total return of each
portfolio over its years of operation. If you want further information,
including a detailed discussion of each portfolio's recent performance, you can
call the Trust's toll-free number and request the 1997 Annual Report to
Shareholders, which is another part of this prospectus and contains financial
highlights for the past five years.
PAGE 6 SIDEBAR
[PHOTO]
Laura Provost is the lead manager of the team that manages our money market
fund. She joined Citizens Advisers in 1997. Previously, she was a portfolio
manager with John Hancock Mutual Funds.
"Our money market can be a good vehicle for short-term cash management and for
investors who need stability of principal."
<PAGE>
[PHOTO]
The managing partner of our sub-adviser, Seneca Capital Management LLC, Gail
Seneca is the primary manager of the Citizens Income Portfolio.
PAGE 7 SIDEBAR
"Since our goal is to achieve a reliable
stream of monthly income, we analyze
carefully the credit quality of the debt we purchase."
- -Gail Seneca
[PHOTO]
Part of the team that manages the Citizens Index Portfolio, Edwin Ek spent
eight years at Wilshire Associates before joining the RhumbLine team in October
1994.
"The Citizens Index Portfolio is highly diversified, both by industry and in
the number of individual companies. We think it presents lower risk than a
portfolio with fewer holdings or more industry concentration."
PAGE 8 SIDEBAR
[PHOTO]
Part of the team that manages the Citizens Emerging Growth Portfolio, Rick
Little has worked in the investment field for 24 years. He has been with Seneca
Capital Management LLC since its inception in 1990 and was previously a senior
vice president at NatWest Securities. He explains the investment approach used
to manage the Emerging Growth Portfolio.
"We are looking to build a portfolio of companies that have special
characteristics, and therefore have the ability to grow in their sales and
earnings at a rapid rate. These are the companies we hope can become `the next
Microsoft,' developing new and innovative products and services."
<PAGE>
PAGE 9 SIDEBAR
[PHOTO]
Lilia Clemente is the Chairman of Clemente Capital, Inc., the lead member of
the team which manages the Citizens Global Equity Portfolio.
"As a person who was born in the Philippines and who has traveled throughout
the world as a global investor, I believe global investment offers an
opportunity to reduce risk and increase returns by linking security and
prosperity to the performance of an array of markets and companies, instead of
concentrating only in the U.S. "
PAGE 10 SIDEBAR
[PHOTO]
Azie Taylor Morton, chair of the board, explains the Trust's relationship with
its adviser.
"One of the Trust's most important
contracts is our Management Agreement with Citizens Advisers. It states that
Citizens Advisers has authority to manage our portfolios and will provide all
necessary office space, facilities, equipment and personnel to do so."
PAGE 11 SIDEBAR
Use the E.fund(R)
Debit Card:
Working Assets Money Market Portfolio offers a transaction account, the Eofund,
which is available through the Fund's distributor, Citizens Securities.
Shareholders who use this account may request an optional MasterCard(R) debit
<PAGE>
card and use it to redeem shares for cash at ATM machines, or to make purchases
at any retail location which accepts the debit card.
Escrow:
Shares purchased by check or ACH transfer are unavailable for redemption for a
period of time; however, they are fully invested.
PAGE 12 SIDEBAR
Common Transactions That Require Medallion Signature Guarantees:
o Written request for redemption
o Changing your account title in any way
o Authorizing a telephone transaction for
the first time
o Changing your
predesignated wire or ACH instructions
o Establishing or modifying a systematic
withdrawal plan
o Exchanges between accounts which do not have identical
titles
Eligible Guarantors:
o Commercial Bank
o Trust Company
o Savings Associations
o Credit Unions
o Members of domestic stock exchange
Note:
Notaries public are
not eligible guarantors.
PAGE 13 SIDEBAR
Voting Rights
Shareholders are entitled to one vote for each full share owned and a
fractional vote for fractional shares. If you have a joint account, each of the
account holders has authority to vote on behalf of the joint account. Shares of
each portfolio are voted separately on matters of concern to that portfolio.
However, all shareholders of the Trust vote together on the selection of
trustees and other matters as required by the Investment Company Act of 1940,
<PAGE>
as amended. The holders of shares have no preemptive, conversion or
subscription rights, and voting rights are not cumulative. To save money, we do
not hold annual meetings. However, a meeting may be called by our trustees or
at the request of 10% of the Trust's shares. We will assist shareholders in
communicating with one another to arrange such a meeting.
PAGE 14 SIDEBAR
Mailing and
Wiring Instructions
Regular U.S. Mail:
Please use the business reply envelope
provided with this prospectus, or mail to:
Citizens Trust
c/o PFPC Inc.
PO Box 8962
Wilmington, DE
19899-8962
Our Wiring Address: Instructions:
PNC Bank, N.A.
Philadelphia, PA
ABA#: 031000053
For Further Credit A/C# 86-1030-3646
Shareholder
name/acct. number
Overnight Delivery Package (i.e. Federal Express, UPS, Airborne Express, etc.):
No U.S. mail, please.
Send to:
Citizens Trust
c/o PFPC Inc.
400 Bellevue Parkway Suite 108
Wilmington, DE 19809
Phone: 800-223-7010
Please send overnight delivery packages only to the above address. Regular U.S.
Mail will not be accepted at this address and may be returned to you.
<PAGE>
PAGE 15 SIDEBAR
Transfer Agent:
PFPC Inc.
400 Bellevue Parkway Suite 108
Wilmington, DE 19809
Dividend Paying Agent:PFPC Inc.
400 Bellevue Parkway Suite 108
Wilmington, DE 19809
Phone: 800-223-7010
PAGE 16 SIDEBAR
[CITIZENS TRUST LOGO]
Printed on recycled paper with soy-based ink.
(C)1998 Citizens Advisers
Working Assets is a registered trademark of Working Assets Funding Service.
Used under license.
The Talking Prospectus(TM) and Citizens Index(TM) are trademarks of Citizens
Advisers. Eofund(R) is a registered trademark of Citizens Advisers.
<PAGE>
Rule 497(e)
File Nos. 2-80886
811-3626
Supplement dated July 14, 1998 to the Prospectus of Citizens Trust
(Institutional Classes of Shares) dated October 30, 1997:
On page 1, the following statement should be added:
Effective July 2, 1998, the name of Citizens Investment Trust has been changed
to "Citizens Funds" and all references herein to Citizens Investment Trust or
Citizens Trust shall hereinafter refer to Citizens Funds.
On page 1, the address for Citizens Trust should be deleted and replaced by the
following:
230 Commerce Way, Suite 300
Portsmouth, NH 03801
On page 1, the following statement should also be added:
Effective July 2, 1998, the name of each individual fund has been changed such
that the word, "Portfolio", has been stricken from the name of each fund and
the word, "Fund", has been substituted therefor. All references herein to the
individual funds shall hereinafter refer to Working Assets Money Market Fund
and Citizens Index Fund.
On page 4, the reference to Jim Mahoney of Tait, Weller & Baker should be
deleted and replaced by the following:
Coopers & Lybrand L.L.P. serves as our Funds' independent auditors.
On page 5, under the heading, "Commercial Paper," the third sentence of the
first paragraph is deleted in its entirety and is replaced by the following
sentence:
If a security is rated by only one agency, it must be rated in the highest
rating category by that agency.
<PAGE>
On page 9 immediately following the paragraph entitled, "Exchange Privilege,"
insert the following:
Excessive Exchanges and Market Timing
Because excessive trading can lower a Fund's performance and harm shareholders,
we reserve the right to temporarily suspend or permanently terminate, with or
without advance notice, the exchange privilege of any investor who makes
excessive use of the privilege (e.g., more than five exchanges within a one
year period). Your exchanges may also be restricted or refused, and your
account may be closed, if we perceive a pattern of simultaneous orders
affecting significant portions of a Fund's assets. In particular, a pattern of
exchanges or other transactions evidencing a so-called "market timer"
investment strategy, because they may be particularly disruptive to a Fund,
will likely result in a termination of exchange privileges or closure of your
account. You may still redeem your shares or purchase new shares in the event
that your exchange privileges are suspended or terminated.
<PAGE>
Rule 497(e)
File Nos. 2-80886
811-3626
Supplement dated July 14, 1998 to the Statement of Additional Information of
Citizens Trust dated October 30, 1997:
At the bottom of page 1, below the table of contents, the following two
paragraphs should be added:
On December 1, 1997, the shareholders of the E(fund portfolio voted to merge
the E(fund portfolio into the Working Assets Money Market Portfolio effective
December 5, 1997.
As of December 5, 1997, the E(fund portfolio is no longer in existence and all
references to the E(fund portfolio in this Statement of Additional Information
should be disregarded.
On page 1, the following statement should be added:
Effective July 2, 1998, the name of Citizens Investment Trust has been changed
to "Citizens Funds" and all references herein to Citizens Investment Trust or
Citizens Trust shall hereinafter refer to Citizens Funds.
On page 1, the address for Citizens Trust should be deleted and replaced by the
following:
230 Commerce Way
Suite 300
Portsmouth, NH 03801
On page 1, the name of each fund shall be changed as follows:
Working Assets Money Market Fund
(includes Institutional Class Shares)
Citizens Income Fund
Citizens Emerging Growth Fund
Citizens Global Equity Fund
Citizens Index Fund
(includes Institutional Class Shares)
<PAGE>
On page 5, the section entitled "Portfolio Quality and Required Maturities"
shall be stricken in its entirety and the following shall be substituted:
QUALITY AND MATURITY OF SECURITIES. Because the Working Assets Money Market
Fund uses the amortized cost method of valuation (see "The Value of Our
Shares"), the Fund will not purchase any instruments with a remaining maturity
of more than 397 days (13 months) or maintain a dollar-weighted average
maturity of the entire Fund in excess of 90 calendar days. Except as provided
below, the maturity of a security is deemed to be the period remaining until
the date on which, in accordance with the terms of the security, the principal
amount must unconditionally be paid or, if called for redemption, the date on
which the redemption must be made. Obligations of U.S. Government agencies and
instrumentalities ("Government Securities") with variable rates of interest
which are adjusted no less frequently than every 762 calendar days are deemed
to have a maturity equal to the period remaining until the next readjustment.
Government Securities that are Floating Rate Securities, or securities whose
terms provide for adjustment of their interest rates when a specified rate
changes and whose market value can reasonably be expected to approximate
amortized cost, are deemed to have a remaining maturity of one day. Variable
Rate Securities, which are securities whose terms provide for adjustment of
their interest rate on set dates and whose market value can be reasonably
expected to approximate amortized cost, wherein the principal amount must
unconditionally be paid in 397 calendar days or less, are deemed to have a
maturity equal to the period remaining until the next readjustment of the
interest rate or the period remaining until the principal amount can be
recovered through demand, whichever is earlier. A Variable Rate Security
subject to a demand feature, wherein the principal amount is scheduled to be
paid in more than 397 calendar days, is deemed to have a maturity equal to the
longer of the period remaining until the next readjustment of the interest rate
or the period remaining until the principal amount can be recovered through
demand. A Floating Rate Security wherein the principal amount must
unconditionally be paid in 397 calendar days or less is deemed to have a
maturity of one day. A Floating Rate Security subject to a demand feature
wherein the principal amount is scheduled to be paid in more than 397 days, is
deemed to have a maturity equal to the period remaining until the principal
amount can be recovered through demand. A repurchase agreement is deemed to
have a maturity equal to the period remaining until the date on which the
repurchase of the securities is scheduled to occur or, where the agreement is
subject to demand, the notice period applicable to a demand for repurchase of
the securities. A fund lending agreement is deemed to have a maturity equal to
the period remaining until the date on which the loaned securities are
scheduled to be returned or, where the agreement is subject to a demand, the
notice period applicable to the demand.
The Working Assets Money Market Fund may not invest more than 5% of its assets
in securities of any one issuer, except for U.S. Government securities. With
respect to securities subject to a guarantee or demand feature, the Fund may
not invest more than 10% of its assets in the institution that issued the
guarantee or demand feature unless the same was issued by a person who does not
control or is not controlled by that institution.
The Working Assets Money Market Fund also may only invest in securities which
are rated in the top rating category by at least two nationally recognized
statistical rating organizations ("NRSROs"). Such securities are called First
Tier Securities. If only one NRSRO has rated a security, the Fund may purchase
<PAGE>
that security only if it is rated in that NRSRO's top rating category and the
acquisition is approved or ratified by the Fund's Board of Trustees. If a
security is not rated by any NRSRO, the Fund may purchase that security only if
the Fund's Board of Trustees determines that it is of comparable quality to a
First Tier Security and the Board approves or ratifies the acquisition. If a
security is rated by more than two NRSROs, the Fund may purchase that security
if it is rated in the top rating category by any two NRSROs and no more than
one other NRSRO rates it in the second highest category or lower. If a security
is subject to a guarantee or a conditional demand feature, the Fund may
purchase the security only if the guarantee or conditional demand feature meets
the criteria set forth above or, in the case of a security subject to a
conditional demand feature and issued after February 10, 1998, only if the
Adviser determines and periodically confirms that there is minimal risk that
the conditions preventing exercise of the demand feature will occur and either
(a) the conditions limiting exercise can be readily monitored by the Fund or
relate to the taxability of interest payments on the security or (b) the terms
of the conditional demand feature require that the Fund will receive notice of
the occurrence of the condition and the opportunity to exercise the demand
feature.
In the section entitled "Turnover and Portfolio Transactions" on page 10,
delete the final two paragraphs in their entirety and substitute the following:
It is the policy of Citizens Advisers and the Trust to seek to obtain the
benefit of "soft dollar" payments for the Trust's funds and other clients of
Citizens Advisers when consistent with obtaining best execution and when doing
so is within the "safe harbor" created by Section 28(e) of the Securities
Exchange Act of 1934. To that end, Citizens Advisers will maintain an account
with one or more broker-dealers who agree to provide or pay for brokerage and
research services which benefit the Trust's funds. Sub-advisers will be
informed in writing of the names of the broker-dealers and provided with
account information to allow the execution of trades through those
broker-dealers. In the event that best execution of an equity transaction is
available through a broker-dealer which has been so identified, Citizens
Advisers or a sub-adviser, as the case may be, may place the transaction with
that broker-dealer after determining in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided.
Any "soft dollars" generated in this fashion shall be used solely to purchase
brokerage and research services within the meaning of Section 28(e), and must
be of benefit to the Fund on whose behalf the transaction is made. Such
brokerage and research services, however, need not exclusively benefit the Fund
on whose behalf the transaction is made, and may also benefit other Citizens
Trust funds or other clients of Citizens Advisers or its sub-advisers. For
these purposes, brokerage and research services mean those which provide
assistance to Citizens Advisers, or a sub-adviser, in the performance of
decision-making responsibilities. If a product or service serves non-research
as well as research functions, "soft dollars" shall be used to pay for the
product or service only to the extent that it constitutes research.
The investment management or advisory fee that the Trust pays to the Adviser
will not be reduced as a consequence of the Adviser's receipt of brokerage and
research services. While such services are not expected to reduce the expenses
of the Adviser, the Adviser would, through the use of such services, avoid the
<PAGE>
additional expenses which would be incurred if it should attempt to develop
comparable information through its own staff or obtain such services
independently.
The carryover paragraph on pages 11-12 and the first full paragraph on page 12
shall be deleted in their entirety and the following shall be substituted:
Under the procedures which our Trustees have adopted in connection with the
valuation of our securities using the amortized cost method, the Fund, through
its Custodian, conducts weekly mark-to-market appraisals to compare its
determination of Net Asset Value per share with the amortized cost-based net
asset value. In the event of a deviation between the market value and the
amortized cost value in excess of 0.10%, or if the Adviser believes the
deviation may result in dilution or other unfair results to shareholders or
investors, daily mark-to-market appraisals will be conducted until the
deviation falls below 0.10%. If the deviation exceeds 0.30%, the Board of
Trustees must be notified and may consider taking remedial action. If the
deviation exceeds 0.50%, the Board of Trustees will take such action as it
deems appropriate to eliminate or reduce any material dilution of shares or
other unfair results to shareholders or investors, including without
limitation: redeeming shares in kind; selling securities prior to maturity to
realize capital gains or losses or to shorten the average maturity of the Fund;
withholding dividends or payment of distributions; determining Net Asset Value
per share utilizing market quotations or equivalents; reducing or increasing
the number of shares outstanding on a pro rata basis; offsetting each
shareholder's pro rata portion of the deviation from their accrued dividend
account or from future dividends; or some combination of the foregoing.
We also limit our investments, including repurchase agreements, to those U.S.
Dollar-denominated securities which the Adviser determines to present minimal
credit risks to the Fund, which are First Tier Securities and which meet the
maturity and diversification requirements set forth in Rule 2a-7 and included
herein (see page 5 above).
On page 19, under the section entitled "Trustees and Officers", the fifth
sentence of the first paragraph is deleted in its entirety and is replaced by
the following sentence:
The address of each, except where an address is indicated, is 230 Commerce Way,
Suite 300, Portsmouth, New Hampshire 03801.
On page 22, under the section entitled "Investment Advisory and Other
Services", the first paragraph is deleted and the following shall be
substituted:
We are advised by Citizens Advisers, Inc. (the "Adviser") under a contract
known as the Management Agreement. The Adviser has offices at 230 Commerce Way,
Suite 300, Portsmouth, New Hampshire 03801. The Adviser is a California
corporation. Citizens Securities, Inc., a wholly-owned subsidiary of the
Adviser and a California corporation, serves as the Fund's distributor.
<PAGE>
On page 26, the section entitled "Auditors" shall be stricken in its entirety
and the following shall be substituted:
Coopers & Lybrand L.L.P., One Post Office Square, Boston, MA 02109, serves as
our Fund's independent auditors, providing audit services including (1)
examination of the annual financial statements and limited review of unaudited
semi-annual financial statements (2) assistance and consultation in connection
with SEC filings and (3) review of the federal and state income tax returns
filed on our behalf.
The financial statements of the Fund incorporated here by reference, have been
examined by Tait, Weller & Baker, who served as auditors to the Fund prior to
the recent appointment of Coopers & Lybrand, as stated in their report which is
incorporated by reference, and have been so incorporated in reliance upon such
report given upon their authority as experts in accounting and auditing.
