LANDMARK FUNDS I, N-30B-2, 1995-08-28

LANDMARK FUNDS I
N-30B-2, 1995-08-28

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<PAGE>
[LOGO] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.

LANDMARK
BALANCED FUND

SEMI-ANNUAL
REPORT
June 30, 1995
<PAGE>
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A LETTER TO OUR SHAREHOLDERS
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Dear Shareholder:

The first six months of 1995 saw higher prices for most financial
assets, including the U.S.-based stocks and bonds in which the Landmark Balanced
Fund primarily invests through the Balanced Portfolio. In fact, both stocks and
bonds have rallied significantly since the beginning of the year. Most major
stock indices have set new records, and bonds have more than erased any declines
posted in 1994.

The Landmark Funds' investment adviser, Citibank, N.A., manages the
Balanced Portfolio to earn high current income by investing in a broad range of
securities, to preserve capital, and to provide growth potential with reduced
risk. The Portfolio seeks to participate in the potential long-term returns of
the stock market at a lower level of share price volatility than is normally
available from a fund invested entirely in stocks.

This Semi-Annual Report for the period ended June 30, 1995, reviews
the Fund's investment activities and performance over the past six months and
provides a summary of Citibank's perspective on the financial markets and
outlook for the foreseeable future. On behalf of the Board of Trustees of the
Landmark Funds, we want to thank our shareholders for their participation and
support. We look forward to serving you in the months and years ahead.

/s/Philip W. Coolidge

Philip W. Coolidge
President
July 20, 1995

---------------------------------------------
Remember that Mutual Fund Shares:
* Are not bank deposits or FDIC insured
* Are not obligations of or guaranteed by
Citibank or Citicorp Investment Services
* Are subject to investment risks,
including possible loss of the
principal amount invested

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TABLE OF CONTENTS

1 Letter to Shareholders
----------------------------------------------
2 Market Environment
Fund Snapshot
Fund Quotes
----------------------------------------------
3 Portfolio Managers
The Portfolio Managers Respond
----------------------------------------------
4 Strategy and Outlook
Balanced Portfolio by the Numbers
----------------------------------------------
5 Fund Data
Performance Highlights

LANDMARK BALANCED FUND
----------------------------------------------
6 Statement of Assets and Liabilities
Statement of Operations
----------------------------------------------
7 Statement of Changes in Net Assets
----------------------------------------------
8 Financial Highlights
----------------------------------------------
9 Notes to Financial Statements
----------------------------------------------

BALANCED PORTFOLIO
----------------------------------------------
12 Portfolio of Investments
----------------------------------------------
15 Statement of Assets and Liabilities
Statement of Operations
----------------------------------------------
16 Statement of Changes in Net Assets
Financial Highlights
----------------------------------------------
17 Notes to Financial Statements
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<PAGE>
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MARKET ENVIRONMENT
-------------------------------------------------------------------------------

The U.S. stock and bond markets rallied sharply during the first half
of 1995, the result of investors' perception that the Federal Reserve has been
largely successful in its efforts to constrain economic growth without causing
either a recession or an acceleration of inflation. Recent economic data suggest
that the U.S. is experiencing a "soft landing" after 1994's torrid pace of
economic growth, a state of affairs that raises expectations for continued
economic expansion with low inflation and, perhaps most important, no need for
the Federal Reserve to raise short-term interest rates further.

In the stock market, good economic news was reinforced by strong
earnings reports from many U.S. corporations, and equity investors bid stock
prices higher. Inflows from money previously committed to money market
instruments and emerging overseas markets helped fuel the domestic stock
market's broad-based advance. In the bond market, the fear of renewed
inflationary pressures that caused last year's sell-off abated, producing the
best first-half performance of any year since 1985. Total return on benchmark
30-year U.S. Treasury bonds rose 19.7% during the period.

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FUND SNAPSHOT
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COMMENCEMENT OF OPERATIONS
October 19, 1990

NET ASSETS AS OF 6/30/95
$237.3 million

FUND OBJECTIVE
To earn high current income by investing in a broad range of securities, to
preserve capital and to provide growth potential with reduced risk.

DIVIDENDS
Paid quarterly, if any

CAPITAL GAINS
Distributed annually, if any

BENCHMARKS
* Standard & Poor's 500 Index
* Lehman Government/Corporate Bond Index
* Lipper Balanced Funds Average

INVESTMENT ADVISER,
BALANCED PORTFOLIO
Citibank, N.A.

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FUND QUOTES FROM THE PORTFOLIO MANAGERS
-------------------------------------------------------------------------------

"The rise in the stock market has been linked to strength in the bond market.
The combination of lower interest rates and higher corporate earnings is very
powerful."

"As it became obvious that the economy was slowing, fixed-income investors
became convinced that inflation wouldn't be the problem they feared it would
be last year."

"We dramatically reduced our exposure to mortgage-backed fixed-income securities
as interest rates came down and more homeowners began to refinance their
mortgages."
<PAGE>
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PORTFOLIO MANAGERS
-------------------------------------------------------------------------------

A. DWIGHT HYDE, JR.
Vice President, Citibank, N.A.
U.S. Chief Investment Officer,
Citibank Global Asset Management

Mr. Hyde has been responsible for managing the equity portion of the Portfolio
since its inception after serving as the manager of the equity portion of the
Fund since January 1993. He serves as U.S. Chief Investment Officer for Citibank
Global Asset Management and personally manages over $2 billion of equity assets
for Citibank, including the Equity Portfolio. He also serves as head of the
Equity Strategy Committee and is a member of the Citibank Investment Policy
Committee. Mr. Hyde joined Citibank in 1980. He has also served as Chief
Investment Officer at Dean Witter Asset Management and Paribas Asset Management.
Mr. Hyde is a member of the New York Society of Security Analysts and the
Financial Analysts Foundation.

MARK LINDBLOOM
Vice President, Citibank, N.A.

Mr. Lindbloom has been responsible for managing the fixed income portion of the
Portfolio since its inception after serving as the manager of the fixed income
portion of the Fund since March 1993. He also manages the Landmark Intermediate
Income Fund and intermediate maturity fixed income portfolios for investment
advisory and institutional accounts at Citibank. Prior to joining Citibank in
1986, Mr. Lindbloom was employed by Brown Brothers Harriman & Company, where he
managed discretionary corporate portfolios holding fixed income assets.

-------------------------------------------------------------------------------
THE PORTFOLIO MANAGERS RESPOND
-------------------------------------------------------------------------------

The equity portion of the Balanced Portfolio is built around
large-capitalization stocks that are expected to provide healthy earnings growth
in virtually any economic climate. We complement those core positions with
economically sensitive stocks that we expect to provide above-average gains
under prevailing conditions. We invest opportunistically in stocks that we
believe will benefit from temporary trends or other topical influences. During
the first half of 1995, we found attractive opportunities in energy stocks that
had improving operating margins and would benefit from rising commodity prices.
Other areas of focus include the transportation, health care and industrial
services industries, all of which should do well in a slow-growth economic
environment. We continued to underweight investments in industries that we
expect to lag the market, including utilities and retail.

In the fixed-income portion of the Balanced Portfolio, we maintained a
longer-than-average duration (a measure of sensitivity to changes in interest
rates) in order to keep higher-yielding securities in the Portfolio for as long
as possible as interest rates fell. We also increased the percentage of assets
invested in U.S. Treasury securities, simultaneously reducing our exposure to
mortgage-backed securities and corporate bonds as the differences in yields
among the different types of securities narrowed.
<PAGE>
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STRATEGY AND OUTLOOK
-------------------------------------------------------------------------------

In the wake of the substantial gains achieved during the first half of
the year, we are maintaining a more cautious approach to the stock and bond
markets. In our view, bonds currently have the more favorable outlook. While a
market correction is possible over the near term if the economy strengthens, we
believe that a true deceleration of economic growth over the longer term may
call for lower interest rates from the Federal Reserve, a move that should boost
bond prices. In the stock market, attractive valuations have become harder to
find and the market may be vulnerable to a correction. However, we expect any
pause in the stock market's advance to be temporary. Market corrections in
either stocks or bonds should be viewed as buying opportunities in order to
participate in the long-term gains we believe are ahead.

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BALANCED PORTFOLIO
-------------------------------------------------------------------------------
BY THE NUMBERS
-------------------------------------------------------------------------------

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TOP TEN EQUITY HOLDINGS OF THE PORTFOLIO
(As of 6/30/95)
----------------------------------------------------------------------
NAME INDUSTRY SECTOR % OF NET ASSETS
General Electric Co. Producer Manufacturing 2.00%
Royal Dutch Petroleum Co. Energy/Minerals 1.78%
Air Products & Chemical Inc. Commodities 1.74%
Exxon Corp. Energy/Minerals 1.74%
Amoco Corp. Energy/Minerals 1.72%
Kerr-McGee Corp. Energy/Minerals 1.68%
General Motors Corp. Consumer Durables 1.64%
Federal National
Mortgage Association Finance 1.58%
Eastman Kodak Co. Consumer Durables 1.57%
American Express Commercial Services 1.52%

CHANGES IN PORTFOLIO ASSET ALLOCATION
Portfolio of investments as of 6/30/95

[GRAPHICS OMITTED: pie charts]

STOCKS 52%
TREASURIES 22%
OTHER BONDS 19%
CASH/SHORT TERM/OTHER 6%
FOREIGN CLOSED END FUNDS 1%

...Compared to 12/31/94

STOCKS 56%
OTHER BONDS 20%
TREASURIES 19%
CASH/SHORT TERM/OTHER 5%
<PAGE>
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FUND DATA All Periods Ended June 30, 1995 (unaudited)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURNS
----------------------------------------
SINCE
SIX ONE 10/19/90
MONTHS** YEAR INCEPTION*
--------- ---------- ----------
<S> <C> <C> <C>
Landmark Balanced Fund without Sales Charge............... 12.92% 15.33% 12.82%
Lipper Balanced Funds Average............................. 13.70% 16.02% 12.81%+
Standard & Poor's 500 Index............................... 20.19% 26.03% 16.77%+
Lehman Government/Corporate Bond Index.................... 11.80% 12.76% 9.79%+
Landmark Balanced Fund with Maximum Sales Charge of 4.75% 7.59% 9.86% 11.66%

** Not annualized
* Annualized
+ From 10/31/90

30-Day SEC Yield 2.81%
Income Dividends Per Share $0.200
</TABLE>

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PERFORMANCE HIGHLIGHTS
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A $10,000 investment in the Fund made on inception date would have grown to
$16,787 with sales charge (as of 6/30/95). The graph shows how the Fund compares
to our benchmarks for the period October 31, 1990 to June 30, 1995.

The graph includes the initial sales charge on the Fund (no comparable charge
exists for the other indices) and assumes all dividends and distributions from
the Fund are reinvested at Net Asset Value.

[The following data is presented as a graph in the printed report]

Landmark Landmark Lehman
Balanced Balanced Lipper Government/
Without With Balanced S&P 500 Corporate
Sales Sales Funds Index Bond Index
Charge Charge Average (Unmanaged) (Unmanaged)
Oct-90 $ 9,826 $ 9,359 $10,000 $10,000 $10,000
Nov-90 $10,369 $ 9,877 $10,435 $10,646 $10,133
Dec-90 $10,609 $10,106 $10,677 $10,943 $10,354
Jan-91 $11,105 $10,578 $11,034 $11,420 $10,510
Feb-91 $11,673 $11,119 $11,520 $12,237 $10,628
Mar-91 $11,816 $11,255 $11,724 $12,533 $10,719
Apr-91 $11,827 $11,265 $11,752 $12,563 $10,793
May-91 $12,264 $11,681 $12,098 $13,104 $10,917
Jun-91 $11,837 $11,275 $11,725 $12,504 $10,969
Jul-91 $12,403 $11,814 $12,122 $13,087 $10,957
Aug-91 $12,886 $12,274 $12,433 $13,397 $11,095
Sep-91 $12,713 $12,109 $12,449 $13,173 $11,350
Oct-91 $12,945 $12,330 $12,632 $13,350 $11,587
Nov-91 $12,723 $12,119 $12,353 $12,812 $11,690
Dec-91 $13,751 $13,098 $13,357 $14,277 $11,807
Jan-92 $13,496 $12,855 $13,241 $14,012 $12,205
Feb-92 $13,698 $13,048 $13,400 $14,194 $12,024
Mar-92 $13,530 $12,887 $13,202 $13,917 $12,088
Apr-92 $13,583 $12,938 $13,322 $14,326 $12,022
May-92 $13,658 $13,009 $13,460 $14,397 $12,094
Jun-92 $13,417 $12,780 $13,315 $14,182 $12,328
Jul-92 $13,868 $13,210 $13,712 $14,762 $12,510
Aug-92 $13,664 $13,015 $13,582 $14,460 $12,830
Sep-92 $13,910 $13,249 $13,753 $14,630 $12,944
Oct-92 $14,115 $13,445 $13,754 $14,681 $13,120
Nov-92 $14,569 $13,877 $14,094 $15,182 $12,919
Dec-92 $14,690 $13,992 $14,355 $15,369 $12,908
Jan-93 $14,798 $14,095 $14,548 $15,498 $13,130
Feb-93 $14,776 $14,075 $14,644 $15,709 $13,416
Mar-93 $15,288 $14,562 $14,920 $16,040 $13,694
Apr-93 $15,091 $14,375 $14,736 $15,652 $13,741
May-93 $15,331 $14,603 $14,978 $16,071 $13,846
Jun-93 $15,326 $14,598 $15,146 $16,118 $13,839
Jul-93 $15,206 $14,484 $15,170 $16,054 $14,153
Aug-93 $15,688 $14,943 $15,628 $16,662 $14,244
Sep-93 $15,677 $14,933 $15,681 $16,534 $14,571
Oct-93 $15,809 $15,059 $15,822 $16,876 $14,622
Nov-93 $15,644 $14,901 $15,591 $16,716 $14,682
Dec-93 $15,935 $15,178 $15,867 $16,918 $14,508
Jan-94 $16,282 $15,509 $16,253 $17,494 $14,571
Feb-94 $15,958 $15,200 $15,934 $17,020 $14,791
Mar-94 $15,350 $14,621 $15,348 $16,277 $14,469
Apr-94 $15,440 $14,707 $15,377 $16,486 $14,114
May-94 $15,643 $14,899 $15,449 $16,756 $13,997
Jun-94 $15,282 $14,556 $15,167 $16,346 $13,971
Jul-94 $15,702 $14,957 $15,509 $16,882 $13,937
Aug-94 $16,020 $15,259 $15,906 $17,574 $14,216
Sep-94 $15,590 $14,849 $15,618 $17,149 $14,222
Oct-94 $15,818 $15,067 $15,711 $17,546 $14,007
Nov-94 $15,430 $14,697 $15,324 $16,902 $13,991
Dec-94 $15,607 $14,866 $15,453 $17,151 $13,741
Jan-95 $15,804 $15,053 $15,644 $17,595 $13,832
Feb-95 $16,300 $15,526 $16,115 $18,280 $14,097
Mar-95 $16,602 $15,813 $16,391 $18,819 $14,424
Apr-95 $16,811 $16,012 $16,691 $19,372 $14,521
May-95 $17,450 $16,621 $17,228 $20,145 $14,724
Jun-95 $17,624 $16,787 $17,550 $20,613 $15,341

Notes: All Fund performance numbers represent past performance, and are no
guarantee of future results. The Fund's share price and investment return will
fluctuate, so that the value of an investor's shares, when redeemed, may be
worth more or less than their original cost. Total returns include change in
share price and reinvestment of dividends and distributions, if any. Total
return figures "with sales charge" are provided in accordance with SEC
guidelines for comparative purposes for prospective investors.
<PAGE>
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Landmark Balanced Fund
-------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (unaudited)
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in Balanced Portfolio, at value (Note 1A)....................... $237,769,341
Receivable for shares of beneficial interest sold.......................... 15,893
------------
Total assets........................................................... 237,785,234
------------
LIABILITIES:
Payable for shares of beneficial interest repurchased...................... 352,176
Payable to affiliates -- Shareholder servicing agents' fee (Note 2B)....... 48,912
Accrued expenses and other liabilities..................................... 43,041
------------
Total liabilities...................................................... 444,129
------------
NET ASSETS for 15,759,591 shares of beneficial interest outstanding ....... $237,341,105
============
NET ASSETS CONSIST OF:
Paid-in capital............................................................ $217,650,059
Unrealized appreciation of investments..................................... 18,826,400
Accumulated net realized gain on investments............................... 91,582
Undistributed net investment income........................................ 773,064
------------
Total.................................................................. $237,341,105
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST .... $15.06
======
COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a 4.75%
sales charge ($15.06 / 0.9525)............................................ $15.81
======
See notes to financial statements
</TABLE>
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Landmark Balanced Fund
-------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1995 (unaudited)
-------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (Note 1B):
Interest Income from Balanced Portfolio.................................... $3,582,407
Dividend Income from Balanced Portfolio.................................... 1,336,794
Other Income Foreign Tax reclaim........................................... 10,923
Allocated Expenses from Balanced Portfolio................................. (577,627) $ 4,352,497
----------
EXPENSES:
Shareholder Servicing Agents' fees (Note 2B)............................... 460,107
Administrative fees (Note 2A).............................................. 172,540
Distribution fees (Note 3)................................................. 57,513
Expense fees (Note 6)...................................................... 79,522
----------
Total expenses......................................................... 769,682
Less aggregate amount waived by Shareholder
Servicing Agents (Note 2B)............................................... (172,540)
----------
Net expenses.......................................................... 597,142
-----------
Net investment income................................................. 3,755,355
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM BALANCED PORTFOLIO
Net realized gain (loss)................................................... 7,094,774
Net change in unrealized appreciation (depreciation)....................... 17,283,282
-----------
Net realized and unrealized gain (loss) from Balanced Portfolio............ 24,378,056
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................... $28,133,411
===========
See notes to financial statements
</TABLE>
<PAGE>
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Landmark Balanced Fund
-------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income........................................ $ 3,755,355 $ 6,897,273
Net realized gain (loss) on investment transactions.......... 7,094,774 (6,869,492)
Net change in unrealized appreciation (depreciation) of investments 17,283,282 (5,321,496)
------------ ------------
Net increase (decrease) in net assets resulting from operations 28,133,411 (5,293,715)
------------ ------------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income........................................ (3,184,826) (6,810,013)
Net realized gain on investments............................. -- (527,276)
------------ ------------
Decrease in net assets from distributions to shareholders.. (3,184,826) (7,337,289)
------------ ------------

TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (NOTE 5):
Net proceeds from sale of shares............................. 2,050,238 9,407,740
Net asset value of shares issued to shareholders
from reinvestment of distributions......................... 3,184,826 7,330,858
Cost of shares repurchased................................... (20,151,340) (42,014,602)
------------ ------------
Net increase (decrease) in net assets from
transactions in shares of beneficial interest............ (14,916,276) (25,276,004)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ....................... 10,032,309 (37,907,008)

NET ASSETS:
Beginning of period.......................................... 227,308,796 265,215,804
------------ ------------
End of period (including undistributed net investment
income of $773,064 and $202,535, respectively)............. $237,341,105 $227,308,796
============ ============

See notes to financial statements
</TABLE>
<PAGE>
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Landmark Balanced Fund
-------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, OCTOBER 19, 1990
JUNE 30, ------------------------------------------ (COMMENCEMENT OF
1995 OPERATIONS) TO
(UNAUDITED) 1994 1993 1992 1991 DECEMBER 31,1990
--------- ------- -------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 13.52 $ 14.24 $ 13.54 $ 12.93 $ 10.27 $ 9.75
------- ------- ------- ------- ------- ------
Income From Operations:
Net investment income.................... 0.237 0.399 0.336** 0.266 0.336 0.081
Net realized and unrealized gain (loss)
on investments......................... 1.503 (0.695) 0.803 0.600 2.665 0.513
------- ------- ------- ------- ------- ------
Total from operations............... 1.740 (0.296) 1.139 0.866 3.001 0.594
------- ------- ------- ------- ------- ------
Less Distributions From:
Net investment income.................. (0.200) (0.394) (0.319) (0.256) (0.341) (0.074)
Net realized gain on investments -- (0.030) (0.120) -- -- --
------- ------- ------- ------- ------- ------
Total from distributions .......... (0.200) (0.424) (0.439) (0.256) (0.341) (0.074)
------- ------- ------- ------- ------- ------
Net Asset Value, end of period........... $ 15.06 $ 13.52 $ 14.24 $ 13.54 $ 12.93 $10.27
======= ======= ======= ======= ======= ======

Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $237,341 $227,309 $265,216 $15,296 $10,239 $6,855
Ratio of expenses to average net assets 1.02%*(A) 1.02%(A) 1.04% 1.40% 1.40% 1.40%*
Ratio of net investment income to average
net assets............................. 3.26%* 2.82% 2.46% 2.07% 2.88% 4.06%*
Portfolio turnover (B)................... -- 29% 101% 102% 117% 12%
Total return............................. 12.92%+ (2.06)% 8.48% 6.82% 29.61% 6.09%+

Note: If Agents of the Fund for the periods indicated had not waived a portion of their fees and had expenses been
limited to that required by certain state securities laws, the net investment income per share and the ratios would
have been as follows:

Net investment income per share.......... $0.226 $0.378 $0.310** $0.148 $0.211 $0.059
Ratios:
Expenses to average net assets........... 1.17%*(A) 1.17%(A) 1.23% 2.32% 2.47% 2.50%*
Net investment income to
average net assets..................... 3.11%* 2.67% 2.27% 1.15% 1.81% 2.96%*

* Annualized
** Because of the significant increase in Fund shares outstanding during the year ended December 31, 1993, the per share
amount for net investment income was computed using a monthly average number of shares outstanding during the year.
+ Not annualized
(A) Includes the Fund's share of Balanced Portfolio allocated expenses for the period May 1, 1994 to December 31, 1994 and
for the period indicated.
(B) Portfolio turnover represents the rate of portfolio activity for the period while the Fund was making investments
directly in securities. The portfolio turnover rate for the period since the Fund transferred substantially all of its
investable assets to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in
this report.

(1) SIGNIFICANT ACCOUNTING POLICIES

The Landmark Balanced Fund (the "Fund") is a separate diversified series of
Landmark Funds I (the "Trust"), a Massachusetts business trust. The Trust is
registered under the Investment Company Act of 1940, as amended, as an open-end,
management investment company. The Fund invests all of its investable assets in
Balanced Portfolio (the "Portfolio"), a management investment company for which
Citibank, N.A. ("Citibank") serves as Investment Adviser. The Landmark Funds
Broker-Dealer Services, Inc. ("LFBDS") acts as the Fund's Administrator and
Distributor. Citibank also serves as Sub-Administrator and makes Fund shares
available to customers as Shareholder Servicing Agent.

The Trust seeks to achieve the Fund's investment objectives of earning high
current income, preservation of capital and providing growth potential with
reduced risk by investing all of its investable assets in the Portfolio, an
open-end, diversified management investment company having the same investment
objectives and policies and substantially the same investment restrictions as
the Fund. The value of such investment reflects the Fund's proportionate
interest (99.2% at June 30, 1995) in the net assets of the Portfolio.

The financial statements of the Portfolio, including the portfolio of
investments, are contained elsewhere in this report and should be read in
conjunction with the Fund's financial statements.

The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting principles and are as follows:

A. INVESTMENT VALUATION -- Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.

B. INVESTMENT INCOME -- The Fund earns income, net of Portfolio expenses, daily
based on its investment in the Portfolio.

C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investment transactions. Accordingly, no provision for federal income or
excise tax is necessary. At December 31, 1994, the Fund, for federal income tax
purposes, had a capital loss carryover of $3,730,366, which will expire on
December 31, 2002. Such capital loss carryover will reduce the Fund's taxable
income arising from future net realized gain on investment transactions, if any,
to the extent permitted by the Internal Revenue Code, and thus will reduce the
amount of the distributions to shareholders which would otherwise be necessary
to relieve the Fund of any liability for federal income or excise tax.

D. EXPENSES -- The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and LFBDS. Expenses incurred by the Trust with
respect to any two or more funds or series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that fund. The Fund's share of the Portfolio's expenses are
charged against and reduce the amount of the Fund's investment in the Portfolio.

E. DISTRIBUTIONS -- Distributions to shareholders are recorded on ex-dividend
date. The amount and character of income and net realized gains to be
distributed are determined in accordance with income tax rules and regulations,
which may differ from generally accepted accounting principles. These
differences are attributable to permanent book and tax accounting differences.
Reclassifications are made to the Fund's capital accounts to reflect income and
net realized gains available for distribution (or available capital loss
carryovers) under income tax rules and regulations. For the year ended December
31, 1994, the Fund reclassed $12,198 to paid-in capital, $127,473 from
accumulated net loss on investment and $115,275 to undistributed net investment
income.

F. OTHER -- All the net investment income, realized and unrealized gain and loss
of the Portfolio is allocated pro rata, based on respective ownership interests,
among the Fund and the other investors in the Portfolio at the time of such
determination. Investment transactions are accounted for on the trade date
basis. Realized gains and losses are determined on the identified cost basis.

(2) ADMINISTRATIVE SERVICES PLAN

The Trust has adopted an Administrative Services Plan (the "Administrative
Services Plan") which provides that the Trust, on behalf of the Fund, may obtain
the services of an Administrator, one or more Shareholder Servicing Agents and
other Servicing Agents and may enter into agreements providing for the payment
of fees for such services. Under the Trust Administrative Services Plan, the
aggregate of the fee paid to the Administrator from the Fund, the fees paid to
the Shareholder Servicing Agents from the Fund under such Plan and the Basic
Distribution Fee paid from the Fund to the Distributor under the Distribution
Plan may not exceed 0.65% of the Fund's average daily net assets on an
annualized basis for the Fund's then current fiscal year.

A. ADMINISTRATIVE FEE -- Under the terms of an Administrative Services
Agreement, the administrative fee paid to the Administrator, as compensation for
overall administrative services and general office facilities, may not exceed an
annual rate of 0.20% of the Fund's average daily net assets. For the six months
ended June 30, 1995, under the Administrative Services Plan the Administrator
received fees computed at an annual rate of 0.15% of the Fund's average daily
net assets which amounted to $172,540. Citibank acts as Sub-Administrator and
performs such duties and receives such compensation from LFBDS as from time to
time is agreed to by LFBDS and Citibank. The Fund pays no compensation directly
to any officer who is affiliated with the Administrator, all of whom receive
remuneration for their services to the Fund from the Administrator or its
affiliates. Certain of the officers and a Trustee of the Fund are officers or
directors of the Administrator or its affiliates.

B. SHAREHOLDER SERVICING AGENTS FEES -- The Trust, on behalf of the Fund, has
entered into shareholder servicing agreements with each Shareholder Servicing
Agent pursuant to which that Shareholder Servicing Agent acts as an agent for
its customers and provides other related services. For their services, each
Shareholder Servicing Agent receives fees from the Fund, which may be paid
periodically, which may not exceed, on an annualized basis, an amount equal to
0.40% of the average daily net assets of the Fund represented by shares owned
during the period for which payment is being made by investors for whom such
Shareholder Servicing Agent maintains a servicing relationship. Shareholder
Servicing Agents' fees amounted to $460,107, of which $172,540 was voluntarily
waived for the six months ended June 30, 1995.

(3) DISTRIBUTION FEES

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, in which the Fund reimburses the
Distributor for expenses incurred or anticipated in connection with sales of
shares of the Fund, at an annual rate not to exceed 0.15% of the Fund's average
daily net assets. The Distributor may also receive an additional fee from the
Fund at an annual rate not to exceed 0.05% of the Fund's average daily net
assets in anticipation of, or as reimbursement for, advertising expenses
incurred by the Distributor in connection with the sale of shares of the Fund.
No payment of such additional fee has been made during the period. Under the
Administrative Services Plan distribution fees were computed at an annual rate
of 0.05% of the Fund's average daily net assets, which amounted to $57,513 for
the six months ended June 30, 1995.

(4) INVESTMENT TRANSACTIONS

Increases and decreases in the Fund's investment in the Portfolio for the six
months ended June 30, 1995 aggregated $2,165,348 and $20,901,440, respectively.
<PAGE>

(5) SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares of beneficial interest were as follows:

Six Months Ended Year Ended
June 30, December 31,
1995 1994
---------------- -----------
Shares sold........... 141,440 671,065
Shares issued to share-
holders from reinvest-
ment of distribution 218,651 539,598
Shares repurchased.... (1,411,322) (3,026,611)
---------- ----------
Net increase (decrease) (1,051,231) (1,815,948)
========== ==========

(6) EXPENSE FEE

LFBDS has entered into an expense agreement with the Fund. LFBDS has agreed to
pay all of the ordinary operating expenses (excluding interest, taxes, brokerage
commissions, litigation costs or other extraordinary costs or expenses) of the
Fund, other than fees paid under the Administrative Services Agreement,
Distribution Agreement, and the Shareholder Servicing Agreements. The Agreement
may be terminated by either party upon not less than 30 days nor more than 60
days written notice.

The Fund has agreed to pay LFBDS an expense fee on an annual basis, accrued
daily and paid monthly; provided, however, that such fee shall not exceed the
amount such that immediately after any such payment the aggregate expenses of
the Fund including expenses allocated from the Portfolio would, on an annual
basis, exceed an agreed upon rate, currently 1.02% of average daily net assets.
<PAGE>
-------------------------------------------------------------------------------
Balanced Portfolio
-------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited)
-------------------------------------------------------------------------------

ISSUER SHARES VALUE
---------------------------------------------------------------

---------------------------------------------------------------
COMMON STOCKS -- 51.8%
---------------------------------------------------------------
COMMERCIAL SERVICES - 2.8%
American Express......... 75,000 $ 3,637,500
Sysco Corp. ............. 100,000 2,950,000
------------
6,587,500
------------
COMMODITIES - 3.7%
Air Products & Chemicals Inc. 75,000 4,181,250
EI Dupont De Nemours & Co. Inc. 36,600 2,516,250
Lubrizol Corp............ 60,000 2,122,500
------------
8,820,000
------------
CONSUMER DURABLES - 3.2%
Eastman Kodak Co......... 62,000 3,758,750
General Motors Corp...... 84,000 3,937,500
------------
7,696,250
------------
CONSUMER NON-DURABLES - 3.1%
PepsiCo Inc.............. 62,500 2,851,563
Philip Morris Comp Cos Inc. 43,000 3,198,125
RJR Nabisco Holdings Group 48,000 1,338,000
------------
7,387,688
------------
CONSUMER SERVICES - 2.8%
Carnival Corp............ 96,500 2,255,688
McDonald's Corp.......... 86,000 3,364,750
Mirage Resorts Inc....... 35,500 1,087,188
------------
6,707,626
------------
ELECTRONIC/TECHNOLOGICAL SERVICES - 6.0%
Cisco Systems, Inc....... 55,000 2,780,938
Computer Associates Intl. Inc. 33,300 2,256,075
DSC Communications....... 48,000 2,232,000
General Motors Corp. Class "E" 65,000 2,827,500
Loral Corp. ............. 34,900 1,806,075
Silicon Graphics Inc.*... 60,000 2,392,500
------------
14,295,088
------------
ENERGY/MINERALS - 6.9%
Amoco Corp............... 62,000 4,130,750
Exxon Corp............... 59,100 4,173,938
Kerr-McGee Corp.......... 75,000 4,021,875
Royal Dutch Petroleum Co.
ADRs................... 35,000 4,265,625
------------
16,592,188
------------
FINANCE - 4.9%
American International Group Inc. 28,000 3,192,000
BankAmerica Corp......... 60,000 3,157,500
Federal National Mortgage
Association............ 40,000 3,775,000
State Street Boston Corp. 44,300 1,633,563
------------
11,758,063
------------
HEALTH SERVICES/TECHNOLOGY - 3.6%
Community Health Systems. 35,500 1,202,563
Johnson & Johnson ....... 49,000 3,313,625
Pfizer Inc............... 32,000 2,956,000
United Health Care Corp.. 5,600 231,700
Value Health Inc......... 35,300 1,138,425
------------
8,842,313
------------
INDUSTRIAL SERVICES - 3.0%
Fluor Corp. ............. 45,000 2,340,000
Schlumberger LTD......... 27,000 1,677,375
WMX Technologies Inc. ... 108,800 3,087,200
------------
7,104,575
------------
PRODUCER MANUFACTURING - 5.0%
Danaher Corp............. 54,500 1,648,625
Emerson Electric Co...... 35,000 2,502,500
General Electric Co...... 85,000 4,791,875
Xerox Corp............... 26,500 3,107,125
------------
12,050,125
------------
RETAIL TRADE - 2.7%
Limited Inc.............. 65,000 1,430,000
Nine West Group Inc...... 31,700 1,157,050
Toys "R" Us Inc.*........ 80,000 2,340,000
Wal-Mart Stores Inc...... 58,000 1,551,500
------------
6,478,550
------------
TRANSPORTATION - 1.3%
Norfolk Southern Co...... 45,000 3,031,873
------------

UTILITIES - 2.8%
FPL Group Inc............ 73,000 2,819,625
GTE Corp................. 82,000 2,798,250
Texas Utilities.......... 30,000 1,031,250
------------
6,649,125
------------

TOTAL COMMON STOCKS
(Identified Cost $106,128,255) 124,000,964
------------

---------------------------------------------------------------
FOREIGN CLOSED END FUNDS -- 1.4%
---------------------------------------------------------------
Emerging Germany Fund, Inc. 23,100 167,473
Emerging Tiger Fund, Inc. 34,600 458,450
First Australia Fund, Inc. 8,500 66,937
First Philippine Fund.... 11,400 190,950
France Growth Fund....... 9,400 96,350
Global Privatization Fund 13,100 168,663
Growth Fund of Spain..... 20,000 200,000
Malaysia Fund............ 19,600 379,750
Pakistan Investment Fund. 34,100 230,175
Thai Capital Fund........ 18,500 321,437
The India Fund, Inc...... 30,000 307,500
The New Germany Fund..... 28,600 346,775
The Thai Fund, Inc....... 14,100 373,650
------------

TOTAL FOREIGN CLOSED END FUNDS
(Identified Cost $3,751,452) 3,308,110
------------
<PAGE>
PRINCIPAL
ISSUER AMOUNT VALUE
---------------------------------------------------------------

---------------------------------------------------------------
FIXED INCOME -- 40.4%
---------------------------------------------------------------
ASSET BACKED - 6.4%
Contimortgage Home Equity Loan
7.95 %, due 5/01/25..... $2,800,000 $ 2,859,668
Equitable Capital Credit
8.95 %, due 10/15/06.... 3,000,000 3,143,438
First USA Credit Card
6.265 %, due 10/15/01... 3,000,000 3,002,517
General Motors Acceptance Corp.
5.95 %, due 2/15/97..... 120,826 120,826
GMAC 1992 E Grantor Trust,
4.75 %, due 8/15/97..... 228,318 226,176
Household Finance Corp.
6.663 %, due 5/20/08.... 3,275,000 3,288,297
United Companies Financial Corp.
7.25 %, due 12/10/20.... 2,800,000 2,789,500
------------
15,430,422
------------
MORTGAGE OBLIGATIONS - 8.0%
COLLATERALIZED MORTGAGE OBLIGATIONS - 6.3%
Federal National
Mortgage Association
5.00 %, due 11/25/21.... 2,000,000 1,626,860
6.50 %, due 11/25/21.... 3,000,000 2,853,750
Nomura Asset Corp.
7.268 %, due 7/07/03.... 2,567,323 2,624,071
8.15 %, due 3/04/20..... 3,000,000 3,244,688
Resolution Trust Corp.
6.675 %, due 6/25/26.... 2,847,535 2,847,535
Structured Asset Securities Corp.
7.375 %, due 2/25/24.... 1,944,974 1,944,974
------------
15,141,878
------------

MORTGAGE BACKED SECURITIES - 0.1%
Federal Home Loan Mortgage Corp.
8.50 % , due 6/1/01..... $ 40,726 $ 41,922
9.50 % , due 2/1/01..... 22,379 23,232
Federal National Mortgage
Association
9.00 %, due 11/1/01..... 30,366 31,703
------------
96,857
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 1.6%
7.00 %, due 6/20/25..... 2,940,000 2,990,069
8.25 %, due 7/15/05..... 864,769 883,145
------------
3,873,214
------------
TOTAL MORTGAGE OBLIGATIONS 19,111,949
------------

DOMESTIC CORPORATE BONDS - 2.5%
K Mart
12.50 %, due 3/01/05.... 2,100,000 2,801,736
8.125 % due 12/01/06.... 3,000,000 3,093,060
------------
5,894,796
------------
YANKEE BONDS - 2.1%
Midland Bank
7.65 %, due 5/01/25..... 2,800,000 2,959,684
Province of Newfoundland
7.32 %, due 10/13/23.... 2,000,000 1,977,020
------------
4,936,704
------------

UNITED STATES
GOVERNMENT OBLIGATIONS - 21.4%
UNITED STATES TREASURY NOTES - 17.2%
7.375 %, due 11/15/97... 3,600,000 3,717,000
6.75 %, due 4/30/00..... 3,000,000 3,090,930
6.25 %, due 5/31/00..... 33,000,000 33,350,460
7.50%, due 2/15/05...... 1,000,000 1,088,910
------------
41,247,300
------------
UNITED STATES TREASURY BONDS - 4.2%
United States Treasury Bond
7.625 %, due 2/15/25.... $ 9,000,000 $ 10,164,330
------------

TOTAL UNITED STATES
GOVERNMENT OBLIGATIONS 51,411,630
------------
TOTAL FIXED INCOME
(Identified Cost $95,288,944) 96,785,501
------------

---------------------------------------------------------------
SHORT-TERM OBLIGATIONS -- 4.4%
---------------------------------------------------------------
Chase Manhattan Repurchase Agreement
6.125 %, due 7/03/95, proceeds at
maturity $10,618,417 (secured by
$10,836,945 U.S. Treasury Notes
6.125 %, due 7/31/96).... 10,613,000
------------
TOTAL INVESTMENTS........ 98.0% 234,707,575
(Identified Cost $215,781,651)

OTHER ASSETS
LESS LIABILITIES........ 2.0 4,923,828
----------- ------------
NET ASSETS............... 100.0% $239,631,403
=========== ============

*Non-income producing security

See notes to financial statements
<PAGE>

-------------------------------------------------------------------------------
Balanced Portfolio
-------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (unaudited)
-------------------------------------------------------------------------------
ASSETS:
Investments at value (Note 1A) (Identified Cost, $215,781,651).. $234,707,575
Cash............................................................ 616
Receivable for investments sold................................. 8,898,390
Dividends and interest receivable............................... 1,136,648
------------
Total assets................................................ 244,743,229
------------
LIABILITIES:
Payable for investments purchased............................... 5,002,895
Payable to affiliates--Investment advisory fee (Note 2)......... 78,966
Accrued expenses and other liabilities.......................... 29,965
------------
Total liabilities........................................... 5,111,826
------------
NET ASSETS ..................................................... $239,631,403
============
REPRESENTED BY:
Paid-in capital for beneficial interests........................ $239,631,403
============
See notes to financial statements

EXPENSES
Investment advisory fees (Note 2).................. 464,216
Administrative fees (Note 3)....................... 58,027
Expense fees (Note 6).............................. 59,047
----------
Total expenses................................... 581,290
-----------
Net investment income............................ 4,368,854
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) from
investment transactions.......................... 7,140,181
Unrealized appreciation (depreciation) of investments--
Beginning of period............................... 1,535,684
End of period..................................... 18,925,924
-----------
Net change in unrealized appreciation
(depreciation)................................... 17,390,240
-----------
Net realized and unrealized gain
(loss) on investments............................ 24,530,421
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................... $28,899,275
===========
See notes to financial statements
<PAGE>

<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
Operations:
Net investment income............................................... $ 4,368,854 $ 5,659,198
Net realized loss on investment transactions........................ 7,140,181 (6,675,580)
Net change in unrealized depreciation of investments................ 17,390,240 4,422,530
------------ ------------
Net increase in net assets resulting from operations............ 28,899,275 3,406,148
------------ ------------

CAPITAL TRANSACTIONS:
Proceeds from contributions......................................... 2,777,773 251,032,858
Value of withdrawals................................................ (20,993,608) (25,491,043)
------------ ------------
Net increase (decrease) in net assets from capital transactions. (18,215,835) 225,541,815
------------ ------------

NET INCREASE IN NET ASSETS ......................................... 10,683,440 228,947,963
Net Assets:
Beginning of period................................................. 228,947,963 --
------------ ------------
End of period....................................................... $239,631,403 $228,947,963
============ ============
See notes to financial statements
</TABLE>

* Annualized
</TABLE>

See notes to financial statements
<PAGE>

(1) SIGNIFICANT ACCOUNTING POLICIES
Balanced Portfolio (the "Portfolio"), a separate series of The Premium
Portfolios (the "Portfolio Trust"), is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company which was organized as a trust under the laws of the State of New York.
The Declaration of Trust permits the Trustees to issue beneficial interests in
the Portfolio. Signature Financial Group (Grand Cayman), Ltd. ("SFG") acts as
the Portfolio's Administrator.

The significant accounting policies consistently followed by the Portfolio are
in conformity with generally accepted accounting principles and are as follows:

A. INVESTMENT SECURITY VALUATIONS -- Equity securities listed on securities
exchanges or reported through the NASDAQ system are valued at last sale prices.
Unlisted securities or listed securities for which last sales prices are not
available are valued at last quoted bid prices. Debt securities (other than
short-term obligations maturing in sixty days or less), are valued on the basis
of valuations furnished by pricing services which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, and other market data,
without exclusive reliance on quoted prices or exchange or over-the-counter
prices, since such valuations are believed to reflect more accurately the fair
value of the securities. Short-term obligations, maturing in sixty days or less,
are valued at amortized cost, which approximates market value. Securities, if
any, for which there are no such valuations or quotations are valued at fair
value as determined in good faith by or under guidelines established by the
Trustees.

B. INCOME -- Interest income consists of interest accrued and discount earned,
adjusted for amortization of premium or discount on long-term debt securities
when required for federal income tax purposes. Gain and loss from principal
paydowns are recorded as interest income. Dividend income is recorded on the
ex-dividend date.

C. U.S. FEDERAL TAXES -- The Portfolio is considered a partnership under the
U.S. Internal Revenue Code. Accordingly, no provision for federal income or
excise tax is necessary.

D. EXPENSES -- The Portfolio bears all costs of its operations other than
expenses specifically assumed by Citibank and SFG. Expenses incurred by the
Portfolio Trust with respect to any two or more portfolios or series are
allocated in proportion to the average net assets of each portfolio, except when
allocations of direct expenses to each portfolio can otherwise be made fairly.
Expenses directly attributable to a portfolio are charged to that portfolio.

E. REPURCHASE AGREEMENTS -- It is the policy of the Portfolio to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System or to have segregated within the custodian bank's
vault, all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Portfolio to
monitor, on a daily basis, the market value of the repurchase agreement's
underlying investments to ensure the existence of a proper level of collateral.

F. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Realized gains and losses are determined on
the identified cost basis.

(2) INVESTMENT ADVISORY FEES
The investment advisory fee paid to Citibank, as compensation for overall
investment management services, amounted to $464,216 for the six months ended
June 30, 1995. The investment advisory fee is computed at the annual rate of
0.40% of the Portfolio's average daily net assets.

(3) ADMINISTRATIVE FEE
Under the terms of an Administrative Services Agreement, the administrative fee
paid to the Administrator, as compensation for overall administrative services
and general office facilities, is computed at an annual rate of 0.05% of the
Portfolio's average daily net assets. The administrative fee amounted to $58,027
for the six months ended June 30, 1995. Citibank acts as Sub-Administrator and
performs such duties and receives such compensation from SFG as from time to
time is agreed to by SFG and Citibank. The Portfolio pays no compensation
directly to any officer who is affiliated with the Administrator, all of whom
receive remuneration for their services to the Portfolio from the Administrator
or its affiliates. Certain of the officers and a Trustee of the Portfolio are
officers or directors of the Administrator or its affiliates.

(4) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term obligations,
aggregated $282,149,022 and $296,870,614, respectively, for the six months ended
June 30, 1995.

(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at June 30, 1995, as computed on a federal income tax basis,
are as follows:

Aggregate cost...................... $215,781,651
===========
Gross unrealized appreciation....... $ 21,179,674
Gross unrealized depreciation....... (2,253,750)
-----------
Net unrealized appreciation......... $ 18,925,924
==========

(6) EXPENSE FEE
SFG has entered into an expense agreement with the Portfolio. SFG has agreed to
pay all of the ordinary operating expenses (excluding interest, taxes, brokerage
commissions litigation costs or other extraordinary costs or expenses) of the
Portfolio, other than fees paid under the Advisory Agreement and Administrative
Services Agreement. The Agreement may be terminated by either party upon not
less than 30 days nor more than 60 days written notice.

The Portfolio has agreed to pay SFG an expense fee on an annual basis, accrued
daily and paid monthly; provided, however, that such fee shall not exceed the
amount such that immediately after any such payment the aggregate ordinary
expenses of the Portfolio would, on an annual basis, exceed an agreed upon rate,
currently 0.55% of average daily net assets.

(7) LINE OF CREDIT
The Portfolio, along with the other Landmark Funds, entered into an ongoing
agreement with a bank which allows the Funds collectively to borrow up to $40
million for temporary or emergency purposes. Interest on the borrowings, if any,
is charged to the specific fund executing the borrowing at the base rate of the
bank. In addition, the $15 million committed portion of the line of credit
requires a quarterly payment of a commitment fee based on the average daily
unused portion of the line of credit. For the six months ended June 30, 1995,
the commitment fee allocated to the Portfolio was $928. Since the line of credit
was established, there have been no borrowings.
<PAGE>
-------------------------------------------------------------------------------
SHAREHOLDER
SERVICING AGENTS
-------------------------------------------------------------------------------

FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CUSTOMERS:
Citibank, N.A.
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT,
(800) 285-1701, for all other states, (800) 285-1707

FOR PRIVATE BANKING CLIENTS:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer,
Investment Specialist or (212) 559-5959

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200
(212) 736-8170 in New York City
<PAGE>

[LOGO] LANDMARK
FUNDS

MONEY MARKET FUNDS:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves

U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves

Tax Free Reserves
California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves

STOCK & BOND FUNDS:
U.S. Government Income Fund
Intermediate Income Fund
National Tax Free Income Fund
New York Tax Free Income Fund

Balanced Fund
Equity Fund
International Equity Fund
Small Cap Equity Fund
Emerging Asian Markets Equity Fund
<PAGE>

TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
H. B. Alvord
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Donald B. Otis
E. Kirby Warren
William S. Woods, Jr.

SECRETARY AND TREASURER
James B. Craver*

ASSISTANT TREASURER
Barbara M. O'Dette*

ASSISTANT SECRETARIES
Susan Jakuboski*
Molly S. Mugler*
*Affiliated Person of Administrator and Distributor

---------------------------------------------------

INVESTMENT ADVISER
(OF BALANCED PORTFOLIO)
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

CUSTODIAN
Investors Bank and Trust Company
One Lincoln Plaza, Boston, MA 02111

AUDITORS
Price Waterhouse LLP
160 Federal Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110

---------------------------------------------------

SHAREHOLDER SERVICING AGENTS
(See Inside Cover)

This report is prepared for the information of shareholders. It
is authorized for distribution to prospective investors only
when preceded or accompanied by an effective prospectus.

This Report is Prepared & Printed on Recycled Paper [LOGO]
EQ/BL/S/95