CITIFUNDS TRUST I, 485APOS, 1998-12-23

CITIFUNDS TRUST I
485APOS, 1998-12-23

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As filed with the Securities and Exchange Commission on December 23, 1998

File Nos. 2-90518
811-4006

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM N-1A

REGISTRATION STATEMENT
UNDER

THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 30

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
AMENDMENT NO. 31

CITIFUNDS TRUST I*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

21 MILK STREET, 5TH FLOOR, BOSTON, MASSACHUSETTS 02109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 617-423-1679

PHILIP W. COOLIDGE, 21 MILK STREET, 5TH FLOOR, BOSTON, MASSACHUSETTS 02109
(NAME AND ADDRESS OF AGENT FOR SERVICE)

COPY TO:
ROGER P. JOSEPH, BINGHAM DANA LLP, 150 FEDERAL STREET,
BOSTON, MASSACHUSETTS 02110

It is proposed that this filing will become effective on March 1, 1999
pursuant to paragraph (a) of Rule 485.

__________________________________________________________________________
* This filing relates solely to shares of the Trust's series designated
CitiSelect Folio 200, CitiSelect Folio 300, CitiSelect Folio 400 and
CitiSelect Folio 500.

<PAGE>

Prospectus

CITISELECT(R) PORTFOLIOS

A Family of Asset Allocation Mutual Funds Managed By
Citibank, N.A.

CITISELECT(R) FOLIO 200
CITISELECT(R) FOLIO 300
CITISELECT(R) FOLIO 400
CITISELECT(R) FOLIO 500

CLASS A AND CLASS B SHARES

The Securities and Exchange Commission has
not approved or disapproved these securities or
passed upon the accuracy of this prospectus,
and any representation to the contrary is a
criminal offense.

March 1, 1999

<PAGE>

CITISELECT PORTFOLIOS

TABLE OF CONTENTS

Funds at a Glance

Your CitiSelect Account

Choosing a Share Class
How to Buy Shares
How the Price of Your Shares is Calculated
How to Sell Shares
Reinstating Recently Sold Shares
Exchanges
Dividends
Tax Matters

Management of the Funds

Manager
Management Fees

More About the Funds

Principal Investment Strategies
Risks

Financial Highlights

Appendix

<PAGE>

FUNDS AT A GLANCE

The four diversified mutual funds described in this prospectus are asset
allocation funds. Each Fund invests in a carefully selected mix of equity,
fixed income and money market securities that is designed by Citibank to offer
a different level of potential return with a corresponding amount of risk. For
example, CitiSelect Folio 200 is designed to provide the lowest relative risk,
but with a lower level of potential return. CitiSelect Folio 500 is designed to
provide the highest potential for return, but with the highest risk. Your
investment objective, your investment time frame and your comfort level with
risk will help you decide which Fund to consider.

Each Fund has its own investment goal and its own mix of investments. Of
course, there is no assurance that any Fund will achieve its goal.

FUND GOALS

CITISELECT FOLIO 200

This Fund's goal is as high a total return over time as is consistent with a
primary emphasis on a combination of fixed income and money market securities,
and a secondary emphasis on equity securities.

CITISELECT FOLIO 300

This Fund's goal is as high a total return over time as is consistent with a
balanced emphasis on equity and fixed income securities.

CITISELECT FOLIO 400

This Fund's goal is as high a total return over time as is consistent with a
primary emphasis on equity securities, and a secondary emphasis on fixed income
securities.

CITISELECT FOLIO 500

This Fund's goal is as high a total return over time as is consistent with a
dominant emphasis on equity securities and a small allocation to fixed income
securities.

MAIN INVESTMENT STRATEGIES

Each Fund invests in a mix of equity, fixed income and money market securities
that is designed by Citibank to offer a different level of potential return
with a different amount of risk. The Funds' equity securities include common
stocks, preferred stocks, securities convertible into common stocks, warrants
and depositary receipts (receipts representing the right to receive securities
of foreign issuers deposited in a U.S. bank or a local branch of a foreign
bank). The Funds' fixed income and money market securities include bonds,
short-term notes, mortgage-backed and asset-backed securities, certificates of
deposit and repurchase agreements.

Please note that these Funds seek high total returns over time. Current income
is not a primary consideration.

<PAGE>

o CITISELECT FOLIO 200 invests primarily in fixed income and money
market securities. A smaller allocation to equity securities gives
the potential for some capital growth. This Fund is expected to be
the least volatile of the Funds.

o CITISELECT FOLIO 300 emphasizes both equity and fixed income
securities. This balanced mix offers the growth potential of stocks
with the lower volatility of fixed income securities.

o CITISELECT FOLIO 400 and CITISELECT FOLIO 500 invest primarily in
equity securities. They may invest more of their assets in
international securities and small cap securities. CitiSelect Folio
500 is expected to be the most volatile of the Funds.

Citibank generally allocates each Fund's assets as provided in this chart, but
cash flows into or out of a Fund, or market fluctuations, could produce
different results. Citibank monitors each Fund's asset mix daily and conducts
quarterly reviews to determine whether to rebalance the Fund's investments.
Rebalancing may be accomplished over a period of time, subject to any
regulatory restrictions.

________________________________________________

ASSET CLASS RANGE *

_______________________________________________________________________

FIXED MONEY
EQUITY INCOME MARKET
_______________________________________________________________________
CITISELECT
FOLIO 200 25-45% 35-55% 10-30%
_______________________________________________________________________
CITISELECT
FOLIO 300 40-60% 35-55% 1-10%
_______________________________________________________________________
CITISELECT
FOLIO 400 55-85% 15-35% 1-10%
_______________________________________________________________________
CITISELECT
FOLIO 500 70-95% 5-20% 1-10%
_______________________________________________________________________

*Each asset class includes other types of investments which are
described in this prospectus and which are deemed related to the
management of that asset class. Equity and fixed income ranges include
investment positions that seek equivalent asset class exposure. When
money market instruments are used in connection with these positions
they will be counted towards the assets of the applicable asset class.

Citibank may further allocate assets within the equity and fixed income asset
classes seeking to minimize risk and volatility and to maximize returns.

o Equity securities may be allocated among large and small
capitalization securities and international securities.

o Fixed income securities may be allocated among U.S. and foreign
government and corporate bonds and short-term debt.

Citibank is not required to allocate each Fund's assets among all of these
types of equity and fixed income securities at all times.

<PAGE>

Citibank invests at least 25%, and possibly up to 100%, of the assets in the
money market class in bank obligations.

Citibank also allocates assets among different subadvisers who specialize in
managing particular kinds of securities or managing in a particular style. This
may help the Funds take advantage of different investment cycles, such as
periods when equities with different characteristics (i.e., growth or value)
perform differently. Citibank monitors and supervises all of the Funds'
subadvisers and may terminate the services of any subadviser at any time.

The Funds may use derivatives in order to protect (or "hedge") against changes
in interest rates or the prices of securities held or to be bought. The Funds
may also use derivatives for non-hedging purposes, to enhance potential gains
or generate income. In addition, the Funds may use derivatives to manage the
maturity or duration of fixed income securities. These derivatives include
futures, options and forward foreign currency exchange contracts.

MAIN RISKS

The principal risks of investing in CitiSelect Folios are described below.
Please remember that the risks of investing in each Fund depend on the
securities it holds and the investment strategies it uses. For example, Funds
investing more of their assets in fixed income securities may be more
susceptible to interest rate risk and credit risk than Funds investing more of
their assets in equity securities. Conversely, Funds investing more of their
assets in equity securities may be susceptible to greater price volatility than
Funds investing more of their assets in fixed income securities. See page ___
for more information about risks.

o MARKET RISK. This is the risk that the prices of securities will
rise or fall due to changing economic, political or market
conditions, or due to a company's individual situation. The value of
the Funds' shares will change daily as the value of their underlying
securities change. This means that your shares may be worth more or
less when you sell them than when you bought them.

It is also possible that the Funds will not perform as intended. For
example, CitiSelect Folio 200 is expected to be the least volatile
of the Funds. However, under certain market conditions this Fund
could be the most volatile.

o EQUITY SECURITIES. Equity securities are subject to market risk that
historically has resulted in greater price volatility than exhibited
by fixed income securities.

o INTEREST RATE RISK. In general, the prices of debt securities rise
when interest rates fall, and fall when interest rates rise. Longer
term obligations are usually more sensitive to interest rate
changes. A change in interest rates could cause the Funds' share
prices to go down.

o CREDIT RISK. Some issuers may not make payments on debt securities
held by the Funds, causing a loss. Or, an issuer's financial
condition may deteriorate, lowering the credit quality of a security
and leading to greater volatility in the price of the security and
in shares of a Fund. The prices of lower rated securities often are
more volatile than those of higher rated securities.

o FOREIGN SECURITIES. Investments in foreign securities involve risks
relating to adverse political, social and economic developments

<PAGE>

abroad, as well as risks resulting from the differences between the
regulations to which U.S. and foreign issuers and markets are
subject. These risks may include expropriation of assets,
confiscatory taxation, withholding taxes on dividends and interest
paid on Fund investments, currency exchange controls and other
limitations on the use or transfer of Fund assets and political or
social instability. There may be rapid changes in the value of
foreign currencies or securities, causing the Funds' share prices to
be volatile. Also, in certain circumstances, the Funds could realize
reduced or no value in U.S. dollars from their investments in
foreign securities, causing the Funds' share prices to go down.

Each Fund may invest in issuers located in emerging, or developing,
markets. All of the risks of investing in foreign securities are
heightened by investing in these markets.

o BANK OBLIGATIONS. Banks, and thus bank obligations, are sensitive to
changes in money market and general economic conditions, as well as
decisions by regulators that can affect banks' profitability.

o SMALLER COMPANIES. The securities of smaller capitalized companies
may have more risks than those of larger, more seasoned companies.
They may be particularly susceptible to market downturns and their
prices may be more volatile, causing the Funds' share prices to be
volatile.

o PREPAYMENT RISK. The issuers of debt securities held by a Fund may
be able to prepay principal due on the securities, particularly
during periods of declining interest rates. The Funds may not be
able to reinvest that principal at attractive rates, reducing income
to the Funds. On the other hand, rising interest rates may cause
prepayments to occur at slower than expected rates. This effectively
lengthens the maturities of the affected securities, making them
more sensitive to interest rate changes and the Funds' share prices
more volatile. Mortgage-backed securities are particularly
susceptible to prepayment risk and their prices may be volatile.

o SPECIAL CHARACTERISTICS OF CONVERTIBLE SECURITIES. Convertible
securities, which are debt securities that may be converted into
stock, are subject to the market risk of stocks, and, like other
debt securities, are also subject to interest rate risk and the
credit risk of their issuers.

o DERIVATIVES. The Funds' use of derivatives (such as futures
contracts and forward foreign currency contracts), particularly for
non-hedging purposes, may be risky. This practice could result in
losses that are not offset by gains on other portfolio assets.
Losses would cause the Funds' share prices to go down. Each Fund's
ability to use derivatives successfully depends on the ability of
the Fund's portfolio managers to accurately predict movements in
stock prices, interest rates and currency exchange rates. If these
predictions are wrong, the Fund could suffer greater losses than if
the Fund had not used derivatives.

Please note that an investment in the Funds is not a deposit of Citibank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.

<PAGE>

WHO MAY WANT TO INVEST

You should keep in mind that an investment in CitiSelect Portfolios is not a
complete investment program.

You should consider investing in CitiSelect Portfolios if your investment
horizon is long term - typically at least five years - and you are seeking to
reduce the risks of investing in a single asset or type of asset, and to
cushion the volatility of financial markets by investing in diversified
portfolios of several types of assets. The Funds offer a convenient way to own
a portfolio tailored to specific investment goals.

o CITISELECT FOLIO 200 is designed for investors seeking relatively
lower risk provided by substantial investments in fixed income and
money market securities, but who also seek some capital growth.

o CITISELECT FOLIO 300 is designed for investors seeking a balanced
approach by emphasizing stocks for their higher capital appreciation
potential but retaining a significant fixed income component to
temper volatility.

o CITISELECT FOLIO 400 and CITISELECT FOLIO 500 are designed for
investors willing and able to take higher risks in the pursuit of
long-term capital appreciation. CitiSelect Folio 500 is designed for
investors who can withstand greater market swings to seek potential
long-term rewards. CitiSelect Folio 400 is designed for investors
seeking long-term rewards, but with less volatility.

Don't invest in CitiSelect Portfolios if:

o You are not prepared to accept daily share price fluctuations.

o You're seeking current income.

FUND PERFORMANCE

The following bar charts and tables can help you evaluate the risks of
investing in each Fund, and how its returns have varied over time.

o The bar charts show changes in the Funds' performance from year to year.
The charts and related information do not take into account any sales
charges that you may be required to pay. Any sales charges will reduce
your return.

o The tables show how the Funds' average annual returns for the periods
indicated compare to a broad measure of market performance. Please
remember that, unlike the Funds, the market indexes do not include the
costs of buying and selling securities and other Fund expenses.

o In both the charts and tables, the returns shown for the Funds are for
periods before the creation of share classes on January 4, 1999. All
existing Fund shares were designated Class A shares on that date. Prior to
that date, there were no sales charges on the purchase or sale of Fund
shares. The returns for Class A in the tables, but not the bar charts,
have been adjusted to reflect the maximum front-end sales charge currently
applicable to the Class A shares.

<PAGE>

o The Class B shares are newly offered commencing January 4, 1999. Class B
performance would have been lower than that shown for Class A shares,
because of higher fund expenses and the effects of the contingent deferred
sales charge.

When you consider this information, please remember that the Funds' past
performance is not necessarily an indication of how they will perform in the
future.

<PAGE>

---------------------------------------------------
CITISELECT FOLIO 200 HIGHEST AND LOWEST RETURNS
(for calendar quarters covered by the bar chart)
---------------------------------------------------
TOTAL RETURN Quarter Ending
---------------------------------------------------
(per calendar year - Class A) Highest [6.71%] [June 30, 1997]
---------------------------------------------------
Lowest [-4.27%] [September 30, 1998]
---------------------------------------------------
1997 1998
- ---------------------------
---------------------------------------------------
[bar chart for calendar AVERAGE ANNUAL TOTAL RETURNS
years 1997 and 1998] (through December 31, 1998)
---------------------------------------------------
1 Year Life of Fund
1997........... 8.03% (since 6/17/96)
---------------------------------------------------
1998........... Class A ____% ____%
---------------------------------------------------
Class B N/A N/A
---------------------------------------------------
Blended
Internal
Benchmark ____% ____%
---------------------------------------------------

---------------------------------------------------
CITISELECT FOLIO 300 HIGHEST AND LOWEST RETURNS
(for calendar quarters covered by the bar chart)
---------------------------------------------------
TOTAL RETURN Quarter Ending
---------------------------------------------------
(per calendar year - Class A) Highest [8.66%] [June 30, 1997]
---------------------------------------------------
Lowest [-7.51%] [September 30, 1998]
---------------------------------------------------
1997 1998
- ---------------------------
---------------------------------------------------
[bar chart for calendar AVERAGE ANNUAL TOTAL RETURNS
years 1997 and 1998] (through December 31, 1998)
---------------------------------------------------
1 Year Life of Fund
1997........... 9.87% (since 6/17/96)
---------------------------------------------------
1998........... Class A ____% ____%
---------------------------------------------------
Class B N/A N/A
---------------------------------------------------
Blended
Internal
Benchmark ____% ____%
---------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
---------------------------------------------------
CITISELECT FOLIO 400 HIGHEST AND LOWEST RETURNS
(for calendar quarters covered by the bar chart)
---------------------------------------------------
TOTAL RETURN Quarter Ending
---------------------------------------------------
(per calendar year - Class A) Highest [10.29%] [June 30, 1997]
---------------------------------------------------
Lowest [-12.70%] [September 30, 1998]
---------------------------------------------------
1997 1998
- ---------------------------
---------------------------------------------------
[bar chart for calendar AVERAGE ANNUAL TOTAL RETURNS
years 1997 and 1998] (through December 31, 1998)
---------------------------------------------------
1 Year Life of Fund
1997........... 10.25% (since 6/17/96)
---------------------------------------------------
1998........... Class A ____% ____%
---------------------------------------------------
Class B N/A N/A
---------------------------------------------------
Blended
Internal
Benchmark ____% ____%
---------------------------------------------------

---------------------------------------------------
CITISELECT FOLIO 500 HIGHEST AND LOWEST RETURNS
(for calendar quarters covered by the bar chart)
---------------------------------------------------
TOTAL RETURN Quarter Ending
---------------------------------------------------
(per calendar year - Class A) Highest [11.49%] [June 30, 1997]
---------------------------------------------------
Lowest [-17.57%] [September 30, 1998]
---------------------------------------------------
1997 1998
- ---------------------------
---------------------------------------------------
[bar chart for calendar AVERAGE ANNUAL TOTAL RETURNS
years 1997 and 1998] (through December 31, 1998)
---------------------------------------------------
1 Year Life of Fund
1997........... 11.99% (since 9/3/96)
---------------------------------------------------
1998........... Class A ____% ____%
---------------------------------------------------
Class B N/A N/A
---------------------------------------------------
Blended
Internal
Benchmark ____% ____%
---------------------------------------------------

</TABLE>

<PAGE>

FUND FEES AND EXPENSES

THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF THE FUNDS.

CITISELECT FOLIO 200 CLASS A CLASS B
Class descriptions begin on page[---]
SHAREHOLDER FEES (fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases 4.50% None
Maximum Deferred Sales Charge (Load) None(1) 4.50%(2)

ANNUAL FUND OPERATING EXPENSES (expenses that are
deducted from Fund assets)(3):
Management Fees 0.75% 0.75%
Distribution (12b-1) Fees 0.50% 0.75%
Other Expenses (administrative, shareholder servicing and
other expenses): 0.25% 0.25%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.50% 1.75%

</TABLE>

1 Except for investment of $500,000 or more.

2 Class B shares have a contingent deferred sales charge (CDSC) which is
deducted from your sale proceeds if you sell your Class B shares within five
years of your original purchase of the shares. In the first year after
purchase, the CDSC is 4.50% of the price at which you purchased your shares, or
the price at which you sold your shares, whichever is less, declining to 1.00%
in the fifth year after purchase.

3 Each Fund invests in multiple underlying mutual funds. This table reflects
the expenses of each Fund and the underlying funds in which it invests.

<PAGE>

<S> <C> <C>
CITISELECT FOLIO 300 CLASS A CLASS B
Class descriptions begin on page [---]
SHAREHOLDER FEES (fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases 4.50% None
Maximum Deferred Sales Charge (Load) None(1) 4.50%(2)

</TABLE>

1 Except for investment of $500,000 or more.

3 Each Fund invests in multiple underlying mutual funds. This table reflects
the expenses of each Fund and the underlying funds in which it invests.

<PAGE>

<S> <C> <C>
CITISELECT FOLIO 400 CLASS A CLASS B
Class descriptions begin on page [---]
SHAREHOLDER FEES (fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases 5.00% None
Maximum Deferred Sales Charge (Load) None(1) 5.00%(2)

ANNUAL FUND OPERATING EXPENSES (expenses that are
deducted from Fund assets)(3):
Management Fees 0.75% 0.75%
Distribution (12b-1) Fees 0.50% 1.00%
Other Expenses (administrative, shareholder servicing and
other expenses): 0.25% 0.25%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.50% 2.00%

</TABLE>

1 Except for investment of $500,000 or more.

2 Class B shares have a contingent deferred sales charge (CDSC) which is
deducted from your sale proceeds if you sell your Class B shares within five
years of your original purchase of the shares. In the first year after
purchase, the CDSC is 5.00% of the price at which you purchased your shares, or
the price at which you sold your shares, whichever is less, declining to 1.00%
in the fifth year after purchase.

3 Each Fund invests in multiple underlying mutual funds. This table reflects
the expenses of each Fund and the underlying funds in which it invests.

<PAGE>

<S> <C> <C>
CITISELECT FOLIO 500 CLASS A CLASS B
Class descriptions begin on page [---]
SHAREHOLDER FEES (fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases 5.00% None
Maximum Deferred Sales Charge (Load) None(1) 5.00%(2)

</TABLE>

1 Except for investment of $500,000 or more.

2 Class B shares have a contingent deferred sales charge (CDSC) which is
deducted from your sale proceeds if you sell your Class B shares within five
years of your original purchase. In the first year after purchase, the CDSC is
5.00% of the price at which you purchased your shares, or the price at which
you sold your shares, whichever is less, declining to 1.00% in the fifth year
after purchase.

3 Each Fund invests in multiple underlying mutual funds. This table reflects
the expenses of each Fund and the underlying funds in which it invests.

<PAGE>

EXAMPLES

These examples are intended to help you compare the cost of investing in a Fund
to the cost of investing in other mutual funds. The examples assume that:

o you invest $10,000 in a Fund for the time periods indicated;

o you pay the maximum applicable sales charge;

o you reinvest all dividends; and

o you then sell all your shares at the end of those periods, if you own
Class A shares.

If you own Class B shares, two numbers are given, one showing your expenses if
you sold all your shares at the end of each time period and one if you held
onto your shares. The examples also show the effects of the conversion of Class
B shares to Class A shares after 8 years.

The examples also assume that:

o each investment has a 5% return each year -- the assumption of a 5% return
is required by the SEC for the purpose of these examples and is not a
prediction of any Fund's future performance; and

o the Funds' operating expenses shown in the tables above remain the same
before taking into consideration any fee waivers or reimbursements.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

- ------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------
CITISELECT FOLIO 200

Class A $ 596 $ 903 $1,232 $2,160

Class B

Assuming sale at end of
period $ 628 $ 851 $1,049 $2,062

Assuming no sale $ 178 $ 551 $ 949 $2,062

- ------------------------------------------------------------------------------
CITISELECT FOLIO 300

Class A $ 596 $ 903 $1,232 $2,160

Class B

Assuming sale at end of
period $ 628 $ 851 $1,049 $2,062

Assuming no sale $ 178 $ 551 $ 949 $2,062

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

<PAGE>

- -------------------------------------------------------------------------------
CITISELECT FOLIO 400

Class A $ 645 $ 950 $1,278 $2,201

Class B

Assuming sale at end of
period $ 703 $ 927 $1,178 $2,327

Assuming no sale $ 203 $ 627 $1,078 $2,327

- -------------------------------------------------------------------------------
CITISELECT FOLIO 500

Class A $ 645 $ 950 $1,278 $2,201

Class B

Assuming sale at end of
period $ 703 $ 927 $1,178 $2,327

Assuming no sale $ 203 $ 627 $1,078 $2,327

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

<PAGE>

YOUR CITISELECT ACCOUNT

CHOOSING A SHARE CLASS

EACH FUND OFFERS TWO SHARE CLASSES, CLASS A AND CLASS B. EACH CLASS
HAS ITS OWN SALES CHARGE AND EXPENSE STRUCTURE. PLEASE READ THE
INFORMATION BELOW CAREFULLY TO HELP YOU DECIDE WHICH SHARE CLASS IS
BEST FOR YOU.

<TABLE>
<CAPTION>
<S> <C>
CLASS A AT A GLANCE: CLASS B AT A GLANCE:

o Front-end load--there is an initial sales o No initial sales charge
charge of 4.50% or less (5.00% or less in
the case of CitiSelect Folio 400 and
CitiSelect Folio 500)
o Lower sales charge rates for larger o The deferred sales charge declines from
investments 4.50% (5.00% in the case of CitiSelect
Folio 400 and CitiSelect Folio 500) to 1%
over five years, and is eliminated if you
hold your shares for six years or more
o Annual distribution/service fee of up to o Annual distribution/service fee of up to
0.50% 0.75% (1.00% in the case of CitiSelect
Folio 400 and CitiSelect Folio 500)
o Lower annual expenses than Class B o Automatic conversion to Class A shares
shares after 8 years
</TABLE>

_______________________________________________________________________________
WHAT ARE DISTRIBUTION/SERVICE FEES?

Both Class A and Class B shares have annual DISTRIBUTION/SERVICE FEES that are
paid under a 12B-1 PLAN. These are fees, also called 12B-1 FEES, that are
deducted from Fund assets and are used to compensate those financial
professionals who sell fund shares and provide ongoing services to shareholders
and to pay other marketing and advertising expenses. Because you pay these fees
during the whole period that you own the shares, over time, you may pay more
than if you had paid other types of sales charges. For this reason, you should
consider the effects of 12b-1 fees as well as sales loads when choosing a share
class.
_______________________________________________________________________________

SALES CHARGES--CLASS A SHARES

o Class A shares are sold at net asset value plus a front-end, or
initial, sales charge. The rate you pay goes down as the amount of
your investment in Class A shares goes up. The tables below show the
rate of sales charge that you pay, depending on the amount that you
purchase.

o The tables below also show the amount of broker/dealer compensation
that is paid out of the sales charge. This compensation includes
commissions and other fees that financial professionals who sell
shares of the Funds receive. The distributor keeps up to approximately
10% of the sales charge imposed on Class A shares. Financial
professionals that sell Class A shares will also receive the service
fee payable on Class A shares at an annual rate equal to 0.50% of the
average daily net assets represented by the Class A shares sold by
them.

<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
CITISELECT FOLIO 200 AND CITISELECT FOLIO 300
- ----------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE BROKER/DEALER
AS A % OF AS A % OF COMMISSION AS
AMOUNT OF OFFERING YOUR A % OF OFFERING
YOUR INVESTMENT PRICE INVESTMENT PRICE
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
Less than $25,000 4.50% 4.71% 4.05%
- ----------------------------------------------------------------------------------
$25,000 to less than $50,000 4.00% 4.17% 3.60%
- ----------------------------------------------------------------------------------
$50,000 to less than $100,000 3.50% 3.63% 3.15%
- ----------------------------------------------------------------------------------
$100,000 to less than $250,000 2.50% 2.56% 2.25%
- ----------------------------------------------------------------------------------
$250,000 to less than $500,000 1.50% 1.52% 1.35%
- ----------------------------------------------------------------------------------
$500,000 or more none* none* up to 1.00%
- ----------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------
CITISELECT FOLIO 400 AND CITISELECT FOLIO 500
- ----------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE BROKER/DEALER
AS A % OF AS A % OF COMMISSION AS
AMOUNT OF OFFERING YOUR A % OF OFFERING
YOUR INVESTMENT PRICE INVESTMENT PRICE
- ----------------------------------------------------------------------------------
Less than $25,000 5.00% 5.26% 4.50%
- ----------------------------------------------------------------------------------
$25,000 to less than $50,000 4.00% 4.17% 3.60%
- ----------------------------------------------------------------------------------
$50,000 to less than $100,000 3.50% 3.63% 3.15%
- ----------------------------------------------------------------------------------
$100,000 to less than $250,000 3.00% 3.09% 2.70%
- ----------------------------------------------------------------------------------
$250,000 to less than $500,000 2.00% 2.04% 1.80%
- ----------------------------------------------------------------------------------
$500,000 or more none* none* up to 1.00%
- ----------------------------------------------------------------------------------
</TABLE>

*A contingent deferred sales charge may apply in certain instances. See
below.

o After the initial sales charge is deducted from your investment, the
balance of your investment is invested in the Fund.

o The sales charge may also be waived or reduced in certain circumstances, as
described in "Sales Charge Waivers or Reductions" below. If you qualify to
purchase Class A shares without a sales load, you should purchase Class A
shares rather than Class B shares because Class A shares pay lower fees.

o If you invest at least $500,000 in a Fund, you do not pay any initial sales
charge. However, you may be charged a "contingent deferred sales charge"
(CDSC) of 1% of the purchase price, or the sale price, whichever is less,
if you sell within the first year. Under certain circumstances, waivers may
apply. Other policies regarding the application of the CDSC are the same as
for Class B shares. Please read the discussion below on Class B shares for
more information.

SALES CHARGES--CLASS B SHARES

o Class B shares are sold without a front-end, or initial, sales charge, but
you are charged a "contingent deferred sales charge" (CDSC) when you sell
shares within five years of purchase. The rate of CDSC goes down the longer
you hold your shares. The tables below show the rates that you pay, as a
percentage of the purchase price (or the sale price, whichever is less),
depending upon when you sell your shares.

<PAGE>
- -------------------------------------------------------------------------------
CITISELECT FOLIO 200 AND CITISELECT FOLIO 300
- -------------------------------------------------------------------------------
SALE DURING CDSC ON SHARES BEING SOLD
- -------------------------------------------------------------------------------
1st year since purchase 4.50%
- -------------------------------------------------------------------------------
2nd year since purchase 4.00%
- -------------------------------------------------------------------------------
3rd year since purchase 3.00%
- -------------------------------------------------------------------------------
4th year since purchase 2.00%
- -------------------------------------------------------------------------------
5th year since purchase 1.00%
- -------------------------------------------------------------------------------
6th year (or later) since purchase None
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
CITISELECT FOLIO 400 AND CITISELECT FOLIO 500
- -------------------------------------------------------------------------------
SALE DURING CDSC ON SHARES BEING SOLD
- -------------------------------------------------------------------------------
1st year since purchase 5.00%
- -------------------------------------------------------------------------------
2nd year since purchase 4.00%
- -------------------------------------------------------------------------------
3rd year since purchase 3.00%
- -------------------------------------------------------------------------------
4th year since purchase 2.00%
- -------------------------------------------------------------------------------
5th year since purchase 1.00%
- -------------------------------------------------------------------------------
6th year (or later) since purchase None
- -------------------------------------------------------------------------------

o Financial professionals selling Class B shares receive a commission based
upon the purchase price of the Class B shares that they sell, except sales
exempt from the CDSC. The commission is 4.00% of the purchase price of
Folio 200 and Folio 300 Class B shares, and 4.50% of the purchase price of
Folio 400 and Folio 500 Class B shares. Financial professionals also
receive a service fee at an annual rate equal to 0.25% of the average daily
net assets represented by the Class B shares that they have sold.

o When you sell your shares, the CDSC will be based on either your purchase
price, or the sale price, whichever is less.

o You do not pay a CDSC on shares acquired through reinvestment of dividends,
capital gain distributions and shares representing capital appreciation.

o To ensure that you pay the lowest CDSC possible, the Funds will always use
the Class B shares with the lowest CDSC to fill your sell requests.

o If you acquired your Class B shares through an exchange from another Fund
or from another fund managed or advised by Citibank, the date of your
initial investment will be used as the basis of the CDSC calculations. If
the rate of CDSC on the shares exchanged was higher than the rate of CDSC
on your Fund shares, you will be charged the higher rate when you sell your
Fund shares.

From time to time, the distributor or Citibank may provide additional
promotional bonuses, incentives or payments to dealers that sell shares of the
Funds. These may include payments for travel expenses, including lodging,
incurred in connection with trips taken by invited registered representatives
and their guests to locations within and outside the United States for meetings
or seminars of a business nature. In some instances, these bonuses, incentives
or payments may be offered only to dealers who have sold or may sell
significant amounts of shares.

The Funds' distributor may make payments for distribution and/or shareholder
servicing activities out of its past profits and other available sources. The
distributor may also make payments for marketing, promotional or related

<PAGE>

expenses to dealers. The amount of these payments is determined by the
distributor and may vary. Citibank may make similar payments under similar
arrangements.

SALES CHARGE WAIVERS OR REDUCTIONS

You may reduce or eliminate your sales charge on shares if you qualify for
certain waivers or elect to participate in certain programs. These include:

Front-End Loads

o Sales charge elimination for certain eligible purchasers, including
certain tax-exempt organizations, certain employee benefit plans,
certain entities or persons with a qualifying affiliation or
relationship with Citibank, and, under certain circumstances,
investors using the proceeds of a redemption from another mutual fund
for their purchase of Class A shares. Further information about
eligible purchasers may be found in the Appendix to this prospectus.

o Reduced sales charge plan for qualified groups.

o Right of Accumulation.

o Letter of Intent.

CDSC

o Redemptions made within one year of the death of the shareholder.

o Lump sum or other distributions from IRAs and certain other retirement
accounts.

You may learn more about the requirements for waiver or reduction and how the
programs work by requesting a copy of the Funds' Statement of Additional
Information, or by consulting with your financial professional.

AUTOMATIC CONVERSION OF CLASS B SHARES

Class B shares automatically convert to Class A shares approximately eight
years after purchase. If you acquired your shares through an exchange, the date
of your initial investment will be used to determine your conversion date. You
will receive the same dollar amount of Class A shares as the Class B shares
converted. The price of Class A shares may be higher than Class B shares at the
time of conversion, because of the lower expenses of Class A shares. Therefore,
you may receive fewer Class A shares than the number of Class B shares
converted.

<PAGE>

HOW TO BUY SHARES

Shares of the CitiSelect Portfolios are offered continuously and purchases may
be made Monday through Friday, except on certain holidays. Shares may be
purchased from the Funds' distributor or a broker-dealer or financial
institution (called a Service Agent) that has entered into a service agreement
with the distributor concerning the Funds. Please specify whether you are
purchasing Class A or Class B shares. If you fail to specify, Class A shares
will be purchased for your account. The Funds and the distributor have the
right to reject any purchase order or cease offering Fund shares at any time.

Shares are purchased at net asset value (NAV) the next time it is calculated
after your order is received and accepted by the Funds' transfer agent. NAV is
the value of a single share of a Fund. If you are purchasing Class A shares,
the applicable sales charge will be added to the cost of your shares.

Your Service Agent will not transmit your purchase order for Fund shares until
it receives the purchase price in federal or other immediately available funds.
If you pay by check, the Service Agent transmits the order when the check
clears, usually within two business days.

If you are a customer of a Service Agent, your Service Agent will establish and
maintain your account and be the shareholder of record.

HOW THE PRICE OF YOUR SHARES IS CALCULATED

Each Fund calculates its NAV every day the New York Stock Exchange is open for
trading. This calculation is normally made at 4:00 p.m. Eastern time. NAV is
calculated separately for each class of shares. NAV may be higher for Class A
shares because Class A shares bear lower expenses. On days when the financial
markets in which the Funds invest close early, NAV will be calculated as of the
close of those markets.

Portfolio securities and other assets are valued primarily on the basis of
market quotations, or if quotations are not available, by a method believed to
accurately reflect fair value. For foreign securities the values are translated
from the local currency into U.S. dollars using current exchange rates. If
trading in the currency is restricted, the Funds use a rate believed to reflect
the currency's fair value in U.S. dollars. Trading may take place in foreign
securities held by a Fund on days when the Fund is not open for business. As a
result, a Fund's NAV may change on days on which it is not possible to purchase
or sell shares of the Fund.

HOW TO SELL SHARES

You may sell (redeem) your shares on any business day. The price will be the
NAV the next time it is calculated after your redemption request in proper form
has been received by the Funds' transfer agent. If your shares are subject to a
CDSC, the applicable charge will be deducted from your sale proceeds.

You may make redemption requests in writing through the Funds' transfer agent
or, if you are a customer of a Service Agent, through your Service Agent. If
your account application permits, you may also make redemption requests by
calling the Funds' transfer agent or, if you are a customer of a Service Agent,

<PAGE>

your Service Agent. Each Service Agent is responsible for promptly submitting
redemption requests to the Funds' transfer agent. You are responsible for
making sure that your redemption request is in proper form.

If you own both Class A and Class B shares, and want to sell shares, you should
specify which class of shares you wish to sell. If you fail to specify, Class A
shares will be redeemed first.

When you sell your Class B shares, they will be redeemed so as to minimize your
CDSC. Shares on which the CDSC is not payable, i.e.

o shares representing capital appreciation and

o shares representing the reinvestment of dividends and capital gain
distributions

will be sold first followed by

o shares held for the longest period of time.

You will receive your redemption proceeds in federal funds normally on the
business day after you sell your shares but generally within seven days. Your
redemption proceeds may be delayed for up to ten days if your purchase was made
by check. Your redemption proceeds may also be delayed, or your right to
receive redemption proceeds suspended, if the New York Stock Exchange is closed
(other than on weekends or holidays) or trading is restricted, or if an
emergency exists. Each Fund has the right to pay your redemption proceeds by
giving you securities instead of cash. In that case, you may incur costs (such
as brokerage commissions) converting the securities into cash. You should be
aware that you may have to pay taxes on your redemption proceeds.

REINSTATING RECENTLY SOLD SHARES

For 90 days after you sell your Class A shares, the Funds permit you to
repurchase Class A shares in the same Fund, up to the dollar amount of shares
redeemed, without paying any sales charges. To take advantage of this
reinstatement privilege, you must notify the Fund in writing at the time you
wish to repurchase the shares.

EXCHANGES

You may exchange Fund shares for shares of the same class of each other Fund
and certain CitiFunds. You may also be able to exchange your Class A shares for
shares of certain CitiFunds that offer only a single class of shares, unless
your Class A shares are subject to a contingent deferred sales charge. You may
not exchange Class B shares for shares of CitiFunds that offer only a single
class of shares. You may acquire Fund shares through an exchange from another
fund managed by Citibank. You may place exchange orders through the transfer
agent or, if you are a customer of a Service Agent, through your Service Agent.
You may place exchange orders by telephone if your account application permits.
The transfer agent or your Service Agent can provide you with more information,
including a prospectus for any fund that may be acquired through an exchange.
You cannot exchange shares until a Fund has received payment in federal funds
for your shares.

The exchange will be based on the relative NAVs of both funds when they are
next determined after your order is accepted by the Funds' transfer agent. When
you exchange your Class A shares, you generally will be required to pay the

<PAGE>

difference, if any, between the sales charge payable on the shares to be
acquired in the exchange and the sales charge paid in connection with your
original purchase of Class A shares. When you exchange your Class B shares, you
will not pay any initial sales charge, and no CDSC is imposed when your Class B
shares are exchanged for Class B shares of certain CitiFunds that are made
available by your Service Agent. However, you may be required to pay a
contingent deferred sales charge when you sell those shares. The length of time
that you owned Fund shares will be included in the holding period of your new
Class B shares.

The exchange privilege may be changed or terminated at any time with at least
60 days' notice, when notice is required by applicable rules and regulations.
An exchange will be treated as a sale of Fund shares and you may have to pay
taxes on any gain on the transaction.

DIVIDENDS

Each Fund pays substantially all of its net income (if any) from dividends and
interest to its shareholders of record as a dividend on the following schedule:

For CITISELECT FOLIO 200 and CITISELECT FOLIO 300, quarterly during the months
of March, June, September and December.

For CITISELECT FOLIO 400 and CITISELECT FOLIO 500, annually during the month of
December.

Each Fund's net realized short-term and long-term capital gains, if any, will
be distributed to the Fund's shareholders at least annually, in December. Each
Fund may also make additional distributions to shareholders to the extent
necessary to avoid the application of the 4% non-deductible excise tax on
certain undistributed income and net capital gains of mutual funds.

Unless you choose to receive your dividends in cash, you will receive them as
full and fractional additional shares of the applicable class. There is no
sales charge on these shares.

TAX MATTERS

This discussion of taxes is for general information only. You should consult
your own tax adviser about your particular situation, and the status of your
account under state and local laws.

Shareholders are required to pay federal income tax on any dividends or other
distributions received, whether it is in cash or Fund shares. Generally,
distributions from a Fund's net investment income and short-term capital gains
will be taxed as ordinary income. A portion of distributions from net
investment income may be eligible for the dividends-received deduction
available to corporations. Distributions from long-term net capital gains will,
for tax purposes, be treated as long-term capital gains no matter how long you
have held the shares of the Fund. The tax you pay on a given distribution
generally depends on how long the Fund has held the portfolio securities it
sold, and not on how long you have held your Fund shares.

Fund distributions will reduce the distributing Fund's net asset value per
share. As a result, shareholders who buy shares just before a Fund makes a

<PAGE>

distribution may pay the full price for the shares and then effectively receive
a portion of the purchase price back as a taxable distribution.

If you sell your shares of a Fund, or exchange them for shares of another
mutual fund, you generally will be subject to tax on any taxable gain. Your
taxable gain is computed by subtracting your tax basis in the shares from the
redemption proceeds (in the case of a sale) or the value of the shares received
(in the case of an exchange).

By law, the Funds must withhold 31% of your distributions and proceeds if you
have not provided complete, correct taxpayer information.

Each Fund will withhold U.S. federal income tax payments at the rate of 30% (or
any lower applicable treaty rate) on taxable dividends and other payments
subject to withholding taxes that are made to persons who are not citizens or
residents of the United States. Distributions received from a Fund by non-U.S.
persons also may be subject to tax under the laws of their own jurisdictions.

MANAGEMENT OF THE FUNDS

MANAGER

The CitiSelect Portfolios draw on the strength and experience of Citibank.
Citibank is the investment manager of each Fund, and subject to policies set by
the Funds' Trustees, Citibank makes investment decisions. Citibank, with
headquarters at 153 East 53rd Street, New York, New York, has been managing
money since 1822. With its affiliates, it currently manages more than $290
billion in assets worldwide. Citibank is a wholly-owned subsidiary of Citicorp,
which is, in turn, a wholly-owned subsidiary of Citigroup Inc. Citigroup Inc.
was formed as a result of the merger of Citicorp and Travelers Group, Inc.,
which was completed on October 8, 1998. "CitiSelect" is a registered trademark
of Citicorp.

Citibank and its affiliates may have banking (including investment banking)
relationships with the issuers of securities that are held in the Funds.
However, in making investment decisions for the Funds, Citibank does not obtain
or use material inside information acquired by any division, department or
affiliate of Citibank in the course of those relationships. Citibank and its
affiliates may have loans outstanding that are repaid with proceeds of
securities purchased by the Funds.

Richard Goldman, a Vice President of Citibank, has been the overall portfolio
manager of the Funds since January, 1999 and is responsible for determining
asset allocations, supervising and monitoring the performance of the Citibank
personnel described below who are responsible for the Funds' securities, and
supervising and monitoring the performance of the subadvisers. Mr. Goldman's
investment experience is discussed below.

The following subadvisers currently manage the following kinds of securities
for the Funds:

SMALL CAP VALUE SECURITIES: Franklin Advisory Services, Inc., One Parker Plaza,
19th Floor, Fort Lee, New Jersey 07024. Franklin Advisory Services is a
registered investment adviser. William J. Lippman, President of Franklin
Advisory Services or its predecessor since 1988, has been responsible for the
daily management of U.S. small cap value securities since the Funds' inception.

<PAGE>

INTERNATIONAL EQUITY SECURITIES: Hotchkis and Wiley, 725 South Figueroa Street,
Suite 4000, Los Angeles, California 90017-5400. Hotchkis and Wiley is a
division of Merrill Lynch Asset Management, L.P., a registered investment
adviser. Harry W. Hartford and Sarah H. Ketterer have been responsible for the
daily management of international equity securities since the Funds' inception.
Prior to joining Hotchkis and Wiley in 1994, Mr. Hartford was with The
Investment Bank of Ireland (now Bank of Ireland Asset Management), as a Senior
Manager, where he gained 10 years of experience in both international and
global equity management. Prior to joining Hotchkis and Wiley in 1990, Ms.
Ketterer was an associate with Bankers Trust and an analyst at Dean Witter.

FOREIGN GOVERNMENT SECURITIES: Pacific Investment Management Company, 840
Newport Center Drive, Suite 360, P.O. Box 6430, Newport Beach, California
92658-9030. PIMCO is a registered investment adviser. Lee R. Thomas, III,
Senior International Portfolio Manager, has been responsible for the daily
management of foreign government securities since the Funds' inception. He
joined PIMCO in 1995. Previously, he was a member of Investcorp's Management
Committee, where he was responsible for global securities and foreign exchange
trading. Prior to Investcorp, he was associated with Goldman Sachs, where he
was an Executive Director in the fixed income division of the London office.

The following individuals at Citibank are responsible for the management of all
other Fund investments:

LARGE CAP GROWTH SECURITIES: Grant D. Hobson and Richard Goldman, Vice
Presidents, have been responsible for the daily management of large cap growth
securities since the Funds' inception. Mr. Hobson is a Senior Portfolio Manager
responsible for managing U.S. equity portfolios for trust and pension accounts
of Citibank Global Asset Management and currently manages, or co-manages, more
than $4 billion of total assets at Citibank. Prior to joining Citibank in 1993,
Mr. Hobson was a securities analyst and sector manager for pension accounts and
mutual funds for Axe Houghton, formerly a division of USF&G. Mr. Goldman is a
Senior Investment Officer and lead portfolio manager for the Focused Growth
Large Cap Funds. He joined Citibank in 1985 as an assistant portfolio manager,
working on quantitative portfolio strategies. Within the investment unit, he
has had responsibilities in both product development and portfolio management,
and he spent several years working for the firm's senior management where his
responsibilities included Citicorp's relationships with its investors and
rating agencies. He currently manages, or co-manages, approximately $6 billion
of total assets at Citibank.

LARGE CAP VALUE SECURITIES: Richard Goldman, Vice President, has been
responsible for the daily management of large cap growth securities since the
Funds' inception. Mr. Goldman took over responsibility for the daily management
of large cap value securities in January, 1999. Mr. Goldman is a Senior
Investment Officer and lead portfolio manager for the Focused Growth Large Cap
Funds. He joined Citibank in 1985 as an assistant portfolio manager, working on
quantitative portfolio strategies. Within the investment unit, he has had
responsibilities in both product development and portfolio management, and he
spent several years working for the firm's senior management where his
responsibilities included Citicorp's relationships with its investors and
rating agencies. He currently manages, or co-manages, approximately $6 billion
of total assets at Citibank.

SMALL CAP GROWTH SECURITIES: Marguerite Wagner, Vice President and Senior
Portfolio Manager, has been responsible for the daily management of the Funds'
small cap growth securities since January, 1999. Ms. Wagner joined Citibank in

<PAGE>

1985. Since 1995, she has had portfolio management and research analyst
responsibility for private equity managed accounts. From 1992 to 1994, Ms.
Wagner was a member of the small capitalization equity management group of
Citibank Global Asset Management. Prior to 1992, she managed portfolios for the
Private Banking Group of Citibank.

DOMESTIC FIXED INCOME SECURITIES: Mark Lindbloom, Vice President, has been
responsible for the daily management of domestic fixed income securities since
the Funds' inception, and has been a portfolio manager for fixed income
securities since joining Citibank in 1986. Mr. Lindbloom has more than 19 years
of investment management experience. Prior to joining Citibank, Mr. Lindbloom
was a Fixed Income Portfolio Manager with Brown Brothers Harriman & Co., where
he managed fixed income assets for discretionary corporate portfolios.

MONEY MARKET SECURITIES: Kevin Kennedy, Vice President, has been responsible
for the daily management of money market securities since the Funds' inception.
Mr. Kennedy has managed the Liquidity Management Unit of the U.S. Fixed Income
Department of Citibank Global Asset Management since joining Citibank in 1993.
Prior to joining Citibank, Mr. Kennedy was with the Metropolitan Life Insurance
Company as the Managing Trader of the Treasurer's Division. He was responsible
for the management of more than $9 billion in short duration fixed income
assets. Mr. Kennedy has more than 15 years of fixed income management
experience.

MANAGEMENT FEES

For the services Citibank and the subadvisers provided under management
agreements for the Funds and their underlying mutual funds for their fiscal
years ended October 31, 1998, Citibank and the subadvisers received a total of
0.75% of each Fund's average daily net assets.

MORE ABOUT THE FUNDS

The Funds' goals, principal investments and risks are summarized in "Funds at a
Glance" on page ____. More information on investments, investment strategies
and risks appears below.

PRINCIPAL INVESTMENT STRATEGIES

The Funds' principal investment strategies are the strategies that, in the
opinion of Citibank, are most likely to achieve each Fund's investment goal. Of
course, there can be no assurance that any Fund will achieve its goal. Please
note that each Fund may also use strategies and invest in securities that are
not described below but that are described in the Statement of Additional
Information. Of course, a Fund's portfolio managers may decide, as a matter of
investment strategy, not to use the investments and investment techniques
described below and in the Statement of Additional Information at any
particular time. Each Fund's goal and strategies may be changed without
shareholder approval.

Each Fund is a diversified asset allocation mutual fund that invests in a mix
of equity, fixed income and money market securities. Each Fund's asset mix is
designed by Citibank to offer a different level of potential return with a
corresponding amount of risk. For example, equity securities typically have
greater potential for growth of capital than fixed income securities, and have
the potential to outperform fixed income securities over the long term.

<PAGE>

However, equity securities generally are more volatile. Fixed income and money
market securities sometimes go up in value when equity securities go down. As a
result, a Fund investing a higher percentage of its assets in equity securities
may, over time, have the potential to generate higher returns than a Fund
investing more in fixed income securities, but it may be more volatile and a
riskier investment. In making asset allocations, Citibank studies the long term
performance and valuation relationships among these three types of securities
and the effects of market and economic variables on those relationships. Each
Fund's asset mix is determined by Citibank to be an optimal combination of
stocks, bonds and money market instruments that maximizes potential returns and
minimizes risk for that Fund's investment goal. Of course, there can be no
assurance that the Funds will perform as intended.

Citibank generally allocates each Fund's assets among equity, fixed income and
money market securities (each of these types of securities is referred to as an
asset class) as provided in the following chart. However, cash flows into or
out of a Fund, or changes in market valuations, could produce different
results. Citibank monitors each Fund's asset mix daily and conducts quarterly
reviews to determine whether to rebalance the Fund's investments. Rebalancing
may be accomplished over a period of time, subject to any regulatory
restrictions.

--------------------------------------------------
ASSET CLASS RANGE *

--------------------------------------------------------------------
FIXED MONEY
EQUITY INCOME MARKET
--------------------------------------------------------------------
CITISELECT 25-45% 35-55% 10-30%
FOLIO 200
--------------------------------------------------------------------
CITISELECT 40-60% 35-55% 1-10%
FOLIO 300
--------------------------------------------------------------------
CITISELECT 55-85% 15-35% 1-10%
FOLIO 400
--------------------------------------------------------------------
CITISELECT 70-95% 5-20% 1-10%
FOLIO 500
--------------------------------------------------------------------

Citibank may further allocate each Fund's equity securities among large cap
securities, small cap securities and international securities, and each Fund's
fixed income securities among U.S. and foreign government and corporate bonds.
These further allocations are intended to maximize returns while lowering
overall volatility. Each asset class and the types of securities in that class
are described below. There is no requirement that Citibank allocate a Fund's
assets among all of the foregoing types of equity and fixed income securities
at all times.

MANAGEMENT STYLE. In allocating assets while seeking to maximize returns,
Citibank employs a multi-style, multi-manager strategy. Citibank believes that
there are periods when securities with particular characteristics, or selected
based on a particular investment style, outperform other kinds of securities in

<PAGE>

the same asset class. Citibank attempts to take advantage of investment cycles
by blending asset classes and investment styles on a complementary basis.

To implement this strategy, Citibank has recommended that the Funds employ
subadvisers with expertise managing specific types of securities or managing in
a particular style. The following subadvisers currently manage the following
kinds of securities:

- -------------------------------------------------------------------------------
small cap value securities Franklin Advisory Services, Inc.
- -------------------------------------------------------------------------------
international equity securities Hotchkis and Wiley
- -------------------------------------------------------------------------------
foreign government securities Pacific Investment Management Company
- -------------------------------------------------------------------------------

Citibank manages all other kinds of securities, including large cap growth,
large cap value, small cap growth, fixed income and money market securities.
Citibank monitors and supervises the activities of the subadvisers and may
terminate the services of any subadviser at any time.

Each Fund invests in multiple underlying mutual funds, or Portfolios. Each
Portfolio invests directly in securities in a particular type, such as large
cap growth securities and related investments, or foreign government securities
and related investments. See "Investment Structure" on page _____.

THE EQUITY CLASS

Each Fund generally diversifies its equity securities among large cap issuers,
small cap issuers and international issuers. The mix of equity securities
varies from Fund to Fund. For example, CitiSelect Folio 400 currently
emphasizes securities of small cap issuers and international issuers to a
greater extent than CitiSelect Folios 200 and 300. CitiSelect Folio 500
currently emphasizes securities of small cap issuers and international issuers
to a greater extent than CitiSelect Folio 400. The types of equity securities
emphasized may change over time and in different market conditions, and there
is no requirement that each Fund invest in each type of equity security.

LARGE CAP ISSUERS. Large cap issuers are those with market capitalizations
within the top 1,000 stocks of the equity market. In selecting large cap
securities, the Funds emphasize securities issued by established companies with
stable operating histories.

SMALL CAP ISSUERS. Small cap issuers are those with market capitalizations
below the top 1,000 stocks of the equity market. These stocks may include
stocks in the Russell 2000 Index, which is an index of small cap stocks. Small
cap companies generally have negligible dividend yields and extremely high
levels of volatility. They may offer more profit opportunity during certain
economic conditions than large and medium sized companies, but they also
involve special risks.

INTERNATIONAL ISSUERS. International issuers are those based outside the United
States. The Funds emphasize securities included in the EAFE Index, which
contains securities of companies located in Europe, Australia and the Far East.
The Funds also may invest in emerging market equity securities. There may be
investment opportunities in overseas markets not present in the U.S., and
market performance in the U.S. and abroad may not be the same or highly
correlated. However, overseas investments, particularly in emerging markets,
involve special risks.

<PAGE>

See "Risks" for more information about the risks associated with investing in
equity securities.

_______________________________________________________________________________
WHAT ARE EQUITY SECURITIES?

EQUITY SECURITIES generally represent an ownership interest (or a right
to acquire an ownership interest) in an issuer, and include COMMON STOCKS,
SECURITIES CONVERTIBLE INTO COMMON STOCKS, PREFERRED STOCKS, WARRANTS for the
purchase of stock and DEPOSITARY RECEIPTS (receipts which represent the right
to receive the securities of non-U.S. issuers deposited in a U.S. or
correspondent bank). While equity securities historically have been more
volatile than fixed income securities, they historically have produced higher
levels of total return. Citibank believes that longer term, investors with
diversified equity portfolios have a higher probability of achieving their
investment goals with lower levels of volatility than those who have not
diversified.
_______________________________________________________________________________

THE FIXED INCOME CLASS

Each Fund generally diversifies its fixed income securities among investment
grade corporate debt obligations and securities issued by the U.S. government
and its agencies and instrumentalities and by foreign governments. The mix of
fixed income securities varies from Fund to Fund. There is no requirement that
each Fund invest in each type of fixed income security. Investment grade
securities are those rated Baa or better by Moody's, BBB or better by Standard
& Poor's or which Citibank or a subadviser believes to be of comparable
quality. Securities rated Baa or BBB and securities of comparable quality may
have speculative characteristics.

The Funds may invest in securities with all maturities, including long bonds
(10+ years), intermediate notes (3 to 10 years) and short-term notes (1 to 3
years).

GOVERNMENT SECURITIES. U.S. government securities are high quality instruments
issued or guaranteed as to principal and interest by the U.S. government or by
an agency or instrumentality of the U.S. government. U.S. government securities
have minimal credit risk. Securities issued or guaranteed as to principal and
interest by foreign governments or agencies or instrumentalities of foreign
governments (which include securities of supranational agencies) also may
provide opportunities for income with minimal credit risk. Even though
government securities have minimal credit risk, they still fluctuate in value
when interest rates change.

CORPORATE BONDS. Corporate bonds are used by U.S. and foreign corporate issuers
to borrow money from investors, and may have varying maturities. Bonds also
have varying degrees of quality and varying degrees of sensitivity to changes
in interest rates. For example, the values of lower quality bonds generally
fluctuate more than higher quality bonds. Investment in bonds of U.S. and
foreign corporate issuers may provide higher levels of current income than
government securities.

See "Risks" for more information about the risks associated with investing in
fixed income securities.

<PAGE>

_______________________________________________________________________________
WHAT ARE FIXED INCOME SECURITIES?

FIXED INCOME SECURITIES generally represent a debt obligation of an
issuer, and include BONDS, SHORT-TERM OBLIGATIONS and MORTGAGE-BACKED and
ASSET-BACKED SECURITIES. Fixed income securities, in general, offer a fixed
stream of cash flow. Most bond investments focus on generating income. The
potential for capital appreciation is a secondary objective. The value of fixed
income securities generally goes up when interest rates go down, and down when
rates go up. The value of these securities also fluctuates based on other
market and credit factors.
_______________________________________________________________________________

THE MONEY MARKET CLASS

Each Fund invests its assets allocated to the money market class in cash and in
U.S. dollar-denominated high quality money market and short-term instruments.
These investments provide opportunities for income with low credit risk, but
may result in a lower yield (the income on your investment) than investing in
lower quality or longer-term instruments. At least 25% of the assets in the
money market class, and possibly up to 100% of the assets in this class, are
invested in bank obligations.

_______________________________________________________________________________
WHAT ARE MONEY MARKET INSTRUMENTS?

A MONEY MARKET INSTRUMENT is a short-term IOU issued by a bank or other
corporation, or the U.S. or a foreign government, or a state or local
government. Money market instruments may include CERTIFICATES OF DEPOSIT,
BANKERS' ACCEPTANCES, VARIABLE or FLOATING RATE DEMAND NOTES (where the
interest rate is reset periodically and the holder may demand payment from the
issuer at any time), FIXED-TERM OBLIGATIONS, COMMERCIAL PAPER (short term
unsecured debt of corporations), ASSET BACKED SECURITIES (which are backed by
pools of accounts receivable such as car installment loans or credit card
receivables) and REPURCHASE AGREEMENTS. In a repurchase agreement, the seller
sells a security and agrees to buy it back at a later date (usually within
seven days) and at a higher price, which reflects an agreed upon interest rate.
_______________________________________________________________________________

DERIVATIVES. The Funds may use derivatives in order to protect (or "hedge")
against declines in the value of securities held by the Funds or increases in

<PAGE>

cost of securities to be purchased in the future, or to hedge against changes
in interest rates. The Funds may also use derivatives for non-hedging purposes,
to generate income or enhance potential gains. In addition, the Funds may use
derivatives to manage the effective maturity or duration of fixed income
securities. These derivatives include bond or stock index futures, foreign
currency futures, forwards and exchange contracts, options on securities and
foreign currencies, options on interest rate and stock index futures and swaps.
In some cases, the derivatives purchased by the Funds are standardized
contracts traded on commodities exchanges or boards of trade. This means that
the exchange or board of trade guaranties counterparty performance. In other
cases, the derivatives may be illiquid, and the Funds may bear more
counterparty risk. Derivatives may not be available on terms that make economic
sense (for example, they may be too costly). The Fund's ability to use
derivatives may also be limited by tax considerations.

DEFENSIVE STRATEGIES. The Funds may, from time to time, take temporary
defensive positions that are inconsistent with the Funds' principal investment
strategies in attempting to respond to adverse market, political or other
conditions. When doing so, the Funds may invest without limit in high quality
money market and other short-term instruments, and may not be pursuing their
investment goals.

INVESTMENT STRUCTURE. The Funds do not invest directly in securities. Instead,
each Fund invests in multiple Portfolios. Each Portfolio is a mutual fund with
its own investment goals and policies. The Portfolios buy, hold and sell
securities in accordance with these goals and policies. Of course, there can be
no assurance that the Funds or the Portfolios will achieve their goals. Each
Portfolio invests in securities in a particular asset class, in particular
types of securities or in securities of particular maturities or duration.

Each Fund may withdraw its investment in any Portfolio at any time, and will do
so if the Fund's Trustees believe it to be in the best interest of the Fund's
shareholders. Each Portfolio may change its investment goals and certain of its
investment policies and restrictions without approval by its investors, but the
Portfolio will notify the Fund and its other investors at least 30 days before
implementing any change in its investment goals. A change in investment goals,
policies or restrictions may cause a Fund to withdraw its investment in a
Portfolio. If the Fund were to withdraw, the Fund could either invest in
another mutual fund or pooled investment vehicle or invest directly in
securities. Upon withdrawal, the Fund could receive securities from a Portfolio
instead of cash, causing the Fund to incur brokerage, tax and other charges or
leaving it with securities which may or may not be readily marketable or widely
diversified.

Each Fund bears its share of each Portfolio's fees and expenses. The total fees
of each Fund and the underlying Portfolios are reflected in the fee tables in
"Funds at a Glance".

Certain investment restrictions of each Portfolio cannot be changed without
approval by the investors in that Portfolio. Of course, a Fund could be
outvoted, or otherwise adversely affected, by other investors in a Portfolio.

Citibank and the subadvisers may use brokers or dealers for Fund transactions
who also provide brokerage and research services to the Funds or other accounts
over which Citibank, the subadvisers or their affiliates exercise investment
discretion. Each Fund may "pay up" for brokerage services, meaning that it is
authorized to pay a broker or dealer who provides these brokerage and research
services a commission for executing a portfolio transaction which is higher
than the commission another broker or dealer would have charged. However, the
Funds will "pay up" only if Citibank or the subadviser determines in good faith
that the higher commission is reasonable in relation to the brokerage and
research services provided, viewed in terms of either the particular
transaction or all of the accounts over which that adviser exercises investment
discretion.

Each of the Funds is actively managed. Although the portfolio managers attempt
to minimize portfolio turnover, from time to time a Fund's annual portfolio
turnover rate may exceed 100%. The sale of securities may produce capital
gains, which, when distributed, are taxable to investors. Active trading may
also increase the amount of commissions or mark-ups the Funds pay to broker or
dealers when they buy and sell securities. The "Financial Highlights" section
of this prospectus shows each Fund's historical portfolio turnover rate.

<PAGE>

RISKS

Investing in a mutual fund involves risk. Before investing, you should consider
the risks you will assume. Certain of these risks are described below. More
information about risks appears in the Funds' Statement of Additional
Information. Remember that you may receive little or no return on your
investment in the Funds. You may lose money if you invest in these Funds.

The risks of investing in each Fund vary depending on the securities it holds
and the investment strategies it uses. For example, Funds investing more of
their assets in fixed income securities may be more susceptible to interest
rate risk and credit risk than Funds investing more of their assets in equity
securities. Conversely, Funds investing more of their assets in equity
securities may be more susceptible to greater price volatility than Funds
investing more of their assets in fixed income securities. Please remember that
an investment in the Funds is not a deposit of Citibank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

MARKET RISK. This is the risk that the prices of securities will rise or fall
due to changing economic, political or market conditions, or due to a company's
individual situation. The value of the Funds' shares will change daily as the
value of their underlying securities change. This means that your shares of a
Fund may be worth more or less when you sell them than when you bought them.

It is also possible that the Funds will not perform as intended. For example,
CitiSelect Folio 200 is expected to be the least volatile of the Funds.
However, under certain market conditions this Fund could be the most volatile.

EQUITY SECURITIES. Equity securities are subject to market risk that
historically has resulted in greater price volatility than exhibited by fixed
income securities.

INTEREST RATE RISK. In general, the prices of debt securities rise when
interest rates fall, and fall when interest rates rise. Longer term obligations
are usually more sensitive to interest rate changes. A change in interest rates
could cause the Funds' share prices to go down.

CREDIT RISK. The Funds invest in investment grade debt securities. However, it
is possible that some issuers will not make payments on debt securities held by
the Funds. Or, an issuer may suffer adverse changes in its financial condition
that could lower the credit quality of a security, leading to greater
volatility in the price of the security and in shares of a Fund. A change in
the quality rating of a bond or other security can also affect the security's
liquidity and make it more difficult for the Fund to sell. The lower quality
debt securities in which the Funds may invest are more susceptible to these
problems than higher quality obligations.

FOREIGN SECURITIES. Investments in foreign securities involve risks relating to
adverse political, social and economic developments abroad, as well as risks
resulting from the differences between the regulations to which U.S. and
foreign issuers and markets are subject.

o These risks may include expropriation of assets, confiscatory
taxation, withholding taxes on dividends and interest paid on fund

<PAGE>

investments, currency exchange controls and other limitations on the
use or transfer of Fund assets and political or social instability.

o Foreign companies may not be subject to accounting standards or
governmental supervision comparable to U.S. companies, and there may
be less public information about their operations.

o Foreign markets may be less liquid and more volatile than U.S.
markets. Rapid increases in money supply may result in speculative
investing, contributing to volatility. Also, equity securities may
trade at price-earnings multiples that are higher than those of
comparable U.S. companies, and that may not be sustainable. As a
result, there may be rapid changes in the value of foreign securities.

o Foreign markets may offer less protection to investors. Enforcing
legal rights may be difficult, costly and slow. There may be special
problems enforcing claims against foreign governments.

o Since foreign securities often trade in currencies other than the U.S.
dollar, changes in currency exchange rates will affect a Fund's net
asset value, the value of dividends and interest earned, and gains and
losses realized on the sale of securities. An increase in the U.S.
dollar relative to these other currencies will adversely affect the
value of the Fund. In addition, some foreign currency values may be
volatile and there is the possibility of governmental controls on
currency exchanges or governmental intervention in currency markets.
Controls or intervention could limit or prevent a Fund from realizing
value in U.S. dollars from its investment in foreign securities.

o Each Fund may invest in issuers located in emerging, or developing,
markets.

o Emerging or developing countries are generally defined as countries in
the initial stages of their industrialization cycles with low per
capita income.

o All of the risks of investing in foreign securities are heightened by
investing in developing countries.

o The markets of developing countries have been more volatile than the
markets of developed countries with more mature economies. These
markets often have provided higher rates of return, and greater risks,
to investors, but they also may provide lower rates of return or
negative returns, for extended periods.

SMALLER COMPANIES. The securities of smaller capitalization companies may have
more risks than those of larger, more seasoned companies. They may be
particularly susceptible to market downturns because of limited financial or
management resources. Also, there may be less publicly available information
about small cap companies. As a result, their prices may be volatile, causing
the Funds' share prices to be volatile.

PREPAYMENT RISK. The issuers of debt securities held by a Fund may be able to
prepay principal due on the securities, particularly during periods of
declining interest rates. The Funds may not be able to reinvest that principal
at attractive rates, reducing income to the Funds. In addition, rising interest

<PAGE>

rates may cause prepayments to occur at slower than expected rates. This
effectively lengthens the maturities of the affected securities, making them
more sensitive to interest rate changes and the Funds' share prices more
volatile. Prepayment risk is a major risk of mortgage-backed securities, but it
affects other fixed income securities too.

BANK OBLIGATIONS. At least 25%, and possibly up to 100%, of the Funds'
investments in the money market class are in bank obligations. Bank obligations
are susceptible to adverse events affecting the banking industry. Banks are
sensitive to changes in money market and general economic conditions, as well
as decisions by regulators that can affect their profitability.

SPECIAL CHARACTERISTICS OF CONVERTIBLE SECURITIES. Convertible securities,
which are debt securities that may be converted into stock, are subject to the
market risk of stocks, and, like other debt securities, are also subject to
interest rate risk and the credit risk of their issuers. Call provisions may
allow the issuer to repay the debt before it matures.

DERIVATIVES. The Funds' use of derivatives (such as futures contracts and
forward foreign currency contracts), particularly when used for non-hedging
purposes, may be risky. This practice could result in losses that are not
offset by gains on other portfolio assets. Losses would cause the Funds' share
prices to go down. There is also the risk that the counterparty may fail to
honor its contract terms. This risk becomes acute when the Fund invests in
derivatives that are not traded on commodities exchanges or boards of trade.
Each Fund's ability to use derivatives successfully depends on its portfolio
managers' ability to accurately predict movements in stock prices, interest
rate and currency exchange rates. If the portfolio managers' predictions are
wrong, the Fund could suffer greater losses than if the Fund had not used
derivatives.

EURO CONVERSION. The Funds may invest in securities of issuers in European
countries. Many European countries adopted a single European currency, called
the euro, on January 1, 1999. The consequences of the euro conversion for
foreign exchange rates, interest rates and the value of European securities
held by the Fund are presently unclear. European financial markets, and
therefore, the Fund, could be adversely affected if the euro conversion does
not continue as planned or if a participating country chooses to withdraw from
the European Economic and Monetary Union. The Fund could also be adversely
affected if the computing, accounting and trading systems used by its service
providers are not capable of processing transactions related to the euro.

YEAR 2000. The Funds could be adversely affected if the computer systems used
by the Funds or their service providers are not programmed to accurately
process information on or after January 1, 2000. The Funds, and their service
providers, are making efforts to resolve any potential Year 2000 problems.
While it is likely these efforts will be successful, the failure to implement
any necessary modifications could have an adverse impact on the Funds. The
Funds also could be adversely affected if the issuers of securities held by the
Funds do not solve their Year 2000 problems, or if it costs them large amounts
of money to solve these problems.

<PAGE>

FINANCIAL HIGHLIGHTS

This table is intended to help you understand the Funds' performance and other
financial information for the fiscal periods indicated. "Total return" shows
how much your investment in a Fund would have increased or decreased during
each period, assuming you had reinvested all dividends and distributions. These
financial statements and notes have been audited by PricewaterhouseCoopers LLP,
independent accountants for the Funds, whose report is included in the Funds'
annual report.

<PAGE>

Appendix

CLASS A SHARES - ELIGIBLE PURCHASERS:

Class A shares may be purchased without a sales charge by the following
eligible purchasers:

[] tax exempt organizations under Section 501(c)(3-13) of the
Internal Revenue Code

[] trust accounts for which Citibank, N.A or any subsidiary or
affiliate of Citibank acts as trustee and exercises discretionary
investment management authority

[] accounts for which Citibank or any subsidiary or affiliate of
Citibank performs investment advisory services or charges fees for
acting as custodian

[] directors or trustees (and their immediate families), and retired
directors or trustees (and their immediate families), of any
investment company for which Citibank or any subsidiary or
affiliate of Citibank serves as the investment adviser or as a
service agent

[] employees of Citibank and its affiliates, CFBDS, Inc. and its
affiliates or any Service Agent and its affiliates (including
immediate families of any of the foregoing), and retired employees
of Citibank and its affiliates or CFBDS and its affiliates
(including immediate families of any of the foregoing)

[] investors participating in a fee-based arrangement sponsored or
advised by Citibank or its affiliates

[] investors participating in a rewards program that offers Fund
shares as an investment option based on an investor's balances in
selected Citigroup Inc. products and services

[] employees of members of the National Association of Securities
Dealers, Inc., provided that such sales are made upon the
assurance of the purchaser that the purchase is made for
investment purposes and that the securities will not be resold
except through redemption or repurchase

[] separate accounts used to fund certain unregistered variable
annuity contracts

[] direct rollovers by plan participants from a 401(k) plan offered
to Citigroup employees

[] shareholder accounts established through a reorganization or
similar form of business combination approved by a Fund's Board of
Trustees or by the Board of Trustees of any CitiFund the terms of

<PAGE>

which entitle those shareholders to purchase shares of a Fund or
any CitiFund at net asset value without a sales charge

[] employee benefit plans qualified under Section 401(k) of the
Internal Revenue Code with accounts outstanding on January 4, 1999

[] employee benefit plans qualified under Section 401 of the Internal
Revenue Code, including salary reduction plans qualified under
Section 401(k) of the Code, subject to minimum requirements as may
be established by CFBDS with respect to the amount of purchase;
currently, the amount invested by the qualified plan in a Fund or
in any combination of the Funds and CitiFunds must total a minimum
of $1 million

[] accounts associated with Copeland Retirement Programs

[] investors purchasing $500,000 or more of Class A shares; however,
a contingent deferred sales charge will be imposed on the
investments in the event of certain share redemptions within 12
months following the share purchase, at the rate of 1% of the
lesser of the value of the shares redeemed (not including
reinvested dividends and capital gains distributions) or the total
cost of the shares; the contingent deferred sales charge on Class
A shares will be waived under the same circumstances as the
contingent deferred sales charge on Class B shares will be waived;
in determining whether a contingent deferred sales charge on Class
A shares is payable, and if so, the amount of the charge:
+ it is assumed that shares not subject to the contingent
deferred sales charge are the first redeemed followed by other
shares held for the longest period of time
+ all investments made during a calendar month will age one month
on the last day of the month and each subsequent month
+ any applicable contingent deferred sales charge will be
deferred upon an exchange of Class A shares for Class A shares
of another Fund or any CitiFund and deducted from the
redemption proceeds when the exchanged shares are subsequently
redeemed (assuming the contingent deferred sales charge is then
payable)
+ the holding period of Class A shares so acquired through an
exchange will be aggregated with the period during which the
original Class A shares were held

[] subject to appropriate documentation, investors where the amount
invested represents redemption proceeds from a mutual fund (other
than a Fund or a CitiFund), if:
+ the redeemed shares were subject to an initial sales charge or
a deferred sales charge (whether or not actually imposed), and
+ the redemption has occurred no more than 60 days prior to the
purchase of Class A shares of the Fund

<PAGE>

[] an investor who has a business relationship with an investment
consultant or other registered representative who joined a
broker-dealer which has a sales agreement with CFBDS from another
investment firm within six months prior to the date of purchase by
the investor, if:
+ the investor redeems shares of another mutual fund sold through
the investment firm that previously employed that investment
consultant or other registered representative, and either paid
an initial sales charge or was at some time subject to, but did
not actually pay, a deferred sales charge or redemption fee
with respect to the redemption proceeds
+ the redemption is made within 60 days prior to the investment
in a Fund, and
+ the net asset value of the shares of the Fund sold to that
investor without a sales charge does not exceed the proceeds of
the redemption

<PAGE>

The Statement of Additional Information (SAI) provides more details about the
Funds and their policies. The SAI is incorporated by reference into this
prospectus and is legally part of it.

Additional information about each Fund's investments is available in that
Fund's Annual and Semi-Annual Reports to Shareholders. In each Fund's Annual
Report, you will find a discussion of the market conditions and investment
strategies that significantly affected that Fund's performance.

The Annual and Semi-Annual Reports for each Fund list its portfolio holdings
and describe its performance.

To obtain free copies of the SAI and the Annual and Semi-Annual Reports or to
make other inquiries, please call toll-free 1-800-625-4554.

The SAI is also available from the Securities and Exchange Commission. You can
find it on the SEC Internet site at http://www.sec.gov. Information about the
Funds (including the SAI) can also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. You can get information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can receive
copies of this information by sending your request and a duplicating fee to the
SEC's Public Reference Section, Washington, DC 20549-6009.

SEC file number: 811-4006

<PAGE>

Statement of Additional Information
March 1, 1999

CITISELECT(R) FOLIO 200
CITISELECT(R) FOLIO 300
CITISELECT(R) FOLIO 400
CITISELECT(R) FOLIO 500

CitiFunds Trust I (formerly known as "Landmark Funds I") (the "Trust") is
an open-end management investment company which was organized as a business
trust under the laws of the Commonwealth of Massachusetts on April 13, 1984.
The Trust offers shares of CitiSelect(R) Folio 200, CitiSelect(R) Folio 300,
CitiSelect(R) Folio 400 and CitiSelect(R) Folio 500 (collectively, the
"Funds"), to which this Statement of Additional Information relates, as well as
shares of one other series. The address and telephone number of the Trust are
21 Milk Street, Boston, Massachusetts 02109, (617) 423-1679. The Trust invests
all of the investable assets of the Funds in Large Cap Value Portfolio, Small
Cap Value Portfolio, Intermediate Income Portfolio, Short-Term Portfolio,
International Portfolio and Foreign Bond Portfolio, which are separate series
of Asset Allocation Portfolios, and Large Cap Growth Portfolio and Small Cap
Growth Portfolio, which are separate series of The Premium Portfolios. The
address of Asset Allocation Portfolios and The Premium Portfolios is
Elizabethan Square, George Town, Grand Cayman, British West Indies.

FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
CITIBANK, N.A. OR ANY OF ITS AFFILIATES, ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>

1. The Trust.................................................................................
2. Investment Objectives and Policies........................................................
3. Description of Permitted Investments and Investment Practices.............................
4. Investment Restrictions...................................................................
5. Performance Information and Advertising...................................................
6. Determination of Net Asset Value; Valuation of Securities.................................
7. Additional Information on the Purchase and Sale of Fund Shares and Shareholder Programs...
8. Management................................................................................
9. Portfolio Transactions....................................................................
10. Description of Shares, Voting Rights and Liabilities......................................
11. Certain Additional Tax Matters............................................................
12. Certain Bank Regulatory Matters...........................................................
13. Financial Statements......................................................................
</TABLE>

This Statement of Additional Information sets forth information which may be of
interest to investors but which is not necessarily included in the Funds'
Prospectus, dated March 1, 1999. This Statement of Additional Information
should be read in conjunction with the Prospectus, a copy of which may be
obtained by an investor without charge by calling 1-800-625-4554.

This Statement of Additional Information incorporates by reference the
financial statements described on page ___ hereof. These financial statements
can be found in the Funds' Annual Report to Shareholders, a copy of which
accompanies this Statement of Additional Information.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.

<PAGE>

1. THE TRUST

CitiFunds Trust I (the "Trust") is an open-end management investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts on April 13, 1984. The Trust was called Landmark Funds I until
its name was changed effective March 2, 1998. This Statement of Additional
Information relates to four funds offered by the Trust -- CitiSelect Folio 200,
CitiSelect Folio 300, CitiSelect Folio 400 and CitiSelect Folio 500
(collectively, the "Funds").

The Trust seeks the investment objective of each Fund by investing all of
its investable assets in multiple underlying investment companies or series
thereof. Currently, these investment companies are Large Cap Value Portfolio,
Small Cap Value Portfolio, Intermediate Income Portfolio, Short-Term Portfolio,
International Portfolio, Foreign Bond Portfolio, Large Cap Growth Portfolio and
Small Cap Growth Portfolio (collectively, the "Portfolios"). The Portfolios
(other than Large Cap Growth Portfolio and Small Cap Growth Portfolio, which
are series of The Premium Portfolios) are series of Asset Allocation Portfolios
(collectively, with The Premium Portfolios, the "Portfolio Trusts"). The
Portfolio Trusts are open-end, diversified management investment companies
organized as New York trusts. Under the Investment Company Act of 1940, as
amended (the "1940 Act"), a diversified management investment company must
invest at least 75% of its assets in cash and cash items, U.S. Government
securities, investment company securities and other securities limited as to
any one issuer to not more than 5% of the total assets of the investment
company and not more than 10% of the voting securities of the issuer.

All references in this Statement of Additional Information to a Fund
include that Fund's underlying Portfolios, except as otherwise noted. In
addition, references to the Trust include the Portfolio Trusts, except as
otherwise noted.

Citibank, N.A. ("Citibank" or the "Manager") is investment adviser and
also provides certain administrative services to each of the Funds and the
Portfolios. Citibank manages the investments of the Portfolios from day to day
in accordance with each Portfolio's investment objective and policies. The
selection of investments for the Portfolios and the way they are managed depend
on the conditions and trends in the economy and the financial marketplaces.

The Boards of Trustees of the Trust and the Portfolio Trusts provide broad
supervision over the affairs of the Funds and the Portfolios, respectively.
Shares of the Funds are continuously sold by CFBDS, Inc., the Funds'
distributor ("CFBDS" or the "Distributor").

2. INVESTMENT OBJECTIVES AND POLICIES

Each Fund is an asset allocation fund that allocates its investments among
three primary classes of assets -- equity, fixed income and money market
securities. Each Fund's asset mix is designed by Citibank to offer a different
level of potential return within a corresponding amount of risk. The investment
objective (or goal) of each Fund is as follows:

The investment objective of CitiSelect Folio 200 is as high a total return
over time as is consistent with a primary emphasis on a combination of fixed
income and money market securities, and a secondary emphasis on equity
securities.

The investment objective of CitiSelect Folio 300 is as high a total return
over time as is consistent with a balanced emphasis on equity and fixed income
securities.

The investment objective of CitiSelect Folio 400 is as high a total return
over time as is consistent with a primary emphasis on equity securities, and a
secondary emphasis on fixed income securities.

The investment objective of CitiSelect Folio 500 is as high a total return
over time as is consistent with a dominant emphasis on equity securities and a
small allocation to fixed income securities.

<PAGE>

The investment objective of each Fund may be changed by its Trustees
without approval by that Fund's shareholders, but shareholders will be given
written notice at least 30 days before any change is implemented. Of course,
there can be no assurance that any Fund will achieve its investment objective.

The Prospectus contains a discussion of the principal investment
strategies of each Fund and the principal risks of investing in each Fund. The
following supplements the information contained in the Prospectus concerning
the investment policies and techniques of each Fund.

CitiSelect Folio 200 is expected to be the least volatile of the four
Funds and is designed for the investor who is seeking relatively lower risk
provided by substantial investments in fixed income and money market
securities, but who also seeks some capital growth. CitiSelect Folio 300 is
designed for the investor seeking a balanced approach by emphasizing stocks for
their higher capital appreciation potential but retaining a significant fixed
income investment component to temper volatility. CitiSelect Folio 400 and
CitiSelect Folio 500 are designed for the investor willing and able to take
higher risks in the pursuit of long-term capital appreciation. CitiSelect Folio
500 is expected to be the most volatile of the four Funds, and is designed for
investors who can withstand greater market swings to seek potential long-term
rewards. CitiSelect Folio 400 is designed for investors seeking long-term
rewards, but with less volatility.

The Trust may withdraw the investment of any Fund from one or more of its
underlying Portfolios at any time if the Board of Trustees of the Trust
determines that it is in the best interests of the Fund to do so. Upon any such
withdrawal, the Fund's assets would continue to be invested in accordance with
the investment policies described herein with respect to that Fund. The
policies described above and those described below are not fundamental and may
be changed without shareholder approval.

3. DESCRIPTION OF PERMITTED INVESTMENTS AND INVESTMENT PRACTICES

The Funds may, but need not, invest in all of the investments and utilize
any or all of the investment techniques described in the Prospectus and herein.
The selection of investments and the utilization of investment techniques
depend on, among other things, the Manager's and, as applicable, the
subadvisers' investment strategies for the Funds, conditions and trends in the
economy and financial markets and investments being available on terms that, in
the Manager's or a subadviser's opinion, make economic sense.

BANK OBLIGATIONS
Each of the Funds may invest in bank obligations, i.e., certificates of
deposit, time deposits (including Eurodollar time deposits) and bankers'
acceptances and other short-term debt obligations issued by domestic banks,
foreign subsidiaries or foreign branches of domestic banks, domestic and
foreign branches of foreign banks, domestic savings and loan associations and
other banking institutions. A bankers' acceptance is a bill of exchange or time
draft drawn on and accepted by a commercial bank. It is used by corporations to
finance the shipment and storage of goods and to furnish dollar exchange.
Maturities are generally six months or less. A certificate of deposit is a
negotiable interest-bearing instrument with a specific maturity. Certificates
of deposit are issued by banks and savings and loan institutions in exchange
for the deposit of funds and normally can be traded in the secondary market
prior to maturity. A time deposit is a non-negotiable receipt issued by a bank
in exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot
be traded in the secondary market. Time deposits with a withdrawal penalty are
considered to be illiquid securities.

COMMERCIAL PAPER
Each Fund may invest in commercial paper, which is unsecured debt of
corporations usually maturing in 270 days or less from its date of issuance.

OTHER INVESTMENT COMPANIES
Subject to applicable statutory and regulatory limitations, assets of each
Fund may be invested in shares of other investment companies. Each Fund may
invest up to 5% of its assets in closed-end investment companies which
primarily hold securities of non-U.S. issuers.

<PAGE>

SECURITIES RATED BAA OR BBB
Each Fund may purchase securities rated Baa by Moody's or BBB by S&P and
securities of comparable quality, which may have poor protection of payment of
principal and interest. These securities are often considered to be speculative
and involve greater risk of default or price changes than securities assigned a
higher quality rating due to changes in the issuer's creditworthiness. The
market prices of these securities may fluctuate more than higher-rated
securities and may decline significantly in periods of general economic
difficulty which may follow periods of rising interest rates.

MORTGAGE-BACKED SECURITIES
Each of the Funds may invest in mortgage-backed securities, which are
securities representing interests in pools of mortgage loans. Interests in
pools of mortgage-related securities differ from other forms of debt securities
which normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. Instead, these
securities provide a monthly payment which consists of both interest and
principal payments. In effect, these payments are a "pass-through" of the
monthly payments made by the individual borrowers on their mortgage loans, net
of any fees paid to the issuer or guarantor of such securities. Additional
payments are caused by prepayments of principal resulting from the sale,
refinancing or foreclosure of the underlying property, net of fees or costs
which may be incurred. The market value and interest yield of these instruments
can vary due to market interest rate fluctuations and early prepayments of
underlying mortgages.

The principal governmental issuers or guarantors of mortgage-backed
securities are the Government National Mortgage Association ("GNMA"), Federal
National Mortgage Association ("FNMA"), and Federal Home Loan Mortgage
Corporation ("FHLMC"). Obligations of GNMA are backed by the full faith and
credit of the United States Government while obligations of FNMA and FHLMC are
supported by the respective agency only. Although GNMA certificates may offer
yields higher than those available from other types of U.S. Government
securities, GNMA certificates may be less effective than other types of
securities as a means of "locking in" attractive long-term rates because of the
prepayment feature. For instance, when interest rates decline, the value of a
GNMA certificate likely will not rise as much as comparable debt securities due
to the prepayment feature. In addition, these prepayments can cause the price
of a GNMA certificate originally purchased at a premium to decline in price to
its par value, which may result in a loss.

Each Fund may also invest a portion of its assets in collateralized
mortgage obligations or "CMOs," a type of mortgage-backed security. CMOs are
securities collateralized by mortgages, mortgage pass-through certificates,
mortgage pay-through bonds (bonds representing an interest in a pool of
mortgages where the cash flow generated from the mortgage collateral pool is
dedicated to bond repayment), and mortgage-backed bonds (general obligations of
the issuers payable out of the issuers' general funds and additionally secured
by a first lien on a pool of single family detached properties). Many CMOs are
issued with a number of classes or series which have different maturities and
are retired in sequence.

Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the scheduled payments of interest and
principal on the underlying mortgages plus all unscheduled prepayments of
principal up to a predetermined portion of the total CMO obligation. Until that
portion of such CMO obligations is repaid, investors in the longer maturities
receive interest only. Accordingly, the CMOs in the longer maturity series are
less likely than other mortgage pass-through certificates to be prepaid prior
to their stated maturity. Although some of the mortgages underlying CMOs may be
supported by various types of insurance, and some CMOs may be backed by GNMA
certificates or other mortgage pass-through certificates issued or guaranteed
by U.S. Government agencies or instrumentalities, the CMOs themselves are not
generally guaranteed.

Even if the U.S. government or one of its agencies guarantees principal
and interest payments of a mortgage-backed security, the market price of a
mortgage-backed security is not insured and may be subject to market
volatility. When interest rates decline, mortgage-backed securities experience
higher rates of prepayment because the underlying mortgages are refinanced to

<PAGE>

take advantage of the lower rates. The prices of mortgage-backed securities may
not increase as much as prices of other debt obligations when interest rates
decline, and mortgage-backed securities may not be an effective means of
locking in a particular interest rate. In addition, any premium paid for a
mortgage-backed security may be lost when it is prepaid. When interest rates go
up, mortgage-backed securities experience lower rates of prepayment. This has
the effect of lengthening the expected maturity of a mortgage-backed security.
This particular risk, referred to as "maturity extension risk," may effectively
convert a security that was considered short or intermediate-term at the time
of purchase into a long-term security. Long-term securities generally fluctuate
more widely in response to changes in interest rates than short or
intermediate-term securities. Thus, rising interest rates would not only likely
decrease the value of a Fund's fixed income securities, but would also increase
the inherent volatility of the Fund by effectively converting short-term debt
instruments into long-term debt instruments. As a result, prices of
mortgage-backed securities may decrease more than prices of other debt
obligations when interest rates go up.

MORTGAGE "DOLLAR ROLL" TRANSACTIONS
The Funds may enter into mortgage "dollar roll" transactions pursuant to
which they sell mortgage-backed securities for delivery in the future and
simultaneously contract to repurchase substantially similar securities on a
specified future date. During the roll period, a Fund forgoes principal and
interest paid on the mortgage-backed securities. The Fund is compensated for
the lost principal and interest by the difference between the current sales
price and the lower price for the future purchase (often referred to as the
"drop") as well as by the interest earned on the cash proceeds of the initial
sale. The Fund may also be compensated by receipt of a commitment fee. A
"covered roll" is a specific type of dollar roll for which a Fund establishes a
segregated account with liquid high grade debt securities equal in value to the
securities subject to repurchase by the Fund. The Funds will invest only in
covered rolls.

CORPORATE ASSET-BACKED SECURITIES
Each of the Funds may invest in corporate asset-backed securities. These
securities, issued by trusts and special purpose corporations, are backed by a
pool of assets, such as credit card and automobile loan receivables,
representing the obligations of a number of different parties.

Corporate asset-backed securities present certain risks. For instance, in
the case of credit card receivables, these securities may not have the benefit
of any security interest in the related collateral. Credit card receivables are
generally unsecured and the debtors are entitled to the protection of a number
of state and federal consumer credit laws, many of which give such debtors the
right to set off certain amounts owed on the credit cards, thereby reducing the
balance due. Most issuers of automobile receivables permit the servicers to
retain possession of the underlying obligations. If the servicer were to sell
these obligations to another party, there is a risk that the purchaser would
acquire an interest superior to that of the holders of the related automobile
receivables. In addition, because of the large number of vehicles involved in a
typical issuance and technical requirements under state laws, the trustee for
the holders of the automobile receivables may not have a proper security
interest in all of the obligations backing such receivables. Therefore, there
is the possibility that recoveries on repossessed collateral may not, in some
cases, be available to support payments on these securities. The underlying
assets (e.g., loans) are also subject to prepayments which shorten the
securities' weighted average life and may lower their return.

Corporate asset-backed securities are often backed by a pool of assets
representing the obligations of a number of different parties. To lessen the
effect of failures by obligors on underlying assets to make payments, the
securities may contain elements of credit support which fall into two
categories: (i) liquidity protection and (ii) protection against losses
resulting from ultimate default by an obligor on the underlying assets.
Liquidity protection refers to the provision of advances, generally by the
entity administering the pool of assets, to ensure that the receipt of payments
on the underlying pool occurs in a timely fashion. Protection against losses
resulting from ultimate default ensures payment through insurance policies or
letters of credit obtained by the issuer or sponsor from third parties. A Fund
will not pay any additional or separate fees for credit support. The degree of
credit support provided for each issue is generally based on historical
information respecting the level of credit risk associated with the underlying
assets. Delinquency or loss in excess of that anticipated or failure of the
credit support could adversely affect the return on an investment in such a
security.

<PAGE>

RULE 144A SECURITIES
Consistent with applicable investment restrictions, each of the Funds may
purchase securities that are not registered ("restricted securities") under the
Securities Act of 1933 (the "Securities Act"), but can be offered and sold to
"qualified institutional buyers" under Rule 144A under the Securities Act.
However, none of the Funds invests more than 10% of its net assets in illiquid
investments, which include securities for which there is no readily available
market, securities subject to contractual restrictions on resale and restricted
securities, unless, in the case of restricted securities, the Board of Trustees
of the Trust determines, based on the trading markets for the specific
restricted security, that it is liquid. The Trustees have adopted guidelines
and, subject to oversight by the Trustees, have delegated to the Manager and to
each Subadviser the daily function of determining and monitoring liquidity of
restricted securities.

PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS
Each Fund may invest up to 10% of its net assets in securities for which
there is no readily available market. These illiquid securities may include
privately placed restricted securities for which no institutional market
exists. The absence of a trading market can make it difficult to ascertain a
market value for illiquid investments. Disposing of illiquid investments may
involve time-consuming negotiation and legal expenses, and it may be difficult
or impossible for a Fund to sell them promptly at an acceptable price.

SECURITIES OF NON-U.S. ISSUERS
Each of the Funds may invest in securities of non-U.S. issuers. Investing
in securities of foreign issuers may involve significant risks not present in
domestic investments. For example, the value of such securities fluctuates
based on the relative strength on the U.S. dollar. In addition, there is
generally less publicly available information about foreign issuers,
particularly those not subject to the disclosure and reporting requirements of
the U.S. securities laws. Non-U.S. issuers are generally not bound by uniform
accounting, auditing and financial reporting requirements comparable to those
applicable to domestic issuers. Investments in securities of non-U.S. issuers
also involve the risk of possible adverse changes in investment or exchange
control regulations, expropriation or confiscatory taxation, limitation on the
removal of funds or other assets of the Fund, political or financial
instability or diplomatic and other developments which would affect such
investments. Further, economies of other countries or areas of the world may
differ favorably or unfavorably from the economy of the U.S.

It is anticipated that in most cases the best available market for
securities of non-U.S. issuers would be on exchanges or in over-the-counter
markets located outside the U.S. Non-U.S. stock markets, while growing in
volume and sophistication, are generally not as developed as those in the U.S.,
and securities of some non-U.S. issuers (particularly those located in
developing countries) may be less liquid and more volatile than securities of
comparable U.S. companies. Non-U.S. security trading practices, including those
involving securities settlement where the Fund's assets may be released prior
to receipt of payments, may expose the Fund to increased risk in the event of a
failed trade or the insolvency of a non-U.S. broker-dealer. In addition,
foreign brokerage commissions are generally higher than commissions on
securities traded in the U.S. and may be non-negotiable. In general, there is
less overall governmental supervision and regulation of non-U.S. securities
exchanges, brokers and listed companies than in the U.S.

Investments in closed-end investment companies which primarily hold
securities of non-U.S. issuers may entail the risk that the market value of
such investments may be substantially less than their net asset value and that
there would be duplication of investment management and other fees and
expenses.

American Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs"), Global Depositary Receipts ("GDRs") and other forms of depositary
receipts for securities of non-U.S. issuers provide an alternative method for
the Funds to make non-U.S. investments. These securities are not usually
denominated in the same currency as the securities into which they may be
converted. Generally, ADRs, in registered form, are designed for use in U.S.
securities markets and EDRs and GDRs, in bearer form, are designed for use in
European and global securities markets. ADRs are receipts typically issued by a
U.S. bank or trust company evidencing ownership of the underlying securities.
EDRs and GDRs are European and global receipts, respectively, evidencing a
similar arrangement.

<PAGE>

ADRs, EDRs, and GDRs may be issued pursuant to sponsored or unsponsored
programs. In sponsored programs, an issuer has made arrangements to have its
securities traded in the form of depositary receipts. In unsponsored programs,
the issuer may not be directly involved in the creation of the program.
Although regulatory requirements with respect to sponsored and unsponsored
programs are generally similar, in some cases it may be easier to obtain
financial information from an issuer that has participated in the creation of a
sponsored program. Accordingly, there may be less information available
regarding issuers of securities underlying unsponsored programs and there may
not be a correlation between such information and the market value of the
depositary receipts.

The Funds may invest in securities of non-U.S. issuers that impose
restrictions on transfer within the United States or to United States persons.
Although securities subject to such transfer restrictions may be marketable
abroad, they may be less liquid than securities of non-U.S. issuers of the same
class that are not subject to such restrictions.

REPURCHASE AGREEMENTS
Each of the Funds may invest in repurchase agreements collateralized by
securities in which that Fund may otherwise invest. Repurchase agreements are
agreements by which a Fund purchases a security and simultaneously commits to
resell that security to the seller (which is usually a member bank of the U.S.
Federal Reserve System or a member firm of the New York Stock Exchange (or a
subsidiary thereof)) at an agreed upon date within a number of days (usually
not more than seven) from the date of purchase. The resale price reflects the
purchase price plus an agreed upon market rate of interest which is unrelated
to the coupon rate or maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay the agreed upon price,
which obligation is in effect secured by the value of the underlying security,
usually U.S. Government or Government agency issues. Under the 1940 Act
repurchase agreements may be considered to be loans by the buyer. A Fund's risk
is limited to the ability of the seller to pay the agreed-upon amount on the
delivery date. If the seller defaults, the underlying security constitutes
collateral for the seller's obligation to pay although that Fund may incur
certain costs in liquidating this collateral and in certain cases may not be
permitted to liquidate this collateral. All repurchase agreements entered into
by the Funds are fully collateralized, with such collateral being marked to
market daily. In the event of the bankruptcy of the other party to a repurchase
agreement, a Fund could experience delays in recovering either the securities
or cash. To the extent that, in the meantime, the value of the securities
purchased has decreased, the Fund could experience a loss.

REVERSE REPURCHASE AGREEMENTS
Each Fund may enter into reverse repurchase agreements. Reverse repurchase
agreements involve the sale of securities held by the Fund and the agreement by
the Fund to repurchase the securities at an agreed-upon price, date and
interest payment. When a Fund enters into reverse repurchase transactions,
securities of a dollar amount equal in value to the securities subject to the
agreement will be segregated. The segregation of assets could impair the Fund's
ability to meet its current obligations or impede investment management if a
large portion of the Fund's assets are involved. Reverse repurchase agreements
are considered to be a form of borrowing. In the event of the bankruptcy of the
other party to a reverse repurchase agreement, a Fund could experience delays
in recovering the securities sold. To the extent that, in the meantime, the
value of the securities sold has increased, the Fund could experience a loss.

LENDING OF SECURITIES
Consistent with applicable regulatory requirements and in order to
generate income, each of the Funds may lend its securities to broker-dealers
and other institutional borrowers. Such loans will usually be made only to
member banks of the U.S. Federal Reserve System and to member firms of the New
York Stock Exchange (and subsidiaries thereof). Loans of securities would be
secured continuously by collateral in cash, cash equivalents, or U.S. Treasury
obligations maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The cash collateral would be invested in
high quality short-term instruments. Either party has the right to terminate a
loan at any time on customary industry settlement notice (which will not

<PAGE>

usually exceed three business days). During the existence of a loan, a Fund
would continue to receive the equivalent of the interest or dividends paid by
the issuer on the securities loaned and with respect to cash collateral, would
also receive compensation based on investment of cash collateral (subject to a
rebate payable to the borrower) or a fee from the borrower in the event the
collateral consists of securities. Where the borrower provides a Fund with
collateral consisting of U.S. Treasury obligations, the borrower is also
obligated to pay the Fund a fee for use of the borrowed securities. The Fund,
would not, however, have the right to vote any securities having voting rights
during the existence of the loan, but would call the loan in anticipation of an
important vote to be taken among holders of the securities or of the giving or
withholding of their consent on a material matter affecting the investment. As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower fail financially. However,
the loans would be made only to entities deemed by the Manager or a Subadviser
to be of good standing, and when, in the judgment of the Manager or a
Subadviser, the consideration which can be earned currently from loans of this
type justifies the attendant risk. In addition, a Fund could suffer loss if the
borrower terminates the loan and the Fund is forced to liquidate investments in
order to return the cash collateral to the buyer. If the Manager or a
Subadviser determines to make loans, it is not intended that the value of the
securities loaned would exceed 30% of the value of the respective Fund's total
assets.

WHEN-ISSUED SECURITIES
Each of the Funds may purchase securities on a "when-issued" or on a
"forward delivery" basis, which means that the securities would be delivered to
the Fund at a future date beyond customary settlement time. It is expected
that, under normal circumstances, the applicable Fund would take delivery of
such securities. In general, the Fund does not pay for the securities until
received and does not start earning interest until the contractual settlement
date. When a Fund commits to purchase a security on a "when-issued" or on a
"forward delivery" basis, it sets up procedures consistent with Securities and
Exchange Commission policies. Since those policies currently require that an
amount of a Fund's assets equal to the amount of the purchase be held aside or
segregated to be used to pay for the commitment, the Funds expect always to
have cash or liquid securities sufficient to cover any commitments or to limit
any potential risk. However, even though the Funds do not intend to make such
purchases for speculative purposes and intend to adhere to the provisions of
Securities and Exchange Commission policies, purchases of securities on such
bases may involve more risk than other types of purchases. For example, a Fund
may have to sell assets which have been set aside in order to meet redemptions.
Also, if the Manager or a Subadviser determines it is advisable as a matter of
investment strategy to sell the "when-issued" or "forward delivery" securities,
the Fund would be required to meet its obligations from the then available cash
flow or the sale of securities, or, although it would not normally expect to do
so, from the sale of the "when-issued" or "forward delivery" securities
themselves (which may have a value greater or less than the Fund's payment
obligation). An increase in the percentage of the Fund's assets committed to
the purchase of securities on a "when-issued" basis may increase the volatility
of its net asset value.

FOREIGN CURRENCY EXcHANGE TRANSACTIONS
Because each of the Funds may buy and sell securities denominated in
currencies other than the U.S. dollar, and receive interest, dividends and sale
proceeds in currencies other than the U.S. dollar, the Funds may enter into
foreign currency exchange transactions to convert United States currency to
foreign currency and foreign currency to United States currency, as well as
convert foreign currency to other foreign currencies. A Fund either enters into
these transactions on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign currency exchange market, or uses forward contracts to purchase or
sell foreign currencies. The Funds may also enter into foreign currency hedging
transactions (including proxy hedges and cross hedges) in an attempt to protect
the value of their assets as measured in U.S. dollars from unfavorable changes
in currency exchange rates and control regulations. (Although each Fund's
assets are valued daily in terms of U.S. dollars, the Trust does not intend to
convert a Fund's holdings of other currencies into U.S. dollars on a daily
basis.)

The Funds may convert currency on a spot basis from time to time, and
investors should be aware of the costs of currency conversion. Although
currency exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a dealer may offer to sell a
currency at one rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.

A forward contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date

<PAGE>

of the contract, agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers.
A forward contract generally has no deposit requirement, and no fees or
commissions are charged at any stage for trades. A Fund may enter into forward
contracts for hedging and non-hedging purposes, including transactions entered
into for the purposes of profiting from anticipated changes in foreign currency
exchange rates.

Forward contracts are traded over-the-counter and not on organized
commodities or securities exchanges. As a result, such contracts operate in a
manner distinct from exchange-traded instruments, and their use involves
certain risks beyond those associated with transactions in the futures and
options contracts described herein.

When a Fund enters into a contract for the purchase or sale of a security
denominated in a non-U.S. currency, it may desire to "lock in" the U.S. dollar
price of the security. By entering into a forward contract for the purchase or
sale, for a fixed amount of U.S. dollars, of the amount of non-U.S. currency
involved in the underlying security transaction, the Fund may be able to
protect against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the non-U.S. currency during the
period between the date the security is purchased or sold and the date on which
payment is made or received.

When the Manager or a Subadviser believes that the currency of a
particular country may suffer a substantial decline against the U.S. dollar, a
Fund may enter into a forward contract to sell, for a fixed amount of U.S.
dollars, the amount of non-U.S. currency approximating the value of some or all
of the Fund's securities denominated in such non-U.S. currency. The precise
matching of the forward contract amounts and the value of the securities
involved is not generally possible since the future value of such securities in
non-U.S. currencies changes as a consequence of market movements in the value
of those securities between the date the forward contract is entered into and
the date it matures. The projection of a short-term hedging strategy is highly
uncertain. The Funds generally do not enter into such forward contracts or
maintain a net exposure to such contracts where the consummation of the
contracts obligates a Fund to deliver an amount of non-U.S. currency in excess
of the value of the Fund's securities or other assets denominated in that
currency. Under normal circumstances, consideration of the prospect for
currency parities will be incorporated in the investment decisions made with
regard to overall diversification strategies. However, the Manager believes
that it is important to have the flexibility to enter into such forward
contracts when it determines that the best interests of the Fund will be
served.

The Funds generally would not enter into a forward contract with a term
greater than one year. At the maturity of a forward contract, a Fund will
either sell the security and make delivery of the non-U.S. currency, or retain
the security and terminate its contractual obligation to deliver the non-U.S.
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
non-U.S. currency. If a Fund retains the security and engages in an offsetting
transaction, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If a Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the non-U.S. currency. Should forward prices decline
during the period between the date a Fund enters into a forward contract for
the sale of the non-U.S. currency and the date it enters into an offsetting
contract for the purchase of such currency, the Fund will realize a gain to the
extent the selling price of the currency exceeds the purchase price of the
currency. Should forward prices increase, the Fund will suffer a loss to the
extent that the purchase price of the currency exceeds the selling price of the
currency.

It is impossible to forecast with precision the market value of Fund
securities at the expiration of the contract. Accordingly, it may be necessary
for a Fund to purchase additional non-U.S. currency on the spot market if the
market value of the security is less than the amount of non-U.S. currency the
Fund is obligated to deliver and if a decision is made to sell the security and
make delivery of such currency. Conversely, it may be necessary to sell on the
spot market some of the non-U.S. currency received upon the sale of the
security if its market value exceeds the amount of such currency the Fund is
obligated to deliver.

<PAGE>

Each of the Funds may also purchase put options on a non-U.S. currency in
order to protect against currency rate fluctuations. If a Fund purchases a put
option on a non-U.S. currency and the value of the non- U.S. currency declines,
the Fund will have the right to sell the non-U.S. currency for a fixed amount
in U.S. dollars and will thereby offset, in whole or in part, the adverse
effect on the Fund which otherwise would have resulted. Conversely, where a
rise in the U.S. dollar value of another currency is projected, and where the
Fund anticipates investing in securities traded in such currency, the Fund may
purchase call options on the non-U.S. currency.

The purchase of such options could offset, at least partially, the effects
of the adverse movements in exchange rates. However, the benefit to the Fund
from purchases of foreign currency options will be reduced by the amount of the
premium and related transaction costs. In addition, where currency exchange
rates do not move in the direction or to the extent anticipated, the Fund could
sustain losses on transactions in foreign currency options which would require
it to forgo a portion or all of the benefits of advantageous changes in such
rates.

The Funds may write options on non-U.S. currencies for hedging purposes or
otherwise to achieve their investment objectives. For example, where a Fund
anticipates a decline in the value of the U.S. dollar value of a foreign
security due to adverse fluctuations in exchange rates it could, instead of
purchasing a put option, write a call option on the relevant currency. If the
expected decline occurs, the option will most likely not be exercised, and the
diminution in value of the security held by the Fund may be offset by the
amount of the premium received.

Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the cost of a foreign security to be acquired because
of an increase in the U.S. dollar value of the currency in which the underlying
security is primarily traded, a Fund could write a put option on the relevant
currency which, if rates move in the manner projected, will expire unexercised
and allow the Fund to hedge such increased cost up to the amount of the
premium. However, the writing of a currency option will constitute only a
partial hedge up to the amount of the premium, and only if rates move in the
expected direction. If this does not occur, the option may be exercised and the
Fund would be required to purchase or sell the underlying currency at a loss
which may not be offset by the amount of the premium. Through the writing of
options on currencies, a Fund also may be required to forgo all or a portion of
the benefits which might otherwise have been obtained from favorable movements
in exchange rates.

Put and call options on non-U.S. currencies written by a Fund will be
covered by segregation of cash and liquid securities in an amount sufficient to
discharge the Fund's obligations with respect to the option, by acquisition of
the non-U.S. currency or of a right to acquire such currency (in the case of a
call option) or the acquisition of a right to dispose of the currency (in the
case of a put option), or in such other manner as may be in accordance with the
requirements of any exchange on which, or the counterparty with which, the
option is traded and applicable laws and regulations.

In a proxy hedge, which is generally less costly than a direct hedge, a
Fund, having purchased a security, would sell a currency whose value is
believed to be closely linked to the currency in which the security is
denominated. Interest rates prevailing in the country whose currency was sold
would be expected to be closer to those in the U.S. and lower than those of
securities denominated in the currency of the original holding. This type of
hedging entails greater risk than a direct hedge because it is dependent on a
stable relationship between the two currencies paired as proxies and the
relationships can be very unstable at times. A Fund may enter into a cross
hedge if a particular currency is expected to decrease against another
currency. The Fund would sell the currency expected to decrease and purchase a
currency which is expected to increase against the currency sold in an amount
equal to some or all of the Fund's holdings denominated in the currency sold.

Investing in ADRs and other depositary receipts presents many of the same
risks regarding currency exchange rates as investing directly in securities
traded in currencies other than the U.S. dollar. Because the securities
underlying ADRs are traded primarily in non-U.S. currencies, changes in

<PAGE>

currency exchange rates will affect the value of these receipts. For example, a
decline in the U.S. dollar value of another currency in which securities are
primarily traded will reduce the U.S. dollar value of such securities, even if
their value in the other non-U.S. currency remains constant, and thus will
reduce the value of the receipts covering such securities. A Fund may employ
any of the above described foreign currency hedging techniques to protect the
value of its assets invested in depositary receipts.

Of course, a Fund is not required to enter into the transactions described
above and does not do so unless deemed appropriate by the Manager or a
Subadviser. It should be realized that the under certain circumstances, the
Funds may not be able to hedge against a decline in the value of a currency,
even if the Manager or a Subadviser deems it appropriate to try to do so,
because doing so would be too costly. It should also be realized that this
method of protecting the value of a Fund's securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. Additionally, although such contracts tend to minimize the risk
of loss due to a decline in the value of the hedged currency, they also tend to
limit any potential gain which might result should the value of such currency
increase.

Each Fund has established procedures consistent with policies of the
Securities and Exchange Commission concerning forward contracts. Those policies
currently require that an amount of a Fund's assets equal to the amount of the
purchase be held aside or segregated to be used to pay for the commitment.
Therefore, each Fund expects to always have cash or liquid securities available
sufficient to cover any commitments under these contracts.

OPTIONS
Each of the Funds may write covered call and put options and purchase call
and put options on securities. Call and put options written by a Fund may be
covered in the manner set forth below.

A call option written by a Fund is "covered" if the Fund owns the security
underlying the call or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration held in a segregated account) upon conversion or exchange of
other securities held in its portfolio. A call option is also covered if a Fund
holds a call on the same security and in the same principal amount as the call
written where the exercise price of the call held (a) is equal to or less than
the exercise price of the call written or (b) is greater than the exercise
price of the call written if the difference is maintained by a Fund in cash or
liquid securities in a segregated account. A put option written by a Fund is
"covered" if the Fund maintains cash or liquid securities with a value equal to
the exercise price in a segregated account or else holds a put on the same
security and in the same principal amount as the put written where the exercise
price of the put held is equal to or greater than the exercise price of the put
written or where the exercise price of the put held is less than the exercise
price of the put written if the difference is maintained by the Fund in cash or
liquid debt securities in a segregated account. Put and call options written by
a Fund may also be covered in such other manner as may be in accordance with
the requirements of the exchange on which, or the counterparty with which, the
option is traded, and applicable laws and regulations. If the writer's
obligation is not so covered, it is subject to the risk of the full change in
value of the underlying security from the time the option is written until
exercise.

Each of the Funds may purchase options for hedging purposes or to increase
the Fund's return. Put options may be purchased to hedge against a decline in
the value of portfolio securities. If such decline occurs, the put options will
permit a Fund to sell the securities at the exercise price, or to close out the
options at a profit. By using put options in this way, the Fund will reduce any
profit it might otherwise have realized in the underlying security by the
amount of the premium paid for the put option and by transaction costs.

Each of the Funds may purchase call options to hedge against an increase
in the price of securities that the Fund anticipates purchasing in the future.
If such increase occurs, the call option will permit the Fund to purchase the
securities at the exercise price, or to close out the options at a profit. The
premium paid for the call option plus any transaction costs will reduce the
benefit, if any, realized by the Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option may expire
worthless to the Fund.

Each of the Funds may write (sell) covered call and put options and
purchase call and put options on stock indices. In contrast to an option on a

<PAGE>

security, an option on a stock index provides the holder with the right, but
not the obligation, to make or receive a cash settlement upon exercise of the
option, rather than the right to purchase or sell a security. The amount of
this settlement is equal to (i) the amount, if any, by which the fixed exercise
price of the option exceeds (in the case of a call) or is below (in the case of
a put) the closing value of the underlying index on the date of exercise,
multiplied by (ii) a fixed "index multiplier."

Each of the Funds may cover call options on stock indices by owning
securities whose price changes, in the opinion of the Manager or a Subadviser,
are expected to be similar to those of the underlying index, or by having an
absolute and immediate right to acquire such securities without additional cash
consideration (or for additional cash consideration held in a segregated
account by its custodian) upon conversion or exchange of other securities in
its portfolio. Where a Fund covers a call option on a stock index through
ownership of securities, such securities may not match the composition of the
index and, in that event, the Fund will not be fully covered and could be
subject to risk of loss in the event of adverse changes in the value of the
index. A Fund may also cover call options on stock indices by holding a call on
the same index and in the same principal amount as the call written where the
exercise price of the call held (a) is equal to or less than the exercise price
of the call written or (b) is greater than the exercise price of the call
written if the difference is maintained by the Fund in cash or liquid
securities in a segregated account. A Fund may cover put options on stock
indices by maintaining cash or liquid securities with a value equal to the
exercise price in a segregated account or by holding a put on the same stock
index and in the same principal amount as the put written where the exercise
price of the put held is equal to or greater than the exercise price of the put
written or where the exercise price of the put held is less than the exercise
price of the put written if the difference is maintained by the Fund in cash or
liquid securities in a segregated account. Put and call options on stock
indices may also be covered in such other manner as may be in accordance with
the rules of the exchange on which, or the counterparty with which, the option
is traded, and applicable laws and regulations.

A Fund will receive a premium from writing a put or call option, which
increases the Fund's gross income in the event the option expires unexercised
or is closed out at a profit. If the value of an index on which a Fund has
written a call option falls or remains the same, the Fund will realize a profit
in the form of the premium received (less transaction costs) that could offset
all or a portion of any decline in the value of the securities it owns. If the
value of the index rises, however, the Fund will realize a loss in its call
option position, which will reduce the benefit of any unrealized appreciation
in the Fund's stock investments. By writing a put option, a Fund assumes the
risk of a decline in the index. To the extent that the price changes of
securities owned by a Fund correlate with changes in the value of the index,
writing covered put options on indices will increase the Fund's losses in the
event of a market decline, although such losses will be offset in part by the
premium received for writing the option.

Each of the Funds may also purchase put options on stock indices to hedge
the Fund's investments against a decline in value. By purchasing a put option
on a stock index, a Fund will seek to offset a decline in the value of
securities it owns through appreciation of the put option. If the value of the
Fund's investments does not decline as anticipated, or if the value of the
option does not increase, the Fund's loss will be limited to the premium paid
for the option plus related transaction costs. The success of this strategy
will largely depend on the accuracy of the correlation between the changes in
value of the index and the changes in value of the Fund's security holdings.

The purchase of call options on stock indices may be used by a Fund to
attempt to reduce the risk of missing a broad market advance, or an advance in
an industry or market segment, at a time when the Fund holds uninvested cash or
short-term debt securities awaiting investment. When purchasing call options
for this purpose, a Fund will also bear the risk of losing all or a portion of
the premium paid if the value of the index does not rise. The purchase of call
options on stock indices when a Fund is substantially fully invested is a form
of leverage, up to the amount of the premium and related transaction costs, and
involves risks of loss and of increased volatility similar to those involved in
purchasing calls on securities the Fund owns.

Each of the Funds may purchase and write options on foreign currencies in
a manner similar to that in which futures contracts on foreign currencies, or
forward contracts, will be utilized.

<PAGE>

FUTURES CONTRACTS
Each of the Funds may enter into interest rate futures contracts, stock
index futures contracts and/or foreign currency futures contracts. Such
investment strategies may be used for hedging purposes and for nonhedging
purposes, subject to applicable law.

A futures contract is an agreement between two parties for the purchase or
sale for future delivery of securities or for the payment or acceptance of a
cash settlement based upon changes in the value of the securities or of an
index of securities. A "sale" of a futures contract means the acquisition of a
contractual obligation to deliver the securities called for by the contract at
a specified price, or to make or accept the cash settlement called for by the
contract, on a specified date. A "purchase" of a futures contract means the
acquisition of a contractual obligation to acquire the securities called for by
the contract at a specified price, or to make or accept the cash settlement
called for by the contract, on a specified date. Futures contracts in the
United States have been designed by exchanges which have been designated
"contract markets" by the Commodity Futures Trading Commission ("CFTC") and
must be executed through a futures commission merchant, or brokerage firm,
which is a member of the relevant contract market. Futures contracts trade on
these markets, and the exchanges, through their clearing organizations,
guarantee that the contracts will be performed as between the clearing members
of the exchange. Futures contracts may also be traded on markets outside the
U.S.

While futures contracts based on debt securities do provide for the
delivery and acceptance of securities, such deliveries and acceptances are very
seldom made. Generally, a futures contract is terminated by entering into an
offsetting transaction. Brokerage fees will be incurred when a Fund purchases
or sells a futures contract. At the same time such a purchase or sale is made,
the Fund must provide cash or securities as a deposit ("initial deposit") known
as "margin." The initial deposit required will vary, but may be as low as 1% or
less of a contract's face value. Daily thereafter, the futures contract is
valued through a process known as "marking to market," and the Fund may receive
or be required to pay additional "variation margin" as the futures contract
becomes more or less valuable. At the time of delivery of securities pursuant
to such a contract, adjustments are made to recognize differences in value
arising from the delivery of securities with a different interest rate than the
specific security that provides the standard for the contract. In some (but not
many) cases, securities called for by a futures contract may not have been
issued when the contract was entered into.

A Fund may purchase or sell futures contracts to attempt to protect the
Fund from fluctuations in interest rates, or to manage the effective maturity
or duration of the Fund's portfolio in an effort to reduce potential losses or
enhance potential gain, without actually buying or selling debt securities. For
example, if interest rates were expected to increase, the Fund might enter into
futures contracts for the sale of debt securities. Such a sale would have much
the same effect as if the Fund sold bonds that it owned, or as if the Fund sold
longer-term bonds and purchased shorter-term bonds. If interest rates did
increase, the value of the Fund's debt securities would decline, but the value
of the futures contracts would increase, thereby keeping the net asset value of
the Fund from declining as much as it otherwise would have. Similar results
could be accomplished by selling bonds, or by selling bonds with longer
maturities and investing in bonds with shorter maturities. However, by using
futures contracts, the Fund avoids having to sell its securities.

Similarly, when it is expected that interest rates may decline, a Fund
might enter into futures contracts for the purchase of debt securities. Such a
purchase would be intended to have much the same effect as if the Fund
purchased bonds, or as if the Fund sold shorter-term bonds and purchased
longer-term bonds. If interest rates did decline, the value of the futures
contracts would increase.

Each of the Funds may enter into stock index futures contracts to gain
stock market exposure while holding cash available for investments and
redemptions and may sell such contracts to protect against a decline in the
stock market.

Each of the Funds may purchase and sell foreign currency futures contracts
to attempt to protect its current or intended investments from fluctuations in
currency exchange rates. Such fluctuations could reduce the dollar value of

<PAGE>

portfolio securities denominated in foreign currencies, or increase the cost of
foreign-denominated securities to be acquired, even if the value of such
securities in the currencies in which they are denominated remains constant. A
Fund may sell futures contracts on a foreign currency, for example, where it
holds securities denominated in such currency and it anticipates a decline in
the value of such currency relative to the dollar. In the event such decline
occurs, the resulting adverse effect on the value of foreign-denominated
securities may be offset, in whole or in part, by gains on the futures
contracts.

Conversely, the Fund could protect against a rise in the dollar cost of
foreign-denominated securities to be acquired by purchasing futures contracts
on the relevant currency, which could offset, in whole or in part, the
increased cost of such securities resulting from a rise in the dollar value of
the underlying currencies. Where the Fund purchases futures contracts under
such circumstances, however, and the prices of securities to be acquired
instead decline, the Fund will sustain losses on its futures position which
could reduce or eliminate the benefits of the reduced cost of portfolio
securities to be acquired.

Although the use of futures for hedging should tend to minimize the risk
of loss due to a decline in the value of the hedged position (e.g., if a Fund
sells a futures contract to protect against losses in the debt securities held
by the Fund), at the same time the futures contract limits any potential gain
which might result from an increase in value of a hedged position.

In addition, the ability effectively to hedge all or a portion of a Fund's
investments through transactions in futures contracts depends on the degree to
which movements in the value of the securities underlying such contracts
correlate with movements in the value of the Fund's securities. If the security
underlying a futures contract is different than the security being hedged, they
may not move to the same extent or in the same direction. In that event, the
Fund's hedging strategy might not be successful and the Fund could sustain
losses on these hedging transactions which would not be offset by gains on the
Fund's other investments or, alternatively, the gains on the hedging
transaction might not be sufficient to offset losses on the Fund's other
investments. It is also possible that there may be a negative correlation
between the security underlying a futures contract and the securities being
hedged, which could result in losses both on the hedging transaction and the
securities. In these and other instances, the Fund's overall return could be
less than if the hedging transactions had not been undertaken. Similarly, even
where a Fund enters into futures transactions other than for hedging purposes,
the effectiveness of its strategy may be affected by lack of correlation
between changes in the value of the futures contracts and changes in value of
the securities which the Fund would otherwise buy or sell.

The ordinary spreads between prices in the cash and futures markets, due
to differences in the nature of those markets, are subject to distortions.
First, all participants in the futures market are subject to initial deposit
and variation margin requirements. Rather than meeting additional variation
margin requirements, investors may close out futures contracts through
offsetting transactions which could distort the normal relationship between the
cash and futures markets. Second, there is the potential that the liquidity of
the futures market may be lacking. Prior to expiration, a futures contract may
be terminated only by entering into a closing purchase or sale transaction,
which requires a secondary market on the contract market on which the futures
contract was originally entered into. While a Fund will establish a futures
position only if there appears to be a liquid secondary market therefor, there
can be no assurance that such a market will exist for any particular futures
contract at any specific time. In that event, it may not be possible to close
out a position held by the Fund, which could require the Fund to purchase or
sell the instrument underlying the futures contract or to meet ongoing
variation margin requirements. The inability to close out futures positions
also could have an adverse impact on the ability effectively to use futures
transactions for hedging or other purposes.

The liquidity of a secondary market in a futures contract may be adversely
affected by "daily price fluctuation limits" established by the exchanges,
which limit the amount of fluctuation in the price of a futures contract during
a single trading day and prohibit trading beyond such limits once they have
been reached. The trading of futures contracts also is subject to the risk of
trading halts, suspensions, exchange or clearing house equipment failures,
government intervention, insolvency of a brokerage firm or clearing house or
other disruptions of normal trading activity, which could at times make it
difficult or impossible to liquidate existing positions or to recover excess
variation margin payments.

<PAGE>

Investments in futures contracts also entail the risk that if the
Manager's or a Subadviser's investment judgment about the general direction of
interest rates, equity markets, or other economic factors is incorrect, the
Fund's overall performance may be poorer than if any such contract had not been
entered into. For example, if a Fund hedged against the possibility of an
increase in interest rates which would adversely affect the price of the Fund's
bonds and interest rates decrease instead, part or all of the benefit of the
increased value of the Fund's bonds which were hedged will be lost because the
Fund will have offsetting losses in its futures positions. Similarly, if a Fund
purchases futures contracts expecting a decrease in interest rates and interest
rates instead increased, the Fund will have losses in its futures positions
which will increase the amount of the losses on the securities in its portfolio
which will also decline in value because of the increase in interest rates. In
addition, in such situations, if the Fund has insufficient cash, the Fund may
have to sell bonds from its investments to meet daily variation margin
requirements, possibly at a time when it may be disadvantageous to do so.

Each contract market on which futures contracts are traded has established
a number of limitations governing the maximum number of positions which may be
held by a trader, whether acting alone or in concert with others. The Manager
does not believe that these trading and position limits would have an adverse
impact on a Fund's hedging strategies.

CFTC regulations require compliance with certain limitations in order to
assure that a Fund is not deemed to be a "commodity pool" under such
regulations. In particular, CFTC regulations prohibit a Fund from purchasing or
selling futures contracts (other than for bona fide hedging transactions) if,
immediately thereafter, the sum of the amount of initial margin required to
establish that Fund's non-hedging futures positions would exceed 5% of that
Fund's net assets.

Each Fund will comply with this CFTC requirement, and each Fund currently
intends to adhere to the additional policies described below. First, an amount
of cash or cash equivalents will be maintained by each Fund in a segregated
account so that the amount so segregated, plus the applicable margin held on
deposit, will be approximately equal to the amount necessary to satisfy the
Fund's obligations under the futures contract. The second is that a Fund will
not enter into a futures contract if immediately thereafter the amount of
initial margin deposits on all the futures contracts held by the Fund would
exceed approximately 5% of the net assets of the Fund. The third is that the
aggregate market value of the futures contracts held by a Fund not exceed
approximately 50% of the market value of the Fund's total assets other than its
futures contracts. For purposes of this third policy, "market value" of a
futures contract is deemed to be the amount obtained by multiplying the number
of units covered by the futures contract times the per unit price of the
securities covered by that contract.

The use of futures contracts potentially exposes a Fund to the effects of
"leveraging," which occurs when futures are used so that the Fund's exposure to
the market is greater than it would have been if the Fund had invested directly
in the underlying securities. "Leveraging" increases a Fund's potential for
both gain and loss. As noted above, each of the Funds intends to adhere to
certain policies relating to the use of futures contracts, which should have
the effect of limiting the amount of leverage by the Fund.

The use of futures contracts may increase the amount of taxable income of
a Fund and may affect the amount, timing and character of a Fund's income for
tax purposes, as more fully discussed herein in the section entitled "Certain
Additional Tax Matters."

OPTIONS ON FUTURES CONTRACTS
Each of the Funds may purchase and write options to buy or sell futures
contracts in which the Fund may invest. Such investment strategies will be used
for hedging purposes and for non-hedging purposes, subject to applicable law.

An option on a futures contract provides the holder with the right to
enter into a "long" position in the underlying futures contract, in the case of
a call option, or a "short" position in the underlying futures contract, in the

<PAGE>

case of a put option, at a fixed exercise price up to a stated expiration date
or, in the case of certain options, on such date. Upon exercise of the option
by the holder, the contract market clearinghouse establishes a corresponding
short position for the writer of the option, in the case of a call option, or a
corresponding long position in the case of a put option. In the event that an
option is exercised, the parties will be subject to all the risks associated
with the trading of futures contracts, such as payment of initial and variation
margin deposits. In addition, the writer of an option on a futures contract,
unlike the holder, is subject to initial and variation margin requirements on
the option position.

A position in an option on a futures contract may be terminated by the
purchaser or seller prior to expiration by effecting a closing purchase or sale
transaction, subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series (i.e., the same exercise
price and expiration date) as the option previously purchased or sold. The
difference between the premiums paid and received represents the trader's
profits or loss on the transaction.

Options on futures contracts that are written or purchased by a Fund on
U.S. exchanges are traded on the same contract market as the underlying futures
contract, and, like futures contracts, are subject to regulation by the CFTC
and the performance guarantee of the exchange clearinghouse. In addition,
options on futures contracts may be traded on foreign exchanges.

Each of the Funds may cover the writing of call options on futures
contracts (a) through purchases of the underlying futures contract, (b) through
ownership of the instrument, or instruments included in the index underlying
the futures contract, or (c) through the holding of a call on the same futures
contract and in the same principal amount as the call written where the
exercise price of the call held (i) is equal to or less than the exercise price
of the call written or (ii) is greater than the exercise price of the call
written if the difference is maintained by the Fund in cash or securities in a
segregated account with its custodian. A Fund may cover the writing of put
options on futures contracts (a) through sales of the underlying futures
contract, (b) through segregation of cash, short-term money market instruments
or high quality debt securities in an amount equal to the value of the security
or index underlying the futures contract, (c) through the holding of a put on
the same futures contract and in the same principal amount as the put written
where the exercise price of the put held is equal to or greater than the
exercise price of the put written or where the exercise price of the put held
is less than the exercise price of the put written if the difference is
maintained by a Fund in cash, short-term money market instruments or high
quality debt securities in a segregated account with its custodian. Put and
call options on futures contracts may also be covered in such other manner as
may be in accordance with the rules of the exchange on which the option is
traded and applicable laws and regulations. Upon the exercise of a call option
on a futures contract written by a Fund, the Fund will be required to sell the
underlying futures contract which, if the Fund has covered its obligation
through the purchase of such contract, will serve to liquidate its futures
position. Similarly, where a put option on a futures contract written by a Fund
is exercised, the Fund will be required to purchase the underlying futures
contract which, if the Fund has covered its obligation through the sale of such
contract, will close out its futures position.

The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the securities deliverable on exercise of the
futures contract. A Fund will receive an option premium when it writes the
call, and, if the price of the futures contract at expiration of the option is
below the option exercise price, the Fund will retain the full amount of this
option premium, which provides a partial hedge against any decline that may
have occurred in the Fund's security holdings. Similarly, the writing of a put
option on a futures contract constitutes a partial hedge against increasing
prices of the securities deliverable upon exercise of the futures contract. If
a Fund writes an option on a futures contract and that option is exercised, the
Fund may incur a loss, which loss will be reduced by the amount of the option
premium received, less related transaction costs. A Fund's ability to hedge
effectively through transactions in options on futures contracts depends on,
among other factors, the degree of correlation between changes in the value of
securities held by the Fund and changes in the value of its futures positions.
This correlation cannot be expected to be exact, and the Fund bears a risk that
the value of the futures contract being hedged will not move in the same
amount, or even in the same direction, as the hedging instrument. Thus it may
be possible for a Fund to incur a loss on both the hedging instrument and the
futures contract being hedged.

Each of the Funds may purchase options on futures contracts for hedging
purposes instead of purchasing or selling the underlying futures contracts. For

<PAGE>

example, where a decrease in the value of portfolio securities is anticipated
as a result of a projected market-wide decline or changes in interest or
exchange rates, a Fund could, in lieu of selling futures contracts, purchase
put options thereon. In the event that such decrease occurs, it may be offset,
in whole or part, by a profit on the option. Conversely, where it is projected
that the value of securities to be acquired by a Fund will increase prior to
acquisition, due to a market advance or changes in interest or exchange rates,
the Fund could purchase call options on futures contracts, rather than
purchasing the underlying futures contracts.

CONVERTIBLE SECURITIES
Each Fund may invest in convertible securities. A convertible security is
a fixed-income security (a bond or preferred stock) which may be converted at a
stated price within a specified period of time into a certain quantity of
common stock or other equity securities of the same or a different issuer.
Convertible securities rank senior to common stock in a corporation's capital
structure but are usually subordinated to similar non-convertible securities.
While providing a fixed-income stream (generally higher in yield than the
income derivable from common stock but lower than that afforded by a similar
non-convertible security), a convertible security also affords an investor the
opportunity, through its conversion feature, to participate in the capital
appreciation attendant upon a market price advance in the convertible
security's underlying common stock. Convertible securities purchased are not
subject to the ratings requirements applicable to the Funds' purchase of fixed
income investments.

In general, the market value of a convertible security is at least the
higher of its "investment value" (i.e., its value as a fixed-income security)
or its "conversion value" (i.e., its value upon conversion into its underlying
stock). As a fixed-income security, a convertible security tends to increase in
market value when interest rates decline and tends to decrease in value when
interest rates rise. However, the price of a convertible security is also
influenced by the market value of the security's underlying common stock. The
price of a convertible security tends to increase as the market value of the
underlying stock rises, whereas it tends to decrease as the market value of the
underlying stock declines. While no securities investment is without some risk,
investments in convertible securities generally entail less risk than
investments in the common stock of the same issuer.

SWAPS AND RELATED TRANSACTIONS
Each Fund may enter into interest rate swaps, currency swaps, equity swaps
and other types of available swap agreements, such as caps, collars and floors,
for the purpose of attempting to obtain a particular desired return at a lower
cost to the Fund than if the Fund had invested directly in an instrument that
yielded that desired return. Interest rate swaps involve the exchange by the
Fund with another party of their respective commitments to pay or receive
interest. An equity swap is an agreement to exchange cash flows on a principal
amount based on changes in the values of the reference index. A currency swap
is an agreement to exchange cash flows on a principal amount based on changes
in the values of the currency exchange rates. In a typical cap or floor
agreement, one party agrees to make payments only under specified
circumstances, usually in return for payment of a fee by the counterparty. For
example, the purchase of an interest rate cap entitles the buyer, to the extent
that a specified index exceeds a predetermined interest rate, to receive
payments of interest on a contractually-based principal amount from the
counterparty selling such interest rate cap. The sale of an interest rate floor
obligates the seller to make payments to the extent that a specified interest
rate falls below an agreed-upon level. A collar arrangement combines elements
of buying a cap and selling a floor.

A Fund will maintain liquid assets with its custodian to cover its current
obligations under swap transactions. If the Fund enters into a swap agreement
on a net basis (i.e., the two payments streams are netted out, with the Fund
receiving or paying, as the case may be, only the net amount of the two
payments), the Fund will maintain liquid assets with its custodian with a daily
value at least equal to the excess, if any, of the Fund's accrued obligations
under the swap agreement over the accrued amount the Fund is entitled to
receive under the agreement. If the Fund enters into a swap agreement on other
than a net basis, it will maintain liquid assets with a value equal to the full
amount of the Fund's accrued obligations under the agreement.

The most significant factor in the performance of swaps, caps, floors and
collars is the change in the specific interest rate, equity, currency or other

<PAGE>

factor that determines the amount of payments to be made under the arrangement.
If the Manager or a Subadviser is incorrect in its forecasts of such factors,
the investment performance of the Fund would be less than what it would have
been if these investment techniques had not been used. If a swap agreement
calls for payments by the Fund, the Fund must be prepared to make such payments
when due. No Fund will enter into any swap unless the Manager or Subadviser
deems the counterparty to be creditworthy. If the counterparty's
creditworthiness declined, the value of the swap agreement would be likely to
decline, potentially resulting in losses. If the counterparty defaults, the
Fund's risk of loss consists of the net amount of payments that the Fund is
contractually entitled to receive. Each Fund anticipates that it will be able
to eliminate or reduce its exposure under these arrangements by assignment or
other disposition or by entering into an offsetting agreement with the same or
another counterparty.

Swap agreements are subject to each Fund's overall limit that not more
than 10% of its net assets may be invested in illiquid securities, and no Fund
will enter into a swap agreement with any single party if the net amount owed
or to be received under existing contracts with that party would exceed 5% of
the Fund's assets.

ADDITIONAL DISCLOSURE REGARDING DERIVATIVES
Transactions in options may be entered into on U.S. exchanges regulated by
the SEC, in the over-the-counter market and on foreign exchanges, while forward
contracts may be entered into only in the over-the-counter market. Futures
contracts and options on futures contracts may be entered into on U.S.
exchanges regulated by the CFTC and on foreign exchanges. The securities
underlying options and futures contracts traded by a Fund may include domestic
as well as foreign securities. Investors should recognize that transactions
involving foreign securities or foreign currencies, and transactions entered
into in foreign countries, may involve considerations and risks not typically
associated with investing in U.S. markets.

Transactions in options, futures contracts, options on futures contracts
and forward contracts entered into for non-hedging purposes involve greater
risk and could result in losses which are not offset by gains on other
portfolio assets. For example, a Fund may sell futures contracts on an index of
securities in order to profit from any anticipated decline in the value of the
securities comprising the underlying index. In such instances, any losses on
the futures transactions will not be offset by gains on any portfolio
securities comprising such index, as might occur in connection with a hedging
transaction.

Options, futures contracts, options on futures contracts, forward
contracts and swaps may be used alone or in combinations in order to create
synthetic exposure to securities in which a Fund otherwise invests, such as
non-U.S. government securities.

DEFENSIVE STRATEGIES
The Funds may, from time to time, take temporary defensive positions that
are inconsistent with the Funds' principal investment strategies in attempting
to respond to adverse market, political or other conditions. When doing so, the
Funds may invest without limit in high quality money market and other
short-term instruments, and may not be pursuing their investment goals.

4. INVESTMENT RESTRICTIONS

The Trust, on behalf of the Funds, and the Portfolio Trusts, on behalf of
the Portfolios, have each adopted the following policies which may not be
changed with respect to any of the foregoing Funds or Portfolios without
approval by holders of a majority of the outstanding voting securities of that
Fund or Portfolio, which as used in this Statement of Additional Information
means the vote of the lesser of (i) 67% or more of the outstanding voting
securities of the Fund or Portfolio present at a meeting at which the holders
of more than 50% of the outstanding voting securities of the Fund or Portfolio
are present or represented by proxy, or (ii) more than 50% of the outstanding
voting securities of the Fund or Portfolio. The term "voting securities" as
used in this paragraph has the same meaning as in the 1940 Act.

<PAGE>

None of the Funds or Portfolios may:

(1) Borrow money, except that as a temporary measure for
extraordinary or emergency purposes it may borrow in an amount not to
exceed 1/3 of the current value of its net assets, including the amount
borrowed, or purchase any securities at any time at which borrowings
exceed 5% of the total assets of the Fund or Portfolio, taken at market
value. It is intended that the Fund or Portfolio would borrow money
only from banks and only to accommodate requests for the repurchase of
shares of the Fund or beneficial interests in the Portfolio while
effecting an orderly liquidation of portfolio securities.

(2) Make loans to other persons except (a) through the lending of
its portfolio securities and provided that any such loans not exceed
30% of the Fund's or Portfolio's total assets (taken at market value),
(b) through the use of repurchase agreements, fixed time deposits or
the purchase of short-term obligations or (c) by purchasing all or a
portion of an issue of debt securities of types commonly distributed
privately to financial institutions. The purchase of short-term
commercial paper or a portion of an issue of debt securities which is
part of an issue to the public shall not be considered the making of a
loan.

(3) Purchase securities of any issuer if such purchase at the time
thereof would cause with respect to 75% of the total assets of the Fund
or Portfolio more than 10% of the voting securities of such issuer to
be held by the Fund or Portfolio; provided that, for purposes of this
restriction, the issuer of an option or futures contract shall not be
deemed to be the issuer of the security or securities underlying such
contract; and provided further that the Fund or Portfolio may invest
all or any portion of its assets in one or more investment companies,
to the extent not prohibited by the 1940 Act, the rules and regulations
thereunder, and exemptive orders granted under such Act.

(4) Purchase securities of any issuer if such purchase at the time
thereof would cause as to 75% of the Fund's or Portfolio's total assets
more than 5% of the Fund's or Portfolio's assets (taken at market
value) to be invested in the securities of such issuer (other than
securities or obligations issued or guaranteed by the United States,
any state or political subdivision thereof, or any political
subdivision of any such state, or any agency or instrumentality of the
United States or of any state or of any political subdivision of any
state); provided that, for purposes of this restriction, the issuer of
an option or futures contract shall not be deemed to be the issuer of
the security or securities underlying such contract; and provided
further that the Fund or Portfolio may invest all or any portion of its
assets in one or more investment companies, to the extent not
prohibited by the 1940 Act, the rules and regulations thereunder, and
exemptive orders granted under such Act.

(5) Concentrate its investments in any particular industry, but if
it is deemed appropriate for the achievement of the Fund's or
Portfolio's investment objective, (a) up to 25% of its assets, at
market value at the time of each investment, may be invested in any one
industry, except that positions in futures contracts shall not be
subject to this restriction and (b) with respect to the Short Term
Portfolio only, up to 100% of its assets, at market value at the time
of each investment, may be invested in bank obligations.

(6) Underwrite securities issued by other persons, except that all
or any portion of the assets of the Fund or Portfolio may be invested
in one or more investment companies, to the extent not prohibited by
the 1940 Act, the rules and regulations thereunder, and exemptive
orders granted under such Act, and except in so far as the Fund or
Portfolio may technically be deemed an underwriter under the Securities
Act in selling a security.

(7) Purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or
commodity contracts in the ordinary course of business (the foregoing
shall not be deemed to preclude the Fund or Portfolio from purchasing
or selling futures contracts or options thereon, and each of the Fund
and the Portfolio reserves the freedom of action to hold and to sell
real estate acquired as a result of the ownership of securities by the
Fund or the Portfolio).

<PAGE>

(8) Issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder.

If a percentage or rating restriction on investment or utilization of
assets set forth above or referred to in this Registration Statement is adhered
to at the time an investment is made or assets are so utilized, a later change
in percentage resulting from changes in the value of the securities or a later
change in the rating of the securities held for the Fund will not be considered
a violation of policy.

5. PERFORMANCE INFORMATION AND ADVERTISING

Fund performance may be quoted in advertising, shareholder reports and
other communications in terms of total rate of return. All performance
information is historical and is not intended to indicate future performance.
Total rates of return fluctuate in response to market conditions and other
factors, and the value of a Fund's shares when redeemed may be worth more or
less than their original cost.

Each Fund may provide its period and average annualized "total rates of
return". The "total rate of return" refers to the change in the value of an
investment in the Fund over a stated period, reflects any change in net asset
value per share and is compounded to include the value of any shares purchased
with any dividends or capital gains declared during such period. Period total
rates of return may be "annualized". An "annualized" total rate of return
assumes that the period rate of return is generated over a one-year period.

A total rate of return quotation for a Fund is calculated for any period
by (a) dividing (i) the sum of the net asset value per share on the last day of
the period and the net asset value per share on the last day of the period of
shares purchasable with dividends and capital gains distributions declared
during such period with respect to a share held at the beginning of such period
and with respect to shares purchased with such dividends and capital gains
distributions, by (ii) the public offering price per share on the first day of
such period, and (b) subtracting 1 from the result. Any annualized total rate
of return quotation is calculated by (x) adding 1 to the period total rate of
return quotation calculated above, (y) raising such sum to a power which is
equal to 365 divided by the number of days in such period, and (z) subtracting
1 from the result.

Set forth below is total rate of return information for the Class A shares
of each Fund for the periods indicated, assuming that dividends and capital
gains distributions, if any, were reinvested. All outstanding shares were
designated Class A shares on January 4, 1999. The return information relates to
periods prior to January 4, 1999, when there were no sales charges on the
purchase or sale of the Funds' shares. The Class A performance for past periods
has therefore been adjusted to reflect the maximum sales charge currently in
effect. The Class B shares are newly offered and have no investment history.
Performance results include any applicable fee waivers or expense subsidies in
place during the time period, which may cause the results to be more favorable
than they would otherwise have been.

<TABLE>
<CAPTION>
CITISELECT FOLIO 200

<S> <C> <C>
REDEEMABLE VALUE
OF A HYPOTHETICAL
$1,000 INVESTMENT
TOTAL RATE OF AT THE END OF
PERIOD RETURN THE PERIOD
June 17, 1996
(commencement of operations)
to October 31, 1998 _____%* $_____
One year ended October 31, 1998 _____%* $_____

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
CITISELECT FOLIO 300
<S> <C> <C>
REDEEMABLE VALUE
OF A HYPOTHETICAL
$1,000 INVESTMENT
TOTAL RATE OF AT THE END OF
PERIOD RETURN THE PERIOD
June 17, 1996
(commencement of operations)
to October 31, 1998 _____%* $_____
One year ended October 31, 1998 _____%* $_____

CITISELECT FOLIO 400
REDEEMABLE VALUE
OF A HYPOTHETICAL
$1,000 INVESTMENT
TOTAL RATE OF AT THE END OF
PERIOD RETURN THE PERIOD
June 17, 1996
(commencement of operations)
to October 31, 1998 _____%* $_____
One year ended October 31, 1998 _____%* $_____

CITISELECT FOLIO 500
REDEEMABLE VALUE
OF A HYPOTHETICAL
$1,000 INVESTMENT
TOTAL RATE OF AT THE END OF
PERIOD RETURN THE PERIOD
September 3, 1996
(commencement of operations)
to October 31, 1998 _____%* $_____
One year ended October 31, 1998 _____%* $_____
</TABLE>

*Not Annualized.

From time to time, advertising and marketing material of any of the Funds
may include charts showing the historical performance of hypothetical
portfolios comprised of classes of assets similar to those in which the Funds
invest. The classes of assets will be represented by the historical performance
of specific unmanaged indices. The information contained in such charts should
not be viewed as a projection of results of any of the Funds or as the
historical performance of any of the Funds. In addition, the past performance
illustrated by such charts should not be viewed as a guarantee of future
results.

For advertising and sales purposes, the Funds will generally use the
performance of Class A shares. All outstanding Fund shares were designated
Class A shares on January 4, 1999. Performance prior to that date will be
adjusted to include the sales charges currently in effect. Class A shares are
sold at net asset value plus a current maximum sales charge of 4.50%.
Performance will typically include this maximum sales charge for the purposes
of calculating performance figures. If the performance of Class B shares is
used for advertising and sales purposes, performance after class inception on
January 4, 1999 will be actual performance, while performance prior to that
date will be Class A performance, adjusted to reflect the differences in sales

<PAGE>

charges (but not the differences in fees and expenses) between the classes. For
these purposes, it will be assumed that the maximum contingent deferred sales
charge applicable to the Class B shares is deducted at the times, in the
amount, and under the terms stated in the Prospectus. Class B share performance
generally would have been lower than Class A performance, had the Class B
shares been offered for the entire period, because the expenses attributable to
Class B shares are higher than the expenses attributable to the Class A shares.
Fund performance may also be presented in advertising and sales literature
without the inclusion of sales charges.

6. DETERMINATION OF NET ASSET VALUE; VALUATION OF
SECURITIES

The net asset value per share of each Fund is determined for each class on
each day during which the New York Stock Exchange is open for trading
("Business Day"). As of the date of this Statement of Additional Information,
the Exchange is open for trading every weekday except for the following
holidays (or the days on which they are observed): New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. This determination of net
asset value is made once each day as of the close of regular trading on the
Exchange by adding the market value of all securities and other assets
attributable to the class (including its interest in its underlying
Portfolios), then subtracting the liabilities attributable to that class, and
then dividing the result by the number of outstanding shares of the class. The
net asset value per share is effective for orders received and accepted by the
Transfer Agent prior to its calculation.

For purposes of calculating net asset value per share, all assets and
liabilities initially expressed in non-U.S. currencies will be converted into
U.S. dollars at the prevailing market rates or if there are no market rates, at
fair value, at the time of valuation. Equity securities are valued at the last
sale price on the exchange on which they are primarily traded or on the NASDAQ
system for unlisted national market issues, or at the last quoted bid price for
securities in which there were no sales during the day or for unlisted
securities not reported on the NASDAQ system. Securities listed on a foreign
exchange are valued at the last quoted sale price available before the time
when net assets are valued. Bonds and other fixed income securities (other than
short-term obligations) are valued on the basis of valuations furnished by a
pricing service, use of which has been approved by the Board of Trustees of the
Trust. In making such valuations, the pricing service utilizes both
dealer-supplied valuations and electronic data processing techniques which take
into account appropriate factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data, without exclusive reliance upon
quoted prices or exchange or over-the-counter prices, since such valuations are
believed to reflect more accurately the fair value of such securities. In
certain instances, securities are valued on the basis of valuations received
from a single dealer, which is usually an established market maker in the
security. In these instances, additional dealer valuations are obtained
monthly. Short-term obligations (maturing in 60 days or less) are valued at
amortized cost, which constitutes fair value as determined by the Board of
Trustees of the Trust. Futures contracts are normally valued at the settlement
price on the exchange on which they are traded. Securities for which there are
no such valuations are valued at fair value as determined in good faith by or
at the direction of the Board of Trustees of the Trust.

Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of regular trading on the
Exchange. Trading may also take place on days on which the Exchange is closed
and on which it is not possible to purchase or redeem shares of the Funds. If
events materially affecting the value of foreign securities occur between the
time when the exchange on which they are traded closes and the time when a
Fund's net asset value is calculated, such securities may be valued at fair
value in accordance with procedures established by and under the general
supervision of the Board of Trustees of the Trust.

Interest income on long-term obligations held for a Fund is determined on
the basis of interest accrued plus amortization of "original issue discount"
(generally, the difference between issue price and stated redemption price at
maturity) and premiums (generally, the excess of purchase price over stated
redemption price at maturity). Interest income on short-term obligations is
determined on the basis of interest accrued plus amortization of premiums.

<PAGE>

7. ADDITIONAL INFORMATION ON THE PURCHASE AND SALE OF FUND SHARES
AND SHAREHOLDER PROGRAMS

As described in the Prospectus, the Funds provide you with alternative
ways of purchasing shares based upon your individual investment needs.

Each class of shares of a Fund represents an interest in the same
portfolio of investments. Each class is identical in all respects except that
each class bears its own class expenses, including distribution and service
fees, and each class has exclusive voting rights with respect to any
distribution or service plan applicable to its shares. As a result of the
differences in the expenses borne by each class of shares, net income per
share, dividends per share and net asset value per share will vary for each
class of shares. There are no conversion, preemptive or other subscription
rights, except that Class B shares automatically convert to Class A shares in
eight years as more fully described below.

Shareholders of each class will share expenses proportionately for
services that are received equally by all shareholders. A particular class of
shares will bear only those expenses that are directly attributable to that
class, where the type or amount of services received by a class varies from one
class to another. The expenses that may be borne by specific classes of shares
may include (i) transfer agency fees attributable to a specific class of
shares, (ii) printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxy
statements to current shareholders of a specific class of shares, (iii)
Securities and Exchange Commission ("SEC") and state securities registration
fees incurred by a specific class, (iv) the expense of administrative personnel
and services required to support the shareholders of a specific class of
shares, (v) litigation or other legal expenses relating to a specific class of
shares, (vi) accounting expenses relating to a specific class of shares and
(vii) any additional incremental expenses subsequently identified and
determined to be properly allocated to one or more classes of shares.

CLASS A SHARES
You may purchase Class A shares at a public offering price equal to the
applicable net asset value per share plus an up-front sales charge imposed at
the time of purchase as set forth in the Prospectus. You may qualify for a
reduced sales charge depending upon the amount of your purchase, or the sales
charge may be waived in its entirety, as described below under "Sales Charge
Waivers." If you qualify to purchase Class A shares without a sales load, you
should purchase Class A shares rather than Class B shares because Class A
shares pay lower fees. Class A shares are also subject to an annual
distribution/service fee of up to .50%. See "Distributor." Set forth below is
an example of the method of computing the offering price of the Class A shares
of the Fund. The example assumes a purchase on October 31, 1998 of Class A
shares from the Fund aggregating less than $25,000 subject to the schedule of
sales charges set forth below.

- ---------------------------------------------------------------------
CITISELECT FOLIO 200 AND CITISELECT FOLIO 300
- ---------------------------------------------------------------------
Net Asset Value per share $
- ---------------------------------------------------------------------
Per Share Sales Charge - 4.50% of $
public offering price (4.71% of net
asset value per share)
- ---------------------------------------------------------------------
Per Share Offering Price to the Public $
- ---------------------------------------------------------------------

- ---------------------------------------------------------------------
CITISELECT FOLIO 400 AND CITISELECT FOLIO 500
- ---------------------------------------------------------------------
Net Asset Value per share $
- ---------------------------------------------------------------------
Per Share Sales Charge - 5.00% of $
public offering price (5.26% of net
asset value per share)
- ---------------------------------------------------------------------
Per Share Offering Price to the Public $
- ---------------------------------------------------------------------

The Fund receives the entire net asset value of all Class A shares that are
sold. The Distributor retains the full applicable sales charge from which it
pays the uniform reallowances shown in the table below.

<PAGE>

The front-end sales charge for Class A shares expressed as a percentage of
offering price and net asset value, and the dealer reallowance expressed as a
percentage of the offering price is set forth in the tables below. The Funds
have established certain shareholder programs that may permit you to take
advantage of the lower rates available for larger purchases, as described under
"Shareholder Programs" below.
<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------
CITISELECT FOLIO 200 AND CITISELECT FOLIO 300
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
SALES CHARGE SALES CHARGE BROKER/DEALER
AS A % OF AS A % OF COMMISSION AS
AMOUNT OF OFFERING YOUR A % OF OFFERING
YOUR INVESTMENT PRICE INVESTMENT PRICE
- ------------------------------------------------------------------------------------
Less than $25,000 4.50% 4.71% 4.05%
- ------------------------------------------------------------------------------------
$25,000 to less than $50,000 4.00% 4.17% 3.60%
- ------------------------------------------------------------------------------------
$50,000 to less than $100,000 3.50% 3.63% 3.15%
- ------------------------------------------------------------------------------------
$100,000 to less than $250,000 2.50% 2.56% 2.25%
- ------------------------------------------------------------------------------------
$250,000 to less than $500,000 1.50% 1.52% 1.35%
- ------------------------------------------------------------------------------------
$500,000 or more none* none* up to 1.00%
- ------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------
CITISELECT FOLIO 400 AND CITISELECT FOLIO 500
- ------------------------------------------------------------------------------------
SALES CHARGE SALES CHARGE BROKER/DEALER
AS A % OF AS A % OF COMMISSION AS
AMOUNT OF OFFERING YOUR A % OF OFFERING
YOUR INVESTMENT PRICE INVESTMENT PRICE
- ------------------------------------------------------------------------------------
Less than $25,000 5.00% 5.26% 4.50%
- ------------------------------------------------------------------------------------
$25,000 to less than $50,000 4.00% 4.17% 3.60%
- ------------------------------------------------------------------------------------
$50,000 to less than $100,000 3.50% 3.63% 3.15%
- ------------------------------------------------------------------------------------
$100,000 to less than $250,000 3.00% 3.09% 2.70%
- ------------------------------------------------------------------------------------
$250,000 to less than $500,000 2.00% 2.04% 1.80%
- ------------------------------------------------------------------------------------
$500,000 or more none* none* up to 1.00%
- ------------------------------------------------------------------------------------
</TABLE>

*A contingent deferred sales charge may apply in certain instances. See
"Sales Charge Waivers".

CLASS B SHARES
Class B shares are sold without a front-end, or initial, sales charge, but
you are charged a "contingent deferred sales charge" (CDSC) when you sell
shares within five years of purchase. The rate of CDSC goes down the longer you
hold your shares. The tables below show the rates that you pay, as a percentage
of the purchase price (or the sale price, whichever is less), depending upon
when you sell your shares.

- ---------------------------------------------------------------------------
CITISELECT FOLIO 200 AND CITISELECT FOLIO 300
- ---------------------------------------------------------------------------
SALE DURING CDSC ON SHARES BEING SOLD
- ---------------------------------------------------------------------------
1st year since purchase 4.50%
- ---------------------------------------------------------------------------
2nd year since purchase 4.00%
- ---------------------------------------------------------------------------
3rd year since purchase 3.00%
- ---------------------------------------------------------------------------
4th year since purchase 2.00%
- ---------------------------------------------------------------------------
5th year since purchase 1.00%
- ---------------------------------------------------------------------------
6th year (or later) since purchase None
- ---------------------------------------------------------------------------

<PAGE>

- ---------------------------------------------------------------------------
CITISELECT FOLIO 400 AND CITISELECT FOLIO 500
- ---------------------------------------------------------------------------
SALE DURING CDSC ON SHARES BEING SOLD
- ---------------------------------------------------------------------------
1st year since purchase 5.00%
- ---------------------------------------------------------------------------
2nd year since purchase 4.00%
- ---------------------------------------------------------------------------
3rd year since purchase 3.00%
- ---------------------------------------------------------------------------
4th year since purchase 2.00%
- ---------------------------------------------------------------------------
5th year since purchase 1.00%
- ---------------------------------------------------------------------------
6th year (or later) since purchase None
- ---------------------------------------------------------------------------

Class B shares pay distribution/service fees of up to 0.75% (up to 1.00%
for CitiSelect Folio 400 and CitiSelect Folio 500) of the average daily net
assets represented by the Class B shares. Financial professionals selling Class
B shares receive a commission based upon the purchase price of the Class B
shares that they sell, except sales exempt from the CDSC. The commission is
4.00% of the purchase price of Folio 200 and Folio 300 Class B shares, and
4.50% of the purchase price of Folio 400 and Folio 500 Class B shares.
Financial professionals also receive a service fee at an annual rate equal to
0.25% of the average daily net assets represented by the Class B shares that
they have sold.

When you sell your shares, the CDSC will be based on either your purchase
price, or the sale price, whichever is less. You do not pay a CDSC on shares
acquired through reinvestment of dividends and capital gain distributions and
shares representing capital appreciation. Each Fund will assume that a
redemption of Class B shares is made:
[] first, of Class B shares representing capital appreciation
[] next, of shares representing the reinvestment of dividends and capital
gains distributions
[] finally, of other shares held by the investor for the longest period of
time. Under certain circumstances, as set forth below in "Sales Charge
Waivers," the CDSC will be waived.

The holding period of Class B shares of a Fund acquired through an
exchange with another CitiFund will be calculated from the date that the Class
B shares were initially acquired in the other CitiFund, and Class B shares
being redeemed will be considered to represent, as applicable, capital
appreciation or dividend and capital gains distribution reinvestments in the
other fund. When determining the amount of the CDSC, each Fund will use the
CDSC schedule of any fund from which you have exchanged shares that would
result in you paying the highest CDSC.

SALES CHARGE WAIVERS
In certain circumstances, the initial sales charge imposed on purchases of
Class A shares, and the CDSC imposed upon sales of Class A or Class B shares,
are waived. Waivers are generally instituted in order to promote good will with
persons or entities with which Citibank or the Distributor or their affiliates
have business relationships, or because the sales effort, if any, involved in
making such sales is negligible, or, in the case of certain CDSC waivers,
because the circumstances surrounding the sale of Fund shares were not
foreseeable or voluntary. These sales charge waivers may be modified or
discontinued at any time.

CLASS A--FRONT-END SALES CHARGE

o Reinvestment. The sales charge does not apply to Class A shares
acquired through the reinvestment of dividends and capital gains
distributions.

o Eligible Purchasers. Class A shares may be purchased without a sales
charge by:
[] tax exempt organizations under Section 501(c)(3-13) of the
Internal Revenue Code
[] trust accounts for which Citibank, N.A or any subsidiary or
affiliate of Citibank acts as trustee and exercises discretionary
investment management authority
[] accounts for which Citibank or any subsidiary or affiliate of
Citibank performs investment advisory services or charges fees for
acting as custodian
[] directors or trustees (and their immediate families), and retired
directors and trustees (and their immediate families), of any

<PAGE>

investment company for which Citibank or any subsidiary or
affiliate of Citibank serves as the investment adviser or as a
service agent

[] employees of Citibank and its affiliates, CFBDS, Inc. and its
affiliates or any Service Agent and its affiliates (including
immediate families of any of the foregoing), and retired employees
of Citibank and its affiliates or CFBDS, Inc. and its affiliates
(including immediate families of the foregoing)

[] investors participating in a fee-based arrangement sponsored or
advised by Citibank or its affiliates

[] investors participating in a rewards program that offers Fund
shares as an investment option based on an investor's balances in
selected Citigroup Inc. products and services

[] separate accounts used to fund certain unregistered variable
annuity contracts

[] direct rollovers by plan participants from a 401(k) plan offered
to Citigroup employees

[] shareholder accounts established through a reorganization or
similar form of business combination approved by a Fund's Board of
Trustees or by the Board of Trustees of any other CitiFund or
mutual fund managed or advised by Citibank (all of such funds
being referred to herein as CitiFunds) the terms of which entitle
those shareholders to purchase shares of a Fund or any other
CitiFund at net asset value without a sales charge

[] employee benefit plans qualified under Section 401(k) of the
Internal Revenue Code with accounts outstanding on January 4,
1999.

[] accounts associated with Copeland Retirement Programs

+ it is assumed that shares not subject to the contingent
deferred sales charge are the first redeemed followed by other
shares held for the longest period of time

+ all investments made during a calendar month will age one month
on the last day of the month and each subsequent month

+ any applicable contingent deferred sales charge will be
deferred upon an exchange of Class A shares for Class A shares
of another CitiFund and deducted from the redemption proceeds
when the exchanged shares are subsequently redeemed (assuming
the contingent deferred sales charge is then payable)

+ the holding period of Class A shares so acquired through an
exchange will be aggregated with the period during which the
original Class A shares were held

[] subject to appropriate documentation, investors where the amount
invested represents redemption proceeds from a mutual fund (other
than a CitiFund), if:

+ the redeemed shares were subject to an initial sales charge or
a deferred sales charge (whether or not actually imposed), and

+ the redemption has occurred no more than 60 days prior to the
purchase of Class A shares of the Fund

+ the investor redeems shares of another mutual fund sold through
the investment firm that previously employed that investment
consultant or other registered representative, and either paid
an initial sales charge or was at some time subject to, but did
not actually pay, a deferred sales charge or redemption fee
with respect to the redemption proceeds

+ the redemption is made within 60 days prior to the investment
in a Fund, and

+ the net asset value of the shares of the Fund sold to that
investor without a sales charge does not exceed the proceeds of
the redemption

CONTINGENT DEFERRED SALES CHARGE:

o Reinvestment. There is no CDSC on shares representing capital
appreciation or on shares acquired through reinvestment of
dividends or capital gains distributions.

o Waivers. The CDSC will be waived in connection with:

[] exchanges into certain CitiFunds

[] a total or partial redemption made within one year of the death of
the shareholder; this waiver is available where the deceased
shareholder is either the sole shareholder or owns the shares with
his or her spouse as a joint tenant with right of survivorship,
and applies only to redemption of shares held at the time of death

[] a lump sum or other distribution in the case of an Individual
Retirement Account (IRA), a self-employed individual retirement
plan (Keogh Plan) or a custodian account under Section 403(b) or
the Internal Revenue Code, in each case following attainment of
age 59 1/2

[] a total or partial redemption resulting from any distribution
following retirement in the case of a tax-qualified retirement
plan

[] a redemption resulting from a tax-free return of an excess
contribution to an IRA

AUTOMATIC CONVERSION OF CLASS B SHARES
A shareholder's Class B shares will automatically convert to Class A
shares in the same Fund approximately eight years after the date of issuance.
At the same, a portion of all Class B shares representing dividends and other
distributions paid in additional Class B shares will be converted in accordance
with procedures from time to time approved by the Funds' Trustees. The
conversion will be effected at the relative net asset values per share of the
two classes on the first business day of the month in which the eighth
anniversary of the issuance of the Class B shares occurs. If a shareholder
effects one or more exchanges among Class B shares of the CitiFunds during the
eight-year period, the holding periods for the shares so exchanged will be
counted toward the eight-year period. Because the per share net asset value of
the Class A shares may be higher than that of the Class B shares at the time of
conversion, a shareholder may receive fewer Class A shares than the number of
Class B shares converted, although the dollar value will be the same.

SHAREHOLDER PROGRAMS
The Funds make the following programs available to shareholders to enable
them to reduce or eliminate the front-end sales charges on Class A shares or to
exchange Fund shares for shares of other CitiFunds without, in many cases, the
payment of a sales charge. These programs may be changed or discontinued at any
time. For more information, please contact your Service Agent.

REDUCED SALES CHARGE PLAN
A qualified group may purchase shares as a single purchaser under the
reduced sales charge plan. The purchases by the group are lumped together and
the sales charge is based on the lump sum. A qualified group must:

<PAGE>

o have been in existence for more than six months
o have a purpose other than acquiring Fund shares at a discount
o satisfy uniform criteria that enable CFBDS to realize economies of scale
in its costs of distributing shares
o have more than ten members
o be available to arrange for group meetings between representatives of the
Funds and the members
o agree to include sales and other materials related to the Funds in its
publications and mailings to members at reduced or no cost to the
distributor
o seek to arrange for payroll deduction or other bulk transmission of
investments to the Funds

LETTER OF INTENT
If an investor anticipates purchasing $25,000 or more of Class A shares of
a Fund alone or in combination with Class B shares of the Fund or any of the
classes of other CitiFunds or of any other mutual fund managed or advised by
Citibank (all of such funds being referred to herein as CitiFunds) within a
13-month period, the investor may obtain the shares at the same reduced sales
charge as though the total quantity were invested in one lump sum by completing
a letter of intent on the terms described below. Subject to acceptance by
CFBDS, Inc., the Funds' distributor, and the conditions mentioned below, each
purchase will be made at a public offering price applicable to a single
transaction of the dollar amount specified in the letter of intent.

[] The shareholder or, if the shareholder is a customer of a Service Agent,
his or her Service Agent must inform CFBDS that the letter of intent is in
effect each time shares are purchased.

[] The shareholder makes no commitment to purchase additional shares, but if
his or her purchases within 13 months plus the value of shares credited
toward completion of the letter of intent do not total the sum specified,
an increased sales charge will apply as described below.

[] A purchase not originally made pursuant to a letter of intent may be
included under a subsequent letter of intent executed within 90 days of
the purchase if CFBDS is informed in writing of this intent within the
90-day period.

[] The value of shares of a Fund presently held, at cost or maximum offering
price (whichever is higher), on the date of the first purchase under the
letter of intent, may be included as a credit toward the completion of the
letter, but the reduced sales charge applicable to the amount covered by
the letter is applied only to new purchases.

[] Instructions for issuance of shares in the name of a person other than the
person signing the letter of intent must be accompanied by a written
statement from the Transfer Agent or a Service Agent stating that the
shares were paid for by the person signing the letter.

[] Neither income dividends nor capital gains distributions taken in
additional shares will apply toward the completion of the letter of
intent.

[] The value of any shares redeemed or otherwise disposed of by the purchaser
prior to termination or completion of the letter of intent are deducted
from the total purchases made under the letter of intent.

If the investment specified in the letter of intent is not completed
(either prior to or by the end of the 13-month period), the Transfer Agent
will redeem, within 20 days of the expiration of the letter of intent, an
appropriate number of the shares in order to realize the difference between
the reduced sales charge that would apply if the investment under the letter

<PAGE>

of intent had been completed and the sales charge that would normally apply
to the number of shares actually purchased. By completing and signing the
letter of intent, the shareholder irrevocably grants a power of attorney to
the Transfer Agent to redeem any or all shares purchased under the letter of
intent, with full power of substitution.

RIGHT OF ACCUMULATION
A shareholder qualifies for cumulative quantity discounts on the purchase
of Class A shares when his or her new investment, together with the current
offering price value of all holdings of that shareholder in the CitiFunds,
reaches a discount level. For example, if a Fund shareholder owns shares
valued at $50,000 and purchases an additional $50,000 of Class A shares of
the Fund, the sales charge for the additional $50,000 purchase would be at
the rate of 2.50% for CitiSelect Folio 200 and CitiSelect Folio 300 and 3.00%
for CitiSelect Folio 400 and CitiSelect Folio 500 (in each case, the rate
applicable to single transactions from $100,000 to less than $250,000). A
shareholder must provide the Transfer Agent with information to verify that
the quantity sales charge discount is applicable at the time the investment
is made.

REINSTATEMENT PRIVILEGE
Shareholders who have redeemed Class A shares may reinstate their Fund
account without a sales charge up to the dollar amount redeemed (with a
credit for any contingent deferred sales charge paid) by purchasing Class A
shares of the same Fund within 90 days after the redemption. To take
advantage of this reinstatement privilege, shareholders must notify their
Service Agents in writing at the time the privilege is exercised.

EXCHANGE PRIVILEGE
Shares of each Fund may be exchanged for shares of the same class of each
other Fund and certain CitiFunds that are made available by a shareholder's
Service Agent, or may be acquired through an exchange of shares of the same
class of those funds. Class A shares also may be exchanged for shares of
certain CitiFunds that offer only a single class of shares, unless the Class
A shares are subject to a contingent deferred sales charge. Class B shares
may not be exchanged for shares of CitiFunds that offer only a single class
of shares. No initial sales charge is imposed on shares being acquired
through an exchange unless Class A shares are being acquired and the sales
charge for Class A shares of the fund being exchanged into is greater than
the current sales charge of the Fund (in which case an initial sales charge
will be imposed at a rate equal to the difference). No CDSC is imposed on
Class B shares when they are exchanged for Class B shares of certain other
CitiFunds that are made available by the shareholder's Service Agent. If you
are exchanging into a fund that imposes a sales charge, you may qualify for
share prices which do not include the sales charge or which reflect a reduced
sales charge, if the Fund shares you are exchanging were: (a) purchased with
a sales charge, (b) acquired through a previous exchange from shares
purchased with a sales charge, (c) outstanding as of January 4, 1999 or (d)
acquired through capital appreciation or the reinvestment of dividends and
capital gains distributions on those shares. To qualify for this sales charge
waiver or reduced sales charge, at the time of exchange you must notify your
Service Agent. Any such qualification may be subject to confirmation, through
a check of appropriate records and documentation, of your existing share
balances and any sales charges paid on prior share purchases. However, you
may be required to pay a CDSC when you sell those shares. When determining
the amount of the CDSC, each Fund will use the CDSC schedule of any fund from
which you have exchanged shares that would result in you paying the highest
CDSC.

ADDITIONAL PURCHASE aND SALE INFORMATION
Each Service Agent has agreed to transmit to its customers who are
shareholders of a Fund appropriate prior written disclosure of any fees that it
may charge them directly. Each Service Agent is responsible for transmitting
promptly orders of its customers.

Investors may be able to establish new accounts in the Funds under one of
several tax-sheltered plans. Such plans include IRAs, Keogh or Corporate
Profit-Sharing and Money-Purchase Plans, 403(b) Custodian Accounts, and certain
other qualified pension and profit-sharing plans. Investors should consult with
their Service Agent and their tax and retirement advisers.

<PAGE>

Shareholders may redeem or exchange Fund shares by telephone, if their
account applications so permit, by calling the transfer agent or, if they are
customers of a Service Agent, their Service Agent. During periods of drastic
economic or market changes or severe weather or other emergencies, shareholders
may experience difficulties implementing a telephone exchange or redemption. In
such an event, another method of instruction, such as a written request sent
via an overnight delivery service, should be considered. The Funds, the
transfer agent and each Service Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These
procedures may include recording of the telephone instructions and verification
of a caller's identity by asking for his or her name, address, telephone,
Social Security number, and account number. If these or other reasonable
procedures are not followed, the Funds, the transfer agent or the Service Agent
may be liable for any losses to a shareholder due to unauthorized or fraudulent
instructions. Otherwise, the shareholder will bear all risk of loss relating to
a redemption or exchange by telephone.

Subject to compliance with applicable regulations, the Trust has reserved
the right to pay the redemption or repurchase price of shares of the Funds,
either totally or partially, by a distribution in kind of readily marketable
securities (instead of cash). The securities so distributed would be valued at
the same amount as that assigned to them in calculating the net asset value for
the shares being sold. If a holder of shares received a distribution in kind,
such holder could incur brokerage or other charges in converting the securities
to cash.

The Trust may suspend the right of redemption or postpone the date of
payment for shares of a Fund more than seven days during any period when (a)
trading in the markets a Fund normally utilizes is restricted, or an emergency,
as defined by the rules and regulations of the Securities and Exchange
Commission (the "SEC"), exists making disposal of a Fund's investments or
determination of its net asset value not reasonably practicable; (b) the New
York Stock Exchange is closed (other than customary weekend and holiday
closings); or (c) the SEC has by order permitted such suspension.

8. MANAGEMENT

Each Fund is supervised by the Board of Trustees of the Trust. Each
Portfolio is supervised by the Board of Trustees of Asset Allocation Portfolios
or The Premium Portfolios, as the case may be. In each case, a majority of the
Trustees are not affiliated with Citibank.

The Trustees and officers of the Trust and the Portfolio Trusts and their
principal occupations during the past five years are set forth below. Their
titles may have varied during that period. Asterisks indicate that those
Trustees and officers are "interested persons" (as defined in the 1940 Act) of
the Trust or the Portfolio Trusts. Unless otherwise indicated below, the
address of each Trustee and officer is 21 Milk Street, Boston, Massachusetts.
The address of the Portfolio Trusts is Elizabethan Square, George Town, Grand
Cayman, British West Indies.

TRUSTEES OF THE TRUST

PHILIP W. COOLIDGE* (aged 47) -- President of the Trust and the Portfolio
Trusts; Chief Executive Officer and President, Signature Financial Group, Inc.
and CFBDS.

RILEY C. GILLEY (aged 72) -- Vice President and General Counsel, Corporate
Property Investors (November 1988 to December 1991); Partner, Breed, Abbott &
Morgan (Attorneys) (retired, December 1987). His address is 4041 Gulf Shore
Boulevard North, Naples, Florida.

DIANA R. HARRINGTON (aged 58) -- Professor, Babson College (since September
1993); Visiting Professor, Kellogg Graduate School of Management, Northwestern
University (September 1992 to September 1993); Professor, Darden Graduate
School of Business, University of Virginia (September 1978 to September 1993);
Trustee, the Highland Family of Funds (March 1997 to March 1998). Her address
is 120 Goulding Street, Holliston, Massachusetts.

<PAGE>

SUSAN B. KERLEY (aged 47) -- President, Global Research Associates, Inc.
(Investment Research) (since August 1990); Manager, Rockefeller & Co. (March
1988 to July 1990); Trustee, Mainstay Institutional Funds (since December
1990). Her address is P.O. Box 9572, New Haven, Connecticut.

C. OSCAR MORONG, JR. (aged 63) -- Managing Director, Morong Capital Management
(since February 1993); Senior Vice President and Investment Manager, CREF
Investments, Teachers Insurance & Annuity Association (retired January 1993);
Director, Indonesia Fund; Director, MAS Funds. His address is 1385 Outlook
Drive West, Mountainside, New Jersey.

E. KIRBY WARREN (aged 64) -- Professor of Management, Graduate School of
Business, Columbia University (since 1987); Samuel Bronfman Professor of
Democratic Business Enterprise (1978 to 1987). His address is Columbia
University, Graduate School of Business, 725 Uris Hall, New York, New York.

WILLIAM S. WOODS, JR. (aged 78) -- Vice President-Investments, Sun Company,
Inc. (retired, April 1984). His address is 35 Colwick Road, Cherry Hill, New
Jersey.

TRUSTEES OF THE PORTFOLIO TRUSTS

ELLIOTT J. BERV (aged 55) -- Chairman and Director, Catalyst, Inc. (Management
Consultants) (since June 1992); President, Chief Operating Officer and
Director, Deven International, Inc. (International Consultants) (June 1991 to
June 1992); President and Director, Elliott J. Berv & Associates (Management
Consultants) (since May 1984). His address is 24 Atlantic Drive, Scarborough,
Maine.

PHILIP W. COOLIDGE* (aged 47) -- President of the Trust and the Portfolio
Trusts; Chief Executive Officer and President, Signature Financial Group, Inc.
and CFBDS.

MARK T. FINN (aged 55) -- President and Director, Delta Financial, Inc. (since
June 1983); Chairman of the Board and Chief Executive Officer, FX 500 Ltd.
(Commodity Trading Advisory Firm) (since April 1990); General Partner and
Shareholder, Greenwich Ventures LLC (Investment Partnership) (since January
1996); President and Secretary, Phoenix Trading Co. (Commodity Trading Advisory
Firm) (since March 1997); Director, Vantage Consulting Group, Inc. (since
October 1988). His address is 3500 Pacific Avenue, P.O. Box 539, Virginia
Beach, Virginia.

WALTER E. ROBB, III (aged 72) -- President, Benchmark Consulting Group, Inc.
(since 1991); Principal, Robb Associates (Corporate Financial Advisors) (since
1978); President, Benchmark Advisors, Inc. (Corporate Financial Advisors)
(since 1989); Trustee of certain registered investment companies in the MFS
Family of Funds. His address is 35 Farm Road, Sherborn, Massachusetts.

OFFICERS OF THE TRUST AND THE PORTFOLIO TRUST

PHILIP W. COOLIDGE* (aged 47) -- President of the Trust and the Portfolio
Trusts; Chief Executive Officer and President, Signature Financial Group, Inc.
and CFBDS.

CHRISTINE A. DRAPEAU* (aged 28) -- Assistant Secretary and Assistant Treasurer
of the Trust and the Portfolio Trusts; Vice President, Signature Financial
Group, Inc. (since January 1996); Paralegal and Compliance Officer, various
financial companies (July 1992 to January 1996).

<PAGE>

TAMIE EBANKS-CUNNINGHAM* (aged 26) -- Assistant Secretary of the Trust and the
Portfolio Trusts; Office Manager, Signature Financial Group, (Grand Cayman)
Limited (Since April 1995); Administrator, Cayman Islands Primary School (prior
to April 1995). Her address is P.O. Box 2494, Elizabethan Square, George Town,
Grand Cayman, Cayman Islands, B.W.I.

JOHN R. ELDER* (aged 50) -- Treasurer of the Trust and the Portfolio Trusts;
Vice President, Signature Financial Group, Inc. (since April 1995); Assistant
Treasurer, CFBDS (since April 1995); Treasurer, the Phoenix Family of Mutual
Funds (Phoenix Home Life Mutual Insurance Company) (1983 to March 1995).

LINDA T. GIBSON* (aged 33) -- Secretary of the Trust and the Portfolio Trusts;
Senior Vice President, Signature Financial Group, Inc.; Secretary, CFBDS.

JAMES E. HOOLAHAN* (aged 52) -- Vice President, Assistant Secretary and
Assistant Treasurer of the Trust and the Portfolio Trusts; Senior Vice
President, Signature Financial Group, Inc.

SUSAN JAKUBOSKI* (aged 34) -- Vice President, Assistant Secretary and Assistant
Treasurer of the Trust and the Portfolio Trusts; Vice President, Signature
Financial Group (Cayman) Ltd. (since August 1994); Fund Compliance
Administrator, Concord Financial Group (November 1990 to August 1994). Her
address is Suite 193, 12 Church St., Hamilton HM11, Bermuda.

MOLLY S. MUGLER* (aged 47) -- Assistant Secretary and Assistant Treasurer of
the Trust and the Portfolio Trusts; Vice President, Signature Financial Group,
Inc.; Assistant Secretary, CFBDS.

CLAIR TOMALIN* (aged 30) -- Assistant Secretary of the Trust and the Portfolio
Trusts; Office Manager, Signature Financial Group (Europe) Limited. Her address
is 117 Charterhouse Street, London ECIM 6AA.

SHARON M. WHITSON* (aged 50) -- Assistant Secretary and Assistant Treasurer of
the Trust and the Portfolio Trusts; Assistant Vice President, Signature
Financial Group, Inc.

JULIE J. WYETZNER* (aged 39) -- Vice President, Assistant Secretary and
Assistant Treasurer of the Trust and the Portfolio Trusts; Vice President,
Signature Financial Group, Inc.

The Trustees and officers of the Trust and the Portfolio Trusts also hold
comparable positions with certain other funds for which CFBDS, Signature
Financial Group, Inc. or their affiliates serve as the distributor or
administrator.

The Trustees of the Trust received the following remuneration from the
Trust during its fiscal year ended October 31, 1998:

<TABLE>
<CAPTION>
PENSION OR ESTIMATED
RETIREMENT ANNUAL TOTAL COMPENSATION
AGGREGATE BENEFITS ACCRUED BENEFITS FROM TRUST AND FUND
COMPENSATION AS PART UPON COMPLEX
TRUSTEE FROM TRUST OF FUND EXPENSES RETIREMENT PAID TO TRUSTEES (1)
<S> <C> <C> <C> <C>

Philip W. Coolidge.............. $_____ _____ _____ $_____
Riley C. Gilley................. $_____ _____ _____ $_____
Diana R. Harrington............. $_____ _____ _____ $_____
Susan B. Kerley................. $_____ _____ _____ $_____
C. Oscar Morong, Jr............. $_____ _____ _____ $_____
E. Kirby Warren................. $_____ _____ _____ $_____
William S. Woods, Jr............ $_____ _____ _____ $_____
</TABLE>

(1) Information relates to the fiscal year ended October 31, 1998. Messrs.
Coolidge, Gilley, Morong, Warren and Woods and Mses. Harrington and Kerley
are trustees of 49, 33, 40, 40, 26, 28 and 28 funds, respectively, of the
family of open-end registered investment companies advised or managed by
Citibank.

<PAGE>

As of __________, all Trustees and officers as a group owned less than 1%
of each Fund's outstanding shares. As of the same date, more than 95% of the
outstanding shares of each Fund were held of record by Citibank, N.A. or its
affiliates as Service Agents of the Fund for the accounts of their respective
clients.

The Declaration of Trust of each of the Trust and the Portfolio Trusts
provides that the Trust or the Portfolio Trust, as the case may be, will
indemnify its Trustees and officers against liabilities and expenses incurred
in connection with litigation in which they may be involved because of their
offices with the Trust or the Portfolio Trust, as the case may be, unless, as
to liability to the Trust, the Portfolio Trust or their respective investors,
it is finally adjudicated that they engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in their offices,
or unless with respect to any other matter it is finally adjudicated that they
did not act in good faith in the reasonable belief that their actions were in
the best interests of the Trust or the Portfolio Trust, as the case may be. In
the case of settlement, such indemnification will not be provided unless it has
been determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees of the Trust
or the Portfolio Trust, or in a written opinion of independent counsel, that
such officers or Trustees have not engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of their duties.

MANAGER
Citibank manages the assets of each Portfolio and provides certain
administrative services to the Funds and the Portfolios pursuant to separate
management agreements (the "Management Agreements"). Subject to such policies
as the Board of Trustees of the Portfolio Trusts may determine, Citibank
manages the securities of each Portfolio and makes investment decisions for
each Portfolio. Citibank furnishes at its own expense all services, facilities
and personnel necessary in connection with managing each Portfolio's
investments and effecting securities transactions for each Portfolio. Each
Management Agreement with the Portfolio Trusts provides that Citibank may
delegate the daily management of the securities of each Portfolio to one or
more Subadvisers. Each Management Agreement with the Portfolio Trusts will
continue in effect indefinitely as long as such continuance is specifically
approved at least annually by the Board of Trustees of the applicable Portfolio
Trust or by a vote of a majority of the outstanding voting securities of the
applicable Portfolio, and, in either case, by a majority of the Trustees of the
applicable Portfolio Trust who are not parties to the Management Agreement or
interested persons of any such party, at a meeting called for the purpose of
voting on the Management Agreement. Each Management Agreement with the Trust
will continue in effect indefinitely as long as such continuance is
specifically approved at least annually by the Board of Trustees of the Trust
or by a vote of a majority of the outstanding voting securities of the
applicable Fund, and, in either case, by a majority of the Trustees of the
Trust who are not parties to the Management Agreement or interested persons of
any such party, at a meeting called for the purpose of voting on the Management
Agreement.

Citibank provides the Funds and the Portfolios with general office
facilities and supervises the overall administration of the Funds and the
Portfolios, including, among other responsibilities, the negotiation of
contracts and fees with, and the monitoring of performance and billings of, the
Fund's or the Portfolios' independent contractors and agents; the preparation
and filing of all documents required for compliance by the Fund or the
Portfolios with applicable laws and regulations; and arranging for the
maintenance of books and records of the Funds or the Portfolios. Trustees,
officers, and investors in the Trust and the Portfolio Trusts are or may be or
may become interested in Citibank, as directors, officers, employees, or
otherwise and directors, officers and employees of Citibank are or may become
similarly interested in the Trust and the Portfolio Trusts.

Each Management Agreement provides that Citibank may render services to
others. Each Management Agreement is terminable without penalty on not more
than 60 days' nor less than 30 days' written notice by the applicable Portfolio
Trust or the Trust, as the case may be, when authorized either by a vote of a
majority of the outstanding voting securities of the applicable Portfolio or

<PAGE>

Fund or by a vote of a majority of the Board of Trustees of the applicable
Portfolio Trust or the Trust, or by Citibank on not more than 60 days' nor less
than 30 days' written notice, and will automatically terminate in the event of
its assignment. Each Management Agreement with the Portfolio Trusts provides
that neither Citibank nor its personnel shall be liable for any error of
judgment or mistake of law or for any loss arising out of any investment or for
any act or omission in the execution of security transactions for the
applicable Portfolio, except for willful misfeasance, bad faith or gross
negligence or reckless disregard of its or their obligations and duties under
the Management Agreement with the Portfolio Trust. Each Management Agreement
with the Trust provides that neither Citibank nor its personnel shall be liable
for any error of judgment or mistake of law or for any omission in the
administration or management of the Trust or the performance of its duties
under the Management Agreement, except for willful misfeasance, bad faith or
gross negligence or reckless disregard of its or their obligations and duties
under the Management Agreement with the Trust.

The Funds pay an aggregate management fee, which is accrued daily and paid
monthly, of 0.75% of each Fund's average daily net assets on an annualized
basis for the Fund's then-current fiscal year. This fee is higher than the
management fee paid by most mutual funds. Citibank may reimburse any Fund or
Portfolio or waive all or a portion of its management fees.

For the period from June 17, 1996 (September 3, 1996 for CitiSelect Folio
500), commencement of operations, to December 31, 1996, all fees payable to
Citibank under prior management agreements with the Trust with respect to
CitiSelect Folio 200, CitiSelect Folio 300 and CitiSelect Folio 500 were
voluntarily waived. For the period from June 17, 1996, commencement of
operations, to December 31, 1996, the fees paid to Citibank, after waivers and
reimbursements, under a prior management agreement with the Trust with respect
to CitiSelect Folio 400 were $78,821. For the period from January 1, 1997 to
October 31, 1997, the fees paid to Citibank, after waivers and reimbursements,
under prior management agreements with the Trust were as follows: CitiSelect
Folio 200 $35,899, CitiSelect Folio 300 $170,079, CitiSelect Folio 400 $299,950
and CitiSelect Folio 500 $120,606. For the period from November 1, 1997 to
October 31, 1998, the fees paid to Citibank, after waivers and reimbursements,
under the Management Agreements with the Trust were as follows: CitiSelect
Folio 200 $________, CitiSelect Folio 300 $________, CitiSelect Folio 400
$________ and CitiSelect Folio 500 $________. Prior to November 1, 1997,
CitiSelect Folio 200, CitiSelect Folio 300, CitiSelect Folio 400 and CitiSelect
Folio 500 invested their assets in, respectively, Asset Allocation Portfolio
200, Asset Allocation Portfolio 300, Asset Allocation Portfolio 400, and Asset
Allocation Portfolio 500. For the period from June 17, 1996 (September 3, 1996
for Asset Allocation Portfolio 500), commencement of operations, to December
31, 1996, all fees payable to Citibank under prior management agreements with
Asset Allocation Portfolios with respect to Asset Allocation Portfolio 200,
Asset Allocation Portfolio 300 and Asset Allocation Portfolio 500 were
voluntarily waived. For the period from June 17, 1996, commencement of
operations, to December 31, 1996, the fees paid to Citibank, after waivers and
reimbursements, under a prior management agreement with Asset Allocation
Portfolios with respect to Asset Allocation Portfolio 400 were $133,692. For
the period from January 1, 1997 to October 31, 1997, the fees paid to Citibank,
after waivers and reimbursements, under prior management agreements with Asset
Allocation Portfolios were as follows: Asset Allocation Portfolio 200 $528,753,
Asset Allocation Portfolio 300 $1,478,303, Asset Allocation Portfolio 400
$1,993,100 and Asset Allocation Portfolio 500 $698,291.

Pursuant to a sub-administrative services agreement with Citibank, CFBDS
performs such sub-administrative duties for the Trust and the Portfolio Trusts
as from time to time are agreed upon by Citibank and CFBDS. For performing such
sub-administrative services, CFBDS receives compensation as from time to time
is agreed upon by Citibank, not in excess of the amount paid to Citibank for
its services under the Management Agreements with the Trust and the Portfolio
Trusts. All such compensation is paid by Citibank.

The Trust has entered into separate Submanagement Agreements with the
Subadvisers listed below for the Portfolios noted opposite the Subadvisers'
names. Each Subadviser's compensation is payable by the applicable Portfolio
(with a corresponding reduction in Citibank's management fee).

Small Cap Value Securities of the Small Cap Value Portfolio -- Franklin
Advisory Services, Inc.

International Portfolio -- Hotchkis and Wiley

Foreign Bond Portfolio -- Pacific Investment Management Company

<PAGE>

It is the responsibility of the Subadviser to make the day-to-day
investment decisions for their allocated assets of the Funds, and to place the
purchase and sales orders for securities transactions concerning those assets,
subject in all cases to the general supervision of Citibank. Each Subadviser
furnishes at its own expense all services, facilities and personnel necessary
in connection with managing the assets of the Funds allocated to it and
effecting securities transactions concerning those assets.

Each Submanagement Agreement will continue in effect as to each applicable
Portfolio indefinitely as long as such continuance is specifically approved at
least annually by the Board of Trustees of the applicable Portfolio Trust as to
that Portfolio or by a vote of a majority of the outstanding voting securities
of that Portfolio, and, in either case, by a majority of the Trustees of the
applicable Portfolio Trust who are not parties to the Submanagement Agreement
or interested persons of any such party, at a meeting called for the purpose of
voting on the Submanagement Agreement.

Each Submanagement Agreement provides that the applicable Subadviser may
render services to others. Each Submanagement Agreement is terminable as to any
Portfolio without penalty on not more than 60 days' nor less than 30 days'
written notice by the applicable Portfolio Trust, when authorized either by a
vote of a majority of the outstanding voting securities of the applicable
Portfolio or by a vote of a majority of the Board of Trustees of the applicable
Portfolio Trust, or by Citibank on not more than 60 days' nor less than 30
days' written notice, and will automatically terminate in the event of its
assignment. Each Submanagement Agreement may be terminated by the applicable
Subadviser on not less than 90 days' written notice. Each Submanagement
Agreement provides that neither the Subadviser nor its personnel shall be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution of security
transactions for any Portfolio, except for willful misfeasance, bad faith or
gross negligence or reckless disregard of its or their obligations and duties
under the Submanagement Agreement.

The management fee is allocated among the Subadvisers at the annual rates
equal to the percentages specified below of the aggregate assets managed by the
particular Subadviser. Citibank retains any management fee in excess of amounts
payable to the Subadvisers. Citibank pays the Subadvisers' fees to the extent
they exceed the aggregate fee of 0.75% of each Fund's average daily net assets.

Franklin Advisory Services, Inc.
0.55% on first $250 million
0.50% on remaining assets

Hotchkis and Wiley
0.60% on first $10 million
0.55% on next $40 million
0.45% on next $100 million
0.35% on next $150 million
0.30% on remaining assets

Pacific Investment Management Company
0.35% on first $200 million
0.30% on remaining assets

The aggregate fees paid to each of the Subadvisers under prior
submanagement agreements were as follows:

<PAGE>

JUNE 17, 1996 (SEPTEMBER 3, 1996
FOR ASSET ALLOCATION PORTFOLIO 500)
(COMMENCEMENT OF OPERATIONS) TO JANUARY 1, 1997 TO
SUBADVISER: DECEMBER 31, 1996: OCTOBER 31, 1997:
<S> <C> <C>

Franklin Advisory Services, Inc. $123,189 $716,245
Hotchkis and Wiley $160,913 $290,312
Pacific Investment Management Company $123,950 $474,072
</TABLE>

The aggregate fees paid to each of the Subadvisers under the Submanagement
Agreements during the period from November 1, 1997 to October 31, 1998 were as
follows:

SUBADVISER:

Franklin Advisory Services, Inc. $________
Hotchkis and Wiley $________
Pacific Investment Management Company $________

Miller Anderson & Sherrerd, LLP, former Subadviser to Large Cap Value
Portfolio ("MAS"), received aggregate fees under prior submanagement agreements
as follows: $90,990 for the period from June 17, 1996 (September 3, 1996 for
Asset Allocation Portfolio 500) (commencement of operations) to December 31,
1996, $580,234 for the period from January 1, 1997 to October 31, 1997. For the
period from November 1, 1997 to October 31, 1998 MAS received aggregate fees in
the amount of $__________ under the Submanagement Agreement with respect to
Large Cap Value Portfolio.

DISTRIBUTOR
CFBDS, 21 Milk Street, Boston, MA 02109, serves as the Distributor of each
Fund's shares pursuant to Distribution Agreements with the Trust with respect
to each class of shares of the Funds (each, a "Distribution Agreement"). In
those states where CFBDS is not a registered broker-dealer, shares of the Funds
are sold through Signature Broker-Dealer Services, Inc., as dealer. Under the
Distribution Agreements, CFBDS is obligated to use its best efforts to sell
shares of each class of the Funds.

Either party may terminate a Distribution Agreement on not less than
thirty days' nor more than sixty days' written notice to the other party.
Unless otherwise terminated each Distribution Agreement will continue from year
to year upon annual approval by the Trust's Board of Trustees and by the vote
of a majority of the Board of Trustees of the Trust who are not parties to the
Distribution Agreement or interested persons of any party to the Distribution
Agreement, cast in person at a meeting called for the purpose of voting on such
approval. Each Distribution Agreement will terminate in the event of its
assignment, as defined in the 1940 Act.

Each class of each Fund has a Service Plan (each, a "Service Plan")
adopted in accordance with Rule 12b-1 under the 1940 Act. Under the Plans, a
Fund may pay monthly fees at an annual rate not to exceed 0.50% of the average
daily net assets of the Fund attributable to that class in the case of the
Plans relating to Class A shares, and not to exceed 1.00% of the average daily
net assets of the Fund attributable to that class in the case of the Plans
relating to Class B shares. Such fees may be used to make payments to the
Distributor for distribution services, to securities dealers and other industry
professionals (called Service Agents) that have entered into service agreements
with the Distributor and others in respect of the sale of shares of the Funds,
and to other parties in respect of the sale of shares of the Funds, and to make
payments for advertising, marketing or other promotional activity, and payments
for preparation, printing, and distribution of prospectuses, statements of
additional information and reports for recipients other than regulators and
existing shareholders. The Funds also may make payments to the Distributor,
Service Agents and others for providing personal service or the maintenance of
shareholder accounts. The amounts paid by the Distributor to each recipient may
vary based upon certain factors, including, among other things, the levels of
sales of Fund shares and/or shareholder services provided. Recipients may
receive different compensation for sales for Class A and Class B shares.

<PAGE>

The Service Plan with respect to Class A shares also provides that the
Distributor, broker-dealers, banks and other financial intermediaries may
receive the sales charge paid by Class A investors as partial compensation for
their services in connection with the sale of shares. The Service Plan with
respect to Class B shares provides that the Distributor, dealers, and others
may receive all or a portion of the deferred sales charges paid by Class B
investors.

The Service Plans permit the Funds to pay fees to the Distributor, Service
Agents and others as compensation for their services, not as reimbursement for
specific expenses incurred. Thus, even if their expenses exceed the fees
provided for by the applicable Plan, the Fund will not be obligated to pay more
than those fees and, if their expenses are less than the fees paid to them,
they will realize a profit. Each Fund will pay the fees to the Distributor, and
others until the applicable Plan or Distribution Agreement is terminated or not
renewed. In that event, the Distributor's or other recipient's expenses in
excess of fees received or accrued through the termination date will be the
Distributor's or other recipient's sole responsibility and not obligations of
the Fund. In their annual consideration of the continuation of the Service
Plans for each Fund, the Trustees will review the Service Plans and the
expenses for each Fund separately.

Each Service Plan continues in effect if such continuance is specifically
approved at least annually by a vote of both a majority of the Trust's Trustees
and a majority of the Trustees who are not "interested persons" of the Trust
and who have no direct or indirect financial interest in the operation of the
Service Plan or in any agreement related to the Plan (for purposes of this
paragraph "Qualified Trustees"). Each Service Plan requires that the Trust and
the Distributor provide to the Board of Trustees, and the Board of Trustees
review, at least quarterly, a written report of the amounts expended (and the
purposes therefor) under the Service Plan. Each Service Plan further provides
that the selection and nomination of the Qualified Trustees is committed to the
discretion of such Qualified Trustees then in office. A Service Plan may be
terminated with respect to any class of a Fund at any time by a vote of a
majority of the Trust's Qualified Trustees or by a vote of a majority of the
outstanding voting securities of that class. A Service Plan may not be amended
to increase materially the amount of a class's permitted expenses thereunder
without the approval of a majority of the outstanding securities of that class
and may not be materially amended in any case without a vote of a majority of
both the Trustees and Qualified Trustees. The Distributor will preserve copies
of any plan, agreement or report made pursuant to the Service Plans for a
period of not less than six years, and for the first two years the Distributor
will preserve such copies in an easily accessible place.

As contemplated by the Service Plans, CFBDS acts as the agent of the Trust
in connection with the offering of shares of the Funds pursuant to the
Distribution Agreements. For the periods from June 17, 1996 (September 3, 1996
for CitiSelect Folio 500), commencement of operations of the Funds, to December
31, 1996, January 1, 1997 to October 31, 1997, and November 1, 1997 to October
31, 1998, the fees paid to CFBDS, after waivers, under the Distribution
Agreement for Class A shares were as follows: CitiSelect Folio 200, $158,021,
$548,279 and $________, respectively; CitiSelect Folio 300, $307,039,
$1,102,327 and $________, respectively; CitiSelect Folio 400, $394,103,
$1,499,752 and $________, respectively; and CitiSelect Folio 500, $83,802,
$603,033 and $________, respectively.

The Distributor may enter into agreements with Service Agents and may pay
compensation to such Service Agents for accounts for which the Service Agents
are holders of record. Payments may be made to the Service Agents or for other
distribution expenses out of the distribution fees received by the Distributor
and out of the Distributor's past profits or any other source available to it.

EXPENSES
In addition to amounts payable under the Management Agreements and the
Service Plans, each Fund is responsible for its own expenses, including, among
other things, the costs of securities transactions, the compensation of
Trustees that are not affiliated with Citibank or the Fund's distributor,
government fees, taxes, accounting and legal fees, expenses of communication
with shareholders, interest expense, and insurance premiums. The Prospectus for
each Fund contains more information about the expenses of each Fund.

<PAGE>

TRANSFER AGENT AND CUSTODIAN
The Trust has entered into a Transfer Agency and Service Agreement with
State Street Bank and Trust Company ("State Street") pursuant to which State
Street acts as transfer agent for each Fund. The Trust also has entered into a
Custodian Agreement and a Fund Accounting Agreement with State Street, pursuant
to which custodial and fund accounting services, respectively, are provided for
each Fund. Among other things, State Street calculates the daily net asset
value for the Funds. Securities may be held by a sub-custodian bank approved by
the Trustees.

Each Portfolio Trust, on behalf of the Portfolios, has entered into a
Custodian Agreement with State Street pursuant to which State Street acts as
custodian for each Portfolio. Each Portfolio Trust, on behalf of the
Portfolios, has entered into a Fund Accounting Agreement with State Street
Cayman Trust Company, Ltd. ("State Street Cayman") pursuant to which State
Street Cayman provides fund accounting services for each Portfolio. State
Street Cayman also provides transfer agency services to each Portfolio.

The principal business address of State Street is 225 Franklin Street,
Boston, Massachusetts 02110. The principal business address of State Street
Cayman is P.O. Box 2508 GT, Grand Cayman, British West Indies.

AUDITORS
PricewaterhouseCoopers LLP are the independent accountants for the Trust,
providing audit services and assistance and consultation with respect to the
preparation of filings with the SEC. The address of PricewaterhouseCoopers LLP
is 160 Federal Street, Boston, Massachusetts 02110. PricewaterhouseCoopers are
the chartered accountants for the Portfolio Trusts. The address of
PricewaterhouseCoopers is Suite 3000, Box 82, Royal Trust Towers, Toronto
Dominion Center, Toronto, Ontario, Canada M5K 1G8.

COUNSEL
Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts 02110, is
counsel for each Fund.

9. PORTFOLIO TRANSACTIONS

The Trust trades securities for a Fund if it believes that a transaction
net of costs (including custodian charges) will help achieve the Fund's
investment objective. Changes in the Fund's investments are made without regard
to the length of time a security has been held, or whether a sale would result
in the recognition of a profit or loss. Therefore, the rate of turnover is not
a limiting factor when changes are appropriate. Specific decisions to purchase
or sell securities for each Fund are made by a portfolio manager who is an
employee of Citibank or a Subadviser and who is appointed and supervised by
senior officers of Citibank or by a Subadviser. The portfolio manager or
Subadviser may serve other clients in a similar capacity.

In connection with the selection of brokers or dealers and the placing of
portfolio securities transactions, brokers or dealers may be selected who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to a Fund and/or the other
accounts over which the Manager, the Subadvisers or their affiliates exercise
investment discretion. The Manager and the Subadvisers are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Fund which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Manager or the applicable Subadviser determines in good
faith that such amount of commission is reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction or
the overall responsibilities which the Manager, the Subadvisers and their
affiliates have with respect to accounts over which they exercise investment
discretion.

The management fee that each Fund pays to Citibank or a Subadviser will
not be reduced as a consequence of Citibank's or the Subadviser's receipt of
brokerage and research services. While such services are not expected to reduce
the expenses of Citibank or the Subadviser, Citibank would, through the use of
the services, avoid the additional expenses which would be incurred if it
should attempt to develop comparable information through its own staff or
obtain such services independently.

<PAGE>

In certain instances there may be securities that are suitable as an
investment for a Fund as well as for one or more of Citibank's or a
Subadviser's other clients. Investment decisions for each Fund and for
Citibank's and the Subadvisers' other clients are made with a view to achieving
their respective investment objectives. It may develop that a particular
security is bought or sold for only one client even though it might be held by,
or bought or sold for, other clients. Likewise, a particular security may be
bought for one or more clients when one or more clients are selling the same
security. Some simultaneous transactions are inevitable when several clients
receive investment advice from the same investment adviser, particularly when
the same security is suitable for the investment objectives of more than one
client. When two or more clients are simultaneously engaged in the purchase or
sale of the same security, the securities are allocated among clients in a
manner believed to be equitable to each. It is recognized that in some cases
this system could adversely affect the price of or the size of the position
obtainable in a security for a Fund. When purchases or sales of the same
security for a Fund and for other portfolios managed by Citibank or a
Subadviser occur contemporaneously, the purchase or sale orders may be
aggregated in order to obtain any price advantages available to large volume
purchases or sales.

For the period from November 1, 1997 to October 31, 1998, [insert
brokerage commission information]. Prior to November 1, 1997, CitiSelect Folio
200, CitiSelect Folio 300, CitiSelect Folio 400 and CitiSelect Folio 500
invested their assets in, respectively, Asset Allocation Portfolio 200, Asset
Allocation Portfolio 300, Asset Allocation Portfolio 400, and Asset Allocation
Portfolio 500. For the periods from June 17, 1996 (September 3, 1996 for Asset
Allocation Portfolio 500), commencement of operations, to December 31, 1996 and
January 1, 1997 to October 31, 1997, Asset Allocation Portfolios paid brokerage
commissions in the following amounts: Asset Allocation Portfolio 200, $89,479
and $111,725, respectively; Asset Allocation Portfolio 300, $241,111 and
$301,201, respectively; Asset Allocation Portfolio 400, $453,048 and $561,555,
respectively; and Asset Allocation Portfolio 500, $185,397 and $308,557,
respectively.

10. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES

The Trust's Declaration of Trust permits the Trust to issue an unlimited
number of full and fractional shares of beneficial interest (without par value)
of each series, to divide or combine the shares of any series into a greater or
lesser number of shares of that series without thereby changing the
proportionate beneficial interests in that series and to divide such shares
into classes. The Trust has reserved the right to create and issue additional
series and classes of shares. Each share of each class represents an equal
proportionate interest in that Fund with each other share of that class. Shares
of each series participate equally in the earnings, dividends and distribution
of net assets of the particular series upon liquidation or dissolution (except
for any differences between classes of shares of a series). Shares of each
series are entitled to vote separately to approve management agreements or
changes in investment policy, and shares of a class are entitled to vote
separately to approve any distribution or service arrangements relating to that
class, but shares of all series may vote together in the election or selection
of Trustees and accountants for the Trust. In matters affecting only a
particular Fund or class, only shares of that particular Fund or class are
entitled to vote.

Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the Trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Trust may elect all of the Trustees of the Trust if
they choose to do so and in such event the other shareholders in the Trust
would not be able to elect any Trustee. The Trust is not required to hold, and
has no present intention of holding, annual meetings of shareholders but the
Trust will hold special meetings of shareholders when in the judgment of the
Trustees it is necessary or desirable to submit matters for a shareholder vote.
Shareholders have, under certain circumstances (e.g., upon the application and
submission of certain specified documents to the Trustees by a specified number
of shareholders), the right to communicate with other shareholders in
connection with requesting a meeting of shareholders for the purpose of
removing one or more Trustees. Shareholders also have under certain
circumstances the right to remove one or more Trustees without a meeting by a
declaration in writing by a specified number of shareholders. No material
amendment may be made to the Trust's Declaration of Trust without the
affirmative vote of the holders of a majority of the outstanding shares of each
series affected by the amendment. (See "Investment Restrictions.")

<PAGE>

At any meeting of shareholders of any Fund, a Service Agent may vote any
shares of which it is the holder of record and for which it does not receive
voting instructions proportionately in accordance with the instructions it
receives for all other shares of which that Service Agent is the holder of
record.

The Trust may enter into a merger or consolidation, or sell all or
substantially all of its assets (or all or substantially all of the assets
belonging to any series of the Trust), if approved by a vote of the holders of
two-thirds of the Trust's outstanding shares, voting as a single class, or of
the affected series of the Trust, as the case may be, except that if the
Trustees of the Trust recommend such sale of assets, merger or consolidation,
the approval by vote of the holders of a majority of the Trust's or the
affected series outstanding shares would be sufficient. The Trust or any series
of the Trust, as the case may be, may be terminated (i) by a vote of a majority
of the outstanding voting securities of the Trust or the affected series or
(ii) by the Trustees by written notice to the shareholders of the Trust or the
affected series. If not so terminated, the Trust will continue indefinitely.

The Funds' Transfer Agent maintains a share register for shareholders of
record. Share certificates are not issued.

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust of the Trust
contains an express disclaimer of shareholder liability for acts or obligations
of the Trust and provides for indemnification and reimbursement of expenses out
of Trust property for any shareholder held personally liable for the
obligations of the Trust. The Declaration of Trust of the Trust also provides
that the Trust may maintain appropriate insurance (e.g., fidelity bonding and
errors and omissions insurance) for the protection of the Trust, its
shareholders, Trustees, officers, employees and agents covering possible tort
and other liabilities. Thus, the risk of a shareholder incurring financial loss
on account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.

The Trust's Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act, but nothing in the Declaration of Trust of the Trust protects a Trustee
against any liability to which he or she would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office.

Each Fund invests in multiple Portfolios. Each Portfolio is a series of
one of the Portfolio Trusts, which are organized as New York trusts.

Each investor in a Portfolio, including the corresponding Fund, may add to
or withdraw from its investment in the applicable Portfolio on each Business
Day. As of the close of regular trading on each Business Day, the value of each
investor's beneficial interest in each Portfolio is determined by multiplying
the net asset value of the Portfolio by the percentage, effective for that day,
that represents that investor's share of the aggregate beneficial interests in
the Portfolio. Any additions or withdrawals that are to be effected on that day
are then effected. The investor's percentage of the aggregate beneficial
interests in the Portfolio is then re-computed as the percentage equal to the
fraction (i) the numerator of which is the value of such investor's investment
in the Portfolio as of the close of regular trading on such day plus or minus,
as the case may be, the amount of any additions to or withdrawals from the
investor's investment in the Portfolio effected on such day, and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of
the close of regular trading on such day plus or minus, as the case may be, the
amount of the net additions to or withdrawals from the aggregate investments in
the Portfolio by all investors in the Portfolio. The percentage so determined
is then applied to determine the value of the investor's interest in the
Portfolio as of the close of regular trading on the next following Business
Day.

<PAGE>

11. CERTAIN ADDITIONAL TAX MATTERS

Each Fund is treated as a separate entity for federal income tax purposes
under the Internal Revenue Code of 1986, as amended (the "Code"). Each Fund has
elected to be treated, and intends to qualify each year, as a "regulated
investment company" under Subchapter M of the Code by meeting all applicable
requirements of Subchapter M, including requirements as to the nature of the
Fund's gross income, the amount of Fund distributions, and the composition of
the Fund's portfolio assets. Provided all such requirements are met, no U.S.
federal income or excise taxes generally will be required to be paid by the
Funds, although non-U.S. source income earned by each Fund may be subject to
non-U.S. withholding or other taxes. If a Fund should fail to qualify as a
"regulated investment company" for any year, the Fund would incur a regular
corporate federal income tax upon its taxable income and Fund distributions
would generally be taxable as ordinary income to shareholders. The Portfolio
Trusts believe the Portfolios also will not be required to pay any U.S. federal
income or excise taxes on their income.

The portion of each Fund's ordinary income dividends attributable to
dividends received in respect of equity securities of U.S. issuers is normally
eligible for the dividends received deduction for corporations subject to U.S.
federal income taxes. Availability of the deduction for particular shareholders
is subject to certain limitations, and deducted amounts may be subject to the
alternative minimum tax and result in certain basis adjustments. Any Fund
dividend that is declared in October, November or December of any calendar
year, that is payable to shareholders of record in such a month, and that is
paid the following January will be treated as if received by the shareholders
on December 31 of the year in which the dividend is declared.

Any Fund distribution will have the effect of reducing the per share net
asset value of shares in the Fund by the amount of the distribution.
Shareholders purchasing shares shortly before the record date of any
distribution may thus pay the full price for the shares and then effectively
receive a portion of the purchase price back as a taxable distribution.

In general, any gain or loss realized upon a taxable disposition of shares
of a Fund by a shareholder that holds such shares as a capital asset will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise as a short-term capital gain or loss; a
long-term capital gain realized by an individual shareholder will be eligible
for reduced tax rates if the shares were held for more than eighteen months.
However, any loss realized upon a disposition of shares in a Fund held for six
months or less will be treated as a long-term capital loss to the extent of any
distributions of net capital gain made with respect to those shares. Any loss
realized upon a disposition of shares may also be disallowed under rules
relating to wash sales.

Any investment by a Fund in zero coupon bonds, deferred interest bonds,
payment-in-kind bonds, certain stripped securities, and certain securities
purchased at a market discount will cause the Fund to recognize income prior to
the receipt of cash payments with respect to those securities. In order to
distribute this income and avoid a tax on the Fund, the Fund may be required to
liquidate portfolio securities that it might otherwise have continued to hold,
potentially resulting in additional taxable gain or loss to the Fund.

Each Fund's transactions in options, futures and forward contracts will be
subject to special tax rules that may affect the amount, timing and character
of Fund income and distributions to shareholders. For example, certain
positions held by each Fund on the last business day of each taxable year will
be marked to market (i.e., treated as if closed out) on that day, and any gain
or loss associated with the positions will be treated as 60% long-term and 40%
short-term capital gain or loss. Certain positions held by a Fund that
substantially diminish its risk of loss with respect to other positions in its
portfolio may constitute "straddles," and may be subject to special tax rules
that would cause deferral of Fund losses, adjustments in the holding periods of
Fund securities, and conversion of short-term into long-term capital losses.
Certain tax elections exist for straddles that may alter the effects of these
rules. Each Fund intends to limit its activities in options, futures and
forward contracts to the extent necessary to meet the requirements of
Subchapter M of the Code.

<PAGE>

An investment by a Fund in residual interests of a CMO that has elected to
be treated as a real estate mortgage investment conduit, or "REMIC," can create
complex tax problems, especially if the Fund has state or local governments or
other tax-exempt organizations as shareholders.

The Funds may make non-U.S. investments. Special tax considerations apply
with respect to such investments. Foreign exchange gains and losses realized by
a Fund will generally be treated as ordinary income and loss. Use of non-U.S.
currencies for non-hedging purposes may be limited in order to avoid a tax on a
Fund. A Fund may elect to mark to market any investments in "passive foreign
investment companies" on the last day of each taxable year. This election may
cause the Fund to recognize ordinary income prior to the receipt of cash
payments with respect to those investments; in order to distribute this income
and avoid a tax on the Fund, the Fund may be required to liquidate portfolio
securities that it might otherwise have continued to hold. Investment by a Fund
in certain "passive foreign investment companies" may also be limited in order
to avoid a tax on the Fund. Investment income received by a Fund from non-U.S.
securities may be subject to non-U.S. taxes. The U.S. has entered into tax
treaties with many other countries that may entitle a Fund to a reduced rate of
tax or an exemption from tax on such income. Each Fund intends to qualify for
treaty reduced rates where applicable. It is not possible, however, to
determine a Fund's effective rate of non-U.S. tax in advance since the amount
of the Fund's assets to be invested within various countries is not known.

If a Fund holds more than 50% of its assets in foreign stock and
securities at the close of its taxable year, the Fund may elect to "pass
through" to the Fund's shareholders foreign income taxes paid. If the Fund so
elects, shareholders will be required to treat their pro rata portion of the
foreign income taxes paid by the Fund as part of the amounts distributed to
them by the Fund and thus includable in their gross income for federal income
tax purposes. Shareholders who itemize deductions would then be allowed to
claim a deduction or credit (but not both) on their federal income tax returns
for such amounts, subject to certain limitations. Shareholders who do not
itemize deductions would (subject to such limitations) be able to claim a
credit but not a deduction. No deduction for such amounts will be permitted to
individuals in computing their alternative minimum tax liability. If a Fund
does not qualify or elect to "pass through" to the Fund's shareholders foreign
income taxes paid by it, shareholders will not be able to claim any deduction
or credit for any part of the foreign taxes paid by the Fund.

The Funds will withhold tax payments at a rate of 30% (or any lower
applicable tax treaty rate) on taxable dividends and other payments subject to
withholding taxes that are made to persons who are not citizens or residents of
the United States. Distributions received from the Funds by non-U.S. persons
also may be subject to tax under the laws of their own jurisdiction.

The account application asks each new shareholder to certify that the
shareholder's Social Security or taxpayer identification number is correct and
that the shareholder is not subject to 31% backup withholding for failing to
report income to the IRS. The Funds may be required to withhold (and pay over
to the IRS for the shareholder's credit) 31% of certain distributions and
redemption proceeds paid to shareholders who fail to provide this information
or who otherwise violate IRS regulations.

Early each year, each Fund will notify its shareholders of the amount and
tax status of distributions paid to shareholders for the preceding year.
Investors should consult their own tax advisers regarding the status of their
accounts under state and local laws.

12. CERTAIN BANK REGULATORY MATTERS

The Glass-Steagall Act prohibits certain financial institutions, such as
Citibank, from underwriting securities of open-end investment companies, such
as the Funds. Citibank believes that its services under the Management
Agreements and the activities performed by it or its affiliates as Service
Agents are not underwriting and are consistent with the Glass-Steagall Act and
other relevant federal and state laws. However, there is no controlling
precedent regarding the performance of the combination of investment advisory,
shareholder servicing and administrative activities by banks. State laws on

<PAGE>

this issue may differ from applicable federal law, and banks and financial
institutions may be required to register as dealers pursuant to state
securities laws. Changes in either federal or state statutes or regulations, or
in their interpretations, could prevent Citibank or its affiliates from
continuing to perform these services. If Citibank or its affiliates were to be
prevented from acting as the Manager or a Service Agent, the Funds would seek
alternative means for obtaining these services. The Funds do not expect that
shareholders would suffer any adverse financial consequences as a result of any
such occurrence.

13. FINANCIAL STATEMENTS

The audited financial statements of the Funds (Statement of Assets and
Liabilities at October 31, 1998, Statement of Operations for the period from
November 1, 1997 to October 31, 1998, Statement of Changes in Net Assets for
the period from November 1, 1997 to October 31, 1998, and Financial Highlights
for the period from November 1, 1997 to October 31, 1998, Notes to Financial
Statements and Independent Auditors' Report), which are included in the Annual
Report to Shareholders, are incorporated by reference into this Statement of
Additional Information and have been so incorporated in reliance upon the
reports of PricewaterhouseCoopers LLP, independent accountants, on behalf of
the Funds.

A copy of the Annual Report for the Funds accompanies this Statement of
Additional Information.

<PAGE>

PART C
<TABLE>
<CAPTION>

Item 23. Exhibits.
<S> <C>

* a(1) Amended and Restated Declaration of Trust of the Registrant
**, *** and filed a(2) Amendments to the Declaration of Trust of the Registrant
herewith
*** b(1) Amended and Restated By-Laws of the Registrant
*** b(2) Amendments to Amended and Restated By-Laws of the Registrant
*** d Amended and Restated Management Agreements between the Registrant
and Citibank, N.A., as manager to the CitiSelect Portfolios
***** e(1) Form of Amended and Restated Distribution Agreement between the
Registrant and CFBDS, as distributor with respect to Class A shares of the
CitiSelect Portfolios
***** e(2) Form of Distribution Agreement between the Registrant and CFBDS, as
distributor with respect to Class B shares of the CitiSelect Portfolios
*** g(1) Custodian Agreement of the Registrant and State Street Bank and Trust
Company ("State Street"), as custodian
*** g(2) Letter Agreement regarding the Custodian Contract between the Registrant
and State Street
*** h Transfer Agency and Servicing Agreement between the Registrant and
State Street, as transfer agent
***** j Opinion and consent of counsel
***** m(1) Form of Amended and Restated Service Plan of the Registrant for Class A
Shares of the CitiSelect Portfolios
***** m(2) Form of Service Plan of the Registrant for Class B Shares of the CitiSelect
Portfolios
***** o Form of Multiple Class Plan of the Registrant
**** p(1) Powers of Attorney for the Registrant
***** p(2) Powers of Attorney for The Premium Portfolios
***** p(3) Powers of Attorney for Asset Allocation Portfolios

</TABLE>

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

* Incorporated herein by reference to Post-Effective Amendment No. 20
to the Registrant's Registration Statement on Form N-1A (File No.
2-90518) as filed with the Securities and Exchange Commission on
December 31, 1996.

** Incorporated herein by reference to Post-Effective Amendment No. 25
to the Registrant's Registration Statement on Form N-1A (File No.
2-90518) as filed with the Securities and Exchange Commission on
April 18, 1997.

*** Incorporated herein by reference to Post-Effective Amendment No. 26
to the Registrant's Registration Statement on Form N-1A (File No.
2-90518) as filed with the Securities and Exchange Commission on
December 30, 1997.

**** Incorporated herein by reference to Post-Effective Amendment No. 27
to the Registrant's Registration Statement on Form N-1A (File No.
2-90518) as filed with the Securities and Exchange Commission on
February 24, 1998.

***** Incorporated herein by reference to Post-Effective Amendment No. 29
to the Registrant's Registration Statement on Form N-1A (File No.
2-90518) as filed with the Securities and Exchange Commission on
December 16, 1998.

Item 24. Persons Controlled by or under Common Control with Registrant.

Not applicable.

<PAGE>

Item 25. Indemnification.

Reference is hereby made to (a) Article V of the Registrant's Declaration
of Trust, filed as an Exhibit to Post-Effective Amendment No. 20 to its
Registration Statement on Form N-1A; (b) Section 6 of the Distribution
Agreements between the Registrant and CFBDS, Inc., filed as Exhibits to
Post-Effective Amendment No. 29 to its Registration Statement on Form N-1A; and
(c) the undertaking of the Registrant regarding indemnification set forth in
its Registration Statement on Form N-1A.

The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940.

Item 26. Business and Other Connections of Investment Adviser.

Citibank, N.A. ("Citibank") is a commercial bank offering a wide range of
banking and investment services to customers across the United States and
around the world. Citibank is a wholly-owned subsidiary of Citicorp, which is,
in turn, a wholly-owned subsidiary of Citigroup Inc. Citibank also serves as
investment adviser to the following registered investment companies (or series
thereof): Asset Allocation Portfolios (Large Cap Value Portfolio, Small Cap
Value Portfolio, International Portfolio, Foreign Bond Portfolio, Intermediate
Income Portfolio and Short-Term Portfolio), The Premium Portfolios (U.S. Fixed
Income Portfolio, Growth & Income Portfolio, Balanced Portfolio, Large Cap
Growth Portfolio, International Equity Portfolio, Government Income Portfolio
and Small Cap Growth Portfolio), Tax Free Reserves Portfolio, U.S. Treasury
Reserves Portfolio, Cash Reserves Portfolio, CitiFundsSM Tax Free Income Trust
(CitiFundsSM New York Tax Free Income Portfolio, CitiFundsSM National Tax Free
Income Portfolio and CitiFundsSM California Tax Free Income Portfolio),
CitiFundsSM Multi-State Tax Free Trust (CitiFundsSM California Tax Free
Reserves, CitiFundsSM New York Tax Free Reserves and CitiFundsSM Connecticut
Tax Free Reserves), CitiFundsSM Institutional Trust (CitiFundsSM Institutional
Cash Reserves) and Variable Annuity Portfolios (CitiSelect VIP Folio 200,
CitiSelect VIP Folio 300, CitiSelect VIP Folio 400, CitiSelect VIP Folio 500
and CitiFundsSM Small Cap Growth VIP Portfolio). Citibank and its affiliates
manage assets in excess of $290 billion worldwide. The principal place of
business of Citibank is located at 399 Park Avenue, New York, New York 10043.

John S. Reed is the Chairman and a Director of Citibank. Victor J. Menezes
is the President and a Director of Citibank. William R. Rhodes and H. Onno
Ruding are Vice Chairmen and Directors of Citibank. The other Directors of
Citibank are Paul J. Collins, Vice Chairman of Citigroup Inc. and Robert I.
Lipp, Chairman and Chief Executive Officer of The Travelers Insurance Group
Inc. and of Travelers Property Casualty Corp.

Each of the individuals named above is also a Director of Citigroup Inc.
In addition, the following persons have the affiliations indicated:

Paul J. Collins Director, Kimberly-Clark Corporation

Robert I. Lipp Chairman, Chief Executive Officer and President, Travelers
Property Casualty Co.

John S. Reed Director, Monsanto Company
Director, Philip Morris Companies
Incorporated
Stockholder, Tampa Tank & Welding, Inc.

<PAGE>

William R. Rhodes Director, Private Export Funding
Corporation

H. Onno Ruding Supervisory Director, Amsterdamsch Trustees Cantoor B.V.
Director, Pechiney S.A.
Advisory Director, Unilever NV and Unilever PLC
Director, Corning Incorporated

Franklin Advisory Services, Inc. ("Franklin"), a sub-adviser with respect
to the small cap value securities of Small Cap Value Portfolio, a series of
Asset Allocation Portfolios, maintains its principal office at One Parker
Plaza, 16th Floor, Fort Lee, New Jersey 07024. Franklin, a Delaware corporation
incorporated in 1996, is a registered investment adviser under the Investment
Advisers Act of 1940 and is a wholly-owned subsidiary of Franklin Resources,
Inc., a publicly owned holding company. Franklin is an investment adviser to
various open-end and closed-end investment companies.

William J. Lippman is the President and Director of Franklin Advisory
Services, Inc. Mr. Lippman holds a master of business administration degree
from New York University and a bachelor of business administration degree from
City College of New York. Mr. Lippman also serves as Senior Vice President of
Franklin Resources, Inc. and Franklin Management, Inc. and has been with the
Franklin Templeton Group since 1988. Prior to joining Franklin Advisers Inc.,
Mr. Lippman was president of L.F. Rothschild Fund Management, Inc. and has been
in the securities industry for over 30 years.

Each of the individuals named below is an officer and/or Director of
Franklin and has the affiliations indicated:

Name: Affiliations:
<S> <C>

William J. Lippman Senior Vice President, Franklin Resources, Inc.
President and Director Senior Vice President, Franklin Advisers, Inc.
Senior Vice President, Franklin Templeton Distributors, Inc.
Senior Vice President, Franklin Management, Inc.

Mr. Lippman also serves as officer and/or director
or trustee of eight of the investment companies in
the Franklin Group of Funds.

Charles B. Johnson President, Chief Executive Officer and Director, Franklin
Chairman of the Board and Resources, Inc.
Director Chairman of the Board and Director, Franklin Advisers, Inc.
Chairman of the Board and Director, Franklin Investment
Advisory Services, Inc.
Chairman of the Board and Director, Franklin Templeton
Distributors, Inc.
Director, Franklin/Templeton Investor Services, Inc.
Director, Franklin Templeton Services, Inc.
Director, General Host Corporation

Mr. Johnson also serves as officer and/or director or trustee, as
the case may be, of most of the other subsidiaries of Franklin
Resources, Inc. and of 54 of the investment companies in the
Franklin Templeton Group of Funds.

<PAGE>

Rupert H. Johnson, Jr. Executive Vice President and Director, Franklin Resources,
Senior Vice President and Inc.
Director Executive Vice President and Director, Franklin Templeton
Distributors, Inc.
President and Director, Franklin Advisers, Inc.
Senior Vice President and Director, Franklin Investment
Advisory Services, Inc.
Director, Franklin/Templeton Investor Services, Inc.

Mr. Johnson also serves as officer and/or director, trustee or
managing general partner, as the case may be, of most other
subsidiaries of Franklin Resources, Inc. and of 60 of the
investment companies in the Franklin Templeton Group of Funds.

Deborah R. Gatzek Senior Vice President and General Counsel, Franklin Resources,
Vice President and Assistant Inc.
Secretary Senior Vice President, Franklin Templeton Distributors, Inc.
Vice President, Franklin Advisers, Inc.
Vice President, Franklin Investment Advisory Services, Inc.

Ms. Gatzek also serves as officer of 60 of the investment
companies in the Franklin Templeton Group of Funds.

Martin L. Flanagan Senior Vice President, Chief Financial Officer and Treasurer,
Treasurer Franklin Resources, Inc.
Executive Vice President, Templeton Worldwide, Inc.
Senior Vice President and Treasurer, Franklin Advisers, Inc.
Senior Vice President and Treasurer, Franklin Templeton
Distributors, Inc.
Senior Vice President, Franklin/Templeton Investor Services, Inc.
Treasurer, Franklin Investment Advisory Services, Inc.

Mr. Flanagan also serves as officer of most other subsidiaries of
Franklin Resources, Inc. and officer, director and/or trustee of
60 of the investment companies in the Franklin Templeton
Group of Funds.

Leslie M. Kratter Vice President, Franklin Resources, Inc.
Secretary Vice President, Franklin Institutional Services Corporation
President and Director, Franklin/Templeton Travel, Inc.

</TABLE>

Pacific Investment Management Company ("PIMCO"), a sub-adviser to Foreign
Bond Portfolio, a series of Asset Allocation Portfolios, maintains its
principal office at 840 Newport Center Drive, Suite 360, P.O. Box 6480, Newport
Beach, California 92658-9030. PIMCO is a registered investment adviser under
the Investment Advisers Act of 1940.

Lee R. Thomas, III joined PIMCO in 1995 and is the Senior International
Portfolio Manager at PIMCO, as well as a Managing Director of PIMCO. Previously
he was a member of Investcorp's Management Committee, where he was responsible
for global securities and foreign exchange trading. Prior to Investcorp, he was
associated with Goldman Sachs, where he was an Executive Director in the fixed
income division of their London office.

<PAGE>

Each of the individuals named below is a Managing Director of PIMCO and
has the affiliations indicated:

Name and Position: Other Affiliations:

William H. Gross, CFA None
Senior Fixed Income Portfolio
Manager

David H. Edington None
Senior Fixed Income Portfolio
Manager

John L. Hague None
Senior Fixed Income Portfolio
Manager

Brent R. Harris, CFA None
Director of Marketing

Dean S. Meiling, CFA None
Account Manager

James F. Muzzy, CFA None
Account Manager

William F. Podlich, III None

William C. Powers None
Senior Fixed Income Portfolio
Manager

Frank B. Rabinovitch None
Senior Fixed Income Portfolio
Manager

Lee R. Thomas, III None
Senior International Portfolio
Manager

William S. Thompson Director, Spieker Properties Inc.
Chief Executive Officer

Hotchkis and Wiley, a division of the Capital Management Group of Merrill
Lynch Asset Management, L.P. ("Hotchkis"), a sub-adviser to International
Portfolio, a series of Asset Allocation Portfolios, maintains its principal
office at 800 West Sixth Street, Fifth Floor, Los Angeles, California 90017.
Harry Hartford and Sarah Ketterer manage international equity accounts and are
also responsible for international investment research. Each serves on the
Investment Policy Committee at Hotchkis. Prior to joining Hotchkis, Mr.
Hartford was with the Investment Bank of Ireland, where he gained 10 years of
experience in both international and global equity management. Prior to joining
Hotchkis, Ms. Ketterer was an associate with Bankers Trust and an analyst at
Dean Witter.

Hotchkis became a division of the Capital Management Group of Merrill
Lynch Asset Management, L.P. upon the completion of the sale by Hotchkis and
Wiley, a Delaware Limited Liability Company and the general partner of Hotchkis
& Wiley, a California limited partnership, of all of the partnership interests
in Hotchkis & Wiley to Merrill Lynch & Co., Inc., a Delaware corporation, in
November of 1996.

<PAGE>

Following are the managing personnel of Hotchkis:

Name and Position: Other Affiliations:

John F. Hotchkis Trustee, Hotchkis and Wiley Funds
Portfolio Manager Board of Governors, The Music Center
Chairman Director, The Music Center Foundation
Director, Los Angeles Philharmonic Orchestra
Director, Big Brothers of Greater Los Angeles
Director, Executive Service Corps of Southern California
Director, KCET
Director, Teach for America
Trustee, The Lawrenceville School
Trustee, Robert Louis Stevenson School
Director, Fountainhead Water Company, Inc.

Michael L. Quinn Head of Merrill Lynch Capital Management Group
Chief Executive
Officer

<PAGE>

Item 27. Principal Underwriters.

(a) CFBDS, the Registrant's Distributor, is also the distributor for
CitiFundsSM International Growth & Income Portfolio, CitiFundsSM International
Growth Portfolio, CitiFundsSM U.S. Treasury Reserves, CitiFundsSM Cash
Reserves, CitiFundsSM Premium U.S. Treasury Reserves, CitiFundsSM Premium
Liquid Reserves, CitiFundsSM Institutional U.S. Treasury Reserves, CitiFundsSM
Institutional Liquid Reserves, CitiFundsSM Institutional Cash Reserves,
CitiFundsSM Tax Free Reserves, CitiFundsSM Institutional Tax Free Reserves,
CitiFundsSM California Tax Free Reserves, CitiFundsSM Connecticut Tax Free
Reserves, CitiFundsSM New York Tax Free Reserves, CitiFundsSM Intermediate
Income Portfolio, CitiFundsSM Short-Term U.S. Government Income Portfolio,
CitiFundsSM New York Tax Free Income Portfolio, CitiFundsSM National Tax Free
Income Portfolio, CitiFundsSM California Tax Free Income Portfolio, CitiFundsSM
Small Cap Value Portfolio, CitiFundsSM Growth & Income Portfolio, CitiFundsSM
Large Cap Growth Portfolio, CitiFundsSM Small Cap Growth Portfolio, CitiFundsSM
Balanced Portfolio, CitiSelect VIP Folio 200, CitiSelect VIP Folio 300,
CitiSelect VIP Folio 400, CitiSelect VIP Folio 500 and CitiFundsSM Small Cap
Growth VIP Portfolio. CFBDS is also the placement agent for Large Cap Value
Portfolio, Small Cap Value Portfolio, International Portfolio, Foreign Bond
Portfolio, Intermediate Income Portfolio, Short-Term Portfolio, Growth & Income
Portfolio, U.S. Fixed Income Portfolio, Large Cap Growth Portfolio, Small Cap
Growth Portfolio, International Equity Portfolio, Balanced Portfolio,
Government Income Portfolio, Tax Free Reserves Portfolio, Cash Reserves
Portfolio and U.S. Treasury Reserves Portfolio. CFBDS also serves as the
distributor for the following funds: The Travelers Fund U for Variable
Annuities, The Travelers Fund VA for Variable Annuities, The Travelers Fund BD
for Variable Annuities, The Travelers Fund BD II for Variable Annuities, The
Travelers Fund BD III for Variable Annuities, The Travelers Fund BD IV for
Variable Annuities, The Travelers Fund ABD for Variable Annuities, The
Travelers Fund ABD II for Variable Annuities, The Travelers Separate Account PF
for Variable Annuities, The Travelers Separate Account PF II for Variable
Annuities, The Travelers Separate Account QP for Variable Annuities, The
Travelers Separate Account TM for Variable Annuities, The Travelers Separate
Account TM II for Variable Annuities, The Travelers Separate Account Five for
Variable Annuities, The Travelers Separate Account Six for Variable Annuities,
The Travelers Separate Account Seven for Variable Annuities, The Travelers
Separate Account Eight for Variable Annuities, The Travelers Fund UL for
Variable Annuities, The Travelers Fund UL II for Variable Annuities, The
Travelers Variable Life Insurance Separate Account One, The Travelers Variable
Life Insurance Separate Account Two, The Travelers Variable Life Insurance

<PAGE>

Separate Account Three, The Travelers Variable Life Insurance Separate Account
Four, The Travelers Separate Account MGA, The Travelers Separate Account MGA
II, The Travelers Growth and Income Stock Account for Variable Annuities, The
Travelers Quality Bond Account for Variable Annuities, The Travelers Money
Market Account for Variable Annuities, The Travelers Timed Growth and Income
Stock Account for Variable Annuities, The Travelers Timed Short-Term Bond
Account for Variable Annuities, The Travelers Timed Aggressive Stock Account
for Variable Annuities, The Travelers Timed Bond Account for Variable
Annuities, Emerging Growth Fund, Government Fund, Growth and Income Fund,
International Equity Fund, Municipal Fund, Balanced Investments, Emerging
Markets Equity Investments, Government Money Investments, High Yield
Investments, Intermediate Fixed Income Investments, International Equity
Investments, International Fixed Income Investments, Large Capitalization
Growth Investments, Large Capitalization Value Equity Investments, Long-Term
Bond Investments, Mortgage Backed Investments, Municipal Bond Investments,
Small Capitalization Growth Investments, Small Capitalization Value Equity
Investments, Appreciation Portfolio, Diversified Strategic Income Portfolio,
Emerging Growth Portfolio, Equity Income Portfolio, Equity Index Portfolio,
Growth & Income Portfolio, Intermediate High Grade Portfolio, International
Equity Portfolio, Money Market Portfolio, Total Return Portfolio, Smith Barney
Adjustable Rate Government Income Fund, Smith Barney Aggressive Growth Fund
Inc., Smith Barney Appreciation Fund, Smith Barney Arizona Municipals Fund
Inc., Smith Barney California Municipals Fund Inc., Balanced Portfolio,
Conservative Portfolio, Growth Portfolio, High Growth Portfolio, Income
Portfolio, Global Portfolio, Select Balanced Portfolio, Select Conservative
Portfolio, Select Growth Portfolio, Select High Growth Portfolio, Select Income
Portfolio, Concert Social Awareness Fund, Smith Barney Large Cap Blend Fund,
Smith Barney Fundamental Value Fund Inc., Large Cap Value Fund, Short-Term High
Grade Bond Fund, U.S. Government Securities Fund, Smith Barney Balanced Fund,
Smith Barney Convertible Fund, Smith Barney Diversified Strategic Income Fund,
Smith Barney Exchange Reserve Fund, Smith Barney High Income Fund, Smith Barney
Municipal High Income Fund, Smith Barney Premium Total Return Fund, Smith
Barney Total Return Bond Fund, Cash Portfolio, Government Portfolio, Municipal
Portfolio, Concert Peachtree Growth Fund, Smith Barney Contrarian Fund, Smith
Barney Government Securities Fund, Smith Barney Hansberger Global Small Cap
Value Fund, Smith Barney Hansberger Global Value Fund, Smith Barney Investment
Grade Bond Fund, Smith Barney Special Equities Fund, Smith Barney Intermediate
Maturity California Municipals Fund, Smith Barney Intermediate Maturity New
York Municipals Fund, Smith Barney Large Capitalization Growth Fund, Smith
Barney S&P 500 Index Fund, Smith Barney Mid Cap Blend Fund, Smith Barney
Managed Governments Fund Inc., Smith Barney Managed Municipals Fund Inc., Smith
Barney Massachusetts Municipals Fund, Cash Portfolio, Government Portfolio,
Retirement Portfolio, California Money Market Portfolio, Florida Portfolio,
Georgia Portfolio, Limited Term Portfolio, New York Money Market Portfolio, New
York Portfolio, Pennsylvania Portfolio, Smith Barney Municipal Money Market
Fund, Inc., Smith Barney Natural Resources Fund Inc., Smith Barney New Jersey
Municipals Fund Inc., Smith Barney Oregon Municipals Fund, Zeros Plus Emerging
Growth Series 2000, Smith Barney Security and Growth Fund, Smith Barney Small
Cap Blend Fund, Inc., Smith Barney Telecommunications Income Fund, Income and
Growth Portfolio, Reserve Account Portfolio, U.S. Government/High Quality
Securities Portfolio, Emerging Markets Portfolio, European Portfolio, Global
Government Bond Portfolio, International Balanced Portfolio, International
Equity Portfolio, Pacific Portfolio, AIM Capital Appreciation Portfolio,
Alliance Growth Portfolio, GT Global Strategic Income Portfolio, MFS Total
Return Portfolio, Putnam Diversified Income Portfolio, Smith Barney High Income
Portfolio, Smith Barney Large Cap Value Portfolio, Smith Barney International
Equity Portfolio, Smith Barney Large Capitalization Growth Portfolio, Smith
Barney Money Market Portfolio, Smith Barney Pacific Basin Portfolio, TBC
Managed Income Portfolio, Van Kampen American Capital Enterprise Portfolio,
Centurion Tax-Managed U.S. Equity Fund, Centurion Tax-Managed International
Equity Fund, Centurion U.S. Protection Fund, Centurion International Protection
Fund, Global High-Yield Bond Fund, International Equity Fund, Emerging
Opportunities Fund, Core Equity Fund, Long-Term Bond Fund, Global Dimensions
Fund L.P., Citicorp Private Equity L.P., AIM V.I. Capital Appreciation Fund,
AIM V.I. Government Series Fund, AIM V.I. Growth Fund, AIM V.I. International
Equity Fund, AIM V.I. Value Fund, Fidelity VIP Growth Portfolio, Fidelity VIP
High Income Portfolio, Fidelity VIP Equity Income Portfolio, Fidelity VIP
Overseas Portfolio, Fidelity VIP II Contrafund Portfolio, Fidelity VIP II Index
500 Portfolio, MFS World Government Series, MFS Money Market Series, MFS Bond
Series, MFS Total Return Series, MFS Research Series, MFS Emerging Growth
Series, Salomon Brothers Institutional Money Market Fund, Salomon Brothers Cash

<PAGE>

Management Fund, Salomon Brothers New York Municipal Money Market Fund, Salomon
Brothers National Intermediate Municipal Fund, Salomon Brothers U.S. Government
Income Fund, Salomon Brothers High Yield Bond Fund, Salomon Brothers Strategic
Bond Fund, Salomon Brothers Total Return Fund, Salomon Brothers Asia Growth
Fund, Salomon Brothers Capital Fund Inc, Salomon Brothers Investors Fund Inc,
Salomon Brothers Opportunity Fund Inc, Salomon Brothers Institutional High
Yield Bond Fund, Salomon Brothers Institutional Emerging Markets Debt Fund,
Salomon Brothers Variable Investors Fund, Salomon Brothers Variable Capital
Fund, Salomon Brothers Variable Total Return Fund, Salomon Brothers Variable
High Yield Bond Fund, Salomon Brothers Variable Strategic Bond Fund, Salomon
Brothers Variable U.S. Government Income Fund, and Salomon Brothers Variable
Asia Growth Fund.

(b) The information required by this Item 27 with respect to each director
and officer of CFBDS is incorporated by reference to Schedule A of Form BD
filed by CFBDS pursuant to the Securities and Exchange Act of 1934 (File No.
8-32417).

Item 28. Location of Accounts and Records.

The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:

NAME ADDRESS

CFBDS, Inc. 21 Milk Street
(distributor) Boston, MA 02109

State Street Bank and Trust Company 1776 Heritage Drive
(transfer agent and custodian) North Quincy, MA 02171

Citibank, N.A. 153 East 53rd Street
(investment manager) New York, NY 10043

Item 29. Management Services.

Not applicable.

Item 30. Undertakings.

Not applicable.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston and Commonwealth of
Massachusetts on the 23rd day of December, 1998.

CITIFUNDS TRUST I

By Philip W. Coolidge
-----------------------
Philip W. Coolidge
President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities indicated below on December 23, 1998.

Signature Title

Philip W. Coolidge President, Principal Executive Officer and Trustee
- -----------------------
Philip W. Coolidge

John R. Elder Principal Financial Officer and Principal
- ----------------------- Accounting Officer
John R. Elder

Riley C. Gilley* Trustee
- -----------------------
Riley C. Gilley

Diana R. Harrington* Trustee
- -----------------------
Diana R. Harrington

Susan B. Kerley* Trustee
- -----------------------
Susan B. Kerley

C. Oscar Morong, Jr.* Trustee
- -----------------------
C. Oscar Morong, Jr.

E. Kirby Warren* Trustee
- -----------------------
E. Kirby Warren

William S. Woods, Jr.* Trustee
- -----------------------
William S. Woods, Jr.

*By: Philip W. Coolidge
-------------------
Philip W. Coolidge
Executed by Philip W. Coolidge on behalf of
those indicated pursuant to Powers of
Attorney.

<PAGE>

EXHIBIT INDEX

a(2) Amendments to the Declaration of Trust of the Registrant

Exhibit a(2)

LANDMARK FUNDS I

AMENDMENT TO
DECLARATION OF TRUST

The undersigned, constituting a majority of the Trustees of Landmark Funds
I (the "Trust"), a business trust organized under the laws of the Commonwealth
of Massachusetts, pursuant to a Declaration of Trust dated April 13, 1984, as
amended and restated (the "Declaration"), do hereby amend Section 1.1 of the
Declaration by deleting Section 1.1 in its entirety and replacing it with the
following, effective on such date as any officer of the Trust may select by
written notice to the Trust:

Section 1.1. Name. The name of the trust created hereby is
"CitiFunds Trust I."

IN WITNESS WHEREOF, the undersigned have executed this Amendment this 14th
day of November, 1997.

Philip W. Coolidge Riley C. Gilley
- -------------------------------- --------------------------------
PHILIP W. COOLIDGE RILEY C. GILLEY
As trustee and not individually As trustee and not individually

Diana R. Harrington Susan B. Kerley
- -------------------------------- --------------------------------
DIANA R. HARRINGTON SUSAN B. KERLEY
As trustee and not individually As trustee and not individually

C. Oscar Morong, Jr. E. Kirby Warren
- -------------------------------- --------------------------------
C. OSCAR MORONG, JR. E. KIRBY WARREN
As trustee and not individually As trustee and not individually

William S. Woods, Jr.
- --------------------------------
WILLIAM S. WOODS, JR.
As trustee and not individually

<PAGE>

Philip W. Coolidge
President
Landmark Funds I
c/o Signature Financial Group Inc.
6 St. James Avenue, 9th Floor
Boston, MA 02116

I, Philip W. Coolidge, hereby certify that I am the duly elected,
qualified and acting President of Landmark Funds I, a Massachusetts business
trust (the "Trust"), and, pursuant to authority granted by the Board of
Trustees of the Trust at a meeting held on November 14, 1997, do hereby give
notice that the Amendment to Declaration of Trust of the Trust, as executed by
the Trustees of the Trust on November 14, 1997, shall become effective as of
March 2, 1998.

IN WITNESS WHEREOF, I have hereunto signed my name at Boston,
Massachusetts this 10th day of February, 1998.

Philip Coolidge
-------------------------------
Philip W. Coolidge, President

<PAGE>

CITIFUNDS TRUST I

AMENDED AND RESTATED
ESTABLISHMENT AND DESIGNATION OF SERIES OF
SHARES OF BENEFICIAL INTEREST (WITHOUT PAR VALUE)

Pursuant to Section 6.9 of the Declaration of Trust, dated April 13, 1984,
as amended and restated (the "Declaration of Trust"), of CitiFunds Trust I
(formerly, Landmark Funds I) (the "Trust"), the undersigned, being a majority
of the Trustees of the Trust, do hereby amend and restate the Trust's existing
Establishment and Designation of Series of Shares of Beneficial Interest
(without par value) in order to change the name of one series of Shares (as
defined in the Declaration of Trust) which was previously established and
designated. No other changes to the special and relative rights of the existing
series are intended by this amendment and restatement. This amendment and
restatement shall become effective on such date as any officer of the Trust may
select by written notice to the Trust.

1. The series shall be as follows:

The series previously designated as Landmark Balanced Fund shall be
redesignated as "CitiFunds Balanced Portfolio."

The remaining series are as follows:
CitiSelect Folio 100;
CitiSelect Folio 200;
CitiSelect Folio 300;
CitiSelect Folio 400; and
CitiSelect Folio 500.

2. Each series shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then currently effective registration statement under the Securities Act of
1933 to the extent pertaining to the offering of Shares of each series. Each
Share of each series shall be redeemable, shall be entitled to one vote or
fraction thereof in respect of a fractional share on matters on which shares of
that series shall be entitled to vote, shall represent a pro rata beneficial
interest in the assets allocated or belonging to such series, and shall be
entitled to receive its pro rata share of the net assets of such series upon
liquidation of the series, all as provided in Section 6.9 of the Declaration of
Trust.

<PAGE>

3. Shareholders of each series shall vote separately as a class on any
matter to the extent required by, and any matter shall be deemed to have been
effectively acted upon with respect to each series as provided in, Rule 18f-2,
as from time to time in effect, under the Investment Company Act of 1940, as
amended, or any successor rule, and by the Declaration of Trust.

4. The assets and liabilities of the Trust shall be allocated to each
series as set forth in Section 6.9 of the Declaration of Trust.

5. Subject to the provisions of Section 6.9 and Article IX of the
Declaration of Trust, the Trustees (including any successor Trustees) shall
have the right at any time and from time to time to reallocate assets and
expenses or to change the designation of any series now or hereafter created or
otherwise to change the special and relative rights of any such series.

IN WITNESS WHEREOF, the undersigned have executed this Establishment and
Designation of Series on separate counterparts this 14th day of November, 1997.

William S. Woods, Jr.
- --------------------------------
WILLIAM S. WOODS, JR.
As trustee and not individually