CITISELECT(R) PORTFOLIOS
SEMI-ANNUAL REPORT
April 30, 2000
BUILT FOR
TODAY'S INVESTOR | ASSET ALLOCATION
| FUND DESIGNED
| TO MAKE YOUR
CITISELECT(R) FOLIO 100 INCOME | MONEY WORK
CITISELECT(R) FOLIO 200 CONSERVATIVE |
CITISELECT(R) FOLIO 300 BALANCED |
CITISELECT(R) FOLIO 400 GROWTH |
CITISELECT(R) FOLIO 500 GROWTH PLUS |
................................................................................
INVESTMENT PRODUCTS: NOT FDIC INSURED O NO BANK GUARANTEE O MAY LOSE VALUE
................................................................................
<PAGE>
TABLE OF CONTENTS
Letter to Our Shareholders 1
................................................................................
Portfolio Environment and Outlook 2
................................................................................
Risk Reward Trade-Off 4
................................................................................
Fund Facts 5
................................................................................
Portfolio Highlights 6
................................................................................
Fund Performance 7
................................................................................
Statements of Assets and Liabilities 12
................................................................................
Statements of Operations 14
................................................................................
Statements of Changes in Net Assets 16
................................................................................
Financial Highlights 18
................................................................................
Notes to Financial Statements 22
................................................................................
<PAGE>
LETTER TO OUR SHAREHOLDERS
Dear CitiSelect Portfolios Shareholder:
During the six months ended April 30, 2000, the U.S. stock and bond markets
experienced historic levels of volatility, leaving many investors with little or
no clear indication of the future direction of the financial markets. Despite
the ongoing strength and expansion of both the U.S. and global economies,
investor concerns regarding inflation and rising interest rates led to wide
fluctuations in stock prices.
In this environment, the CitiSelect Portfolios' investment adviser, Citibank,
N.A., continued to manage the Funds according to their individual investment
objectives and risk characteristic parameters set forth in the prospectus.
Accordingly, on a relative basis, CitiSelect Folio 500 Growth Plus produced the
highest returns with the greatest level of risk, while CitiSelect Folio 400
Growth, Folio 300 Balanced and Folio 200 Conservative provided incrementally
lower returns and risks, respectively. CitiSelect Folio 100 Income, the most
conservative portfolio, provided the lowest returns with the least risk.
This report reviews the Funds' investment activities and investment
performance during the reporting period and provides a summary of Citibank's
perspective on and outlook for the financial markets. On behalf of the Board of
Trustees, I want to thank you for your continued confidence and participation
during these challenging times.
/s/ Philip W. Coolidge
----------------------
Philip W. Coolidge
President
May 15, 2000
1
<PAGE>
PORTFOLIO ENVIRONMENT AND OUTLOOK
THE PERFORMANCE OF LARGE CAP GROWTH STOCKS DURING THE REPORTING PERIOD CAN
BEST BE DESCRIBED IN 19TH CENTURY AUTHOR CHARLES DICKENS' FAMOUS WORDS AS BOTH
"THE BEST OF TIMES AND THE WORST OF TIMES". (Growth stocks are shares of those
companies that are expected to grow earnings faster than the overall market.) To
many investors, the performance of stocks in the fourth quarter of 1999 was
reflective of the "best of times". Many large cap growth stocks, especially
technology and telecommunications stocks, rose sharply as investors drove up
prices amid optimism about the so-called "New Economy", represented primarily by
technology stocks in the biotechnology, communications, Internet and software
industries.
During the first quarter of 2000, however, investor optimism waned,
triggering a decline in many share prices, resulting in what seemed like the
"worst of times". The prices of many stocks, especially those in the technology
sector, fell amid investors' concerns regarding the fundamentals and valuations
of their issuers.
IN THE OPINION OF MANAGEMENT, INVESTORS BEGAN TO CONCLUDE THAT SOME
COMPANIES' STOCK PRICES MAY BE TOO HIGH RELATIVE TO FUNDAMENTALS SUCH AS
REVENUES AND EARNINGS. THE HIGH LEVELS OF VOLATILITY OF THE U.S. STOCK MARKET
TOOK PLACE AGAINST AN ECONOMIC BACKDROP OF ROBUST ECONOMIC GROWTH AND RISING
INTEREST RATES. Strengthening economies worldwide encouraged many investors to
believe that expanding global demand for goods and services would in turn fuel
rising revenues and earnings for large U.S. companies.
However, rising U.S. interest rates tended to have the opposite effect during
the reporting period, dampening investor enthusiasm because of the adverse
effects of higher financing costs that can negatively impact corporate earnings.
Indeed, higher interest rates were the result of more restrictive monetary
policies adopted by several central banks that became increasingly concerned
that unsustainable economic growth might reignite inflationary pressures.
In an attempt to reduce the rate of economic growth, the Federal Reserve
Board ("Fed") raised short-term interest rates by three 25-basis point*
increments (to 6.00%) during the reporting period**. Despite these rate hikes,
SEVERAL MAJOR U.S. STOCK MARKET INDEXES, INCLUDING THE STANDARD & POOR'S 500
INDEX ("S&P 500")***, REACHED RECORD LEVELS BY THE END OF 1999. However, a
closer examination revealed that many investors had already begun to turn their
attention away from the large, well-known, blue chip companies that previously
led the market and in which the CitiSelect Portfolios invest. Investors
gravitated toward young and, for the most part, relatively unproven technology
companies that they believed had great investment potential. Similarly, for the
first time in several years, the small cap growth sector of the U.S. stock
market outperformed the large cap sector during the reporting period. The value
sector continued to remain largely out of favor with most investors and
continued to underperform the overall market. (Value stocks are stocks that are
inexpensive compared to the stocks of other companies with similar earnings or
assets.)
However, during the first quarter of 2000, the performance of the U.S. stock
market dramatically changed. Faced with evidence that the U.S. economy was
gaining momentum and that inflationary pressures were building, investor
sentiment shifted dramatically. The prices of many large cap stocks fell sharply
in January and February before recovering in early March. Between mid-March and
the end of April, however, the market experienced a substantial correction. The
tech-laden NASDAQ Composite Index**** fell by more than 30%, including a
single-day drop of 10% on April 14, 2000. Shares of more seasoned "blue chip"
companies ("Old Economy") declined less severely, reflected by the 7.18% return
of the S&P 500.
Overseas stock markets roughly followed the patterns established in the
United States, wherein many technology companies drove Japanese and European
equity markets higher during the fourth quarter of 1999 and, after considerable
volatility, lower during the first quarter of 2000.
IN THE U.S. BOND MARKET, MOST BOND PRICES MODESTLY DECLINED AS A RESULT OF
HIGHER INTEREST RATES. This was especially true of the higher yielding market
sectors such as corporate bonds and mortgage-backed securities. Conversely,
long-term U.S. Treasury securities rallied during the period, primarily due to
unique supply and demand influences and the federal government's buyback of
outstanding U.S. Treasury debt.
* A basis point is .01% or one one-hundredth of one percent.
** Please note that on May 16, 2000, after this letter was written, the Fed
raised interest rates 50 basis points to 6.50%.
*** The S&P 500 is an index of U.S. common stocks is used as a gauge of general
U.S. stock market performance.
**** The NASDAQ Composite Index is a market value-weighted index that measures
all domestic-based securities listed on the NASDAQ stock market.
2
<PAGE>
FACED WITH THESE VOLATILE MARKET CONDITIONS, CITISELECT(R) PORTFOLIOS
CONTINUED TO ADHERE TO THEIR LONG-TERM DIVERSIFICATION STRATEGY. Broad
diversification enabled CitiSelect Folio 500, the most aggressive portfolio, to
somewhat cushion the volatility of the stock markets while still participating
in some of its gains. Yet, overall, management is disappointed by the Funds'
returns since they are below their expected long-term performance. Looking
ahead, the CitiSelect management team expects heightened volatility to continue
in 2000 because of ongoing investor uncertainty about inflation and the pace of
economic growth.
Please note that international investing involves certain risks, such as
currency fluctuations, differing accounting and financial disclosure standards
and the potential for adverse political developments.
3
<PAGE>
RISK REWAR TRADE-OFF
CitiSelect Portfolios use a proprietary asset allocation which
seeks an optimal mix of stocks, bonds and cash to help
maximize potential return (without sales charge) for any given
level of risk. CitiSelect Folio 100 Income and CitiSelect
Folio 200 Conservative have the lowest risk level -- and the
lowest returns. CitiSelect Folio 300 Balanced scores slightly
higher on both counts, followed by CitiSelect Folio 400
Growth, then CitiSelect Folio 500 Growth Plus.
[Table below represents line chart in its printed piece]
This graph shows how the performance of each CitiSelect Portfolio compares to
the other CitiSelect Portfolios over the same period.
+CitiSelect Folio 100 Income commenced operations on May 3, 1999.
4
<PAGE>
FUND FACTS
MANAGER
Citibank, N.A.
SUBADVISERS
Franklin Advisory Services, LLC -- Small Cap Value Portfolio
Hotchkis and Wiley -- International Portfolio
SSB Citi Fund Management LLC -- Large Cap Value Portfolio
Salomon Brothers Asset Management Inc. -- High Yield Bond Portfolio
Salomon Brothers Asset Management Ltd. -- Foreign Bond Portfolio
CITISELECT FOLIO 100 INCOME
FUND OBJECTIVE
As high a level of current income as is consistent with a dominant emphasis on
fixed income securities and a small allocation to equity securities.
COMMENCEMENT OF OPERATIONS DIVIDENDS
May 3, 1999 Declared daily; paid monthly
NET ASSETS AS OF 4/30/00 CAPITAL GAINS
$207,421 Class A Paid annually, if any
$147,851 Class B
CITISELECT FOLIO 200 CONSERVATIVE
FUND OBJECTIVE
As high a total return over time as is consistent with a primary emphasis on
fixed income securities and a secondary emphasis on equity securities.
COMMENCEMENT OF OPERATIONS DIVIDENDS
June 17, 1996 Paid quarterly, if any
NET ASSETS AS OF 4/30/00 CAPITAL GAINS
$58.7 million Class A Paid annually, if any
$638,046 Class B
CITISELECT FOLIO 300 BALANCED
FUND OBJECTIVE
As high a total return over time as is consistent with a balanced emphasis on
equity and fixed income securities.
COMMENCEMENT OF OPERATIONS DIVIDENDS
June 17, 1996 Paid quarterly, if any
NET ASSETS AS OF 4/30/00 CAPITAL GAINS
$103.4 million Class A Paid annually, if any
$869,960 Class B
CITISELECT FOLIO 400 GROWTH
FUND OBJECTIVE
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.
COMMENCEMENT OF OPERATIONS DIVIDENDS
June 17, 1996 Paid annually, if any
NET ASSETS AS OF 4/30/00 CAPITAL GAINS
$118.2 million Class A Paid annually, if any
$727,645 Class B
CITISELECT FOLIO 500 GROWTH PLUS
FUND OBJECTIVE
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.
COMMENCEMENT OF OPERATIONS DIVIDENDS
September 3, 1996 Paid annually, if any
NET ASSETS AS OF 4/30/00 CAPITAL GAINS
$49.4 million Class A Paid annually, if any
$282,042 Class B
5
<PAGE>
PORTFOLIO HIGHLIGHTS
TOP FIVE SECURITIES (STOCKS)
<TABLE>
<CAPTION>
LARGE CAP GROWTH PORTFOLIO
COMPANY INDUSTRY % NET ASSETS
========================================================================================================
<S> <C> <C>
General Electric Co. Conglomerates 7.91%
Cisco Systems Computer & Telecommunications Equipment 7.17%
Intel Corp. Semi-Conductors 6.69%
Microsoft Corp. Computer Software 4.79%
International Business Machines Corp. Computer & Telecommunications Equipment 4.40%
LARGE CAP VALUE PORTFOLIO
COMPANY INDUSTRY % NET ASSETS
========================================================================================================
Exxon Corp. Energy 3.56%
Kimberly-Clark Corp. Consumer Staples 3.41%
Marsh & McLennan Companies, Inc. Finance 3.38%
PepsiCo, Inc. Consumer Staples 3.31%
Williams Companies Inc. Utilities 3.31%
SMALL CAP GROWTH PORTFOLIO
COMPANY INDUSTRY % NET ASSETS
========================================================================================================
Mercury Interactive Corp. Technology Services 2.96%
R & B Falcon Corp. Energy Minerals 2.70%
Powerwave Technologies, Inc. Electronics/Technical Services 2.17%
Amkor Technologies, Inc. Electronics/Technical Services 2.16%
Pinnacle Holdings, Inc. Electronics/Technical Services 2.10%
SMALL CAP VALUE PORTFOLIO
COMPANY INDUSTRY % NET ASSETS
========================================================================================================
Presidential Life Corp. Finance 4.61%
JLG Industries, Inc. Producer Manufacturing 3.87%
Professionals Group Inc. Finance 3.39%
Timken Co. Producer Manufacturing 3.29%
Wolverine World Wide Inc. Consumer Non-Durables 2.88%
DOMESTIC FIXED INCOME
HIGH YIELD PORTFOLIO
COMPANY INDUSTRY % NET ASSETS
========================================================================================================
Frontier Vision Holdings LP Cable & Other Media 3.87%
Airplane Trust Mortgage Obligations 3.23%
United International Holdings Consumer Products/Tobacco 2.57%
NTL Inc. Cable & Other Media 2.46%
Heafner JH Inc. Cable & Other Media 2.14%
DOMESTIC FIXED INCOME
U.S. FIXED INCOME PORTFOLIO
INSTRUMENTS % NET ASSETS
========================================================================================================
Mortgage and Asset Backed Securities 64.60%
Domestic Corporations 19.37%
U.S. Treasury Issues 14.70%
Short-Term Obligations 12.00%
Foreign Corporations 5.40%
TOP 5 COUNTRIES (INTERNATIONAL ASSET CLASSES)
FOREIGN BOND PORTFOLIO
COUNTRY % NET ASSETS
========================================================================================================
Japan 27.18%
Great Britain 17.94%
United States (excludes short-term) 17.64%
Germany 11.25%
France 6.66%
INTERNATIONAL PORTFOLIO
COUNTRY % NET ASSETS
========================================================================================================
Great Britain 29.80%
Japan 10.90%
France 9.70%
Netherlands 8.20%
Switzerland 5.50%
</TABLE>
6
<PAGE>
FUND PERFORMANCE CITISELECT FOLIO 100 INCOME
TOTAL RETURNS
SINCE
SIX 5/3/99
ALL PERIODS ENDED APRIL 30, 2000 MONTHS** INCEPTION**
================================================================================
CitiSelect(R)Folio 100 Income (Class A)
without sales charge (0.94)% (1.95)%
CitiSelect(R)Folio 100 Income (Class A)
with a maximum sales charge of 4.50% (5.39)% (6.36)%
Composite Benchmark+ (Class A) 1.77% 1.11%
CitiSelect(R)Folio 100 Income (Class B)
without deferred sales charge (1.05)% (2.20)%
CitiSelect(R)Folio 100 Income (Class B)
with a maximum deferred sales charge of 4.50% (5.51)% (6.60)%
Composite Benchmark+ (Class B) 1.77% 1.11%
**Not Annualized
GROWTH OF A $10,000 INVESTMENT
A $10,000 investment in the Fund made on inception date would be worth $9,364
with sales charge (as of 4/30/00). The graph shows how the Fund compares to its
benchmarks over the same period.
[Table below represents line chart in its printed piece]
C100 LB S&P CB
5/3/99 9550 10000 10000 10000
5/31/99 9477 9764 9884 9912
6/30/99 9503 10306 9911 9880
7/31/99 9419 9984 9856 9839
8/31/99 9384 9934 9823 9834
9/30/99 9441 9662 9860 9948
10/31/99 9452 10273 9934 9985
11/30/99 9462 10482 9983 9984
12/31/99 9486 11100 10022 9936
1/31/00 9384 10542 9933 9903
2/29/00 9390 10342 10001 10023
3/31/00 9520 11354 10152 10155
4/30/00 9363 11013 10111 10126
The graph includes the initial sales charge on the Fund (no comparable charge
exists for the other indices) and assumes all dividends and distributions from
the Fund are reinvested at Net Asset Value.
Notes: We believe that the performance comparison to the composite benchmark, on
which the Fund's asset allocation model is based, is a more appropriate
comparison than a comparison to any single broad-based securities market index,
such as the S&P 500 Index or the Lehman Brothers Aggregate Bond Index, which
securities regulations require us to include. All Fund performance numbers
represent past performance, and are no guarantee of future results. The Fund's
share price and investment return will fluctuate, so that the value of an
investor's shares, when redeemed, may be worth more or less than their original
cost. Total returns include change in share price and reinvestment of dividends
and distributions, if any. Returns reflect certain voluntary fee waivers. If the
waivers were not in place, the Fund's return would have been lower. Investors
may not invest directly in an index or in the Composite Benchmark.
+The returns are based on the composite performance of unmanaged indices and
assume reinvestment of dividends and interest payments. Indices and percentages
used as of 4/30/00: S&P 500 Index -- Large Cap Stocks (10%); Lehman Bros.
Aggregate Bond Index -- Domestic Bonds (70%); Salomon Bros. High Yield Bond
Index -- High Yield (20%). Unlike the Fund's total return the Composite
Benchmark total return does not reflect any fees or expenses. Components of the
Composite Benchmark may change at any time.
7
<PAGE>
FUND PERFORMANCE CITISELECT FOLIO 200 CONSERVATIVE
TOTAL RETURNS
<TABLE>
<CAPTION>
SINCE
SIX ONE 6/17/96
ALL PERIODS ENDED APRIL 30, 2000 MONTHS** YEAR INCEPTION*
=========================================================================================
<S> <C> <C> <C>
CitiSelect(R)Folio 200 Conservative (Class A)
without sales charge 2.08% 0.61% 5.58%
CitiSelect(R)Folio 200 Conservative (Class A)
with a maximum sales charge of 4.50% (2.52)% (3.92)% 4.33%
Composite Benchmark+ (Class A) 4.37% 4.10% 8.77%
CitiSelect(R)Folio 200 Conservative (Class B)
without deferred sales charge 1.83% 0.30% (0.25)%#
CitiSelect(R)Folio 200 Conservative (Class B)
with a maximum deferred sales charge of 4.50% (2.75)% (4.21)% (3.67)%#
Composite Benchmark+ (Class B) 4.37% 4.10% 0.61%
</TABLE>
*Average Annual Total Return
**Not Annualized
#Commencement of Operations 1/4/99
GROWTH OF A $10,000 INVESTMENT
A $10,000 investment in the Fund made on inception date would have grown to
$11,786 with sales charge (as of 4/30/00). The graph shows how the Fund compares
to its benchmarks over the same period.
[Table below represents line chart in its printed piece]
200
C200 LB S&P CB
6/17/96 9500 10000 10000 10000
6/30/96 9519 10086 10023 10137
7/31/96 9405 9640 9882 10165
8/31/96 9619 9844 10026 10147
9/30/96 9805 10397 10222 10324
10/31/96 9886 10684 10324 10553
11/30/96 10150 11490 10592 10734
12/31/96 10106 11263 10572 10634
1/31/97 10159 11966 10618 10667
2/28/97 10115 12060 10588 10693
3/31/97 9932 11566 10425 10575
4/30/97 9961 12255 10520 10733
5/31/97 10376 13000 10941 10835
6/30/97 10598 13583 11174 10964
7/31/97 10791 14662 11403 11260
8/31/97 10733 13841 11310 11165
9/30/97 11061 14598 11656 11329
10/31/97 10936 14111 11572 11493
11/30/97 10916 14764 11592 11546
12/31/97 10917 15018 11667 11662
1/31/98 10937 15183 11749 11812
2/28/98 11276 16278 12086 11802
3/31/98 11445 17111 12253 11842
4/30/98 11515 17286 12366 11904
5/31/98 11376 16989 12261 12017
6/30/98 11445 17678 12364 12119
7/31/98 11236 17491 12224 12145
8/31/98 10628 14962 11652 12343
9/30/98 10957 15921 12119 12631
10/31/98 11246 17216 12520 12564
11/30/98 11386 18259 12721 12636
12/31/98 11674 19311 13063 12674
1/31/99 11664 20119 13154 12764
2/28/99 11292 19494 12780 12541
3/31/99 11419 20273 12966 12610
4/30/99 11653 21059 13302 12650
5/31/99 11547 20561 13151 12539
6/30/99 11672 21703 13299 12498
7/31/99 11555 21025 13202 12446
8/31/99 11480 20920 13113 12440
9/30/99 11453 20347 13111 12584
10/31/99 11485 21634 13267 12631
11/30/99 11572 22074 13450 12629
12/31/99 11787 23374 13764 12569
1/31/00 11572 22200 13554 12527
2/29/00 11674 21780 13811 12679
3/31/00 11885 23910 14008 12846
4/30/00 11724 23191 13848 12809
The graph includes the initial sales charge on the Fund (no comparable charge
exists for the other indices) and assumes all dividends and distributions from
the Fund are reinvested at Net Asset Value.
Notes: We believe that the performance comparison to the composite benchmark, on
which the Fund's asset allocation model is based, is a more appropriate
comparison than a comparison to any single broad-based securities market index,
such as the S&P 500 Index or the Lehman Brothers Aggregate Bond Index, which
securities regulations require us to include. All Fund performance numbers
represent past performance, and are no guarantee of future results. The Fund's
share price and investment return will fluctuate, so that the value of an
investor's shares, when redeemed, may be worth more or less than their original
cost. Total returns include change in share price and reinvestment of dividends
and distributions, if any. Returns reflect certain voluntary fee waivers. If the
waivers were not in place, the Fund's return would have been lower. The maximum
sales charge of 4.50% went into effect on January 4, 1999. Investors may not
invest directly in an index or in the Composite Benchmark.
+The returns are based on the composite performance of unmanaged indices and
assume reinvestment of dividends and interest payments. Indices and percentages
used as of 4/30/00: S&P 500 Index -- Large Cap Stocks (15%); Russell 2000 Index
-- Small Cap Stocks (10%); Morgan Stanley EAFE Index -- International Stocks
(5%); Lehman Bros. Aggregate Bond Index -- Domestic Bonds (40%); Salomon Bros.
Currency-Hedged Non-$ World Gov't Bond Index -- Foreign Gov't Bonds (10%);
Salomon Bros. High Yield Bond Index -- High Yield (20%). Unlike the Fund's total
return the Composite Benchmark total return does not reflect any fees or
expenses. Components of the Composite Benchmark may change at any time.
8
<PAGE>
FUND PERFORMANCE CITISELECT FOLIO 300 BALANCED
TOTAL RETURNS
<TABLE>
<CAPTION>
SINCE
SIX ONE 6/17/96
ALL PERIODS ENDED APRIL 30, 2000 MONTHS** YEAR INCEPTION*
=========================================================================================
<S> <C> <C> <C>
CitiSelect(R)Folio 300 Balanced (Class A)
without sales charge 4.61% 4.13% 7.29%
CitiSelect(R)Folio 300 Balanced (Class A)
with a maximum sales charge of 4.50% (0.09)% (0.56)% 6.02%
Composite Benchmark+ (Class A) 6.80% 7.26% 10.85%
CitiSelect(R)Folio 300 Balanced (Class B)
without deferred sales charge 4.49% 3.92% 2.61%#
CitiSelect(R)Folio 300 Balanced (Class B)
with a maximum deferred sales charge of 4.50% (0.22)% (0.76)% (0.91)%#
Composite Benchmark+ (Class B) 6.80% 7.26% 0.44%
</TABLE>
*Average Annual Total Return
**Not Annualized
#Commencement of Operations 1/4/99
GROWTH OF A $10,000 INVESTMENT
A $10,000 investment in the Fund made on inception date would have grown to
$12,542 with sales charge (as of 4/30/00). The graph shows how the Fund compares
to its benchmarks over the same period.
[Table below represents line chart in its printed piece]
C300 LB S&P CB
6/17/96 9500 10000 10000 10000
6/30/96 9519 10086 10018 10137
7/31/96 9320 9640 9790 10165
8/31/96 9605 9844 9966 10147
9/30/96 9838 10397 10216 10324
10/31/96 9914 10684 10313 10553
11/30/96 10267 11490 10654 10734
12/31/96 10223 11263 10624 10634
1/31/97 10300 11966 10688 10667
2/28/97 10242 12060 10651 10693
3/31/97 10022 11566 10435 10575
4/30/97 10060 12255 10557 10733
5/31/97 10587 13000 11100 10835
6/30/97 10890 13583 11409 10964
7/31/97 11168 14662 11716 11260
8/31/97 11053 13841 11550 11165
9/30/97 11476 14598 12003 11329
10/31/97 11255 14111 11815 11493
11/30/97 11245 14764 11846 11546
12/31/97 11231 15018 11941 11662
1/31/98 11241 15183 12042 11812
2/28/98 11718 16278 12506 11802
3/31/98 11967 17111 12748 11842
4/30/98 12036 17286 12873 11904
5/31/98 11828 16989 12706 12017
6/30/98 11907 17678 12836 12119
7/31/98 11589 17491 12630 12145
8/31/98 10675 14962 11738 12343
9/30/98 11013 15921 12268 12631
10/31/98 11410 17216 12805 12564
11/30/98 11609 18259 13109 12636
12/31/98 11971 19311 13556 12674
1/31/99 11928 20119 13676 12764
2/28/99 11471 19494 13189 12541
3/31/99 11645 20273 13436 12610
4/30/99 11982 21059 13893 12650
5/31/99 11873 20561 13734 12539
6/30/99 12132 21703 14023 12498
7/31/99 12034 21025 13889 12446
8/31/99 11925 20920 13752 12440
9/30/99 11849 20347 13718 12584
10/31/99 11926 21634 13952 12631
11/30/99 12091 22074 14247 12629
12/31/99 12482 23374 14835 12569
1/31/00 12173 22200 14513 12527
2/29/00 12399 21780 14978 12679
3/31/00 12705 23910 15205 12846
4/30/00 12476 23191 14901 12809
The graph includes the initial sales charge on the Fund (no comparable charge
exists for the other indices) and assumes all dividends and distributions from
the Fund are reinvested at Net Asset Value.
Notes: We believe that the performance comparison to the composite benchmark, on
which the Fund's asset allocation model is based, is a more appropriate
comparison than a comparison to any single broad-based securities market index,
such as the S&P 500 Index or the Lehman Brothers Aggregate Bond Index, which
securities regulations require us to include. All Fund performance numbers
represent past performance, and are no guarantee of future results. The Fund's
share price and investment return will fluctuate, so that the value of an
investor's shares, when redeemed, may be worth more or less than their original
cost. Total returns include change in share price and reinvestment of dividends
and distributions, if any. Returns reflect certain voluntary fee waivers. If the
waivers were not in place, the Fund's return would have been lower. The maximum
sales charge of 4.50% went into effect on January 4, 1999. Investors may not
invest directly in an index or in the Composite Benchmark.
+The returns are based on the composite performance of unmanaged indices and
assume reinvestment of dividends and interest payments. Indices and percentages
used as of 4/30/00: S&P 500 Index -- Large Cap Stocks (20%); Russell 2000 Index
-- Small Cap Stocks (20%); Morgan Stanley EAFE Index -- International Stocks
(10%); Lehman Bros. Aggregate Bond Index -- Domestic Bonds (25%); Salomon Bros.
Currency-Hedged Non-$ World Gov't Bond Index -- Foreign Gov't Bonds (10%);
Salomon Bros. High Yield Bond Index -- High Yield (15%). Unlike the Fund's total
return the Composite Benchmark total return does not reflect any fees or
expenses. Components of the Composite Benchmark may change at any time.
9
<PAGE>
FUND PERFORMANCE CITISELECT FOLIO 400 GROWTH
TOTAL RETURNS
<TABLE>
<CAPTION>
SINCE
SIX ONE 6/17/96
ALL PERIODS ENDED APRIL 30, 2000 MONTHS** YEAR INCEPTION*
========================================================================================
<S> <C> <C> <C>
CitiSelect(R)Folio 400 Growth (Class A)
without sales charges 6.89% 7.47% 8.15%
CitiSelect(R)Folio 400 Growth (Class A)
with a maximum sales charge of 5.00% 1.54% 2.10% 6.73%
Composite Benchmark+ (Class A) 8.61% 10.20% 11.95%
CitiSelect(R)Folio 400 Growth (Class B)
without deferred sales charge 6.58% 6.87% 4.94%#
CitiSelect(R)Folio 400 Growth (Class B)
with a maximum deferred sales charge of 5.00% 1.25% 1.53% 0.94%#
Composite Benchmark+ (Class B) 8.61% 10.20% (0.15)%
</TABLE>
*Average Annual Total Return
**Not Annualized
#Commencement of Operations 1/4/99
GROWTH OF A $10,000 INVESTMENT
A $10,000 investment in the Fund made on inception date would have grown to
$12,864 with sales charge (as of 4/30/00). The graph shows how the Fund compares
to its benchmarks over the same period.
[Table below represents line chart in its printed piece]
C400 LB S&P CB
6/17/96 9500 10000 10000 10000
6/30/96 9491 10086 9987 10137
7/31/96 9215 9640 9637 10165
8/31/96 9605 9844 9868 10147
9/30/96 9880 10397 10153 10324
10/31/96 9918 10684 10187 10553
11/30/96 10346 11490 10580 10734
12/31/96 10340 11263 10577 10634
1/31/97 10435 11966 10618 10667
2/28/97 10368 12060 10567 10693
3/31/97 10120 11566 10320 10575
4/30/97 10082 12255 10424 10733
5/31/97 10770 13000 11131 10835
6/30/97 11161 13583 11529 10964
7/31/97 11439 14662 11865 11260
8/31/97 11305 13841 11648 11165
9/30/97 11880 14598 12228 11329
10/31/97 11506 14111 11863 11493
11/30/97 11449 14764 11869 11546
12/31/97 11399 15018 11976 11662
1/31/98 11369 15183 12082 11812
2/28/98 12039 16278 12718 11802
3/31/98 12394 17111 13048 11842
4/30/98 12483 17286 13180 11904
5/31/98 12148 16989 12913 12017
6/30/98 12197 17678 13041 12119
7/31/98 11724 17491 12731 12145
8/31/98 10345 14962 11388 12343
9/30/98 10640 15921 11900 12631
10/31/98 11192 17216 12597 12564
11/30/98 11487 18259 13026 12636
12/31/98 11916 19311 13591 12674
1/31/99 11786 20119 13704 12764
2/28/99 11233 19494 13122 12541
3/31/99 11461 20273 13427 12610
4/30/99 11970 21059 14049 12650
5/31/99 11873 20561 13842 12539
6/30/99 12241 21703 14264 12498
7/31/99 12166 21025 14136 12446
8/31/99 12079 20920 13981 12440
9/30/99 11938 20347 13923 12584
10/31/99 12035 21634 14255 12631
11/30/99 12252 22074 14648 12629
12/31/99 12804 23374 15506 12569
1/31/00 12404 22200 15033 12527
2/29/00 12695 21780 15621 12679
3/31/00 13119 23910 15941 12846
4/30/00 12864 23191 15482 12809
The graph includes the initial sales charge on the Fund (no comparable charge
exists for the other indices) and assumes all dividends and distributions from
the Fund are reinvested at Net Asset Value.
Notes: We believe that the performance comparison to the composite benchmark, on
which the Fund's asset allocation model is based, is a more appropriate
comparison than a comparison to any single broad-based securities market index,
such as the S&P 500 Index or the Lehman Brothers Aggregate Bond Index, which
securities regulations require us to include. All Fund performance numbers
represent past performance, and are no guarantee of future results. The Fund's
share price and investment return will fluctuate, so that the value of an
investor's shares, when redeemed, may be worth more or less than their original
cost. Total returns include change in share price and reinvestment of dividends
and distributions, if any. Returns reflect certain voluntary fee waivers. If the
waivers were not in place, the Fund's return would have been lower. The maximum
sales charge of 5.00% went into effect on January 4, 1999. Investors may not
invest directly in an index or in the Composite Benchmark.
+The returns are based on the composite performance of unmanaged indices and
assume reinvestment of dividends and interest payments. Indices and percentages
used as of 4/30/00: S&P 500 Index -- Large Cap Stocks (25%); Russell 2000 Index
-- Small Cap Stocks (25%); Morgan Stanley EAFE Index -- International Stocks
(20%); Lehman Bros. Aggregate Bond Index -- Domestic Bonds (10%); Salomon Bros.
Currency-Hedged Non-$ World Gov't Bond Index -- Foreign Gov't Bonds (10%);
Salomon Bros. High Yield Bond Index -- High Yield (10%). Unlike the Fund's total
return the Composite Benchmark total return does not reflect any fees or
expenses. Components of the Composite Benchmark may change at any time.
10
<PAGE>
FUND PERFORMANCE CITISELECT FOLIO 400 GROWTH
TOTAL RETURNS
<TABLE>
<CAPTION>
SINCE
SIX ONE 9/3/96
ALL PERIODS ENDED APRIL 30, 2000 MONTHS** YEAR INCEPTION*
========================================================================================
<S> <C> <C> <C>
CitiSelect(R)Folio 500 Growth Plus (Class A)
without sales charge 8.64% 10.65% 8.96%
CitiSelect(R)Folio 500 Growth Plus (Class A)
with a maximum sales charge of 5.00% 3.21% 5.12% 7.44%
Composite Benchmark+ (Class A) 10.15% 13.00% 14.64%
CitiSelect(R)Folio 500 Growth Plus (Class B)
without deferred sales charge 8.37% 10.19% 8.06%#**
CitiSelect(R)Folio 500 Growth Plus (Class B)
with deferred sales charge of 5.00% 2.95% 4.68% 3.94%#**
Composite Benchmark+ (Class B) 10.15% 13.00% (0.85)%**
*Average Annual Total Return
**Not Annualized
#Commencement of Operations 1/4/99
</TABLE>
GROWTH OF A $10,000 INVESTMENT
A $10,000 investment in the Fund made on inception date would have grown to
$13,004 with sales charge (as of 4/30/00). The graph shows how the Fund compares
to its benchmarks over the same period.
[Table below represents line chart in its printed piece]
9/3/96 9500 10000 10000 10000
9/30/96 9719 10356 10174 10315
10/31/96 9709 10345 10400 10212
11/30/96 10156 10787 10578 10621
12/31/96 10184 10797 10479 10487
1/31/97 10308 10853 10512 10122
2/28/97 10261 10817 10538 10290
3/31/97 10032 10553 10421 10330
4/30/97 9984 10681 10577 10387
5/31/97 10756 11492 10678 11065
6/30/97 11185 11972 10805 11678
7/31/97 11509 12388 11097 11870
8/31/97 11366 12081 11002 10985
9/30/97 11976 12758 11164 11603
10/31/97 11509 12216 11326 10714
11/30/97 11471 12236 11378 10607
12/31/97 11405 12375 11493 10702
1/31/98 11366 12516 11640 11195
2/28/98 12164 13284 11631 11916
3/31/98 12611 13717 11670 12285
4/30/98 12689 13838 11731 12384
5/31/98 12290 13510 11843 12328
6/30/98 12339 13657 11943 12424
7/31/98 11765 13287 11968 12553
8/31/98 9995 11546 12163 11000
9/30/98 10171 11985 12448 10666
10/31/98 10803 12783 12382 11780
11/30/98 11182 13344 12453 12387
12/31/98 11587 13977 12490 12879
1/31/99 11390 14114 12579 12844
2/28/99 10852 13486 12358 12541
3/31/99 11131 13846 12426 13068
4/30/99 11752 14587 12466 13599
5/31/99 11628 14313 12357 12902
6/30/99 12135 14904 12317 13407
7/31/99 12093 14775 12265 13810
8/31/99 12021 14593 12259 13864
9/30/99 11835 14517 12401 14006
10/31/99 11969 14965 12447 14534
11/30/99 12238 15465 12446 15043
12/31/99 12924 16624 12386 16395
1/31/00 12413 15965 12345 15356
2/29/00 12765 16710 12495 15772
3/31/00 13311 17141 12660 16387
4/30/00 13004 16484 12623 15529
The graph includes the initial sales charge on the Fund (no comparable charge
exists for the other indices) and assumes all dividends and distributions from
the Fund are reinvested at Net Asset Value.
Notes: We believe that the performance comparison to the composite benchmark, on
which the Fund's asset allocation model is based, is a more appropriate
comparison than a comparison to any single broad-based securities market index,
such as the Lehman Brothers Aggregate Bond Index or the Morgan Stanley EAFE
Index, which securities regulations require us to include. All Fund performance
numbers represent past performance, and are no guarantee of future results. The
Fund's share price and investment return will fluctuate, so that the value of an
investor's shares, when redeemed, may be worth more or less than their original
cost. Total returns include change in share price and reinvestment of dividends
and distributions, if any. Returns reflect certain voluntary fee waivers. If the
waivers were not in place, the Fund's return would have been lower. The maximum
sales charge of 5.00% went into effect on January 4, 1999. Investors may not
invest directly in an index or in the Composite Benchmark.
+The returns are based on the composite performance of unmanaged indices and
assume reinvestment of dividends and interest payments. Indices and percentages
used as of 4/30/00: S&P 500 Index -- Large Cap Stocks (30%); Russell 2000 Index
-- Small Cap Stocks (30%); Morgan Stanley EAFE Index -- International Stocks
(30%); Lehman Bros. Aggregate Bond Index -- Domestic Bonds (5%); Salomon Bros.
High Yield Bond Index -- High Yield (5%). Unlike the Fund's total return the
Composite Benchmark total return does not reflect any fees or expenses.
Components of the Composite Benchmark may change at any time.
11
<PAGE>
CITISELECT PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
CITISELECT CITISELECT
FOLIO 100 FOLIO 200
APRIL 30, 2000 (Unaudited) INCOME CONSERVATIVE
==============================================================================================
<S> <C> <C>
ASSETS:
Investment in, at value:
Large Cap Growth Portfolio $ 18,322 $ 3,677,927
Large Cap Value Portfolio 18,661 4,957,102
Small Cap Growth Portfolio -- 2,578,660
Small Cap Value Portfolio -- 2,573,381
International Portfolio -- 3,724,686
U.S. Fixed Income Portfolio 268,731 23,700,822
Foreign Bond Portfolio -- 6,144,660
High Yield Portfolio 77,562 12,223,006
----------------------------------------------------------------------------------------------
Total Investments (Note 1A) 383,276 59,580,244
Receivable from Sub-Administrator 11,347 --
Receivable for shares of beneficial interest sold -- 1,194
Other assets -- 43,471
----------------------------------------------------------------------------------------------
Total Assets 394,623 59,624,909
----------------------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 763 --
Payable for shares of beneficial interest repurchased 158 224,647
Payable to affiliates-- Management fees (Note 2) -- 6,660
Accrued expenses 38,430 84,659
----------------------------------------------------------------------------------------------
Total Liabilities 39,351 315,966
----------------------------------------------------------------------------------------------
NET ASSETS $355,272 $59,308,943
==============================================================================================
NET ASSETS CONSIST OF:
Paid-in capital $385,536 $59,424,744
Undistributed net investment income (loss) -- 560,950
Accumulated net realized gain (loss) on investments (22,146) (3,121,643)
Unrealized appreciation (depreciation) of investments
and foreign currency transactions (8,118) 2,444,892
----------------------------------------------------------------------------------------------
Net Assets $355,272 $59,308,943
==============================================================================================
COMPUTATION OF
CLASS A SHARES:
Net Asset Value per share (net asset value / shares
outstanding, respectively: $207,421/22,320,
$58,670,897/5,748,896, $103,430,369/9,976,963,
$118,213,966/11,134,995, $49,430,785/4,316,150) $9.29 $10.21
Offering price per share based on a 4.50% sales charge
for CitiSelect Folios 100, 200 and 300 and on a 5.00%
sales charge on CitiSelect Folios 400 and 500
($9.29 / 0.955, $10.21 / 0.955, $10.37 / 0.955,
$10.62 / 0.950, $11.45 / 0.950, respectively) $9.73* $10.69*
==============================================================================================
CLASS B SHARES:
Net Asset Value per share and offering price
(net asset value / shares outstanding, respectively:
$147,851/15,916, $638,046/62,650, $869,960/84,162,
$727,645/69,035, $282,042/24,843) $9.29** $10.18**
==============================================================================================
</TABLE>
*Based upon single purchases of less than $25,000.
**Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charges. See notes to financial statements
12
<PAGE>
CITISELECT CITISELECT CITISELECT
FOLIO 300 FOLIO 400 FOLIO 500
BALANCED GROWTH GROWTH PLUS
================================================================================
$ 9,111,716 $ 13,234,509 $ 6,582,874
10,695,389 15,374,469 7,341,737
9,552,142 12,824,571 6,573,690
10,704,416 15,447,403 8,176,885
12,162,228 25,995,939 16,186,034
25,878,972 11,616,247 2,220,588
10,935,686 12,585,715 --
16,259,792 12,419,007 2,677,234
--------------------------------------------------------------------------------
105,300,341 119,497,860 49,759,042
-- -- 4,202
2,006 16,961 333
152,894 373,447 226,724
--------------------------------------------------------------------------------
105,455,241 119,888,268 49,990,301
--------------------------------------------------------------------------------
-- -- --
852,046 666,208 230,383
13,671 9,375 --
289,195 271,074 47,091
--------------------------------------------------------------------------------
1,154,912 946,657 277,474
--------------------------------------------------------------------------------
$104,300,329 $ 118,941,611 $ 49,712,827
================================================================================
$ 99,880,141 $ 111,085,796 $ 43,194,056
854,185 1,378,916 223,688
(12,581,676) (19,664,465) (927,458)
16,147,679 26,141,364 7,222,541
--------------------------------------------------------------------------------
$104,300,329 $ 118,941,611 $ 49,712,827
================================================================================
$10.37 $10.62 $11.45
$10.86* $11.18* $12.05*
================================================================================
$10.34** $10.54** $11.35**
================================================================================
13
<PAGE>
CITISELECT PORTFOLIOS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CITISELECT CITISELECT
FOLIO 100 FOLIO 200
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (Unaudited) INCOME CONSERVATIVE
===============================================================================================
<S> <C> <C>
INVESTMENT INCOME (Note 6):
Interest* $ 16,291 $2,109,320
Dividends* 501 176,565
Allocated net expenses (1,123) (234,018)
Foreign tax reclaims -- 816
-----------------------------------------------------------------------------------------------
15,669 2,052,683
-----------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 141 80,616
Service fees Class A (Note 3) 711 187,496
Service fees Class B (Note 3) 643 2,808
Transfer agent fees 32,732 44,745
Custody and fund accounting fees 12,530 13,570
Shareholder reports 9,911 23,456
Audit fees 9,690 10,085
Legal fees 5,360 12,590
Trustees fees 2,632 4,160
Registration fees 141 --
Other 20,807 29,411
-----------------------------------------------------------------------------------------------
Total expenses 95,298 408,937
Less aggregate amount waived by the Manager (Note 2) (141) (73,956)
Less expenses assumed by the Sub-Administrator (Note 7) (93,214) --
-----------------------------------------------------------------------------------------------
Net expenses 1,943 334,981
-----------------------------------------------------------------------------------------------
Net investment income 13,726 1,717,702
-----------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) (Note 6):
Net realized gain (loss) (17,161) (141,421)
Net change in unrealized appreciation 549 241,785
-----------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (16,612) 100,364
-----------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (2,886) $1,818,066
===============================================================================================
*Net of foreign taxes withheld -- $ 12,022
</TABLE>
See notes to financial statements
14
<PAGE>
CITISELECT CITISELECT CITISELECT
FOLIO 300 FOLIO 400 FOLIO 500
BALANCED GROWTH GROWTH PLUS
======================================================================
$2,671,804 $ 1,797,482 $ 308,200
481,330 779,101 433,250
(463,695) (578,460) (258,395)
2,198 5,826 6,129
----------------------------------------------------------------------
2,691,637 2,003,949 489,184
----------------------------------------------------------------------
101,017 66,703 14,487
332,192 372,744 156,582
3,370 3,871 1,553
29,278 5,860 32,110
10,052 10,070 12,535
12,878 21,902 9,320
10,085 10,085 10,085
7,694 9,890 3,890
4,624 4,678 3,998
-- -- --
29,505 4,068 25,151
----------------------------------------------------------------------
540,695 509,871 269,711
-- -- (14,487)
-- -- (40,888)
----------------------------------------------------------------------
540,695 509,871 214,336
2,150,942 1,494,078 274,848
----------------------------------------------------------------------
4,232,034 8,712,421 5,146,055
485,593 791,428 372,484
----------------------------------------------------------------------
4,717,627 9,503,849 5,518,539
----------------------------------------------------------------------
$6,868,569 $10,997,927 $5,793,387
$ 34,210 $ 65,789 $ 36,882
======================================================================
15
<PAGE>
CITISELECT PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CITISELECT FOLIO 100 CITISELECT FOLIO 200
INCOME CONSERVATIVE
--------------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
SIX MONTHS MAY 3, 1999 SIX MONTHS
ENDED (COMMENCEMENT ENDED YEAR
APRIL 30, 2000 OF OPERATIONS) TO APRIL 30, 2000 ENDED
(Unaudited) OCTOBER 31, 1999 (Unaudited) OCTOBER 31, 1999
=================================================================================================================================
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS FROM:
OPERATIONS:
Net investment income $ 13,726 $ 10,307 $ 1,717,702 $ 4,675,819
Net realized gain (loss) (17,161) (4,985) (141,421) 1,357,465
Net change in unrealized appreciation
(depreciation) of investments 549 (8,667) 241,785 (1,235,326)
---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (2,886) (3,345) 1,818,066 4,797,958
---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS FROM:
Net income (Class A) (8,691) (5,104) (1,145,593) (8,439,415)
(Class B) (5,035) (5,203) (11,159) (16,857)
Net realized gain on investments (Class A) -- -- (3,353,915) (5,996,539)
Net realized gain on investments (Class B) -- -- (30,856) --
---------------------------------------------------------------------------------------------------------------------------------
Total distributions (13,726) (10,307) (4,541,523) (14,452,811)
---------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST (Note 5):
CLASS A
Net proceeds from sale of shares -- 344,182 109,373 13,705,529
Net asset value of shares issued to
shareholders from reinvestment
of distributions 8,691 4,653 4,499,508 14,428,481
Cost of shares repurchased (112,395) (22,027) (39,093,092) (128,964,342)
---------------------------------------------------------------------------------------------------------------------------------
Total Class A (103,704) 326,808 (34,484,211) (100,830,332)
---------------------------------------------------------------------------------------------------------------------------------
CLASS B**
Net proceeds from sale of shares -- 301,013 18,901 980,874
Net asset value of shares issued to
shareholders from reinvestment
of distributions 4,954 3,854 37,740 13,840
Cost of shares repurchased (48,143) (99,246) (251,564) (111,437)
---------------------------------------------------------------------------------------------------------------------------------
Total Class B (43,189) 205,621 (194,923) 883,277
---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM TRANSACTIONS
IN SHARES OF BENEFICIAL INTEREST (146,893) 532,429 (34,679,134) (99,947,055)
---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS (163,505) 518,777 (37,402,591) (109,601,908)
---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 518,777 -- 96,711,534 206,313,442
---------------------------------------------------------------------------------------------------------------------------------
End of period* $ 355,272 $518,777 $59,308,943 $ 96,711,534
=================================================================================================================================
*Including undistributed
(overdistributed) net
investment income $ -- $ -- $ 560,950 $ --
=================================================================================================================================
</TABLE>
**January 4, 1999 (Commencement of Operations).
See notes to financial statements
16
<PAGE>
<TABLE>
<CAPTION>
CITISELECT FOLIO 300 CITISELECT FOLIO 400 CITISELECT FOLIO 500
BALANCED GROWTH GROWTH PLUS
---------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR
APRIL 30, 2000 ENDED APRIL 30, 2000 ENDED APRIL 30, 2000 ENDED
(Unaudited) OCTOBER 31, 1999 (Unaudited) OCTOBER 31, 1999 (Unaudited) OCTOBER 31, 1999
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
$ 2,150,942 $ 5,660,816 $ 1,494,078 $ 3,752,073 $ 274,848 $ 690,511
4,232,034 4,083,333 8,712,421 5,977,259 5,146,055 3,218,138
485,593 4,334,465 791,428 15,299,428 372,484 9,229,350
---------------------------------------------------------------------------------------------------------------------------------
6,868,569 14,078,614 10,997,927 25,028,760 5,793,387 13,137,999
---------------------------------------------------------------------------------------------------------------------------------
(1,286,220) (10,844,955) (114,878) (7,033,484) (63,337) (1,880,597)
(10,537) (9,785) (284) -- (1,051) --
(11,110,680) (20,082,498) (17,231,681) (29,317,452) (6,149,408) (7,715,623)
(71,153) -- (85,306) -- (29,537) --
---------------------------------------------------------------------------------------------------------------------------------
(12,478,590) (30,937,238) (17,432,149) (36,350,936) (6,243,333) (9,596,220)
---------------------------------------------------------------------------------------------------------------------------------
1,366,709 10,176,905 969,487 8,811,457 896,628 4,457,544
12,396,900 30,927,441 17,346,559 36,350,930 6,212,745 9,596,217
(68,399,861) (201,073,561) (77,262,253) (260,612,272) (33,000,965) (105,357,073)
---------------------------------------------------------------------------------------------------------------------------------
(54,636,252) (159,969,215) (58,946,207) (215,449,885) (25,891,592) (91,303,312)
---------------------------------------------------------------------------------------------------------------------------------
7,816 958,471 33,447 916,036 19,418 358,761
72,160 8,794 68,404 -- 28,029 --
(101,786) (26,067) (136,127) (137,286) (75,674) (55,004)
---------------------------------------------------------------------------------------------------------------------------------
(21,810) 941,198 (34,276) 778,750 (28,227) 303,757
---------------------------------------------------------------------------------------------------------------------------------
(54,658,062) (159,028,017) (58,980,483) (214,671,135) (25,919,819) (90,999,555)
---------------------------------------------------------------------------------------------------------------------------------
(60,268,083) (175,886,641) (65,414,705) (225,993,311) (26,369,765) (87,457,776)
---------------------------------------------------------------------------------------------------------------------------------
164,568,412 340,455,053 184,356,316 410,349,627 76,082,592 163,540,368
---------------------------------------------------------------------------------------------------------------------------------
$104,300,329 $164,568,412 $ 118,941,611 $ 184,356,316 $49,712,827 $ 76,082,592
=================================================================================================================================
$ 854,185 $-- $ 1,378,916 $-- $ 223,688 $ 13,228
=================================================================================================================================
</TABLE>
17
<PAGE>
CITISELECT PORTFOLIOS
Financial Highlights
<TABLE>
<CAPTION>
CITISELECT FOLIO 100 INCOME CITISELECT FOLIO 200 CONSERVATIVE
CLASS A CLASS A
-----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED MAY 3, 1999+ ENDED YEAR YEAR TEN MONTHS
APRIL 30, 2000 TO APRIL 30, 2000 ENDED OCTOBER ENDED OCTOBER ENDED OCTOBER
(Unaudited) OCTOBER 31, 1999 (Unaudited) 31, 1999 31, 1999 31, 1999
=============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $9.66 $10.00 $10.60 $11.28 $11.33 $10.50
-----------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.283 0.242+++ 0.271 0.333+++ 0.240 0.138
Net realized and
unrealized gain
(loss) on investments (0.370) (0.345) (0.052)++ (0.091) 0.068++ 0.722
-----------------------------------------------------------------------------------------------------------------------------
Total from operations (0.087) (0.103) 0.219 0.242 0.308 0.860
-----------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.283) (0.237) (0.174) (0.574) (0.172) (0.007)
Net realized gain
on investments -- -- (0.435) (0.348) (0.186) (0.023)
In excess of net income -- -- -- -- -- --
In excess of realized gains
on investments -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
Total distributions (0.283) (0.237) (0.609) (0.922) (0.358) (0.030)
-----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $9.29 $ 9.66 $10.21 $10.60 $11.28 $11.33
=============================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted) $207 $322 $58,671 $95,853 $206,313 $166,203
Ratio of expenses to
average net assets (A) 1.25%* 1.25%* 1.50%* 1.50% 1.50% 1.50%*
Ratio of net investment
income to average
net assets 6.11%* 5.42%* 4.54%* 3.04% 2.70% 2.88%*
Total return (0.94)%** (1.03)%** 2.08%** 2.13% 2.84% 8.21%**
Note: If Agents of the Funds and Agents of the respective Portfolios had not
voluntarily agreed to waive a portion of their fees, and the Sub-administrator
had not assumed expenses for the periods indicated, the net investment income
per share and the ratios would have been as follows:
Net investment income
(loss) per share $(2.159) $(1.434)+++ $0.258 $0.333+++ $0.238 $0.126
RATIOS:
Expenses to average
net assets (A) 39.56%* 37.47%* 1.69%* 1.50% 1.52% 1.75%*
Net investment income to
average net assets (32.20)%* (30.80)%* 4.35%* 3.04% 2.68% 2.63%*
========================================================================================================================
</TABLE>
(A) Includes allocated expenses for the periods indicated from the respective
portfolios.
* Annualized
** Not Annualized
+ Commencement of Operations
++ The amount shown for a share outstanding does not correspond with the
aggregate net realized and unrealized gain (loss) on investments for the
period ended due to the timing of sales of Fund shares in relation to
fluctuating market value of the investments. +++ The per share amounts were
computed using a monthly average number of shares outstanding during the
period.
See notes to financial statements
18
<PAGE>
<TABLE>
<CAPTION>
CITISELECT FOLIO 300 BALANCED
CLASS A
-------------------------------------------------------------------------------------------
JUNE 17, 1996+ SIX MONTHS
TO ENDED YEAR YEAR
DECEMBER 31, APRIL 30, 2000 ENDED ENDED
1996 (Unaudited) OCTOBER 31, 1999 OCTOBER 31,1998
===========================================================================================
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $10.00 $10.84 $11.48 $11.71
-------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.128 0.204 0.246+++ 0.187
Net realized and
unrealized gain
(loss) on investments 0.506 0.282 0.258 (0.036)
-------------------------------------------------------------------------------------------
Total from operations 0.634 0.486 0.504 0.151
-------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.112) (0.119) (0.437) (0.138)
Net realized gain
on investments (0.022) (0.837) (0.707) (0.243)
In excess of net income -- -- -- --
In excess of realized
gain on investments -- -- -- --
-------------------------------------------------------------------------------------------
Total distributions (0.134) (0.956) (1.144) (0.381)
-------------------------------------------------------------------------------------------
Net Asset Value,
end of period $10.50 $10.37 $10.84 $11.48
===========================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted) $102,775 $103,430 $163,635 $340,455
Ratio of expenses to
average net assets (A) 1.50%* 1.50%* 1.50% 1.50%
Ratio of net investment
income to average
net assets 2.84%* 3.22%* 2.23% 2.09%
Total return 6.38%** 4.61%** 4.52% 1.38%
Net investment income
(loss) per share $0.076 $0.205 $0.246+++ $0.187
RATIOS:
Expenses to average
net assets (A) 2.66%* 1.50%* 1.50% 1.50%
Net investment income to
average net assets 1.68%* 3.22%* 2.23% 2.09%
===========================================================================================
</TABLE>
<PAGE>
CITISELECT PORTFOLIOS
Financial Highlights
<TABLE>
<CAPTION>
CITISELECT FOLIO 300 BALANCED CITISELECT FOLIO 400 GROWTH
CLASS A (Cont'd) CLASS A
-----------------------------------------------------------------------------------------------------------------------------------
JUNE 17, 1996+ SIX MONTHS
TEN MONTHS TO ENDED YEAR YEAR TEN MONTHS
ENDED DECEMBER 31, APRIL 30, 2000 ENDED ENDED ENDED
OCTOBER 31, 1997 1996 (Unaudited) OCTOBER 31, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
$10.66 $10.00 $11.11 $11.36 $12.01 $10.82
----------------------------------------------------------------------------------------------------------------------------------
0.101 0.088 0.131 0.143+++ 0.090 0.037
0.974 0.671 0.587 0.682 (0.417) 1.183
----------------------------------------------------------------------------------------------------------------------------------
1.075 0.759 0.718 0.825 (0.327) 1.220
----------------------------------------------------------------------------------------------------------------------------------
(0.002) (0.075) (0.008) (0.208) (0.079) (0.003)
(0.023) (0.024) (1.200) (0.867) (0.244) (0.027)
-- -- -- -- -- --
-- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
(0.025) (0.099) (1.208) (1.075) (0.323) (0.030)
----------------------------------------------------------------------------------------------------------------------------------
$11.71 $10.66 $10.62 $11.11 $11.36 $12.01
===================================================================================================================================
$325,193 $195,428 $118,214 $183,559 $410,350 $455,747
1.50%* 1.50%* 1.45%* 1.45% 1.47% 1.65%
2.30%* 2.38%* 2.00%* 1.30% 1.26% 1.39%
10.09%** 7.61%** 6.89%** 7.63% (2.73)% 11.28%**
$0.100 $0.060 $0.131 $0.143+++ $0.090 $0.037
1.52%* 2.26%* 1.45%* 1.45% 1.47% 1.65%
2.28%* 1.62%* 2.00%* 1.30% 1.26% 1.39%*
===================================================================================================================================
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
CITISELECT FOLIO 500 BALANCED
CLASS A
-----------------------------------------------------------------------------------------------------------------------------------
JUNE 17, 1996+ SIX MONTHS SEPTEMBER 3, 1996+
TO ENDED YEAR YEAR TEN MONTHS TO
DECEMBER 31, APRIL 30, 2000 ENDED ENDED ENDED DECEMBER 31,
1996 (Unaudited) OCTOBER 31, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997 1996
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
$10.00 $11.57 $11.11 $12.08 $10.69 $10.00
----------------------------------------------------------------------------------------------------------------------------------
0.042 0.060 0.069++ 0.053 0.044 0.019
0.841 0.899 1.086 (0.786) 1.346 0.701
----------------------------------------------------------------------------------------------------------------------------------
0.883 0.959 1.154 (0.733) 1.390 0.720
----------------------------------------------------------------------------------------------------------------------------------
(0.029) (0.011) (0.136) (0.083) -- (0.019)
(0.034) (1.068) (0.558) (0.154) -- --
-- -- -- -- -- (0.001)
-- -- -- -- -- (0.010)
----------------------------------------------------------------------------------------------------------------------------------
(0.063) (1.079) (0.694) (0.237) -- (0.030)
----------------------------------------------------------------------------------------------------------------------------------
$10.82 $11.45 $11.57 $11.11 $12.08 $10.69
===================================================================================================================================
$253,556 $49,431 $75,768 $163,540 $202,823 $85,072
1.75%* 1.50%* 1.45% 1.48% 1.72%* 1.76%*
1.39%* 0.88%* 0.60% 0.72% 0.88%* 1.09%*
8.84%** 8.64%** 10.80% (6.14)% 13.00%** 7.20%**
$0.028 $0.048 $0.062+++ $0.053 $0.040 $0.001
2.20%* 1.68%* 1.51% 1.48% 1.80%* 2.80%*
0.93%* 0.70%* 0.54% 0.72% 0.80%* 0.04%*
===================================================================================================================================
</TABLE>
<PAGE>
CITISELECT PORTFOLIOS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CITISELECT FOLIO 100 INCOME CITISELECT FOLIO 200 CONSERVATIVE CITISELECT FOLIO 300 BALANCED
CLASS B CLASS B CLASS B
-----------------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD FOR THE PERIOD
MAY 3, 1999 JANUARY 4, 1999 FOR THE PERIOD
SIX MONTHS (COMMENCEMENT SIX MONTHS (COMMENCEMENT SIX MONTHS JANUARY 4, 1999
ENDED OF OPERATIONS) ENDED OF OPERATIONS) ENDED (OF OPERATIONS)
APRIL 30, 2000 TO OCTOBER 31, APRIL 30, 2000 TO OCTOBER 31, APRIL 30, 2000 TO OCTOBER 31,
(Unaudited) 1999 (Unaudited) 1999 (Unaudited) 1999
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $9.66 $10.00 $10.59 $11.03 $10.83 $11.07
====================================================================================================================================
Income From Operations:
Net investment income 0.271 0.218+++ 0.248 0.292+++ 0.161 0.201+++
Net realized and unrealized
gain (loss) on investments (0.370) (0.333) (0.054)++ (0.526) 0.312 (0.310)
------------------------------------------------------------------------------------------------------------------------------------
Total from operations (0.099) (0.115) 0.194 (0.234) 0.473 (0.109)
------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.271) (0.225) (0.169) (0.206) (0.126) (0.131)
Net realized gain
on investments -- -- (0.435) -- (0.837) --
------------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.271) (0.225) (0.604) (0.206) (0.963) (0.131)
------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value
end of period $9.29 $9.66 $10.18 $10.59 $10.34 $10.83
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted) $148 $197 $638 $859 $870 $933
Ratio of expenses to
average net assets (A) 1.50%* 1.50%* 1.75%* 1.75%* 1.75%* 1.75%*
Ratio of net investment
income to average
net assets 5.86%* 5.17%* 4.29%* 2.79%* 2.97%* 1.98%*
Total return (1.05)%** (1.16)%** 1.83%** (2.13)%** 4.49%** (0.99)%**
Note: If Agents of the Funds and the Agents of Asset Allocation Portfolios had
not voluntarily agreed to waive a portion of their fees, and the
Sub-administrator had not assumed expenses for the periods indicated, the net
investment income per share and the ratios would have been as follows:
Net investment income
(loss) per share $(2.171) $(1.459)+++ $0.236 $0.292+++ $0.161 $0.201+++
RATIOS:
Expenses to average
net assets (A) 39.81%* 37.72%* 1.94%* 1.75%* 1.75%* 1.75%*
Net investment income to
average net assets (32.45)%* (31.05)%* 4.10%* 2.79%* 2.97%* 1.98%*
====================================================================================================================================
</TABLE>
(A) Includes allocated expenses for the periods indicated from the respective
portfolios.
* Annualized
** Not Annualized
++ The amount shown for a share outstanding does not correspond with the
aggregate net realized and unrealized gain (loss) on investments for the
period ended due to the timing of sales of Fund shares in relation to
fluctuating market value of the investments.
+++ The per share amounts were computed using a monthly average number of shares
outstanding during the period.
See notes to financial statements
20
<PAGE>
CITISELECT FOLIO 400 GROWTH CITISELECT FOLIO 500 GROWTH PLUS
CLASS B CLASS B
--------------------------------------------------------------------------------
FOR THE PERIOD FOR THE PERIOD
SIX MONTHS JANUARY 4, 1999 SIX MONTHS JANUARY 4, 1999
ENDED (COMMENCEMENT ENDED (COMMENCEMENT OF
APRIL 30, 2000 OF OPERATIONS) APRIL 30, 2000 OPERATIONS)
(Unaudited) TO OCTOBER 31, 1999 (Unaudited) TO OCTOBER 31, 1999
================================================================================
$11.06 $11.05 $11.53 $11.28
================================================================================
0.085 0.098+++ 0.041 0.027+++
0.599 (0.088) 0.885 0.223
--------------------------------------------------------------------------------
0.684 0.010 0.926 0.250
--------------------------------------------------------------------------------
(0.004) -- (0.038) --
(1.200) -- (1.068) --
--------------------------------------------------------------------------------
(1.204) -- (1.106) --
--------------------------------------------------------------------------------
$10.54 $11.06 $11.35 $11.53
================================================================================
$728 $797 $282 $314
1.95%* 1.95%* 2.00%* 1.95%*
1.50%* 0.80%* 0.38%* 0.10%*
6.58%** 0.09%** 8.37%** 2.22%**
$0.085 $0.098+++ $0.027 $0.021+++
1.95%* 1.95%* 2.18%* 2.01%*
1.50%* 0.80%* 0.20%* 0.04%*
================================================================================
21
<PAGE>
CITISELECT PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES CitiSelect Folio 100 Income, CitiSelect Folio
200 Conservative, CitiSelect Folio 300 Balanced, CitiSelect Folio 400 Growth and
CitiSelect Folio 500 Growth Plus (individually, the "Fund", or collectively, the
"Funds") are each a separate series of CitiFunds Trust I (the "Trust"), a
Massachusetts business trust. The Trust is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
CitiSelect Folio 100 Income, CitiSelect Folio 200 Conservative, CitiSelect Folio
300 Balanced, CitiSelect Folio 400 Growth and CitiSelect Folio 500 Growth Plus
each invest all of their investable assets in some or all of the following:
Large Cap Growth Portfolio, Large Cap Value Portfolio, Small Cap Growth
Portfolio, Small Cap Value Portfolio, International Portfolio, U.S. Fixed Income
Portfolio, Foreign Bond Portfolio, and High Yield Bond Portfolio (the
"Portfolios"). All Portfolios are registered under the Investment Company Act of
1940, as amended, as open-end, diversified management investment companies and
have multiple investors. These Portfolios are organized as trusts under the laws
of the state of New York and are treated as partnerships for U.S. tax purposes.
The Declarations of Trust permit the Trustees to issue beneficial interests in
the respective Portfolios. The financial statements of the Portfolios, including
the portfolio of investments (which are not part of the Funds' financial
statements), may be obtained without charge, and further inquiries about the
Portfolios may be made, by calling 1-800-625-4554.
Citibank, N.A. ("Citibank") is the Investment Manager of each of the
Portfolios and has hired Subadvisers for certain Portfolios. CFBDS, Inc.
("CFBDS") acts as each Fund's Sub-Administrator and Distributor.
The Funds offer Class A and Class B shares. The Funds commenced their public
offering of Class B shares on January 4, 1999 (except for CitiSelect 100
Income--on May 3, 1999). Class A shares have a front-end, or initial, sales
charge effective January 4, 1999. This sales charge may be reduced or eliminated
in certain circumstances. Class B shares have no front-end sales charges, pay a
higher ongoing distribution fee than Class A shares and are subject to a
deferred sales charge if sold within five years of purchase. Class B shares
automatically convert into Class A shares after eight years. Expenses of the
Funds are borne pro-rata by the holders of each class of shares, except that
each class bears expenses unique to that class (including the Rule 12b-1 service
and distribution fees applicable to such class), and votes as a class only with
respect to its own Rule 12b-1 plan. Shares of each class would receive their
pro-rata share of the assets of the Fund if the Funds were liquidated. Class A
shares have lower expenses than Class B shares. For the six months ended April
30, 2000, CFBDS, acting as the distributor received $0, $3,996, $12,070, $22,116
and $16,076 from sales charges of Class A shares and $0, $756, $153, $1,505 and
$409 in deferred sales charges from redemptions of Class B shares of CitiSelect
100 Income, CitiSelect 200 Conservative, CitiSelect 300 Balanced, CitiSelect 400
Growth and CitiSelect 500 Growth Plus, respectively.
CitiSelect Folio 100 Income seeks to achieve as high a level of current
income as is consistent with a dominant emphasis on fixed income securities and
a small allocation to equity securities by investing all of its investable
assets in the Portfolios.
CitiSelect Folio 200 Conservative seeks to achieve its investment objective
of as high a total return over time as is consistent with a primary emphasis on
fixed income securities and a secondary emphasis on equity securities by
investing all of its investable assets in the Portfolios.
CitiSelect Folio 300 Balanced seeks to achieve its investment objective of as
high a total return over time as is consistent with a balanced emphasis on
equity and fixed income securities by investing all of its investable assets in
the Portfolios.
CitiSelect Folio 400 Growth seeks to achieve its investment objective of 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 by investing all
of its investable assets in the Portfolios.
CitiSelect Folio 500 Growth Plus seeks to achieve its investment objective of
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 by investing
all of its investable assets in the Portfolios.
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
The significant accounting policies consistently followed by the Funds are as
follows:
A. INVESTMENT VALUATION Each Fund's net asset value will fluctuate based on
changes in the values of the underlying Portfolios' securities. The values of
each Fund's beneficial interest in its Portfolios are determined by multiplying
the net asset value of a Portfolio by a Fund's percentage of the aggregate
beneficial interest in that Portfolio for that day. This proportionate
percentage of interest in a Portfolio, including the effects of the prior day's
contributions and withdrawals, is then applied to determine the value of each
Fund's interest in a Portfolio as of the close of regular trading on the New
York Stock Exchange on each business day.
Portfolios' investments are valued primarily on the basis of market
quotations, or if market quotations are not available, by a method believed to
accurately reflect fair value. An equity security that is primarily traded on a
U.S. or foreign exchange (including securities traded through the NASDAQ
national market system) is valued at the last sale price on that exchange or, if
there were no sales during the day (or for unlisted securities not reported on
the NASDAQ system), at the quoted bid price. Securities quoted in foreign
currencies are translated into U.S. dollars at the current exchange rate. Bonds,
foreign bonds and other fixed income securities (other than short term
securities maturing in sixty days or less) are valued on the basis of valuations
furnished by pricing services authorized by the Board of Trustees, which utilize
market quotations and transactions, quotations from dealers and various
relationships among securities in deter-
22
<PAGE>
CITISELECT PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Unaudited)
mining value. Short-term obligations (maturing in 60 days or less) are valued at
amortized cost. Other assets and securities for which no quotations are readily
available are valued at fair value as determined in good faith by or under
guidelines established by the Trustees.
B. INVESTMENT INCOME Each Fund earns income, net of Portfolio expenses, daily
based on its investment in each Portfolio. Additionally, each Fund reclaims its
pro rata portion of recoverable foreign taxes.
C. FEDERAL TAXES The Funds' policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investment transactions. Accordingly, no provision for federal income or
excise tax is necessary. At October 31, 1999, CitiSelect Folio 100, for federal
income tax purposes, had a capital loss carryover of $2,623 which will expire on
October 31, 2007.
D. EXPENSES Each Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and CFBDS. Expenses incurred by the Trust with
respect to any two or more funds or series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each Fund can otherwise be made fairly. Expenses directly attributable to a Fund
are charged to that Fund. A Fund's share of the Portfolio's expenses are charged
against and reduce the amount of the Fund's investment in that Portfolio.
E. DISTRIBUTIONS Distributions to shareholders are recorded on the
ex-dividend date. The amount and character of income and net realized gains to
be distributed are determined in accordance with income tax rules and
regulations, which may differ from generally accepted accounting principles.
These differences are attributable to permanent book and tax accounting
differences. Reclassifications are made to each Fund's capital accounts to
reflect income and net realized gains available for distribution (or available
capital loss carryovers) under income tax rules and regulations.
F. OTHER All the realized and unrealized gain and loss of the Portfolios are
allocated pro rata, based on respective ownership interests, among the Funds and
the other investors in each Portfolio at the time of such determination.
2. MANAGEMENT FEES Citibank is responsible for overall management of each Fund's
business affairs, and has a separate Management Agreement with each of the
Funds. Citibank also provides certain administrative services to the Funds.
These administrative services include providing general office facilities and
supervising the overall administration of the Funds. CFBDS acts as
Sub-Administrator and performs certain duties and receives compensation from
Citibank from time to time as agreed to by Citibank and CFBDS. Citibank is a
wholly-owned subsidiary of Citigroup Inc.
For the services of Citibank under the Management Agreements which covers the
Funds and respective Portfolios and the services of the Subadvisers, the Funds
and respective Portfolios pay an aggregate fee, which is accrued daily and paid
monthly, of 0.75% (0.50% for CitiSelect 100 Income) of the average daily net
assets on an annualized basis for the current fiscal year. Citibank may
voluntarily agree to waive a portion of its management fee from any Fund.
The management fees paid to Citibank for CitiSelect Folio 100 Income,
CitiSelect Folio 200 Conservative, CitiSelect Folio 300 Balanced, CitiSelect
Folio 400 Growth and CitiSelect Folio 500 Growth Plus for the six months ended
April 30, 2000 amounted to $141 (all of which was voluntarily waived), $80,616
(of which $73,956 was voluntarily waived), $101,017 (none was waived), $66,703
(none was waived) and $14,487 (all of which were voluntarily waived),
respectively.
The Trust pays no compensation directly to any Trustee or any other officer
who is affiliated with the Sub-Administrator, all of whom receive remuneration
for their services to the Trust from the Sub-Administrator or its affiliates.
3. SERVICE FEES The Funds maintain separate Service Plans for Class A and Class
B shares, which have been adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940, as amended. Under the Class A Service Plan, the
Funds may pay monthly fees at an annual rate not to exceed 0.50% of the average
daily net assets represented by Class A shares of the Funds. The Service fees
for Class A shares of CitiSelect Folio 100 Income, CitiSelect Folio 200
Conservative, CitiSelectFolio 300 Balanced, CitiSelect Folio 400 Growth and
CitiSelect Folio 500 Growth Plus amounted to $711, $187,496, $332,192, $372,744
and $156,582, respectively, for the six months ended April 30, 2000. Under the
Class B Service Plan, the Funds may pay a combined monthly distribution and
service fee at an annual rate not to exceed 0.75% of the average daily net
assets represented by Class B shares of CitiSelect Folio 100 Income, CitiSelect
Folio 200 Conservative and CitiSelect Folio 300 Balanced and 1.00% of the
average daily net assets represented by Class B shares of CitiSelect Folio 400
Growth and CitiSelect Folio 500 Growth Plus. TheService fees for Class B shares
of CitiSelect Folio 100 Income, CitiSelect Folio 200 Conservative,
CitiSelectFolio 300 Balanced, CitiSelect Folio 400 Growth and CitiSelect Folio
500 Growth Plus amounted to $643, $2,808, $3,370, $3,871 and $1,553,
respectively, for the six months ended April 30, 2000. These fees may be used to
make payments to the Distributor for distribution services and to others as
compensation for the sale of shares of the applicable class of the Funds, for
advertising, marketing or other promotional activity, and for preparation,
printing and distribution of prospectuses, statements of additional information
and reports for recipients other than regulators and existing shareholders. The
Funds may make payments to the Distributor and others for providing personal
service or the maintenance of shareholder accounts.
23
<PAGE>
CITISELECT PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
4. INVESTMENT TRANSACTIONS Contributions and withdrawals in the Funds'
investment in the Portfolios for the six months ended April 30, 2000 were as
follows:
CONTRIBUTIONS WITHDRAWALS
================================================================================
CitiSelect Folio 100 Income $ 93,774 $ 190,922
CitiSelect Folio 200 Conservative $ 488,143 $40,837,454
CitiSelect Folio 300 Balanced $2,404,290 $70,900,423
CitiSelect Folio 400 Growth $2,207,864 $80,091,729
CitiSelect Folio 500 Growth Plus $1,586,485 $34,167,199
5. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees
to issue an unlimited number of full and fractional shares of beneficial
interest (without par value). Transactions in shares of beneficial interest were
as follows:
CITISELECT FOLIO 100 INCOME
--------------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30, 2000 PERIOD ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS A
Shares sold -- 35,027
Shares reinvested 913 480
Shares repurchased (11,871) (2,229)
--------------------------------------------------------------------------------
Net increase (decrease) (10,958) 33,278
================================================================================
SIX MONTHS ENDED
APRIL 30, 2000 PERIOD ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS B
Shares sold -- 30,273
Shares reinvested 521 395
Shares repurchased (5,024) (10,249)
--------------------------------------------------------------------------------
Net increase (decrease) (4,503) 20,419
================================================================================
CITISELECT FOLIO 200 CONSERVATIVE
--------------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30, 2000 YEAR ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS A
Shares sold 10,549 1,228,419
Shares reinvested 437,461 1,335,448
Shares repurchased (3,739,774) (11,810,906)
--------------------------------------------------------------------------------
Net decrease (3,291,764) (9,247,039)
================================================================================
SIX MONTHS ENDED
APRIL 30, 2000 PERIOD ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS B
Shares sold 1,839 90,155
Shares reinvested 3,679 1,301
Shares repurchased (23,968) (10,356)
--------------------------------------------------------------------------------
Net increase (decrease) (18,450) 81,100
================================================================================
CITISELECT FOLIO 300 BALANCED
--------------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30, 2000 YEAR ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS A
Shares sold 130,516 905,284
Shares reinvested 1,201,397 2,859,378
Shares repurchased (6,452,821) (18,321,523)
--------------------------------------------------------------------------------
Net decrease (5,120,908) (14,556,861)
================================================================================
24
<PAGE>
CITISELECT PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Unaudited)
SIX MONTHS ENDED
APRIL 30, 2000 PERIOD ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS B
Shares sold 759 87,722
Shares reinvested 7,013 809
Shares repurchased (9,769) (2,372)
--------------------------------------------------------------------------------
Net increase (decrease) (1,997) 86,159
================================================================================
CITISELECT FOLIO 400 GROWTH
--------------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30, 2000 YEAR ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS A
Shares sold 89,628 786,829
Shares reinvested 1,682,498 3,400,461
Shares repurchased (7,166,268) (23,777,463)
--------------------------------------------------------------------------------
Net decrease (5,394,142) (19,590,173)
================================================================================
SIX MONTHS ENDED
APRIL 30, 2000 PERIOD ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS B
Shares sold 3,154 84,676
Shares reinvested 6,667 --
Shares repurchased (12,889) (12,573)
--------------------------------------------------------------------------------
Net increase (decrease) (3,068) 72,103
================================================================================
CitiSelect Folio 500 Growth Plus
--------------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30, 2000 YEAR ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS A
Shares sold 79,040 393,517
Shares reinvested 563,258 884,444
Shares repurchased (2,874,507) (9,445,712)
--------------------------------------------------------------------------------
Net decrease (2,232,209) (8,167,751)
================================================================================
SIX MONTHS ENDED
APRIL 30, 2000 PERIOD ENDED
(Unaudited) OCTOBER 31, 1999
================================================================================
CLASS B
Shares sold 1,698 32,179
Shares reinvested 2,557 --
Shares repurchased (6,676) (4,915)
--------------------------------------------------------------------------------
Net increase (decrease) (2,421) 27,264
================================================================================
6. Pertinent details as to various amounts allocated from each Portfolio to
CitiSelect Folio 100 Income for the six months ended April 30, 2000 are noted
below. With respect to the Portfolios, investment transactions are accounted for
on the trade date basis and realized gains and losses are determined on the
identified cost basis.
<TABLE>
<CAPTION>
PORTFOLIO
INTEREST DIVIDENDS EXPENSES
============================================================================================================================
<S> <C> <C> <C>
Large Cap Growth Portfolio $ 12 $ 72 $ (71)
Large Cap Value Portfolio 1 244 (83)
High Yield Portfolio 5,074 -- (324)
U.S. Fixed Income Portfolio 11,204 185 (645)
----------------------------------------------------------------------------------------------------------------------------
Total $16,291 $501 $(1,123)
============================================================================================================================
</TABLE>
25
<PAGE>
CITISELECT PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
PERIOD ENDED PERCENTAGE
REALIZED UNREALIZED OF OWNERSHIP
GAIN (LOSS) GAIN (LOSS) OF THE PORTFOLIO
================================================================================================================================
<S> <C> <C> <C>
Large Cap Growth Portfolio $ 1,723 $ 232 --%
Large Cap Value Portfolio 215 (1,161) --
High Yield Portfolio (6,091) (1,203) 0.2%
U.S. Fixed Income Portfolio (13,008) 2,681 0.1%
--------------------------------------------------------------------------------------------------------------------------------
Total $(17,161) $ 549
================================================================================================================================
Pertinent details as to various amounts allocated from each Portfolio to
CitiSelect Folio 200 Conservative for the six months ended April 30, 2000 are
noted below. With respect to the Portfolios, investment transactions are
accounted for on the trade date basis and realized gains and losses are
determined on the identified cost basis.
PORTFOLIO
INTEREST DIVIDENDS EXPENSES
=================================================================================================================================
Large Cap Growth Portfolio $ 2,528 $ 15,590 $ (15,323)
Large Cap Value Portfolio 321 63,789 (21,797)
Small Cap Growth Portfolio 3,295 3,817 (15,701)
Small Cap Value Portfolio 1,124 26,760 (16,158)
International Portfolio 3,868 49,197 (21,598)
Foreign Bond Portfolio 207,502 -- (29,222)
High Yield Portfolio 849,947 -- (54,200)
U.S. Fixed Income Portfolio 1,040,735 17,412 (60,019)
--------------------------------------------------------------------------------------------------------------------------------
Total $2,109,320 $ 176,565 $ (234,018)
=================================================================================================================================
PERIOD ENDED PERCENTAGE
REALIZED UNREALIZED OF OWNERSHIP
GAIN (LOSS) GAIN (LOSS) OF THE PORTFOLIO
=================================================================================================================================
Large Cap Growth Portfolio $ 383,922 $ 107,085 0.6%
Large Cap Value Portfolio 62,797 (276,150) 2.6%
Small Cap Growth Portfolio 1,551,211 (92,156) 3.2%
Small Cap Value Portfolio (76,610) 280,672 5.0%
International Portfolio 227,782 79,480 5.2%
Foreign Bond Portfolio (127,408) 65,518 18.0%
High Yield Portfolio (988,317) (230,836) 23.8%
U.S. Fixed Income Portfolio (1,174,599) 313,779 11.4%
Foreign Tax Reclaim (199) (5,607) --
--------------------------------------------------------------------------------------------------------------------------------
Total $ (141,421) $ 241,785
================================================================================================================================
Pertinent details as to various amounts allocated from each Portfolio to
CitiSelect Folio 300 Balanced for the six months ended April 30, 2000 are noted
below. With respect to the Portfolios, investment transactions are accounted for
on the trade date basis and realized gains and losses are determined on the
identified cost basis.
PORTFOLIO
INTEREST DIVIDENDS EXPENSES
=================================================================================================================================
Large Cap Growth Portfolio $ 6,105 $ 37,216 $ (36,697)
Large Cap Value Portfolio 750 150,544 (51,419)
Small Cap Growth Portfolio 11,877 13,387 (56,014)
Small Cap Value Portfolio 3,979 94,486 (57,040)
International Portfolio 13,504 166,357 (73,992)
Foreign Bond Portfolio 357,725 -- (50,307)
High Yield Portfolio 1,130,170 -- (72,053)
U.S. Fixed Income Portfolio 1,147,694 19,340 (66,173)
--------------------------------------------------------------------------------------------------------------------------------
Total $2,671,804 $ 481,330 $(463,695)
================================================================================================================================
</TABLE>
26
<PAGE>
CITISELECT PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Unaudited)
<TABLE>
<CAPTION>
PERIOD ENDED PERCENTAGE
REALIZED UNREALIZED OF OWNERSHIP
GAIN (LOSS) GAIN (LOSS) OF THE PORTFOLIO
================================================================================================================================
<S> <C> <C> <C>
Large Cap Growth Portfolio $ 907,548 $ 223,252 1.4%
Large Cap Value Portfolio 140,823 (653,584) 5.6%
Small Cap Growth Portfolio 5,491,108 (402,527) 12.0%
Small Cap Value Portfolio (281,134) 969,018 20.9%
International Portfolio 794,500 233,669 16.9%
Foreign Bond Portfolio (189,661) 86,017 31.9%
High Yield Portfolio (1,328,287) (310,865) 31.7%
U.S. Fixed Income Portfolio (1,302,212) 359,575 12.4%
Foreign Tax Reclaim (651) (18,962) --
--------------------------------------------------------------------------------------------------------------------------------
Total $ 4,232,034 $ 485,593
================================================================================================================================
Pertinent details as to various amounts allocated from each Portfolio to
CitiSelect Folio 400 Growth for the six months ended April 30, 2000 are noted
below. With respect to the Portfolios, investment transactions are accounted for
on the trade date basis and realized gains and losses are determined on the
identified cost basis.
PORTFOLIO
INTEREST DIVIDENDS EXPENSES
================================================================================================================================
Large Cap Growth Portfolio $ 8,562 $ 52,498 $ (51,898)
Large Cap Value Portfolio 1,061 213,396 (73,165)
Small Cap Growth Portfolio 16,339 18,701 (77,808)
Small Cap Value Portfolio 5,602 132,959 (80,416)
International Portfolio 28,617 353,070 (157,545)
Foreign Bond Portfolio 388,903 -- (54,745)
High Yield Portfolio 844,097 -- (53,808)
U.S. Fixed Income Portfolio 504,301 8,477 (29,075)
--------------------------------------------------------------------------------------------------------------------------------
Total $1,797,482 $779,101 $(578,460)
================================================================================================================================
PERIOD ENDED PERCENTAGE
REALIZED UNREALIZED OF OWNERSHIP
GAIN (LOSS) GAIN (LOSS) OF THE PORTFOLIO
================================================================================================================================
Large Cap Growth Portfolio $1,274,794 $ 313,606 2.0%
Large Cap Value Portfolio 220,754 (884,804) 8.0%
Small Cap Growth Portfolio 7,700,522 (533,496) 16.1%
Small Cap Value Portfolio (399,209) 1,403,221 30.2%
International Portfolio 1,687,645 522,121 36.0%
Foreign Bond Portfolio (212,839) 99,243 36.8%
High Yield Portfolio (984,847) (234,863) 24.2%
U.S. Fixed Income Portfolio (572,661) 153,114 5.6%
Foreign Tax Reclaim (1,738) (46,714) --
--------------------------------------------------------------------------------------------------------------------------------
Total $8,712,421 $ 791,428
================================================================================================================================
Pertinent details as to various amounts allocated from each Portfolio to
CitiSelect Folio 500 Growth Plus for the six months ended April 30, 2000 are
noted below. With respect to the Portfolios, investment transactions are
accounted for on the trade date basis and realized gains and losses are
determined on the identified cost basis.
PORTFOLIO
INTEREST DIVIDENDS EXPENSES
================================================================================================================================
Large Cap Growth Portfolio $ 4,269 $ 26,077 $ (25,842)
Large Cap Value Portfolio 538 108,183 (37,150)
Small Cap Growth Portfolio 8,294 9,387 (39,332)
Small Cap Value Portfolio 2,831 67,037 (40,586)
International Portfolio 18,020 220,941 (98,590)
High Yield Portfolio 178,236 -- (11,359)
U.S. Fixed Income Portfolio 96,012 1,625 (5,536)
--------------------------------------------------------------------------------------------------------------------------------
Total $308,200 $433,250 $(258,395)
================================================================================================================================
</TABLE>
27
<PAGE>
CITISELECT PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
PERIOD ENDED PERCENTAGE
REALIZED UNREALIZED OF OWNERSHIP
GAIN (LOSS) GAIN (LOSS) OF THE PORTFOLIO
================================================================================================================================
<S> <C> <C> <C>
Large Cap Growth Portfolio $ 634,956 $155,408 1.0%
Large Cap Value Portfolio 113,149 (445,113) 3.8%
Small Cap Growth Portfolio 3,868,940 (305,415) 8.3%
Small Cap Value Portfolio (209,579) 699,804 16.0%
International Portfolio 1,056,768 319,643 22.4%
High Yield Portfolio (207,752) (50,367) 5.2%
U.S. Fixed Income Portfolio (109,423) 26,946 1.1%
Foreign Tax Reclaim (1,004) (28,422) --
--------------------------------------------------------------------------------------------------------------------------------
Total $5,146,055 $372,484
================================================================================================================================
</TABLE>
7. ASSUMPTION OF EXPENSES CFBDS, as Sub-Administrator has voluntarily agreed to
pay a portion of the unwaived expenses of certain Funds for the six months ended
April 30, 2000, which amounted to $93,214 for CitiSelect Folio 100 Income and
$40,888 for CitiSelect Folio 500 Growth Plus.
28
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
TRUSTEES AND OFFICERS
C. Oscar Morong, Jr., CHAIRMAN
Philip W. Coolidge*, PRESIDENT
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
Heath B. McLendon**
E. Kirby Warren
William S. Woods, Jr.***
SECRETARY
Robert Frenkel**
TREASURER
Linwood Downs*
*AFFILIATED PERSON OF SUB-ADMINISTRATOR AND DISTRIBUTOR
**AFFILIATED PERSON OF INVESTMENT MANAGER
***TRUSTEE EMERITUS
INVESTMENT MANAGER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
DISTRIBUTOR
CFBDS, Inc.
21 Milk Street, 5th floor
Boston, MA 02109
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
LEGAL COUNSEL
Bingham Dana LLP
150 Federal Street, Boston, MA 02110
This report is prepared for the information of shareholders. It is authorized
for distribution to prospective investors only when preceded or accompanied by
an effective prospectus.
(C)2000 Citicorp [Recycle logo] Printed on recycled paper CSS/400
<PAGE>
CITIFUNDS(SM)
BALANCED
PORTFOLIO
SEMI-ANNUAL REPORT
APRIL 30, 2000
--------------------------------------------------------------------------------
INVESTMENT PRODUCTS: NOT FDIC INSURED o NO BANK GUARANTEE o MAY LOSE VALUE
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Letter to Our Shareholders 1
--------------------------------------------------------------------------------
Portfolio Environment and Outlook 2
--------------------------------------------------------------------------------
Fund Facts 4
--------------------------------------------------------------------------------
Portfolio Highlights 5
--------------------------------------------------------------------------------
Fund Performance 6
--------------------------------------------------------------------------------
Statement of Assets and Liabilities 7
--------------------------------------------------------------------------------
Statement of Operations 8
--------------------------------------------------------------------------------
Statement of Changes in Net Assets 9
--------------------------------------------------------------------------------
Financial Highlights 10
--------------------------------------------------------------------------------
Notes to Financial Statements 12
--------------------------------------------------------------------------------
<PAGE>
LETTER TO OUR SHAREHOLDERS
Dear CitiFunds Shareholder:
During the six months ended April 30, 2000, the U.S. stock and bond markets
were characterized by historic levels of volatility, leaving many investors with
no clear indication of the future direction of the financial markets. Despite
the ongoing strength and expansion of the U.S. and global economies, concerns
regarding inflation and rising interest rates led to wide fluctuations in stock
prices and turbulence in the bond market.
In this environment, the CitiFunds' investment adviser, Citibank, N.A.,
continued to manage CitiFundsSM Balanced Portfolio with the goal of achieving
its investment objectives which are to provide high current income by investing
in a broad range of securities, to preserve capital, and to provide growth
potential with reduced risk.
This report reviews the Fund's investment activities and performance during
the reporting period and provides a summary of Citibank's perspective on and
outlook for the U.S. stock and bond markets. Thank you for your continued
confidence and participation during these challenging times.
Sincerely,
/s/ PHILIP W. COOLIDGE
-----------------------
Philip W. Coolidge
President
May 15, 2000
<PAGE>
PORTFOLIO ENVIRONMENT AND OUTLOOK
BOTH STOCKS AND BONDS WERE ADVERSELY AFFECTED OVER THE PAST SIX MONTHS by the
growing investor uncertainty about persistently strong economic growth, rising
inflation fears and a more restrictive Federal Reserve Board (the "Fed")
monetary policy in the United States. The U.S. economy continued its record
growth rate, with Gross Domestic Product ("GDP") rising 7.3% during the fourth
quarter of 1999 and an estimated 5.4% during the first quarter of 2000. This
high level of economic growth caused concern among many investors regarding
inflation. In an attempt to forestall a potential reacceleration of inflation,
the Fed raised interest rates by 75 basis points (0.75%) during the reporting
period.
HIGHER INTEREST RATES CAUSED MOST SECTORS OF THE U.S. BOND MARKET TO DECLINE.
Many bonds were also affected by changing supply-and-demand influences,
including the federal government's announcement that it intends to buy back
roughly $30 billion of long-term U.S. Treasury bonds. This created an unusual
condition in the bond market called an inverted yield curve. An inverted yield
curve represents an occurrence whereby longer-term bonds offer lower yields than
short-term bonds. In addition, the increased volatility of the stock market
created a "flight to quality" among many risk-averse investors, causing the
yield differences, or spreads, between high-quality and lower-quality bonds to
widen.
DURING THE REPORTING PERIOD, THE U.S. STOCK MARKET WAS CHARACTERIZED BY
RECORD LEVELS OF VOLATILITY. Throughout 1999, especially during November and
December, value stocks (i.e., stocks that are inexpensive compared to other
companies with similar earnings or assets) were virtually ignored by investors.
In contrast, growth stocks (i.e., stocks issued by companies with the potential
for faster-than-average growth within their industries) rose as many investors
appeared willing to pay virtually any price for young and, what the Fund's
management regards as speculative, technology companies. However, investor
sentiment shifted dramatically during the first quarter of 2000. Investors,
reacting to the potential threat of inflation, began to reassess the valuations
assigned to many companies.
As such, many large cap stocks fell sharply in January and February before
recovering in early March. Between mid-March and the end of April, however, the
market experienced a substantial correction. The tech-laden NASDAQ Composite
Index* fell by more than 35% from its high, including a single-day drop of 10%
on April 14, 2000. Shares of "blue chip" companies declined less severely, with
the Standard & Poor's 500 Index** returning 7.18% during the same time period.
Some value-oriented stocks gained ground amid renewed investor interest.
* The Nasdaq Composite Index is a market value-weighted index that measures
all domestic and non-U.S. based securities listed on the NASDAQ stock
market.
** The Standard & Poor's 500 Index ("S&P 500") is an index of U.S. common
stocks and is used as a gauge of general U.S. stock market performance.
2
<PAGE>
DUE TO THE CONTINUING MARKET CHANGES, THE FUND'S MANAGERS REDUCED THE AVERAGE
DURATION OF THE BOND PORTION OF THE PORTFOLIO TO A LEVEL THAT WAS MODESTLY
SHORTER THAN THE AVERAGES. (Average duration is a measure of sensitivity to
changing interest rates.) The bond portfolio's average duration was reduced to
enable management to respond more quickly to investment opportunities when and
if they became available. In addition, the Fund's managers maintained an
emphasis on high-quality corporate bonds, mortgage-backed securities and
asset-backed securities. In their view, these fixed-income securities offered
the most competitive values during the period. Of course, there are no
guarantees that management's expectations will come true.
THE PORTFOLIO'S EQUITY MANAGERS FOLLOW A SPECIFIC DISCIPLINE THAT REQUIRES
THAT A COMPANY HAVE A TRACK RECORD OF PROFITABILITY TO BE CONSIDERED FOR
PURCHASE, AND THE TEAM AVOIDS SPECULATIVE COMPANIES WITHOUT PROFITS, WHICH
INCLUDES MOST INTERNET STOCKS. Instead, the managers continued to focus on
large-cap, multinational companies that they believed had high-quality
businesses that were not reflected in their stock prices, and were likely to
provide improving earnings. The managers identified such opportunities in
well-established, "Old Economy" companies that were, in their view, aggressively
adopting the technologies needed to expand their businesses.
The managers expect the emergence of online markets for chemicals, industrial
goods and other commodity-like products to particularly benefit companies in the
basic materials and capital goods sectors going forward. Although the prospects
of the Portfolio's basic materials and capital holdings have not yet been
reflected in their stock prices, the Fund positively benefited from competitive
results achieved by other industry groups, including natural gas producers,
money-center banks and brokerage firms.
In the financial services sector, the Fund's managers focused primarily on
businesses with coherent strategies for targeting "New Economy" industries.
These companies include financial institutions that provide capital to
fast-growing technology, media and communications companies.
ALTHOUGH NO ASSURANCES CAN BE MADE, THE FUND'S MANAGEMENT TEAM CONTINUES TO
BELIEVE THAT STRENGTHENING GLOBAL DEMAND ULTIMATELY SHOULD BENEFIT THE
PORTFOLIO'S STOCK HOLDINGS. Furthermore, in management's view, the recent
correction of technology stocks may be evidence that many investors are
returning to a more rational approach to investing where financial fundamentals
and valuations really matter. While there is no way to predict whether this
encouraging development will persist, management believes that this new trend
may be positive for certain value-oriented stocks.
3
<PAGE>
FUND FACTS
FUND OBJECTIVE
To provide high current income by investing in a broad range of securities, to
preserve capital and to provide growth potential with reduced risk.
DIVIDENDS CAPITAL GAINS
Paid quarterly, if any Distributed semi-annually, if any
INVESTMENT MANAGER PORTFOLIO SUBADVISER
U.S. Fixed Income Portfolio Large Cap Value Portfolio
Citibank, N.A. SSB Citi Fund Management LLC
COMMENCEMENT OF OPERATIONS BENCHMARKS
October 19, 1990 o Lipper Balanced Funds Average*
o Standard & Poor's Barra Value
NET ASSETS AS OF 4/30/00 Index**
Class A shares $178.6 million o Lehman Brothers Aggregate Bond
Class B shares $1.8 million Index***
* The Lipper Balanced Funds Average reflects the performance (excluding sales
charges) of mutual funds with similar objectives.
** The Standard & Poor's Barra Value Index is an index of U.S. common stocks
and is used as a gauge of general U.S. stock market performance. The S&P
Barra Value Index represents the value of stocks in the S&P500.
*** The Lehman Brothers Aggregate Bond Index is a broad measure of the
performance of taxable bonds in the U.S. market, with maturities of at least
one year.
4
<PAGE>
PORTFOLIO HIGHLIGHTS
================================================================================
TOP FIVE SECURITIES (STOCKS)
LARGE CAP VALUE PORTFOLIO
COMPANY SECTOR % OF NET ASSETS
Exxon Corp. Energy 3.56%
--------------------------------------------------------------------------------
Kimberly-Clark Corp. Consumer Staples 3.41%
--------------------------------------------------------------------------------
Marsh & McLennan Co., Inc. Finance 3.38%
--------------------------------------------------------------------------------
Williams Co., Inc. Utilities 3.31%
--------------------------------------------------------------------------------
PepsiCo, Inc. Consumer Staples 3.31%
--------------------------------------------------------------------------------
DOMESTIC FIXED INCOME
U.S. FIXED INCOME PORTFOLIO
INSTRUMENTS % OF NET ASSETS
Mortgage and Asset Backed Securities 64.6%
--------------------------------------------------------------------------------
Corporate Bonds 28.0%
--------------------------------------------------------------------------------
U.S. Treasury Issues 14.7%
--------------------------------------------------------------------------------
Preferred Stock 1.5%
--------------------------------------------------------------------------------
Short-Term and Other Assets (8.8)%
--------------------------------------------------------------------------------
5
<PAGE>
FUND PERFORMANCE
TOTAL RETURNS
<TABLE>
<CAPTION>
SINCE
SIX FIVE 10/19/90
ALL PERIODS ENDED APRIL 30, 2000 MONTHS** 1 YEAR YEARS* INCEPTION*
==================================================================================
<S> <C> <C> <C> <C>
CitiFunds Balanced Portfolio (Class A)
without sales charge (1.01)% (4.00)% 10.41% 11.22%
Lipper Balanced Funds Average 5.35% 5.23% 14.49% 13.11%+
S&P Barra Value Index 2.70% 0.46% 19.81% 18.13%+
Lehman Brothers Aggregate Bond Index 1.41% 1.26% 6.79% 7.77%+
CitiFunds Balanced Portfolio (Class A)
with a maximum sales charge of 5.00% (5.96)% (8.80)% 9.28% 10.63%
CitiFunds Balanced Portfolio (Class B)
without deferred sales charge (1.42)% (4.72)% -- 1.15%#
Lipper Balanced Funds Average 5.35% 5.23% -- 6.90%++
S&P Barra Value Index 2.70% 0.46% -- 9.04%++
Lehman Brothers Aggregate Bond Index 1.41% 1.26% -- 0.80%++
CitiFunds Balanced Portfolio (Class B)
with a maximum deferred
sales charge of 5.00% (6.35)% (9.48)% -- (2.70)%#
</TABLE>
* Average Annual Total Return
** Not Annualized
+ From 10/31/90
++ From 12/31/98
# Commencement of Operations 1/4/99
GROWTH OF
$10,000 INVESTMENT
A $10,000 investment
in the Fund made on 10/31/90 would have grown to $26,197 with sales charge (as
of 4/30/00). The graph shows how the Fund compares to its benchmarks for the
same period.
[The following represents a chart in the printed piece.]
Citifunds Lipper S&P BARA Lehman Brothers
Balanced Balanced Value Index Aggregate
Portfolio Funds Average (unmanaged) Bond Index (Unmanaged)
10/19/90 9500
10/31/90 9334 10000 10000 10000
11/30/90 9851 10435 10683 10215
12/31/90 10079 10677 10924 10374
1/31/91 10550 11034 11441 10503
2/28/91 11090 11521 12187 10592
3/31/91 11225 11725 12298 10665
4/30/91 11235 11753 12395 10781
5/31/91 11650 12099 12986 10843
6/30/91 11245 11726 12341 10838
7/31/91 11783 12122 12831 10988
8/31/91 12242 12434 13017 11226
9/30/91 12077 12450 12880 11454
10/31/91 12298 12633 13068 11581
11/30/91 12087 12354 12339 11687
12/31/91 13064 13358 13389 12034
1/31/92 12821 13242 13389 11871
2/29/92 13013 13401 13661 11948
3/31/92 12853 13203 13447 11881
4/30/92 12904 13323 14103 11966
5/31/92 12975 13462 14142 12192
6/30/92 12746 13317 14026 12360
7/31/92 13175 13714 14533 12612
8/31/92 12981 13584 14111 12740
9/30/92 13214 13755 14266 12891
10/31/92 13409 13756 14152 12720
11/30/92 13840 14096 14536 12723
12/31/92 13955 14357 14799 12925
1/31/93 14058 14551 15207 13173
2/28/93 14038 14647 15732 13403
3/31/93 14523 14922 16166 13460
4/30/93 14337 14738 16102 13553
5/31/93 14565 14980 16403 13570
6/30/93 14560 15148 16619 13816
7/31/93 14446 15172 16825 13894
8/31/93 14904 15630 17485 14138
9/30/93 14893 15683 17478 14177
10/31/93 15019 15824 17572 14230
11/30/93 14862 15593 17258 14109
12/31/93 15139 15869 17551 14185
1/31/94 15468 16255 18369 14377
2/28/94 15160 15936 17704 14127
3/31/94 14582 15350 16976 13779
4/30/94 14668 15379 17334 13669
5/31/94 14860 15451 17622 13667
6/30/94 14518 15168 17134 13637
7/31/94 14917 15511 17713 13907
8/31/94 15219 15908 18214 13925
9/30/94 14810 15620 17573 13720
10/31/94 15027 15712 17956 13707
11/30/94 14658 15325 17229 13677
12/31/94 14827 15454 17441 13772
1/31/95 15013 15646 17914 14044
2/28/95 15485 16117 18609 14378
3/31/95 15771 16393 19122 14466
4/30/95 15970 16693 19752 14668
5/31/95 16578 17231 20630 15236
6/30/95 16743 17553 20787 15348
7/31/95 16954 17957 21504 15313
8/31/95 16943 18111 21687 15498
9/30/95 17321 18515 22442 15649
10/31/95 17344 18471 22092 15852
11/30/95 17948 19036 23249 16090
12/31/95 18187 19295 23893 16316
1/31/96 18500 19642 24608 16424
2/29/96 18326 19713 24839 16139
3/31/96 18372 19790 25420 16026
4/30/96 18361 19996 25680 15936
5/31/96 18535 20242 26068 15904
6/30/96 18759 20262 25942 16118
7/31/96 18231 19709 24848 16162
8/31/96 18430 20068 25533 16135
9/30/96 19124 20811 26626 16416
10/31/96 19289 21198 27529 16779
11/30/96 19974 22146 29635 17067
12/31/96 19567 21913 29149 16908
1/31/97 20206 22513 30493 16960
2/28/97 20144 22540 30715 17002
3/31/97 19427 21913 29665 16813
4/30/97 20485 22511 30777 17065
5/31/97 21115 23465 32707 17227
6/30/97 21824 24148 33956 17431
7/31/97 22959 25500 36673 17901
8/31/97 21864 24834 35015 17748
9/30/97 22632 25765 37067 18010
10/31/97 22540 25322 35703 18272
11/30/97 23341 25697 37063 18356
12/31/97 23647 26034 37886 18540
1/31/98 23947 26195 37420 18778
2/28/98 24786 27274 40227 18764
3/31/98 25807 28040 42266 18829
4/30/98 25883 28219 42765 18927
5/31/98 25416 27934 42162 19107
6/30/98 25503 28350 42482 19269
7/31/98 24741 27933 41560 19310
8/31/98 22550 25486 34877 19624
9/30/98 23308 26521 36998 20083
10/31/98 24450 27571 39876 19977
11/30/98 24919 28553 41954 20091
12/31/98 25498 29515 43427 20151
1/31/99 26053 29975 44304 20294
2/28/99 25463 29157 43350 19939
3/31/99 25937 29816 44664 20048
4/30/99 27288 30758 48515 20159
5/31/99 27252 30346 47658 19981
6/30/99 27617 31141 49488 19917
7/31/99 26944 30571 47966 19832
8/31/99 26363 30174 46743 19822
9/30/99 25859 29776 44916 20052
10/31/99 26465 30616 47451 20126
11/30/99 26189 31017 47173 20124
12/31/99 26122 32010 48945 20027
1/31/00 25900 31136 47388 19961
2/29/00 24829 31152 44427 20203
3/31/00 26687 32844 49059 20469
4/30/00 26197 32256 48731 20410
The graph includes the initial sales charge on the Fund (no comparable charge
exists for the indices) and assumes all dividends and distributions are
reinvested at Net Asset Value.
Note: All Fund performance numbers represent past performance, and are no
guarantee of future results. The Fund's share price and investment return will
fluctuate, so that the value of an investor's shares, when redeemed, may be
worth more or less than their original cost. Total returns include change in
share price and reinvestment of dividends and distributions, if any. Total
return figures are provided in accordance with SEC guidelines for comparative
purposes for prospective investors and reflect certain voluntary fee waivers
which may be terminated at any time. If the waivers were not in place, the
Fund's return would have been lower. The maximum sales charge of 5.00% went into
effect on January 4, 1999. Investors may not invest directly in an index.
6
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (Unaudited)
================================================================================
ASSETS:
Investment in, at value:
Large Cap Value Portfolio $100,075,754
U.S Fixed Income Portfolio 80,914,701
--------------------------------------------------------------------------------
Total Investments (Note 1A) 180,990,455
Receivable for shares of beneficial interest sold 2,266
Other receivables 31,734
--------------------------------------------------------------------------------
Total assets 181,024,455
--------------------------------------------------------------------------------
LIABILITIES:
Payable for shares of beneficial interest repurchased 521,438
Accrued expenses and other liabilities 135,563
--------------------------------------------------------------------------------
Total liabilities 657,001
--------------------------------------------------------------------------------
NET ASSETS $180,367,454
================================================================================
NET ASSETS CONSIST OF:
Paid-in capital $186,784,631
Unrealized depreciation (4,421,185)
Accumulated net realized loss (2,710,559)
Undistributed net investment income 714,567
--------------------------------------------------------------------------------
Total $180,367,454
================================================================================
COMPUTATION OF
CLASS A SHARES:
Net Asset Value per share ($178,614,608/13,899,397 shares outstanding $12.85
Offering Price per share ($12.85/0.95) $13.53*
================================================================================
CLASS B SHARES:
Net Asset Value per share and offering price
($1,752,846/135,786 shares outstanding) $12.91**
================================================================================
* Based upon single purchases of less than $25,000.
** Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charges.
See notes to financial statements
7
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (Unaudited)
================================================================================
INVESTMENT INCOME (Note 6):
Interest Income $ 3,081,192
Dividend Income (net of foreign
withholding tax of $3,765) 1,224,912
Allocated Expenses (584,668)
--------------------------------------------------------------------------------
3,721,436
--------------------------------------------------------------------------------
EXPENSES
Management fees (Note 2) 206,077
Service fees Class A (Note 3) 242,994
Service fees Class B (Note 3) 9,578
Legal fees 43,282
Shareholder reports 38,233
Custody and fund accounting fees 13,623
Transfer agent fees 13,175
Audit fees 13,175
Trustee fees 7,913
Other 41,448
--------------------------------------------------------------------------------
Total expenses 629,498
Less aggregate amount waived by
the Manager (Note 2) (206,077)
--------------------------------------------------------------------------------
Net expenses 423,421
--------------------------------------------------------------------------------
Net investment income 3,298,015
--------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) (Note 6):
Net realized loss (2,077,505)
Unrealized depreciation on investments (3,857,520)
--------------------------------------------------------------------------------
Net realized and unrealized loss (5,935,025)
--------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ (2,637,010)
================================================================================
See notes to financial statements
8
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS TEN MONTHS YEAR
ENDED ENDED ENDED
APRIL 30, 2000 OCTOBER 31, 1999 DECEMBER 31,
(Unaudited) (Note 1G) 1998
================================================================================
INCREASE (DECREASE) IN
NET ASSETS FROM:
OPERATIONS:
Net investment income $ 3,298,015 $ 5,357,423 $ 6,041,370
Net realized gain (loss) (2,077,505) 17,693,990 26,888,409
Unrealized appreciation
(depreciation) on investments (3,857,520) (13,913,368) (15,478,163)
--------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations (2,637,010) 9,138,045 17,451,616
--------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (Class A) (3,289,710) (5,213,004) (5,439,336)
Net investment income (Class B) (16,279) (30,009) --
Net realized gain (Class A) (16,917,007) (348,563) (34,018,101)
Net realized gain (Class B) (166,586) (3,267) --
--------------------------------------------------------------------------------
Decrease in net assets
from distributions
to shareholders (20,389,582) (5,594,843) (39,457,437)
--------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST (Note 5):
CLASS A
Net proceeds from sale of shares 489,307 6,618,624 23,637,486
Net asset value of shares issued
to shareholders from
reinvestment of distributions 20,193,832 5,561,567 39,433,879
Cost of shares repurchased (34,733,667) (36,653,939) (31,497,141)
--------------------------------------------------------------------------------
Total Class A (14,050,528) (24,473,748) 31,574,224
--------------------------------------------------------------------------------
CLASS B*
Net proceeds from sale of shares 174,021 2,678,077 --
Net asset value of shares issued to
shareholders from reinvestment
of distributions 167,102 33,276 --
Cost of shares repurchased (409,135) (627,087) --
--------------------------------------------------------------------------------
Total Class B (68,012) 2,084,266 --
--------------------------------------------------------------------------------
Net increase (decrease) in
net assets from
transactions in shares of
beneficial interest (14,118,540) (22,389,482) 31,574,224
--------------------------------------------------------------------------------
NET INCREASE (DECREASE)
IN NET ASSETS (37,145,132) (18,846,280) 9,568,403
--------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 217,512,586 236,358,866 226,790,463
--------------------------------------------------------------------------------
End of period (including
undistributed net investment
income of $714,567, $722,541
and $608,131, respectively) $180,367,454 $217,512,586 $236,358,866
================================================================================
*January 4, 1999 (Commencement of Operations).
See notes to financial statements
9
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
SIX MONTHS TEN MONTHS
ENDED ENDED
APRIL 30, OCTOBER 31, YEAR ENDED DECEMBER 31,
2000 1999 ---------------------------------------------
(Unaudited) (Note 1G) 1998 1997 1996 1995 1994+
===============================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $14.42 $14.24 $15.77 $15.61 $15.71 $13.52 $14.24
-----------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.231 0.340++ 0.420 0.421 0.497 0.486 0.399
Net realized and
unrealized gain (loss) (0.402) 0.201 0.795 2.726 0.680 2.540 (0.695)
-----------------------------------------------------------------------------------------------
Total from operations (0.171) 0.541 1.215 3.147 1.177 3.026 (0.296)
-----------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.229) (0.338) (0.380) (0.421) (0.497) (0.495) (0.394)
Net realized gain (1.170) (0.023) (2.365) (2.566) (0.780) (0.341) (0.030)
-----------------------------------------------------------------------------------------------
Total distributions (1.399) (0.361) (2.745) (2.987) (1.277) (0.836) (0.424)
-----------------------------------------------------------------------------------------------
Net Asset Value, end of
period $12.85 $14.42 $14.24 $15.77 $15.61 $15.71 $13.52
===============================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted) $178,615 $215,477 $236,359 $226,790 $230,382 $246,002 $227,309
Ratio of expenses to
average net assets (A) 1.02%* 1.02%* 1.02% 1.02% 1.02% 1.02% 1.02%
Ratio of net investment
income to average
net assets 3.34%* 2.78%* 2.61% 2.44% 3.04% 3.21% 2.82%
Portfolio turnover (B) -- -- -- -- -- -- 29%
Total return (1.01)%** 3.79%** 7.83% 20.85% 7.59% 22.66% (2.06)%
Note: If Agents of the Fund for the periods indicated had not voluntarily waived
a portion of their fees the net investment income per share and the ratios would
have been as follows:
Net investment income $0.216 $0.323++ $0.390 $0.387 $0.464 $0.463 $0.378
RATIOS:
Expenses to average
net assets (A) 1.23%* 1.16%* 1.22% 1.22% 1.22% 1.17% 1.17%
Net investment income to
average net assets 3.13%* 2.64%* 2.41% 2.24% 2.84% 3.06% 2.67%
===============================================================================================
</TABLE>
* Annualized
** Not Annualized
(A) Includes allocated expenses for the periods indicated from the respective
portfolios.
(B) Portfolio turnover represents the rate of portfolio activity for the period
while the Fund was making investments directly in securities.
+ On May 1, 1994 the Fund began investing all of its investable assets in
Balanced Portfolio.
++ The per share amounts were computed using monthly average shares during the
period.
See notes to financial statements
10
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
CLASS B
----------------------------------
SIX MONTHS JANUARY 4, 1999
ENDED (COMMENCEMENT
APRIL 30, 2000 OF OPERATIONS) TO
(Unaudited) OCTOBER 31, 1999
================================================================================
Net Asset Value,
beginning of period $14.42 $14.28
--------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.163 0.249+
Net realized and
unrealized gain (loss) (0.388) 0.180
--------------------------------------------------------------------------------
Total from operations (0.225) 0.429
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.115) (0.266)
Net realized gain (1.170) (0.023)
--------------------------------------------------------------------------------
Total distributions (1.285) (0.289)
--------------------------------------------------------------------------------
Net Asset Value, end of period $12.91 $14.42
================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $1,753 $2,036
Ratio of expenses to average net assets (A) 1.77%* 1.77%*
Ratio of net investment income to average
net assets 2.59%* 2.03%*
Total return (1.42)%** 2.99%**
Note: If Agents of the Fund for the periods indicated had not voluntarily waived
a portion of their fees the net investment income per share and the ratios would
have been as follows:
Net investment income $0.149 $0.232+
RATIOS:
Expenses to average net assets (A) 1.98%* 1.91%*
Net investment income to average net assets 2.38%* 1.89%*
================================================================================
* Annualized
** Not Annualized
(A) Includes the allocated expenses for the periods indicated from the
respective portfolios.
+ The per share amounts were computed using monthly average shares during
the period.
See notes to financial statements
11
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES CitiFunds Balanced Portfolio (the "Fund") is
a separate diversified series of CitiFunds Trust I (the "Trust"), a
Massachusetts business trust. The Trust is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Fund invested all of its investable assets in Balanced Portfolio until July
31, 1999. On August 1, 1999, the Fund began investing all of its investable
assets between Large Cap Value Portfolio and U.S. Fixed Income Portfolio (the
"Portfolios"). The Portfolios are registered under the Investment Company Act of
1940, as amended, as open-end, diversified management investment companies and
have multiple investors. These Portfolios are organized as trusts under the laws
of the state of New York and are treated as partnerships for U.S. tax purposes.
The Declaration of Trust permits the Trustees to issue beneficial interests in
the Portfolios. Citibank, N.A. ("Citibank") is the Investment Manager of each of
the Portfolios and has hired a Subadviser for one of the Portfolios. CFBDS, Inc.
("CFBDS") acts as the Fund's Sub-Administrator and Distributor.
The financial statements of the Portfolios, including the Portfolio of
Investments (which are not part of the Fund's financial statements), may be
obtained without charge, and further inquiries about the Portfolios may be made
by calling 1-800-625-4554.
The Fund offers Class A shares and Class B shares. The Fund commenced its
public offering of Class B shares on January 4, 1999. Class A shares have a
front-end, or initial, sales charge effective January 4, 1999. This sales charge
may be reduced or eliminated in certain circumstances. Class B shares have no
front-end sales charge, pay a higher ongoing distribution fee than Class A
shares and are subject to a deferred sales charge if sold within five years of
purchase. Class B shares automatically convert into Class A shares after eight
years. Expenses of the Fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
Rule 12b-1 service and distribution fees applicable to such class), and votes as
a class only with respect to its own Rule 12b-1 plan. Shares of each class would
receive their pro-rata share of the net assets of the Fund if the Fund was
liquidated. Class A shares have lower expenses than Class B shares. For the
period ended April 30, 2000, CFBDS, acting as the distributor, received net
commissions paid by investors $3,335 from sales of Class A and $5,934 in
deferred sales charges from redemptions of Class B shares.
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
The significant accounting policies consistently followed by the Fund are as
follows:
A. INVESTMENT VALUATION The Fund's net asset value will fluctuate based on
changes in the values of the underlying portfolio's securities. The values of
the Fund's beneficial interest in the Portfolios are determined by multiplying
the net asset value of a Portfolio by a Fund's percentage of the aggregate
beneficial inter-
12
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
est in the Portfolio for that day. This proportionate percentage of interest in
a Portfolio, including the effects of the prior day's contributions and
withdrawals, is then applied to determine the value of the Fund's interest in a
Portfolio as of the close of regular trading on the New York Stock Exchange on
each business day.
The portfolios' investments are valued primarily on the basis of market
quotations, or if market quotations are not available, by a method believed to
accurately reflect fair value. An equity security that is primarily traded on a
U.S. or foreign exchange (including securities traded through the NASDAQ
national market system) is valued at the last sale price on that exchange or, if
there were no sales during the day (or for unlisted securities not reported on
the NASDAQ system), at the quoted bid price. Securities quoted in foreign
currencies are translated into U.S. dollars at the current exchange rate. Bonds,
foreign bonds and other fixed income securities (other than short term
securities maturing in sixty days or less) are valued on the basis of valuations
furnished by pricing services authorized by the Board of Trustees, which utilize
market quotations and transactions, quotations from dealers and various
relationships among securities in determining value. Short-term obligations
(maturing in 60 days or less) are valued at amortized cost. Other assets and
securities for which no quotations are readily available are valued at fair
value as determined in good faith by or under guidelines established by the
Trustees.
B. INVESTMENT INCOME The Fund earns income, net of Portfolio expenses, daily
based on its investment in the Portfolios.
C. FEDERAL TAXES The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investment transactions. Accordingly, no provision for federal income or
excise tax is necessary.
D. EXPENSES The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and CFBDS. Expenses incurred by the Trust with
respect to any two or more funds or series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that fund. The Fund's share of the Portfolios' expenses are
charged against and reduce the amount of the Fund's investment in each
Portfolio.
E. DISTRIBUTIONS Distributions to shareholders are recorded on ex-dividend
date. The amount and character of income and net realized gains to be
distributed are determined in accordance with income tax rules and regulations,
which may differ from generally accepted accounting principles. These
differences are attributable to permanent book and tax accounting differences.
Reclassifications are made to the Fund's capital accounts to reflect income and
net realized gains available for distribution (or available capital loss
carryovers) under income tax rules and regulations.
13
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
F. OTHER All realized and unrealized gain and loss of the Portfolios is
allocated pro rata, based on respective ownership interests, among the Fund and
the other investors in the Portfolios at the time of such determination.
G. CHANGE IN FISCAL YEAR END During fiscal year 1999, the Fund changed its
fiscal year end from December 31 to October 31.
2. MANAGEMENT FEES Citibank is responsible for overall management of the Fund's
business affairs, and has a separate Management Agreement with the Fund.
Citibank also provides certain administrative services to the Fund. These
administrative services include providing general office facilities and
supervising the overall administration of the Fund. CFBDS acts as
Sub-Administrator and performs certain duties and receives compensation from
Citibank from time to time as agreed to by Citibank and CFBDS. Citibank is a
wholly-owned subsidiary of Citigroup Inc.
For the services of Citibank under the Management Agreement which covers the
Fund and respective Portfolios and the services of SSBCiti Fund Management LLC,
the Subadviser to the Portfolio. The Fund and respective Portfolios pay an
aggregate fee, which is accrued daily and paid monthly, of 0.70% of the average
daily net assets on an annualized basis for the current fiscal year. Citibank
may voluntarily agree to waive a portion of its management fee from any Fund.
The management fees paid to Citibank amounted to $206,077, all of which was
voluntarily waived for the period April 30, 2000.
The Trust pays no compensation directly to any Trustee or any other officer
who is affiliated with the Sub-Administrator, all of whom receive remuneration
for their services to the Trust from the Sub-Administrator or its affiliates.
3. SERVICE FEES The Fund maintains separate Service Plans for Class A and Class
B shares, which have been adopted in accordance with Rule 12b-1 under the 1940
Act. Under the Class A Service Plan, the Fund may pay monthly fees at an annual
rate not to exceed 0.25% of the average daily net assets represented by Class A
shares of the Fund. The Service fees for Class A shares amounted to $242,994 for
the six months ended April 30, 2000. Under the Class B Service Plan, the Fund
may pay a combined monthly distribution and service fee at an annual rate not to
exceed 1.00% of the average daily net assets represented by Class B shares of
the Fund. The Service fees for Class B shares amounted to $9,578 for the period
ended April 30, 2000. These fees may be used to make payments to the Distributor
for distribution services and to others as compensation for the sale of shares
of the applicable class of the Fund, for advertising, marketing or other
promotional activity, and for preparation, printing and distribution of
prospectuses, statements of additional information and reports for recipients
other than regulators and existing shareholders. The Fund may also make payments
to the Distributor and others for providing personal service of the maintenance
of shareholder accounts.
14
<PAGE>
CITIFUNDS BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
4. INVESTMENT TRANSACTIONS Increases and decreases in the Fund's investment in
the Portfolios for the six months ended April 30, 2000 were as follows:
CONTRIBUTIONS WITHDRAWALS
================================================================================
Large Cap Value Portfolio $ 353,295 $(17,966,782)
U.S. Fixed Income Portfolio 376,276 (17,380,838)
================================================================================
5. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees
to issue an unlimited number of full and fractional shares of beneficial
interest (without par value). Transactions in shares of beneficial interest were
as follows:
TEN MONTHS
SIX MONTHS ENDED
ENDED OCTOBER 31, YEAR ENDED
APRIL 30, 2000 1999 DECEMBER 31,
(Unaudited) (Note 1G) 1998
================================================================================
CLASS A
Shares sold 36,768 451,225 1,473,554
Shares issued to shareholders from
reinvestment of distributions 1,587,154 381,264 2,695,888
Shares repurchased (2,664,032) (2,488,481) (1,950,608)
--------------------------------------------------------------------------------
Class A net increase (decrease) (1,040,110) (1,655,992) 2,218,834
================================================================================
CLASS B*
Shares sold 13,248 181,981 --
Shares issued to shareholders from
reinvestment of distributions 13,073 2,011 --
Shares repurchased (31,756) (42,771) --
--------------------------------------------------------------------------------
Class B net increase (decrease) (5,435) 141,221 --
================================================================================
*January 4, 1999 (Commencement of Operations).
6. Pertinent details as to various amounts allocated from each Portfolio to
CitiFunds Balanced Portfolio for the six months ended April 30, 2000 are noted
below. With respect to the Portfolios, investment transactions are accounted for
on the trade date basis and realized gains and losses are determined on the
identified cost basis.
PORTFOLIO
INTEREST DIVIDENDS EXPENSES
================================================================================
Large Cap Value Portfolio $ 5,528 $1,172,481 $ (407,624)
U.S. Fixed Income Portfolio 3,075,664 52,431 (177,044)
--------------------------------------------------------------------------------
Total $3,081,192 $1,224,912 $ (584,668)
================================================================================
PERCENTAGE
REALIZED UNREALIZED OF OWNERSHIP
GAIN (LOSS) GAIN (LOSS) OF THE PORTFOLIO
================================================================================
Large Cap Value Portfolio $ 1,486,030 $(4,817,736) 52.2%
U.S. Fixed Income Portfolio (3,563,535) 960,216 38.8%
--------------------------------------------------------------------------------
Total $ (2,077,505) $(3,857,520)
================================================================================
15
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
TRUSTEES AND OFFICERS
C. Oscar Morong, Jr., Chairman
Philip W. Coolidge*, President
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
Heath B. McLendon**
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.***
SECRETARY
Robert Frenkel**
TREASURER
Linwood Downs*
*AFFILIATED PERSON OF ADMINISTRATOR AND DISTRIBUTOR
**AFFILIATED PERSON OF INVESTMENT ADVISER
***TRUSTEE EMERITUS
INVESTMENT MANAGER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
DISTRIBUTOR
CFBDS, Inc.
21 Milk Street, 5th Floor, Boston, MA 02109
(617) 423-1679
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
LEGAL COUNSEL
Bingham Dana LLP
150 Federal Street, Boston, MA 02110
<PAGE>
THE CITIFUNDS FAMILY
LARGE CAP STOCKS
CitiFunds Growth & Income Portfolio
CitiFunds Large Cap Growth Portfolio
SMALL CAP STOCKS
CitiFunds Small Cap Growth Portfolio
CitiFunds Small Cap Value Portfolio
INTERNATIONAL STOCKS
CitiFunds International Growth & Income Portfolio
CitiFunds International Growth Portfolio
GROWTH WITH INCOME
CitiFunds Balanced Portfolio
BONDS
CitiFunds Short-Term U.S. Government Income Portfolio
CitiFunds Intermediate Income Portfolio
CitiFunds National Tax Free Income Portfolio
CitiFunds New York Tax Free Income Portfolio
CitiFunds California Tax Free Income Portfolio
MONEY MARKETS
CitiFunds Cash Reserves
CitiFunds U.S. Treasury Reserves
CitiFunds Tax Free Reserves
CitiFunds New York Tax Free Reserves
CitiFunds California Tax Free Reserves
CitiFunds Connecticut Tax Free Reserves
This report is prepared for the information of shareholders of CitiFunds
Balanced Portfolio. It is authorized for distribution to prospective investors
only when preceded or accompanied by an effective prospectus of CitiFunds
Balanced Portfolio.
For more information about any of the CitiFunds listed above, ask for a
prospectus (except for CitiFunds Balanced Portfolio, which preceded or
accompanies this report) containing more complete information, including all
sales charges (if any), fees and expenses. Please read the prospectus carefully
before you invest or send money.
Although each money market fund seeks to maintain the value of your investment
at $1.00 per share, it is possible to lose money by investing in the funds.
Mutual fund shares are not guaranteed or insured by the Federal Deposit
Insurance Corporation or any other government agency.
CitiFunds are made available by CFBDS, Inc. as distributor. For more information
contact your Service Agent or call 1-800-625-4554.
(C)2000 Citicorp [Recycle logo] Printed on recycled paper CFS/BAL/400
