CITIFUNDS TRUST I, 485APOS, 2000-06-30

CITIFUNDS TRUST I
485APOS, 2000-06-30

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<PAGE>
As filed with the Securities and Exchange Commission on June 30, 2000

File Nos. 2-90518
811-4006

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM N-1A

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 41

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
AMENDMENT NO. 42

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

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

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

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

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

It is proposed that this filing will become effective on August 30, 2000
pursuant to paragraph (a) of Rule 485.

----------------------
* This filing relates only to the series of the Trust designated as Citi
Financial Services Index Portfolio, Citi Health Sciences Index Portfolio
and Citi Technology Index Portfolio (formerly referred to as Citi Financial
Services Portfolio, Citi Health Sciences Portfolio, and Citi Technology
Portfolio, respectively).

<PAGE>
PROSPECTUS
SEPTEMBER __, 2000

CITI SECTOR INDEX FUNDS

Citi Financial Services Index Portfolio

Citi Health Sciences Index Portfolio

Citi Technology Index Portfolio

Class A and D Shares

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

-------------------------------------------------------------------------------
INVESTMENT PRODUCTS:
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
-------------------------------------------------------------------------------

<PAGE>

TABLE OF CONTENTS

THE FUNDS......................................................................
GOALS......................................................................
PRINCIPAL INVESTMENT STRATEGIES............................................
PRINCIPAL RISKS............................................................
FUND PERFORMANCE...........................................................
FEES AND EXPENSES..........................................................

MANAGEMENT OF THE FUNDS........................................................
MANAGER....................................................................
MANAGEMENT FEES............................................................
DISTRIBUTION ARRANGEMENTS..................................................

INDEX PERFORMANCE INFORMATION..................................................

MORE ABOUT THE FUNDS...........................................................
INVESTMENT STRATEGIES......................................................

YOUR ACCOUNT...................................................................
CHOOSING A CLASS OF SHARES TO BUY..........................................
HOW TO BUY SHARES..........................................................
HOW THE PRICE OF YOUR SHARES IS CALCULATED.................................
HOW TO SELL SHARES.........................................................
EXCHANGES..................................................................
DIVIDENDS..................................................................
TAX MATTERS................................................................

Goldman Sachs Sector Index - Financials, Goldman Sachs Sector Index -
Healthcare, and Goldman Sachs Technology (GSTI(TM) Composite) Index are
trademarks and/or servicemarks of Goldman, Sachs & Co. The Funds intend
to license for use or receive permission to use these trademarks and
servicemarks.

The Funds are not sponsored, endorsed, sold or promoted by the sponsor
of any Index, and neither the sponsor of the Indexes nor the Indexes
are in any way affiliated with the Funds. Goldman, Sachs & Co. makes no
representation or warranty, implied or express, to purchasers of any
Fund or to any member of the public regarding the advisability of
investing in the Funds or the ability of the Indexes to track general
stock market performance. Goldman, Sachs & Co. does not guarantee the
accuracy and/or the completeness of any Index or any data included
therein.

<PAGE>

THE FUNDS

GOALS

CITI FINANCIAL SERVICES INDEX PORTFOLIO - The Fund's goal is to provide
investment results that, before fees and expenses, correspond to the
performance of the Goldman Sachs Sector Index - Financials (GSSI Financials
Index).

CITI HEALTH SCIENCES INDEX PORTFOLIO - The Fund's goal is to provide investment
results that, before fees and expenses, correspond to the performance of the
Goldman Sachs Sector Index - Healthcare (GSSI Healthcare Index).

CITI TECHNOLOGY INDEX PORTFOLIO - The Fund's goal is to provide investment
results that, before fees and expenses, correspond to the performance of the
Goldman Sachs Technology (GSTI(TM) Composite) Index.

Each Fund may change its objective without shareholder approval.

PRINCIPAL INVESTMENT STRATEGIES

INDEXING

An index is an unmanaged group of securities whose overall performance is used
as a standard to measure the investment performance of a particular market or
segment of the economy. Each Fund tries to provide investment results that
match, as closely as possible, the performance of a particular Index. The Funds
may use replication or sampling techniques to track the performance of their
Indexes. Replication involves a Fund holding each security in its Index in the
same proportion as the security appears in the Index. Sampling techniques
involve investing in a smaller number of securities included in the Index that
are selected to resemble the Index in terms of industry weightings, market
capitalization, price/earnings ratio, dividend yield or other characteristics.
The Funds also may use derivatives and investment techniques such as buying and
selling options and futures contracts, entering into swap agreements and
purchasing indexed securities to track the performance of their Indexes.

Please remember that the Funds have operating expenses, but the Indexes do not.
This means that while a Fund may track its Index closely, it will usually be
unable to equal the Index's performance.

CITI FINANCIAL SERVICES INDEX PORTFOLIO

The Index. The GSSI Financials Index is an index of common stocks traded on the
New York Stock Exchange, the American Stock Exchange or NASDAQ that is designed
to measure the performance of companies in the financial services sector. The
Index includes stocks in the following types of companies:

<PAGE>

o Banking services - regional trust, money center, commercial and consumer
finance services including credit cards, savings and loans, and mortgage
finance
o Brokerage firms and asset managers
o Insurance companies including brokers, life insurance, property and
casualty, disability and reinsurance
o Real estate operating companies

The GSSI Financials Index includes the stocks of domestic and foreign companies
with a range of market capitalizations, including small and medium market
capitalization companies with market capitalizations under $5 billion. The
Index is market capitalization-weighted, meaning that a company with a larger
market capitalization will have a bigger impact on the performance of the Index
subject to some limitations. As of _________ __, 2000, the GSSI Financials
Index included _____ stocks.

The GSSI Financials Index does not show actual investment returns or reflect
payment of management or brokerage fees, which would lower the Index's
performance. The GSSI Financials Index is unmanaged and does not have to
maintain liquidity to meet redemption requests or pay expenses.

Key investments. The Fund seeks to achieve its investment objective by
investing substantially all of its assets in the stocks that comprise the GSSI
Financials Index and in derivatives based on the performance of the Index or
the market sector represented by the Index. Normally, the Fund invests at least
80% of its assets in securities of companies included in the Index and in
derivatives based on the performance of the Index or the market sector
represented by the Index. The Fund may use replication or sampling techniques
to track the performance of its Index.

The Fund's derivatives and investment techniques may include buying and selling
options and futures contracts, entering into swap agreements and purchasing
indexed securities to track the performance of the GSSI Financials Index. The
Fund also may enter into repurchase agreements and lend portfolio securities.

Selection process. The manager manages the Citi Financial Services Index
Portfolio as a "pure" index Fund. This means that the manager does not evaluate
individual companies to identify attractive investment candidates. Instead, the
manager attempts to mirror the performance of the GSSI Financials Index as
closely as possible by adjusting the Fund's portfolio periodically to match or
sample the companies included in the Index and their weightings. The Fund will
not mirror the Index exactly if it uses sampling techniques. Also, the Fund
does not mirror the GSSI Financials Index exactly because, unlike the Index,
the Fund must maintain a portion of its assets in cash and liquid securities to
meet redemption requests and pay the Fund's expenses. The Fund's returns are
likely to be below those of the GSSI Financials Index because of the Fund's
short-term investments and its operating expenses.

Who may want to invest. The Fund may be an appropriate investment if you:

[] Are seeking to participate in the long-term growth potential of the
financial services sector

[] Are seeking capital appreciation and can tolerate short-term volatility

[] Are comfortable with the risks of the stock market and the special risks of
foreign securities

[] Currently have exposure to the stock market and can tolerate concentrated
investment in a single market sector.

CITI HEALTH SCIENCeS INDEX PORTFOLIO

The Index. The GSSI Healthcare Index is an index of common stocks traded on the
New York Stock Exchange, the American Stock Exchange or NASDAQ that is designed
to measure the performance of companies in the health care sector. The Index
includes stocks in the following types of companies:

<PAGE>

o Providers of healthcare related services including long-term care and
hospital facilities, healthcare management organizations and continuing
care services
o Researchers, manufacturers, and distributors of pharmaceuticals, drugs and
related sciences, and medical supplies, instruments and products

The GSSI Healthcare Index includes the stocks of domestic and foreign companies
with a range of market capitalizations, including small and medium market
capitalization companies with market capitalizations under $5 billion. The
Index is market capitalization-weighted, meaning that a company with a larger
market capitalization will have a bigger impact on the performance of the Index
subject to some limitations. As of _________ __, 2000, the GSSI Healthcare
Index included _____ stocks.

The GSSI Healthcare Index does not show actual investment returns or reflect
payment of management or brokerage fees, which would lower the Index's
performance. The GSSI Healthcare Index is unmanaged and does not have to
maintain liquidity to meet redemption requests or pay expenses.

Key investments. The Fund seeks to achieve its investment objective by
investing substantially all of its assets in the stocks that comprise the GSSI
Healthcare Index and in derivatives based on the performance of the Index or
the market sector represented by the Index. Normally, the Fund invests at least
80% of its assets in securities of companies included in the Index and in
derivatives based on the performance of the Index or the market sector
represented by the Index. The Fund may use replication or sampling techniques
to track the performance of its Index.

The Fund's derivatives and investment techniques may include buying and selling
options and futures contracts, entering into swap agreements and purchasing
indexed securities to track the performance of the GSSI Healthcare Index. The
Fund also may enter into repurchase agreements and lend portfolio securities.

Selection process. The manager manages the Citi Health Sciences Index Portfolio
as a "pure" index Fund. This means that the manager does not evaluate
individual companies to identify attractive investment candidates. Instead, the
manager attempts to mirror the performance of the GSSI Healthcare Index as
closely as possible by adjusting the Fund's portfolio periodically to match or
sample the companies included in the Index and their weightings. The Fund will
not mirror the Index exactly if it uses sampling techniques. Also, the Fund
does not mirror the GSSI Healthcare Index exactly because, unlike the Index,
the Fund must maintain a portion of its assets in cash and liquid securities to
meet redemption requests and pay the Fund's expenses. The Fund's returns are
likely to be below those of the GSSI Healthcare Index because of the Fund's
short-term investments and its operating expenses.

Who may want to invest. The Fund may be an appropriate investment if you:

[] Are seeking to participate in the long-term growth potential of the health
sciences sector

[] Are seeking capital appreciation and can tolerate significant short-term
volatility

[] Are comfortable with the risks of the stock market and the special risks of
foreign securities

[] Currently have exposure to the stock market and can tolerate concentrated
investment in a single market sector.

CITI TECHNOLOGY INDEX PORTFOLIO
The Index. The GSTI Composite Index is an index of common stocks traded on the
New York Stock Exchange, the American Stock Exchange or NASDAQ that is designed
to measure the performance of companies in the technology sector. The Index
includes stocks in the following types of companies:

<PAGE>

o Producers of sophisticated devices related to the fields of computers,
electronics, networking and Internet services
o Producers of computer and Internet software
o Consultants for information technology
o Providers of computer services

The GSTI Composite Index includes the stocks of domestic and foreign companies
with a range of market capitalizations, including small and medium market
capitalization companies with market capitalizations under $5 billion. The
Index is market capitalization-weighted, meaning that a company with a larger
market capitalization will have a bigger impact on the performance of the Index
subject to some limitations. As of _________ __, 2000, the GSTI Composite Index
included _____ stocks.

The GSTI Composite Index does not show actual investment returns or reflect
payment of management or brokerage fees, which would lower the Index's
performance. The GSTI Composite Index is unmanaged and does not have to
maintain liquidity to meet redemption requests or pay expenses.

Key investments. The Fund seeks to achieve its investment objective by
investing substantially all of its assets in the stocks that comprise the GSTI
Composite Index and in derivatives based on the performance of the Index or the
market sector represented by the Index. Normally, the Fund invests at least 80%
of its assets in securities of companies included in the Index and in
derivatives based on the performance of the Index or the market sector
represented by the Index. The Fund may use replication or sampling techniques
to track the performance of its Index.

The Fund's derivatives and investment techniques may include buying and selling
options and futures contracts, entering into swap agreements and purchasing
indexed securities to track the performance of the GSTI Composite Index. The
Fund also may enter into repurchase agreements and lend portfolio securities.

Selection process. The manager manages the Citi Technology Index Portfolio as a
"pure" index Fund. This means that the manager does not evaluate individual
companies to identify attractive investment candidates. Instead, the manager
attempts to mirror the performance of the GSTI Composite Index as closely as
possible by adjusting the Fund's portfolio periodically to match or sample the
companies included in the Index and their weightings. The Fund will not mirror
the Index exactly if it uses sampling techniques. Also, the Fund does not
mirror the GSTI Composite Index exactly because, unlike the Index, the Fund
must maintain a portion of its assets in cash and liquid securities to meet
redemption requests and pay the Fund's expenses. The Fund's returns are likely
to be below those of the GSTI Composite Index because of the Fund's short-term
investments and its operating expenses.

Who may want to invest. The Fund may be an appropriate investment if you:

[] Are seeking to participate in the long-term growth potential of the
technology sector

[] Are seeking capital appreciation and can tolerate significant short-term
volatility

[] Are comfortable with the risks of the stock market and the special risks of
foreign securities

[] Currently have exposure to the stock market and can tolerate concentrated
investment in a single market sector.

PRINCIPAL RISKS

You could lose money on your investment in a Fund, or a Fund may not perform as
well as other investments, because:

<PAGE>

[] SECTOR INVESTING RISK. Each Fund's investment performance will be closely
tied to the performance of its sector. Market conditions, interest rates,
and economic, regulatory or financial developments could significantly
affect a single sector and the securities of companies in that sector could
react similarly to these or other developments. Each Fund is also exposed
to the special risks of investing in its sector:

o CITI FINANCIAL SERVICES INDEX PORTFOLIO. The financial services
industries are subject to extensive government regulation and
relatively rapid change because of increasingly blurred distinctions
between service segments, and can be significantly affected by
availability and cost of capital funds, changes in interest rates,
and price competition. The performance of the financial services
sector may differ in direction and degree from that of the overall
stock market.

o CITI HEALTH SCIENCES INDEX PORTFOLIO. The health science industries
are subject to government regulation and government approval of
products and services, which could have a significant effect on price
and availability, and can be significantly affected by rapid
obsolescence. Lawsuits or other legal proceedings against the
companies in this sector may adversely affect such companies, the
market value of their securities or the Fund's performance. The
performance of the health sciences sector may differ in direction and
degree from that of the overall stock market.

o CITI TECHNOLOGY INDEX PORTFOLIO. Technology companies can be
significantly affected by obsolescence of existing technology, short
product cycles, falling prices and profits, and competition from new
market entrants. The technology sector may be subject to greater
governmental regulation than many other areas, and changes in
governmental policies and the need for regulatory approvals may have
a material adverse effect on the sector. The performance of the
technology sector may differ in direction and degree from that of the
overall stock market.

[] NON-DIVERSIFICATION AND CONCENTRATION. Each Fund is "non-diversified," which
means it may invest a larger percentage of its assets in one issuer than a
diversified fund. To the extent a Fund concentrates its assets in fewer
issuers, the Fund will be more susceptible to negative events affecting
those issuers. Also, each Fund's investments are concentrated in a
particular sector of the economy. This means that the Funds' investments are
not as diversified as most mutual funds, and far less diversified than the
broad securities markets. Each Fund's share price is likely to be more
volatile than those of other mutual funds, and the value of your investment
in a Fund may rise or fall rapidly.

[] INDEX INVESTING RISK. Because each Fund is managed as an index fund, it will
not ordinarily sell a portfolio security because of the security's poor
performance. Each Fund normally buys or sells a portfolio security only to
reflect additions or deletions of stocks that comprise its corresponding
Index or to adjust their relative weightings. Although the portfolio manager
for each Fund seeks to replicate the performance of the corresponding Index,
a Fund may underperform its corresponding Index even before deducting
expenses because the Fund must maintain a portion of its assets in liquid
short-term debt securities which historically have generated significantly
lower returns than common stocks. In addition, expenses and transaction
costs, the size of the Fund and the size and frequency of cash flows into
and out of a Fund, and the differences between how and when the Fund and its
corresponding Index are valued can also cause differences in performance. A
Fund which uses a sampling strategy may not track its Index perfectly
because differences between the underlying Index and the Fund's portfolio
will cause differences in performance.

[] MARKET RISK. The Funds are exposed to the risks of investing in common
stocks. A Fund may not perform as well as other investments, if:

<PAGE>

o The Fund's corresponding Index declines or performs poorly relative
to other related indexes or individual securities.

o An adverse event relating to an issuer, such as an unfavorable
earnings report, negatively affects the price of one of the larger
issuers in the Index.

o The securities issued by companies which comprise the Index fall out
of favor with investors.

[] DERIVATIVES. A Fund's use of derivatives, such as futures contracts, options
and swap agreements, could result in losses that are not offset by gains on
other portfolio assets, causing the Fund's share price to go down. A Fund's
use of derivatives may adversely affect the Fund's ability to track its
Index if the derivatives do not perform as expected, or if the derivatives
are timed incorrectly or are executed under adverse market conditions.

[] FOREIGN SECURITIES. The Funds are exposed to the risks of investing in
foreign securities, which can be affected by currency, political, legal,
regulatory and operational factors. Foreign markets can be less liquid and
more volatile than the U.S. market because of increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.

[] SMALLER COMPANIES. Each Fund's investments may include smaller
capitalization companies whose stocks tend to have more price volatility
than larger companies.

You should know: An investment in a Fund is not a bank deposit and is not
insured or guaranteed by the FDIC or any other government agency.

FUND PERFORMANCE

Because each Fund is a new fund, performance information for the Funds is not
included in this prospectus.

<PAGE>

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of a Fund.

<S> <C> <C> <C>
------------------------- -------------------------- --------------------------- -------------------------
Citi Financial Citi Health Sciences Citi Technology
Services Index Portfolio Index Portfolio Index Portfolio
------------------------- -------------------------- --------------------------- -------------------------
SHAREHOLDER FEES (FEES
PAID DIRECTlY FROM YOUR
INVESTMENT)
Class A and None None None
Class D Shares
------------------------- -------------------------- --------------------------- -------------------------
</TABLE>

<S> <C> <C> <C>
------------------------- -------------------------- --------------------------- -------------------------
Citi Financial Services Citi Health Sciences Citi Technology
Index Portfolio Index Portfolio Index Portfolio
------------------------ ------------ ----------- -------------- ------------ ------------ --------------
Class A Class D Class A Class D Class A Class D
------------------------- ------------ ----------- -------------- ------------ ------------ --------------
ANNUAL FUND
OPERATING
EXPENSES(1)(EXPENSES
THAT ARE DEDUCTED FROM
FUND ASSETS)
------------------------- ------------ ----------- -------------- ------------ ------------ --------------
Management Fees 0.65% 0.65% 0.65% 0.65% 0.65% 0.65%
------------------------- ------------ ----------- -------------- ------------ ------------ --------------
Distribution and
Service (12b-1) Fees 0.20% None 0.20% None 0.20% None

Other Expenses
(administrative and other
expenses) 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
------------------------- ------------ ----------- -------------- ------------ ------------ --------------
TOTAL ANNUAL FUND
OPERATING EXPENSES* 1.10% 0.90% 1.10% 0.90% 1.10% 0.90%
------------------------- ------------ ----------- -------------- ------------ ------------ --------------
</TABLE>

(1) Based on estimated expenses for the fiscal year ending December 31, 2000.
* Certain of the Funds' service providers are voluntarily waiving fees or
reimbursing expenses such that net annual operating expenses are expected
to be:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
------------------------ --------------------------- -------------------------
Citi Financial Services Citi Health Sciences Citi Technology
Index Portfolio Index Portfolio Index Portfolio
----------- ------------ -------------- ------------ ------------ ------------
Class A Class D Class A Class D Class A Class D
----------- ------------ -------------- ------------ ------------ ------------
-----% -----% -----% -----% -----% -----%
----------- ------------ -------------- ------------ ------------ ------------
</TABLE>

These voluntary fee waivers and reimbursements may be reduced or
terminated at any time.

<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the Funds
to the cost of investing in other mutual funds. The example assumes that:

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

o you reinvest all dividends;

o you then sell all of your shares at the end of those periods;

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

o the Funds' operating expenses as shown in the table remain the same - the
example does not include voluntary waivers and fee reimbursements.

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

------------------------------------------- ----------------- -----------------
One Year Three Years
------------------------------------------- ----------------- -----------------
Citi Financial Services Index Portfolio
Class A $112 $350
Class D $92 $287
------------------------------------------- ----------------- -----------------
Citi Health Sciences Index Portfolio
Class A $112 $350
Class D $92 $287
------------------------------------------- ----------------- -----------------
Citi Technology Index Portfolio
Class A $112 $350
Class D $92 $287
------------------------------------------- ----------------- -----------------

MANAGEMENT OF THE FUNDS

MANAGER

Each Fund's investment manager is SSB Citi Fund Management LLC, an affiliate of
Salomon Smith Barney Inc. The manager's address is 388 Greenwich Street, New
York, New York 10013. The manager and Salomon Smith Barney are subsidiaries of
Citigroup Inc. Citigroup businesses offer a broad range of financial services -
asset management, banking and consumer finance, credit and charge cards,
insurance, investments, investment banking and trading - and use diverse
channels to make them available to consumer and corporate customers around the
world.

<PAGE>

MANAGEMENT FEES

Each Fund pays the manager a management fee at the annual rate listed opposite
its name below:

----------------------------------------- ---------------------------------
FEE, AS PERCENTAGE OF
FUND AVERAGE DAILY NET ASSETS
----------------------------------------- ---------------------------------
Citi Financial Services Index Portfolio 0.65%
----------------------------------------- ---------------------------------
Citi Health Sciences Index Portfolio 0.65%
----------------------------------------- ---------------------------------
Citi Technology Index Portfolio 0.65%
----------------------------------------- ---------------------------------

DISTRIBUTION ARRANGEMENTS

Each Fund has adopted a service plan under rule 12b-1 under the Investment
Company Act of 1940 with respect to its Class A shares. The service plan allows
a Fund to pay the distributor, a broker-dealer or financial institution that
has entered into a service agreement with the distributor concerning the Class
A shares of the Funds, or others a monthly service and distribution fee at an
annual rate not to exceed 0.20% of the Fund's average daily net assets
attributable to Class A shares. The service and distribution fee may be used to
make payments for providing personal service or the maintenance of shareholder
accounts, as compensation for the sale of Class A shares of a Fund, and for
advertising, marketing or other promotional activity. Because fees under the
plans are paid out of Fund assets, over time they will increase the cost of
your investment in Class A shares and may cost you more than paying other types
of sales charges.

The distributor may make payments for distribution and/or shareholder servicing
activities out of its past profits and other available sources. The distributor
may also make payments for marketing, promotional or related expenses to
dealers. The amount of these payments is determined by the distributor and may
be substantial. The manager or an affiliate may make similar payments under
similar arrangements.

INDEX PERFORMANCE INFORMATION

The following charts set forth the average annual returns of the various
Indexes since their inception. The data is provided to illustrate the past
performance of the Funds' corresponding Indexes and does not represent the
performance of any of the Funds. You should not consider this performance data
as an indication of future performance of any of the Funds. The returns are not
intended to predict or suggest the returns that might be experienced by any of
the Funds or an individual investing in any of the Funds.

All returns presented were calculated on a total return basis. Performance of
the Funds for the periods shown below would have been lower because of the
operating expenses associated with an investment in the Funds.

[Index performance information to be inserted.]

MORE ABOUT THE FUNDS

The Funds' goals, principal investments and risks are described in THE FUNDS.
More information on investment strategies and risks appears below.

<PAGE>

INVESTMENT STRATEGIES

DERIVATIVES AND HEDGING TECHNIQUES

Each Fund may, but is not required to, use derivatives and investment
techniques such as buying and selling options and futures contracts, entering
into swap agreements and purchasing indexed securities, for any of the
following purposes:

o to simulate full investment in the Fund's corresponding Index while
maintaining sufficient liquidity to satisfy daily redemption requests
and operating expenses

o to facilitate trading in the securities of companies that comprise
the Index

o to reduce transaction costs

o to seek higher investment returns when a contract is priced more
attractively than the stocks comprising the Fund's corresponding
Index

Derivatives are financial instruments whose values are derived, at least in
part, from the prices of other securities or specified assets, indexes or
rates. Each Fund may invest in derivatives as part of its short-term liquidity
holdings and/or as substitutes for comparable market positions in the
underlying securities. Some derivatives may be more sensitive than direct
securities to changes in interest rates or sudden market movements. Some
derivatives also may be susceptible to fluctuations in yield or value because
of their structure or contract terms.

A derivative contract will obligate or entitle a Fund to deliver or receive an
asset or cash payment based on the change in value of one or more securities or
indexes. Even a small investment in derivative contracts can have a big impact
on a Fund's stock market exposure. Therefore, using derivatives can
disproportionately increase losses and reduce opportunities for gains when
stock prices are changing. A Fund may not fully benefit from or may lose money
on derivatives if changes in their value do not correspond accurately to
changes in the value of the Fund's holdings.

The other parties to certain derivative contracts present the same types of
credit risk as issuers of fixed income securities. Derivatives can also make a
Fund less liquid and harder to value, especially in declining markets.

MONEY MARKET INSTRUMENTS

Each Fund may temporarily invest in money market instruments. A Fund invests in
money market instruments under the following circumstances:

o pending investment of proceeds of the sale of shares of the Fund

o pending settlement of purchases of securities by the Fund

o to maintain liquidity to meet anticipated redemptions

<PAGE>

FOREIGN INVESTMENTS

Each Fund may purchase common stocks of the foreign companies included in its
corresponding Index. These securities are publicly traded on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ market system.

Foreign countries generally have markets that are less liquid and more volatile
than markets in the U.S. In some foreign countries, there is also less
information available about foreign issuers and markets because of less
rigorous accounting and regulatory standards than in the U.S.

ILLIQUID SECURITIES

Each Fund also may invest up to 15% of the value of its net assets in illiquid
securities, including repurchase agreements providing for settlement in more
than seven days.

DIVERSIFICATION

Each Fund is non-diversified, which means that it may invest a greater
percentage of its assets in a single issuer and in fewer companies than if it
were a diversified fund.

INVESTMENT STRUCTURE

Each Fund invests directly in securities, but may, in the future, invest in
securities through one or more underlying mutual funds, or portfolios.

YOUR ACCOUNT

CHOOSING A CLASS OF SHARES TO BUY

You may purchase CLASS A SHARES which are sold at net asset value with no
initial or deferred sales charge. Class A shares are subject to an ongoing
service fee. Class A is the class of shares generally available for purchase by
investors.

CLASS D SHARES are sold at net asset value with no initial or deferred sales
charge. Class D shares are not subject to an ongoing service fee. You may
purchase Class D shares only if you are participating in certain investment
programs. Class D shares also are offered to certain tax-exempt employee
benefit and retirement plans. For more information about these programs, please
call 1-800-_________.

Each share class may not be available for purchase by every investor.

HOW TO BUY SHARES

Shares of the Funds are offered continuously and purchases may be made Monday
through Friday, except on certain holidays. Shares may be purchased from the
Funds' distributor or a broker-dealer or financial institution (called a
Service Agent) that has entered into a sales or service agreement with the
distributor concerning the Funds. Please call 1-800-_______ for information.

Shares also may be purchased by customers that have established an account with
________, a Service Agent. To open an account, you must complete the

<PAGE>

application available through the ________ website (www.______.com), or by
calling 1-800-_________. The account application may be submitted
electronically. You will also be required to submit a signature guarantee card
which will be sent to you by mail. For more detailed information on how to open
an account, please visit the ________ website at www.______.com, or call
1-800-_________. Once you open your account, you will be subject to general
account requirements imposed by _______, as described in the on-line account
application, and will have access to all the electronic financial services made
available over the Internet by _________. If you open an on-line account, you
can place orders to purchase Fund shares by accessing the ________ website at
www.______.com, or by calling 1-800-_________. This prospectus is readily
available for viewing and printing on the ________ website. Please note that
www.______.com is an inactive textual reference only, meaning that the
information contained on the website is not part of this prospectus and is not
incorporated herein by reference.

On-line investors who have established an account with ________ will receive
all shareholder information about the Fund they invest in electronically,
unless otherwise requested. Shareholder information includes prospectuses,
financial reports, confirmations, proxy solicitations and financial statements,
among other things. Shareholders may also receive other Fund-related
correspondence through their e-mail account. By purchasing Fund shares on-line,
you certify that you have access to the Internet and a current e-mail account,
and you acknowledge that you are responsible for providing a correct and
operational e-mail address and that you will receive Fund information
electronically unless you otherwise request. You may incur costs for on-line
access to shareholder documents and maintaining an e-mail account from third
parties.

Please specify whether you are purchasing Class A or Class D shares. If you
fail to specify, Class A shares will be purchased for your account.

The Funds do not, but your Service Agent may, impose a minimum initial or
subsequent investment requirement.

Shares are purchased at net asset value the next time it is calculated after
your order is received in proper form by the transfer agent. Each Fund has the
right to reject any purchase order or cease offering Fund shares at any time.

[To complete a purchase transaction, you must have sufficient funds in your
account. If you transfer funds by check, the funds will not be available in
your account until the check clears.]

If you hold your shares through a Service Agent, your Service Agent may
establish and maintain your account and be the shareholder of record. If you
wish to transfer your account, you may transfer it to another financial
institution, or you may set up an account directly with the Fund's transfer
agent.

Each Fund sends only one report to a household if more than one account has the
same address. Contact your Service Agent, _______ or the transfer agent if you
do not want this policy to apply to you.

Automatic Investment Plans

Each Fund has Monthly and Quarterly Systematic Investment Plans which allow you
to automatically invest a specific dollar amount in your account on a monthly
or quarterly basis. For more information, please contact the Funds' transfer
agent or, if you hold your shares through a Service Agent, your Service Agent.
Information also may be obtained on-line on the ________ website at
www.______.com.

HOW THE PRICE OF YOUR SHARES IS CALCULATED

You may buy, exchange or redeem shares at their net asset value next determined
after receipt of your request in good order. Each Fund's net asset value is the
value of its assets minus its liabilities. Net asset value is calculated

<PAGE>

separately for each class of shares. Each Fund calculates its net asset value
every day the New York Stock Exchange is open. This calculation is done when
regular trading closes on the Exchange (normally 4:00 p.m., Eastern time). The
Exchange is closed on certain holidays listed in the Statement of Additional
Information.

Foreign issuers with common shares included in an Index may also have
securities that are primarily listed on foreign exchanges. When reliable market
prices or quotations are not readily available, or when the value of a security
has been materially affected by events occurring after a foreign exchange
closes, a Fund may price those securities at fair value. Fair value is
determined in accordance with procedures approved by the Funds' Board of
Trustees. Each Fund that uses fair value to price securities may value those
securities higher or lower than another Fund using market quotations to price
the same securities.

International markets may be open on days when U.S. markets are closed and the
value of foreign securities owned by a Fund could change on days when you
cannot buy or redeem shares.

HOW TO SELL SHARES

You may sell (redeem) your shares Monday through Friday, except on certain
holidays. You may make redemption requests in writing through the Funds'
transfer agent or, if you hold your shares through a Service Agent, through
your Service Agent. If your account application permits, you may also make
redemption requests by telephone. Customers of ________ may redeem shares by
placing a redemption order on-line at the ________ website, or by calling
1-800-______. All redemption requests must be in proper form, as determined by
the transfer agent. Each Service Agent is responsible for promptly submitting
redemption requests to the Funds' transfer agent. For your protection, the
Funds may request documentation, such as a signature guarantee, for large
redemptions or other unusual activity in your account.

Each Fund has a Systematic Withdrawal Plan which allows you to automatically
withdraw a specific dollar amount from your account on a regular basis. You
must have at least $10,000 in your account to participate in this program. For
more information, please contact the Funds' transfer agent or, if you hold your
shares through a Service Agent, your Service Agent. If your Service Agent is
__________, information also may be obtained on-line on the ________ website at
www.______.com.

The price of any redemption of Fund shares will be the NAV the next time it is
calculated after your redemption request has been received by the transfer
agent. Fund shares are redeemed without a sales charge.

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

Due to increased Internet traffic during periods of dramatic economic or market
changes or due to system failures, you may experience difficulty in
implementing a redemption via the ________ website. In these situations, you
may want to consider effecting redemptions by calling 1-800-______. However,
you may experience similar difficulties in effecting redemptions via telephone
during periods of dramatic economic or market changes. The Funds are not
responsible for any losses associated with unexecuted transactions.

<PAGE>

EXCHANGES

Shares may be exchanged for shares of any other Fund offered in this
Prospectus, or for certain other Funds that may be made available through your
Service Agent. You may exchange Fund shares for shares of the same class. You
may exchange Fund shares for shares of another class only if you are
participating in certain fee based advisory programs or employer-sponsored
retirement plans. You may place exchange orders through the transfer agent or,
if you hold your shares through a Service Agent, through your Service Agent.
You may place exchange orders by telephone if your account application permits.
The transfer agent or your Service Agent can provide you with more information.

Customers of ________ may exchange Fund shares by accessing the ________
website and following the instructions for exchanges, or by calling
1-800-______.

There is no sales charge on Fund shares you get through an exchange.

The exchange privilege may be changed or terminated at any time. You should be
aware that you may have to pay taxes on your exchange.

DIVIDENDS

Each Fund generally pays dividends, if any, and makes capital gains
distributions, if any, once a year, typically in December. Each Fund may pay
additional distributions and dividends at other times if necessary for the Fund
to avoid a federal tax. Each Fund expects distributions to be primarily from
capital gains.

Unless you choose to receive your dividends in cash, you will receive them as
full and fractional additional Fund shares of the same class of shares that you
hold.

TAX MATTERS

This discussion of taxes is very general. You should consult your own tax
adviser about your particular situation.

TAXATION OF DISTRIBUTIONS: You will normally have to pay federal income taxes
on the distributions you receive from a Fund, whether you take the
distributions in cash or reinvest them in additional shares. Distributions
designated by a Fund as capital gain dividends are taxable as long-term capital
gains. Other distributions are generally taxable as ordinary income. Some
distributions paid in January may be taxable to you as if they had been paid
the previous December. Each year the Funds will make available to you a report
of your distributions for the prior year and how they are treated for federal
tax purposes.

Fund distributions will reduce a Fund's net asset value per share. As a result,
if you buy shares just before a Fund makes a distribution, you may pay the full
price for the shares and then effectively receive a portion of the purchase
price back as a taxable distribution.

BACKUP WITHHOLDING: The account application asks each new investor to certify
that the investor's Social Security or taxpayer identification number is
correct and that the shareholder is not subject to 31% backup withholding for
failing to report income to the IRS. A Fund may be required to withhold (and
pay over to the IRS for your credit) 31% of certain distributions it pays you
if you fail to provide this information or otherwise violate IRS regulations.

<PAGE>

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

TAXATION OF TRANSACTIONS: If you sell your shares of a Fund, or exchange them
for shares of another Fund, it is considered a taxable event. Depending on your
purchase price and the sales price of the shares you sell or exchange, you may
have a gain or loss on the transaction. You are responsible for any tax
liabilities generated by your transaction.

<PAGE>

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

To obtain free copies of the SAI and the Annual and Semi-Annual Reports for the
Funds, when available, or to make other inquiries, please call 1-800-______
toll-free. Annual and Semi-Annual Reports also will be available on the
________ website at www.______.com.

The SAI is also available from the Securities and Exchange Commission. You can
find it on the EDGAR Database on the SEC Internet site at http://www.sec.gov.
Information about the Funds (including the SAI) can also be reviewed and copied
at the SEC's Public Reference Room in Washington, DC. You can get information
on the operation of the Public Reference Room by calling the SEC at: (202)
942-8090. Copies may also be obtained upon payment of a duplicating fee by
electronic request to [email protected], or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102.

SEC File Number 811-4006

<PAGE>
Statement of
Additional Information
September __, 2000

Citi Financial Services Index Portfolio
Citi Health Sciences Index Portfolio
Citi Technology Index Portfolio

CitiFunds Trust I (formerly known as "Landmark Funds I") (the "Trust") is
an open-end management investment company which was organized as a business
trust under the laws of the Commonwealth of Massachusetts on April 23, 1984.
The Trust offers shares of Citi Financial Services Index Portfolio, Citi Health
Sciences Index Portfolio, and Citi Technology Index Portfolio (collectively,
the "Funds"), to which this Statement of Additional Information relates, as
well as shares of [eleven] other series. The address and telephone number of
the Trust are 21 Milk Street, Boston, Massachusetts 02109, (617) 423-1679.

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

This Statement of Additional Information sets forth information which may
be of interest to investors but which is not necessarily included in the Funds'
Prospectus, dated September __, 2000, by which shares of the Funds are offered.
This Statement of Additional Information should be read in conjunction with the
Prospectus. An investor may obtain copies of the Funds' Prospectus without
charge on the ________ website at www._____.com or by calling 1-800-______.

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

<PAGE>

1. THE TRUST

CitiFunds Trust I (the "Trust") is an open-end management investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts on April 23, 1984. The Trust was called Landmark Funds I until
its name was changed effective March 2, 1998. This Statement of Additional
Information relates to three funds offered by the Trust - Citi Financial
Services Index Portfolio, Citi Health Sciences Index Portfolio, and Citi
Technology Index Portfolio (collectively, the "Funds"). Each Fund is
"non-diversified," which means it may invest a larger percentage of its assets
in one issuer than a diversified fund.

SSB Citi Fund Management LLC ("SSB Citi" or the "Manager") is responsible
for the overall management of the Funds and also provides certain
administrative services to each of the Funds. SSB Citi manages the investments
of the Funds in accordance with each Fund's investment objective and policies.
The selection of investments for the Funds and the way they are managed depend
upon the Indexes which they track and the conditions and trends in the economy
and the financial marketplaces.

The Board of Trustees of the Trust provides broad supervision over the
affairs of the Funds. Shares of the Funds are continuously sold by CFBDS, Inc.,
the Funds' distributor ("CFBDS" or the "Distributor").

At the date of this Statement of Additional Information, the Funds, like
most mutual funds, invest directly in securities. In the future, however, one
or more of the Funds may convert to a master/feeder investment structure. In
the master/feeder investment structure, a Fund, instead of investing directly
in securities, would invest in a mutual fund with the same investment goals and
policies as the Fund's. The underlying mutual fund, referred to as a portfolio,
would buy, hold and sell securities in accordance with these policies. Of
course, there could be no assurance that a Fund or its portfolio would achieve
their goals.

If a Fund invests using the master/feeder structure, all references in
this Statement of Additional Information to a Fund include that Fund's
underlying portfolio unless the context otherwise requires.

<PAGE>

2. INVESTMENT OBJECTIVES AND POLICIES

The investment objective (or goal) of each Fund is as follows*:

CITI HEALTH SCIENCES INDEX PORTFOLIO - The Fund's goal is to provide
investment results that, before fees and expenses, correspond to the
performance of the Goldman Sachs Sector Index - Healthcare (GSSI Healthcare
Index).

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

Each Fund invests primarily in securities of companies and other issuers
that make up its corresponding Index or uses derivatives or other investment
techniques to match, as closely as possible, the performance of its Index. Each
Fund may also use various investment techniques, such those described in the
Prospectus and described under "Description of Permitted Investments and
Investment Practices," below.

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

--------------------
* Goldman Sachs Sector Index - Financials, Goldman Sachs Sector Index
Healthcare, and Goldman Sachs Technology (GSTI(TM) Composite) Index are
trademarks and/or servicemarks of Goldman, Sachs & Co. The Funds intend to
license for use or receive permission to use these trademarks and
servicemarks.

The Funds are not sponsored, endorsed, sold or promoted by the sponsor of
any Index, and neither the sponsor of the Indexes nor the Indexes are in
any way affiliated with the Funds. Goldman, Sachs & Co. makes no
representation or warranty, implied or express, to purchasers of any Fund
or to any member of the public regarding the advisability of investing in
the Funds or the ability of the Indexes to track general stock market
performance. Goldman, Sachs & Co. does not guarantee the accuracy and/or
the completeness of any Index or any data included therein.

<PAGE>

3. DESCRIPTION OF PERMITTED INVESTMENTS
AND INVESTMENT PRACTICES

The Funds may, but need not, invest in all of the investments and utilize
all of the investment techniques described below and in the Prospectus. The
selection of investments and the utilization of investment techniques depend
on, among other things, the Indexes the Funds track, conditions and trends in
the economy and financial markets and investments being available on terms
that, in the portfolio managers' opinion, make economic sense.

FINANCIAL SERVICES INDEX PORTFOLIO

Financial Services Index Portfolio seeks to achieve its investment
objective by investing substantially all of its assets in the stocks that
comprise the GSSI Financials Index and in derivatives based on the performance
of the Index or the market sector represented by the Index. Normally, the Fund
invests at least 80% of its assets in securities of companies included in the
Index and in derivatives based on the performance of the Index or the market
sector represented by the Index.

The GSSI Financials Index includes stocks in the following types of
companies:

o Banking services - regional trust, money center, commercial and
consumer finance services including credit cards, savings and loans,
and mortgage finance
o Brokerage firms and asset managers
o Insurance companies including brokers, life insurance, property and
casualty, disability and reinsurance
o Real estate operating companies

This sector generally is subject to extensive governmental regulation,
which may change frequently. In addition, the profitability of businesses in
financial services depends heavily upon the availability and cost of money, and
may fluctuate significantly in response to changes in interest rates, as well
as changes in general economic conditions. From time to time, severe
competition may also affect the profitability of financial services companies.

Most financial services companies are subject to extensive governmental
regulation, which limits their activities and may (as with insurance rate
regulation) affect the ability to earn a profit from a given line of business.
Certain financial services businesses are subject to intense competitive
pressures, including market share and price competition. The removal of
regulatory barriers to participation in certain segments of the financial
services sector may also increase competitive pressures on different types of
firms. The availability and cost of funds to financial services firms is
crucial to their profitability. Consequently, volatile interest rates and
general economic conditions can adversely affect their financial performance.

Financial services companies in foreign countries are subject to similar
regulatory and interest rate concerns. In particular, government regulation in
certain foreign countries may include controls on interest rates, credit
availability, prices and currency movements. In some cases, foreign governments
have taken steps to nationalize the operations of banks and other financial
services companies.

The Manager believes that the deregulation of many segments of the
financial services sector provides new opportunities for issuers in this

<PAGE>

sector. As new segments of the financial services sector are opened to certain
larger financial services firms formerly prohibited from doing business in
these segments (such as national and money center banks); certain established
companies in these market segments (such as regional banks or securities firms)
may become attractive acquisition candidates for the larger firm seeking
entrance into the segment. Typically, acquisitions accelerate the capital
appreciation of the shares of the company to be acquired.

HEALTH SCIENCES INDEX PORTFOLIO

The Health Sciences Index Portfolio seeks to achieve its investment
objective by investing substantially all of its assets in the stocks that
comprise the GSSI Healthcare Index and in derivatives based on the performance
of the Index or the market sector represented by the Index. Normally, the Fund
invests at least 80% of its assets in securities of companies included in the
Index and in derivatives based on the performance of the Index or the market
sector represented by the Index.

The GSSI Healthcare Index includes stocks of the following types of
companies:

o Providers of healthcare related services including long-term care and
hospital facilities, healthcare management organizations and
continuing care services
o Researchers, manufacturers, and distributors of pharmaceuticals,
drugs and related sciences, and medical supplies, instruments and
products

Many faster-growing healthcare companies have limited operating histories
and their potential profitability may be dependent on regulatory approval of
their products, which increases the volatility of these companies' security
prices. Many of these activities are funded or subsidized by governments;
withdrawal or curtailment of this support could lower the profitability and
market prices of such companies. Changes in government regulation could also
have an adverse impact. Continuing technological advances may mean rapid
obsolescence of products and services.

TECHNOLOGY INDEX PORTFOLIO

The Fund seeks to achieve its investment objective by investing
substantially all of its assets in the stocks that comprise the GSTI Composite
Index and in derivatives based on the performance of the Index or the market
sector represented by the Index. Normally, the Fund invests at least 80% of its
assets in securities of companies included in the Index and in derivatives
based on the performance of the Index or the market sector represented by the
Index.

The GSTI Composite Index includes stocks of companies in the following
segments of the U.S. technology marketplace:

o Producers of sophisticated devices related to the fields of
computers, electronics, networking and Internet services
o Producers of computer and Internet software
o Consultants for information technology
o Providers of computer services

Many technological products and services are subject to rapid
obsolescence, which may lower the market value of the securities of the
companies in this sector. Also, the portfolio may consist of securities of

<PAGE>

faster-growing, more volatile technology companies. The market prices of these
companies tend to rise and fall more rapidly than those of larger, more
established companies.

TECHNOLOGY AND HEALTH SCIENCE AREAS

The Manager believes that because of rapid advances in technology and
health science, an investment in companies with business operations in these
areas will offer substantial opportunities for long-term capital appreciation.
Of course, prices of common stocks of even the best managed, most profitable
corporations are subject to market risk, which means their stock prices can
decline. In addition, swings in investor psychology or significant trading by
large institutional investors can result in price fluctuations.

Companies in the rapidly changing fields of technology and health science
face special risks. For example, their products or services may not prove
commercially successful or may become obsolete quickly. The value of a Fund's
shares may be susceptible to factors affecting the technology and health
science areas and to greater risk and market fluctuation than an investment in
a fund that invests in a broader range of portfolio securities not concentrated
in any particular industry. As such, a Fund is not an appropriate investment
for individuals who are not long-term investors and who, as their primary
objective, require safety of principal or stable income from their investments.
The technology and health science areas may be subject to greater governmental
regulation than many other areas and changes in governmental policies and the
need for regulatory approvals may have a material adverse effect on these
areas. Additionally, companies in these areas may be subject to risks of
developing technologies, competitive pressures and other factors and are
dependent upon consumer and business acceptance as new technologies evolve.

EACH FUND

Bank Obligations.

Each of the Funds may invest in bank obligations, including certificates
of deposit, time deposits, bankers' acceptances and other short-term
obligations of domestic banks, foreign subsidiaries of domestic banks, foreign
branches of domestic banks, and domestic and foreign branches of foreign banks,
domestic savings and loan associations and other banking institutions.
Certificates of deposit ("CDs") are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time. Time deposits ("TDs") are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. TDs that
may be held by a Fund will not benefit from insurance from the Bank Insurance
Fund or the Savings Association Insurance Fund administered by the FDIC.
Bankers' acceptances are credit instruments evidencing the obligation of a bank
to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations, bearing fixed, floating- or variable-interest
rates.

Domestic commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to be members of
the Federal Reserve System and to have their deposits insured by the FDIC.
Domestic banks organized under state law are supervised and examined by state
banking authorities but are members of the Federal Reserve System only if they

<PAGE>

elect to join. In addition, state banks whose CDs may be purchased by a Fund
are insured by the FDIC (although such insurance may not be of material benefit
to the Fund, depending on the principal amount of the CDs of each bank held by
the Fund) and are subject to Federal examination and to a substantial body of
Federal law and regulation. As a result of Federal or state laws and
regulations, domestic branches of domestic banks whose CDs may be purchased by
the Funds generally are required, among other things, to maintain specified
levels of reserves, are limited in the amounts that they can loan to a single
borrower and are subject to other regulation designed to promote financial
soundness. However, not all of such laws and regulations apply to the foreign
branches of domestic banks.

Obligations of foreign branches of domestic banks, foreign subsidiaries of
domestic banks and domestic and foreign branches of foreign banks, such as CDs
and TDs, may be general obligations of the parent bank in addition to the
issuing branch, or may be limited by the terms of a specific obligation and
governmental regulation as well as governmental action in the country in which
a foreign bank has its head office. Such obligations are subject to different
risks than are those of domestic banks. These risks include foreign economic
and political developments, foreign governmental restrictions that may
adversely affect payment of principal and interest on the obligations, foreign
exchange controls and foreign withholding and other taxes on interest income.
These foreign branches and subsidiaries are not necessarily subject to the same
or similar regulatory requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and accounting, auditing and
financial record keeping requirements. In addition, less information may be
publicly available about a foreign branch of a domestic bank or about a foreign
bank than about a domestic bank. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve requirements imposed
by the Federal Reserve System or by the state in which the branch is located if
the branch is licensed in that state.

In addition, Federal branches licensed by the Comptroller of the Currency
and branches licensed by certain states ("State Branches") may be required to:
(1) pledge to the regulator by depositing assets with a designated bank within
the state, a certain percentage of their assets as fixed from time to time by
the appropriate regulatory authority; and (2) maintain assets within the state
in an amount equal to a specified percentage of the aggregate amount of
liabilities of the foreign bank payable at or through all of its agencies or
branches within the state. The deposits of Federal and State Branches generally
must be insured by the FDIC if such branches take deposits of less than
$100,000.

In view of the foregoing factors associated with the purchase of CDs and
TDs issued by foreign branches of domestic banks, by foreign subsidiaries of
domestic banks, by foreign branches of foreign banks or by domestic branches of
foreign banks, the portfolio managers carefully evaluate such investments on a
case-by-case basis.

Each Fund may purchase CDs issued by banks, savings and loan associations
and similar thrift institutions with less than $1 billion in assets, which are
members of the FDIC, provided such Fund purchases any such CD in a principal
amount of not more than $100,000, which amount would be fully insured by the
Bank Insurance Fund or the Savings Association Insurance Fund administered by
the FDIC. Interest payments on such a CD are not insured by the FDIC. No Fund
will own more than one such CD per such issuer.

<PAGE>

Commercial Paper and Short-Term Corporate Debt Instruments.

Each Fund may invest in commercial paper (including variable amount master
demand notes), which consists of short-term, unsecured promissory notes issued
by corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. The
portfolio managers monitor on an ongoing basis the ability of an issuer of a
demand instrument to pay principal and interest on demand.

Each Fund also may invest in non-convertible corporate debt securities
(e.g., bonds and debentures) with not more than one year remaining to maturity
at the date of settlement. A Fund will invest only in such corporate bonds and
debentures that are rated at the time of purchase at least "Aa" by Moody's or
"AA" by S&P. Subsequent to its purchase by a Fund, an issue of securities may
cease to be rated or its rating may be reduced below the minimum rating
required for purchase by the Fund. The portfolio managers will consider such an
event in determining whether the Fund should continue to hold the obligation.
To the extent the Fund continues to hold such obligations, it may be subject to
additional risk of default.

Investment Company Securities.

Each Fund may invest in securities issued by other open-end, management
investment companies to the extent permitted under the Investment Company Act
of 1940, as amended (the "1940 Act"). As a general matter, under the 1940 Act
investment in such securities is limited to: (i) 3% of the total voting stock
of any one investment company, (ii) 5% of the Fund's net assets with respect to
any one investment company and (iii) 10% of the Fund's net assets with respect
to all such companies in the aggregate. Investments in the securities of other
investment companies generally will involve duplication of advisory fees and
certain other expenses. Each Fund may also purchase interests of
exchange-listed closed-end funds to the extent permitted under the 1940 Act.

Rule 144A Securities.

Each Fund may invest in privately issued securities, including those which
may be resold only in accordance with Rule 144A under the Securities Act of
1933 ("Rule 144A Securities"). Rule 144A Securities are restricted securities
that are not publicly traded. Accordingly, the liquidity of the market for
specific Rule 144A Securities may vary. Delay or difficulty in selling such
securities may result in a loss to the Fund. Privately issued or Rule 144A
securities that are determined by the portfolio managers to be "illiquid" are
subject to the Fund's policy of not investing more than 15% of its net assets
in illiquid securities. The portfolio managers, under guidelines approved by
board of trustees, will evaluate the liquidity characteristics of each Rule
144A Security proposed for purchase by the Fund on a case-by-case basis and
will consider the following factors, among others, in their evaluation: (1) the
frequency of trades and quotes for the Rule 144A Security; (2) the number of
dealers willing to purchase or sell the Rule 144A Security and the number of
other potential purchasers; (3) dealer undertakings to make a market in the
Rule 144A Security; and (4) the nature of the Rule 144A Security and the nature
of the marketplace trades (e.g., the time needed to dispose of the Rule 144A
Security, the method of soliciting offers and the mechanics of transfer).

<PAGE>

Floating- and Variable-Rate Obligations.

Each Fund may purchase floating- and variable-rate obligations. A Fund may
purchase floating- and variable-rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of thirteen months,
but which permit the holder to demand payment of principal at any time, or at
specified intervals not exceeding thirteen months. Variable rate demand notes
include master demand notes that are obligations that permit the Fund to invest
fluctuating amounts, which may change daily without penalty, pursuant to direct
arrangements between the Fund, as lender, and the borrower. The interest rates
on these notes fluctuate from time to time. The issuer of such obligations
ordinarily has a corresponding right after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders of such
obligations. The interest rate on a floating-rate demand obligation is based on
a known lending rate, such as a bank's prime rate, and is adjusted
automatically each time such rate is adjusted. The interest rate on a
variable-rate demand obligation is adjusted automatically at specified
intervals. Frequently, such obligations are secured by letters of credit or
other credit support arrangements provided by banks. Because these obligations
are direct lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and there
generally is no established secondary market for these obligations, although
they are redeemable at face value. Accordingly, where these obligations are not
secured by letters of credit or other credit support arrangements, the Fund's
right to redeem is dependent on the ability of the borrower to pay principal
and interest on demand. Such obligations frequently are not rated by credit
rating agencies and the Fund may invest in obligations, which are not so rated
only if the portfolio managers determine that at the time of investment the
obligations are of comparable quality to the other obligations in which each
Fund may invest. The portfolio managers, on behalf of the Fund, consider on an
ongoing basis the creditworthiness of the issuers of the floating- and
variable-rate demand obligations in the Fund's portfolio. Each Fund will not
invest more than 10% of the value of its total net assets in floating- or
variable-rate demand obligations whose demand feature is not exercisable within
seven days. Such obligations may be treated as liquid, provided an active
secondary market exists.

Illiquid Securities.

Each Fund may invest up to 15% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with its investment objective. Such securities may
include securities that are not readily marketable, such as privately issued
securities and other securities that are subject to legal or contractual
restrictions on resale, floating- and variable-rate demand obligations as to
which the Fund cannot exercise a demand feature on not more than seven days'
notice and as to which there is no secondary market and repurchase agreements
providing for settlement more than seven days after notice.

Foreign Obligations and Securities.

Since the stocks of some foreign issuers may be included in the Indexes, a
Fund's portfolio may contain securities of such foreign issuers which may
subject the Fund to additional investment risks.

<PAGE>

For temporary defensive purposes, each Fund may invest in fixed income
securities of non-U.S. governmental and private issuers. Such investments may
include bonds, notes, debentures and other similar debt securities, including
convertible securities.

Investments in foreign obligations involve certain considerations that are
not typically associated with investing in domestic securities. There may be
less publicly available information about a foreign issuer than about a
domestic issuer. Foreign issuers also are not generally subject to the same
accounting auditing and financial reporting standards or governmental
supervision as domestic issuers. In addition, with respect to certain foreign
countries, taxes may be withheld at the source under foreign tax laws, and
there is a possibility of expropriation or confiscatory taxation, political,
social and monetary instability or diplomatic developments that could adversely
affect investments in, the liquidity of, and the ability to enforce contractual
obligations with respect to, securities of issuers located in those countries.

Repurchase Agreements.

Each Fund may engage in a repurchase agreement with respect to any
security in which it is authorized to invest, although the underlying security
may mature in more than thirteen months. A Fund may enter into repurchase
agreements wherein the seller of a security to the Fund agrees to repurchase
that security from the Fund at a mutually agreed-upon time and price that
involves the acquisition by the Fund of an underlying debt instrument, subject
to the seller's obligation to repurchase, and the Fund's obligation to resell,
the instrument at a fixed price usually not more than one week after its
purchase. The Fund's custodian has custody of, and holds in a segregated
account, securities acquired as collateral by the Fund under a repurchase
agreement. Repurchase agreements are considered by the staff of the Securities
and Exchange Commission (the "SEC") to be loans by the Funds. The Funds may
enter into repurchase agreements only with respect to securities of the type in
which they may invest, including government securities, regardless of their
remaining maturities, and require that additional securities be deposited with
the custodian if the value of the securities purchased should decrease below
resale price. The portfolio managers monitor on an ongoing basis the value of
the collateral to assure that it always equals or exceeds the repurchase price.
Certain costs may be incurred by a Fund in connection with the sale of the
underlying securities if the seller does not repurchase them in accordance with
the repurchase agreement. In addition, if bankruptcy proceedings are commenced
with respect to the seller of the securities, disposition of the securities by
a Fund may be delayed or limited. While it does not presently appear possible
to eliminate all risks from these transactions (particularly the possibility of
a decline in the market value of the underlying securities, as well as delay
and costs to the Funds in connection with insolvency proceedings), it is the
policy of each Fund to limit repurchase agreements to selected creditworthy
securities dealers or domestic banks or other recognized financial
institutions. Each Fund considers on an ongoing basis the creditworthiness of
the institutions with which it enters into repurchase agreements.

Reverse Repurchase Agreements.

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

<PAGE>

bankruptcy of the other party to a reverse repurchase agreement, a Fund could
experience delays in recovering the securities sold. To the extent that, in the
meantime, the value of the securities sold has changed, the Fund could
experience a loss.

Securities Loans.

Each Fund may lend securities from its portfolio to brokers, dealers and
financial institutions (but not individuals) if cash, U.S. Government
securities or other high quality debt obligations equal to at least 100% of the
current market value of the securities loaned (including accrued interest
thereon) plus the interest payable to the Fund with respect to the loan is
maintained with the Fund. In determining whether or not to lend a security to a
particular broker, dealer or financial institution, the portfolio managers
consider all relevant facts and circumstances, including the size,
creditworthiness and reputation of the broker, dealer, or financial
institution. Any loans of portfolio securities are fully collateralized based
on values that are marked to market daily. No Fund will enter into any
portfolio security lending arrangements having a duration longer than one year.
Any securities that a Fund receives as collateral do not become part of its
portfolio at the time of the loan and, in the event of a default by the
borrower, the Fund will, if permitted by law, dispose of such collateral except
for such part thereof that is a security in which the Fund is permitted to
invest. During the time securities are on loan, the borrower will pay the Fund
any accrued income on those securities, and the Fund may invest the cash
collateral and earn income or receive an agreed-upon fee from a borrower that
has delivered cash-equivalent collateral. No Fund will lend securities having a
value that exceeds one-third of the current value of its total assets. Loans of
securities by a Fund are subject to termination at the Fund's or the borrower's
option. Each Fund may pay reasonable administrative and custodial fees in
connection with a securities loan and may pay a negotiated portion of the
interest or fee earned with respect to the collateral to the borrower or the
placing broker. Borrowers and placing brokers are not permitted to be
affiliated, directly or indirectly, with the Fund or the Manager.

Forward Commitments, When-Issued Purchases and Delayed-Delivery Transactions.

Each Fund may purchase or sell securities on a when-issued or
delayed-delivery basis and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. Securities
purchased or sold on a when-issued, delayed-delivery or forward-commitment
basis involve a risk of loss if the value of the security to be purchased
declines, or the value of the security to be sold increases, before the
settlement date. Although the Funds will generally purchase securities with the
intention of acquiring them, a Fund may dispose of securities purchased on a
when-issued, delayed-delivery or a forward-commitment basis before settlement
when deemed appropriate by the adviser. Securities purchased on a when-issued
or forward-commitment basis may expose the Fund to risk because they may
experience such fluctuations prior to their actual delivery. Purchasing
securities on a when-issued or forward-commitment basis can involve the
additional risk that the yield available in the market when the delivery takes
place actually may be higher than that obtained in the transaction itself.

Each Fund will segregate cash, U.S. Government obligations or other
high-quality debt instruments in an amount at least equal in value to the
Fund's commitments to purchase when-issued securities. If the value of these
assets declines, the Fund will segregate additional liquid assets on a daily
basis so that the value of the segregated assets is equal to the amount of such
commitments.

<PAGE>

Short Sales.

The Funds may seek to hedge investments or realize additional gains
through short sales. Short sales are transactions in which a Fund sells a
security it does not own in anticipation of a decline in the market value of
that security. To complete such a transaction, a Fund must borrow the security
to make delivery to the buyer. A Fund then is obligated to replace the security
borrowed by purchasing it at the market price at or prior to the time of
replacement. The price at such time may be more or less than the price at which
the security was sold by a Fund. Until the security is replaced, a Fund is
required to repay the lender any dividends or interest that accrue during the
period of the loan. To borrow the security, a Fund also may be required to pay
a premium, which would increase the cost of the security sold. A portion of the
net proceeds of the short sale may be retained by the broker (or by the Fund's
custodian in a special custody account), to the extent necessary to meet margin
requirements, until the short position is closed out. A Fund will also incur
transaction costs in effecting short sales.

A Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which a
Fund replaces the borrowed security. A Fund will realize a gain if the security
declines in price between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of the premiums,
dividends, interest or expenses a Fund may be required to pay in connection
with a short sale. An increase in the value of a security sold short by a Fund
over the price at which it was sold short will result in a loss to the Fund,
and there can be no assurance that a Fund will be able to close out the
position at any particular time or at an acceptable price. Thus a Fund's losses
on short sales are potentially unlimited.

Euro Conversion.

The Funds may invest in securities of issuers in European countries.
Certain European countries have joined the European Economic and Monetary Union
(EMU). Each EMU participant's currency began a conversion into a single
European currency, called the euro, on January 1, 1999, to be completed by July
1, 2002. The consequences of the euro conversion for foreign exchange rates,
interest rates and the value of European securities held by the Funds are
presently unclear. European financial markets, and therefore, the Funds, could
be adversely affected if the euro conversion does not continue as planned or if
a participating country chooses to withdraw from the EMU. The Funds could also
be adversely affected if the computing, accounting and trading systems used by
its service providers are not capable of processing transactions related to the
euro. These issues may negatively affect the operations of the companies in
which the Funds invest as well.

Options.

Each of the Funds may write call and put options and purchase call and put
options on securities for hedging and nonhedging purposes. Call and put options
written by a Fund will be covered in the manner set forth below, or the Fund
will segregate cash or liquid securities equal to the value of the securities
underlying the option.

A call option written by a Fund is "covered" if the Fund owns the security
underlying the call or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration held in a segregated account) upon conversion or exchange of

<PAGE>

other securities held in its portfolio. A call option is also covered if a Fund
holds a call on the same security and in the same principal amount as the call
written where the exercise price of the call held (a) is equal to or less than
the exercise price of the call written or (b) is greater than the exercise
price of the call written if the difference is maintained by a Fund in cash or
liquid securities in a segregated account. A put option written by a Fund is
"covered" if the Fund maintains cash or liquid securities with a value equal to
the exercise price in a segregated account or else holds a put on the same
security and in the same principal amount as the put written where the exercise
price of the put held is equal to or greater than the exercise price of the put
written or where the exercise price of the put held is less than the exercise
price of the put written if the difference is maintained by the Fund in cash or
liquid securities in a segregated account. Put and call options written by a
Fund may also be covered in such other manner as may be in accordance with the
requirements of the exchange on which, or the counterparty with which, the
option is traded, and applicable laws and regulations. Even if the Fund's
obligation is covered, it is subject to the risk of the full change in value of
the underlying security from the time the option is written until exercise.
Covering an option does not protect the Fund from risk of loss.

When a Fund writes a call option, the Fund, in return for a fee, or
"premium," agrees to sell a security at the exercise price, if the holder
exercises the right to purchase prior to the expiration date of the call
option. If the Fund holds the security in question, the Fund gives up some or
all of the opportunity to profit from the increase in the market price of the
security during the life of the option. The Fund retains the risk of loss
should the price of the security decline. If the option expires unexercised,
the Fund realizes a gain equal to the premium, which may be offset by a decline
in price of the underlying security. If the option is exercised, the Fund
realizes a gain or loss equal to the difference between the Fund's cost for the
underlying security and the proceeds of sale (exercise price minus commissions)
plus the amount of the premium.

A Fund may terminate a call option it has written before it expires by
entering into a closing purchase transaction. A Fund may enter into closing
purchase transactions in order to free itself to sell the underlying security
or to write another call on the security, realize a profit on a previously
written call option, or protect a security from being called in an unexpected
market rise. Any profits from closing a purchase transaction may be offset by a
decline in the value of the underlying security. Conversely, because increases
in the market price of a call option will generally reflect increases in the
market price of the underlying security, if the Fund holds the underlying
security any loss resulting from a closing purchase transaction is likely to be
offset in whole or in part by unrealized appreciation of the underlying
security. If the Fund does not hold the underlying security, the Fund's loss
could be unlimited.

A Fund may write put options in an attempt to enhance its current return.
Such option transactions may also be used as a limited form of hedging against
an increase in the price of securities that a Fund plans to purchase. A put
option written by the Fund gives the holder the right to sell, and, in return
for a premium, obligates the Fund to buy, a security at the exercise price at
any time before the expiration date.

In addition to the receipt of premiums and the potential gains from
terminating such options in closing purchase transactions, a Fund may also
receive a return on the cash and debt securities maintained to cover the
exercise price of the option. By writing a put option, the Fund assumes the
risk that it may be required to purchase the underlying security for an
exercise price higher than its then current market value, resulting in a loss
to the Fund, unless the security later appreciates in value. A Fund may
terminate a put option it has written before it expires by a closing purchase

<PAGE>

transaction. Any loss from this transaction may be partially or entirely offset
by the premium received on the terminated option.

Each of the Funds may purchase options for hedging purposes or to increase
the Fund's return. When put options are purchased as a hedge against a decline
in the value of portfolio securities, the put options may be purchased at or
about the same time that the Fund purchases the underlying security or at a
later time. If such decline occurs, the put options will permit a Fund to sell
the securities at the exercise price, or to close out the options at a profit.
By using put options in this way, the Fund will reduce any profit it might
otherwise have realized in the underlying security by the amount of the premium
paid for the put option and by transaction costs. Similarly, when put options
are used for non-hedging purposes, the Fund may make a profit when the price of
the underlying security or instrument falls below the strike price. If the
price of the underlying security or instrument does not fall sufficiently, the
options may expire unexercised and the Fund would lose the premiums it paid for
the option. If the price of the underlying security or instrument falls
sufficiently and the option is exercised, the amount of any resulting profit
will be offset by the amount of premium paid.

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

Call options may also be purchased in order to increase a Fund's return at
a time when the call is expected to increase in value due to anticipated
appreciation of the underlying security. Prior to its expiration, a call option
may be sold by a Fund in closing sale transactions, which are sales by the
Fund, prior to the exercise of options that it has purchased, of options of the
same series. Profit or loss from the sale will depend upon whether the amount
received is more or less than the premium paid for the option plus the related
transaction costs. The purchase of call options on securities that a Fund owns,
when a Fund is substantially fully invested, is a form of leverage, up to the
amount of the premium and related transaction costs, and involves risks of loss
and of increased volatility.

Each of the Funds may write (sell) call and put options and purchase call
and put options on securities indexes. The delivery requirements of options on
securities indexes differ from options on securities. Unlike a securities
option, which contemplates the right to take or make delivery of securities at
a specified price, an option on a securities index gives the holder the right
to receive a cash "exercise settlement amount" equal to (1) the amount, if any,
by which the fixed exercise price of the option exceeds (in the case of a put)
or is less than (in the case of a call) the closing value of the underlying
index on the date of exercise, multiplied by (2) a fixed "index multiplier."
Receipt of this cash amount will depend upon the closing level of the
securities index upon which the option is based being greater than, in the case
of a call, or less than, in the case of a put, the exercise price of the
option. The writer of the option is obligated, in return for the premium
received, to make delivery of this amount. The writer may offset its position
in securities index options prior to expiration by entering into a closing
transaction on an exchange or it may allow the option to expire unexercised.

<PAGE>

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

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

Each of the Funds may purchase put options on securities indexes when the
portfolio managers believe that there may be a decline in the prices of the
securities covered by the index. The Fund will realize a gain if the put option
appreciates in excess of the premium paid for the option. If the option does
not increase in value, the Fund's loss will be limited to the premium paid for
the option plus related transaction costs.

A Fund may purchase call options on securities indexes to take advantage
of an anticipated broad market advance, or an advance in an industry or market
segment. A Fund will bear the risk of losing all or a portion of the premium
paid if the value of the index does not rise. The purchase of call options on
securities indexes when a Fund is substantially fully invested is a form of
leverage, up to the amount of the premium and related transaction costs, and
involves risks of loss and of increased volatility.

<PAGE>

Securities index options are subject to position and exercise limits and
other regulations imposed by the exchange on which they are traded. The ability
of a Fund to engage in closing purchase transactions with respect to securities
index options depends on the existence of a liquid secondary market. However,
no such secondary market may exist, or the market may cease to exist at some
future date, for some options. No assurance can be given that a closing
purchase transaction can be effected when the portfolio managers desire that a
Fund engage in such a transaction.

Because the value of an index option depends upon movements in the level
of the index rather than the price of a particular security, whether a Fund
realizes a gain or loss from purchasing or writing options on an index depends
upon movements in the level of prices in the market generally or, in the case
of certain indexes, in an industry or market segment, rather than movements in
the price of a particular security. As a result, successful use by a Fund of
options on securities indexes is subject to the portfolio managers' ability to
predict correctly movements in the direction of the market generally or of a
particular industry. This ability contemplates different skills and techniques
from those used in predicting changes in the price of individual securities.
When a Fund purchases or writes securities index options as a hedging
technique, the Fund's success will depend upon the extent to which price
movements in the portion of a securities portfolio being hedged correlate with
price movements of the securities index selected.

A Fund's purchase or sale of securities index options in an attempt to
enhance performance involves speculation and may be very risky and cause
losses, which, in the case of call options written, are potentially unlimited.

The Funds may purchase over-the-counter ("OTC") or dealer options or sell
covered OTC options. Unlike exchange-listed options where an intermediary or
clearing corporation assures that all transactions are properly executed, the
responsibility for performing all transactions with respect to OTC options
rests solely with the writer and the holder of those options. A listed call
option writer, for example, is obligated to deliver the underlying stock to the
clearing organization if the option is exercised, and the clearing organization
is then obligated to pay the writer the exercise price of the option. If a Fund
were to purchase a dealer option, however, it would rely on the dealer from
whom it purchased the option to perform if the option were exercised. If the
dealer fails to honor the exercise of the option by the Fund, the Fund would
lose the premium it paid for the option and the expected benefit of the
transaction.

Listed options may have a liquid market while dealer options have none.
Consequently, a Fund will generally be able to realize the value of a dealer
option it has purchased only by exercising it or reselling it to the dealer who
issued it. Similarly, when a Fund writes a dealer option, it generally will be
able to close out the option prior to the expiration only by entering into a
closing purchase transaction with the dealer to which the Fund originally sold
the option. Although the Funds will seek to enter into dealer options only with
dealers who will agree to and that are expected to be capable of entering into
closing transactions with the Funds, there can be no assurance that a Fund will
be able to liquidate a dealer option at a favorable price at any time prior to
expiration. The inability to enter into a closing transaction may result in
material losses to a Fund. Until a Fund, as an OTC call option writer, is able
to effect a closing purchase transaction, it will not be able to liquidate
securities (or other assets) used to cover the written option until the option
expires or is exercised. This requirement may impair a Fund's ability to sell
portfolio securities at a time when such sale might be advantageous. In the
event of insolvency of the other party, the Fund may be unable to liquidate a
dealer option.

<PAGE>

Each of the Funds may also purchase or write call options on futures
contracts as more fully described in "Options on Futures Contracts" below.

The Funds' use of options may involve leveraging. Leveraging adds
increased risks to a Fund, because the Fund's losses may be out of proportion
to the amount invested in the instrument--a relatively small investment may
lead to much greater losses.

Futures Contracts.

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

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

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

A Fund may purchase or sell interest rate futures contracts or bond
futures contracts to attempt to protect the Fund from fluctuations in interest
rates, to manage the effective maturity or duration of the Fund's portfolio in
an effort to reduce potential losses, or in an effort to enhance potential
gain, without actually buying or selling debt securities. For example, if the
Fund owned long-term bonds and interest rates were expected to increase, the

<PAGE>

Fund might enter into interest rate futures contracts for the sale of debt
securities. Such a sale would have much the same effect as if the Fund sold
bonds that it owned, or as if the Fund sold longer-term bonds and purchased
shorter-term bonds. If interest rates did increase, the value of the Fund's
debt securities would decline, but the value of the futures contracts would
increase, thereby keeping the net asset value of the Fund from declining as
much as it otherwise would have. Similar results could be accomplished by
selling bonds, or by selling bonds with longer maturities and investing in
bonds with shorter maturities. However, by using futures contracts, the Fund
avoids having to sell its securities.

Bond futures may be used for nonhedging purposes. For example, even if the
Fund were not trying to protect the value of any bonds held by it, if the
portfolio managers anticipate that interest rates are about to rise, depressing
future prices of bonds, the portfolio managers may sell bond futures short,
closing out the position later at a lower price, if the future prices fall, as
expected. If the prices do not fall, the Fund would experience a loss and such
loss may be unlimited.

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

Although futures on individual equity securities are not available in
United States markets, futures contracts on individual equity securities may be
available in foreign markets, and may be purchased or sold by the Funds.

The Funds may buy and sell stock index futures contracts to attempt to
increase investment return, to gain stock market exposure while holding cash
available for investments and redemptions, or to protect against a decline in
the stock market.

A stock index futures contract is a contract to buy or sell units of a
stock index at a specified future date at the price agreed upon when the
contract is made. A unit is the current value of the stock index.

The following example illustrates generally the manner in which index
futures contracts operate. The Standard & Poor's 100 Stock Index (the "S&P 100
Index") is composed of 100 selected common stocks, most of which are listed on
the New York Stock Exchange. The S&P 100 Index assigns relative weightings to
the common stocks included in the Index, and the Index fluctuates with changes
in the market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making
up the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if a Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4) reduced by transaction costs. If the Fund enters
into a futures contract to sell 100 units of the stock index at a specified
future date at a contract price of $180 and the S&P 100 Index is at $182 on
that future date, the Fund will lose $200 (100 units x loss of $2) increased by
transaction costs.

<PAGE>

Positions in index futures may be closed out only on an exchange or board
of trade which provides a secondary market for such futures.

Although the use of futures for hedging, if correctly used, may minimize
the risk of loss due to a decline in the value of the hedged position (e.g., if
a Fund sells a futures contract to protect against losses in the debt
securities held by the Fund), they do not eliminate the risk of loss and at the
same time the futures contract limits any potential gain which might result
from an increase in value of a hedged position. Futures markets can be highly
volatile and transactions of this type carry a high risk of loss. Moreover, a
relatively small adverse market movement with respect to these transactions may
result not only in loss of the original investment but also in unquantifiable
further loss exceeding any margin deposited.

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

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

The effective use of futures strategies depends on, among other things,
the Fund's ability to terminate futures positions at times when the portfolio
managers deem it desirable to do so. Although no Fund will enter into a futures
position unless the portfolio managers believe that a liquid secondary market
exists for such future, there is no assurance that the Fund will be able to
effect closing transactions at any particular time or at an acceptable price.

<PAGE>

Each Fund generally expects that its futures transactions will be conducted on
recognized US. and foreign securities and commodity exchanges.

The liquidity of a secondary market in a futures contract may be adversely
affected by "daily price fluctuation limits" established by the exchanges,
which limit the amount of fluctuation in the price of a futures contract during
a single trading day and prohibit trading beyond such limits once they have
been reached. The trading of futures contracts also is subject to the risk of
trading halts, suspensions, exchange or clearing house equipment failures,
government intervention, insolvency of a brokerage firm or clearing house or
other disruptions of normal trading activity, which could at times make it
difficult or impossible to liquidate existing positions or to recover excess
variation margin payments. Each contract market on which futures contracts are
traded has established a number of limitations governing the maximum number of
positions which may be held by a trader, whether acting alone or in concert
with others. The portfolio managers do not believe that these trading and
position limits will have an adverse impact on the hedging strategies regarding
the Funds' investments.

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

Regulations of the CFTC require that each Fund enter into transactions in
futures contracts for hedging purposes only, in order to assure that it is not
deemed to be a "commodity pool" under such regulations. In particular, CFTC
regulations require that all short futures positions be entered into for the
purpose of hedging the value of investment securities held by a Fund, and that
all long futures positions either constitute bona fide hedging transactions, as
defined in such regulations, or have a total value not in excess of an amount
determined by reference to certain cash and securities positions maintained for
the Fund, and accrued profits on such positions. In addition, no Fund may
purchase or sell such instruments if, immediately thereafter, the sum of the
amount of initial margin deposits on its existing futures positions and
premiums paid for options on futures contracts would exceed 5% of the market
value of the Fund's total assets. The Funds' ability to engage in the hedging
transactions described herein may be limited by the additional policies and
concerns of various Federal and state regulatory agencies.

In addition, an amount of cash or liquid securities will be maintained by
each Fund in a segregated account so that the amount so segregated, plus the
applicable margin held on deposit, will be approximately equal to the amount
necessary to satisfy the Fund's obligations under the futures contract, or a
Fund will otherwise "cover" its positions in accordance with applicable
policies and regulations.

<PAGE>

The portfolio managers use a variety of internal risk management
procedures to ensure that derivatives use is consistent with the each Fund's
investment objective, does not expose the Fund to undue risk and is closely
monitored. These procedures include providing periodic reports to the board of
trustees concerning the use of derivatives.

Options on Futures Contracts.

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

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

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

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

Each of the Funds may cover the writing of call options on futures
contracts (a) through purchases of the underlying futures contract, (b) through
ownership of the instrument, or instruments included in the index underlying
the futures contract, or (c) through the holding of a call on the same futures
contract and in the same principal amount as the call written where the
exercise price of the call held (i) is equal to or less than the exercise price
of the call written or (ii) is greater than the exercise price of the call
written if the difference is maintained by the Fund in cash or securities in a
segregated account. A Fund may cover the writing of put options on futures
contracts (a) through sales of the underlying futures contract, (b) through
segregation of cash or liquid securities in an amount equal to the value of the
security or index underlying the futures contract, (c) through the holding of a
put on the same futures contract and in the same principal amount as the put
written where the exercise price of the put held is equal to or greater than
the exercise price of the put written or where the exercise price of the put
held is less than the exercise price of the put written if the difference is
maintained by a Fund in cash or liquid securities in a segregated account. Put
and call options on futures contracts may also be covered in such other manner
as may be in accordance with the rules of the exchange on which the option is
traded and applicable laws and regulations. Upon the exercise of a call option
on a futures contract written by a Fund, the Fund will be required to sell the

<PAGE>

underlying futures contract which, if the Fund has covered its obligation
through the purchase of such contract, will serve to liquidate its futures
position. Similarly, where a put option on a futures contract written by a Fund
is exercised, the Fund will be required to purchase the underlying futures
contract which, if the Fund has covered its obligation through the sale of such
contract, will close out its futures position.

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

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

Each of the Funds may also purchase options on futures contracts for
non-hedging purposes, in order to take advantage of projected market advances
or declines or changes in interest rates or exchange rates. For example, a Fund
can buy a call option on a bond futures contract when the portfolio managers
believe that the underlying futures contract will rise. If prices do rise, the
Fund could exercise the option and acquire the underlying futures contract at
the strike price or the Fund could offset the long call position with a sale
and realize a profit. Or, a Fund can sell a call option if the portfolio
managers believe that futures prices will decline. If prices decline, the call
will likely not be exercised and the Fund would profit. However, if the
underlying futures contract should rise, the buyer of the option would likely
exercise the call against the Fund and acquire the underlying futures position
at the strike price; the Fund's loss in this case could be unlimited.

The Funds' use of options on futures contracts may involve leveraging.
Leveraging adds increased risks to a Fund, because the Fund's losses may be out
of proportion to the amount invested in the instrument--a relatively small
investment may lead to much greater losses.

<PAGE>

Future Development.

The Funds may take advantage of opportunities in the area of options and
futures contracts and options on futures contracts and any other derivative
investments which are not presently contemplated for use by the Funds or which
are not currently available but which may be developed, to the extent such
opportunities are both consistent with a Fund's investment objective and
legally permissible for the Fund. Before entering into such transactions or
making any such investment, the Funds will provide appropriate disclosure in
its prospectus.

Indexed Securities.

Indexed securities include commercial paper, certificates of deposit, and
other fixed-income securities whose values at maturity or coupon interest rates
are determined by reference to the returns of a specified index. Indexed
securities can be affected by stock and bond prices as well as changes in
interest rates and the creditworthiness of their issuers and may not track
their corresponding index as accurately as direct investments in that index.

Convertible Securities.

Although each Fund primarily invests in the common stocks included in its
Index, each Fund may also invest in convertible securities. A convertible
security is a fixed-income security (a bond or preferred stock) which may be
converted at a stated price within a specified period of time into a certain
quantity of common stock or other equity securities of the same or a different
issuer. Convertible securities rank senior to common stock in a corporation's
capital structure but are usually subordinated to similar non-convertible
securities. While providing a fixed-income stream (generally higher in yield
than the income derivable from common stock but lower than that afforded by a
similar non-convertible security), a convertible security also affords an
investor the opportunity, through its conversion feature, to participate in the
capital appreciation attendant upon a market price advance in the convertible
security's underlying common stock.

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

Zero-Coupon Bonds and "Payment-in-Kind" Bonds.

The Funds may invest in "zero-coupon" bonds and "payment-in-kind" bonds.
Zero-coupon bonds are issued at a significant discount from their principal
amount in lieu of paying interest periodically. Payment-in-kind bonds allow the
issuer, at its option, to make current interest payments on the bonds either in
cash or in additional bonds. Because zero-coupon and payment-in kind bonds do
not pay current interest in cash, their value is subject to greater fluctuation
in response to changes in market interest rates than bonds that pay interest
currently. Both zero-coupon and payment-in-kind bonds allow an issuer to avoid
the need to generate cash to meet current interest payments. Accordingly, such
bonds may involve greater credit risks than bonds paying interest currently in

<PAGE>

cash. The Funds are required to accrue interest income on such investments and
to distribute such amounts at least annually to shareholders even though such
bonds do not pay current interest in cash. Thus, it may be necessary at times
for the Funds to liquidate investments in order to satisfy their dividend
requirements.

U.S. Government Securities.

Each Fund may invest in various types of U.S. Government obligations. U.S.
Government obligations include securities issued or guaranteed as to principal
and interest by the U.S. Government its agencies or instrumentalities. Payment
of principal and interest on U.S. Government obligations (i) may be backed by
the full faith and credit of the United States (as with U.S. Treasury
obligations and Government National Mortgage Association (GNMA) certificates)
or (ii) may be backed solely by the issuing or guaranteeing agency or
instrumentality itself (as with Federal National Mortgage Association (FNMA)
notes). In the latter case, the investor must look principally to the agency or
instrumentality issuing or guaranteeing the obligation for ultimate repayment,
which agency or instrumentality may be privately owned. There can be no
assurance that the U.S. Government would provide financial support to its
agencies or instrumentalities where it is not obligated to do so. As a general
matter, the value of debt instruments, including U.S. Government obligations,
declines when market interest rates increase and rises when market interest
rates decrease. Certain types of U.S. Government obligations are subject to
fluctuations in yield or value due to their structure or contract terms.

Swaps and Related Transactions.

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

Each Fund may also enter into index swaps in pursuit of its investment
objective. Index swaps involve the exchange by a Fund with another party of
cash flows based upon the performance of an index of securities or a portion of
an index of securities that usually include dividends or income. In each case,
the exchange commitments can involve payments to be made in the same currency
or in different currencies. The Funds will usually enter into swaps on a net
basis. In so doing, the two payment streams are netted out, with the Funds
receiving or paying, as the case may be, only the net amount of the two
payments. If a Fund enters into a swap, it will maintain a segregated account
on a gross basis, unless the contract provides for a segregated account on a
net basis. If there is a default by the other party to such a transaction, the
Fund will have contractual remedies pursuant to the agreements related to the
transaction.

<PAGE>

The use of index swaps is a highly specialized activity that involves
investment techniques and risks different from those associated with ordinary
portfolio security transactions. There is no limit, except as provided below,
on the amount of swap transactions that may be entered into by the Fund. These
transactions generally do not involve the delivery of securities or other
underlying assets or principal. Accordingly, the risk of loss with respect to
swaps generally is limited to the net amount of payments that the Fund is
contractually obligated to make.

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

A Fund will maintain liquid assets with its custodian or otherwise cover
its current obligations under swap transactions in accordance with current
regulations and policies applicable to the Fund.

Swap agreements are subject to each Fund's overall limit that not more
than 15% of its net assets may be invested in illiquid securities.

Engaging in swap and related transactions may involve leveraging.
Leveraging adds increased risks to a Fund, because the Fund's losses may be out
of proportion to the amount invested in the instrument--a relatively small
investment may lead to much greater losses.

Index-Related Securities.

Each Fund may invest in certain types of derivative securities that enable
investors to purchase or sell shares in a portfolio of securities that seeks to
track the performance of an underlying index or a portion of an Index. Such
securities are similar to index mutual funds, but they are traded on various
stock exchanges or secondary markets. The value of these securities is
dependent upon the performance of the underlying index on which they are based.
Thus, these securities are subject to the same risks as their underlying
indexes as well as the securities that make up those indexes. For example, if
the securities comprising an index that an index-related security seeks to
track perform poorly, the index-related security will lose value.

Additional Disclosure Regarding Derivatives

In some cases, the derivatives purchased by the Funds are standardized
contracts traded on commodities exchanges or boards of trade in the U.S. or in
foreign countries. This means that the exchange or board of trade guarantees
counterparty performance. Over-the-counter derivatives, which may be traded in

<PAGE>

the U.S. and in foreign countries, are not guaranteed. The securities
underlying options and futures contracts traded by a Fund may include domestic
as well as foreign securities. Investors should recognize that transactions
involving foreign securities and transactions entered into in foreign countries
may involve considerations and risks not typically associated with investing in
U.S. markets.

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

The use of certain derivatives, such as futures and written options may
involve leverage for the Funds because they create an obligation, or
indebtedness, to someone other than the Funds' shareholders and enable a Fund
to participate in gains and losses on an amount that exceeds its initial
investment. If a Fund writes a stock put option, for example, it makes no
initial investment, but instead receives a premium in an amount equal to a
fraction of the price of the underlying stock. In return, the Fund is obligated
to purchase the underlying stock at a fixed price, thereby being subject to
losses on the full stock price.

Likewise, if a Fund purchases a futures contract, it makes an initial
margin payment that is typically a small percentage of the contract's price.
However, because of the purchase, the Fund will participate in gains or losses
on the full contract price.

Other types of derivatives provide the economic equivalent of leverage
because they display heightened price sensitivity to market fluctuations, such
as changes in stock prices or interest rates. These derivatives magnify a
Fund's gain or loss from an investment in much the same way that incurring
indebtedness does. For example, if a Fund purchases a stock call option, the
Fund pays a premium in an amount equal to a fraction of the stock price, and in
return, the Fund participates in gains on the full stock price. If there were
no gains, the Fund generally would lose the entire initial premium.

Options, futures contracts, options on futures contracts, and swaps may be
used alone or in combinations in order to create synthetic exposure to
securities in which a Fund otherwise invests.

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

Additional Information

At times, a substantial portion of a Fund's assets may be invested in
securities as to which a Fund, by itself or together with other funds and
accounts managed by SSB Citi and its affiliates, holds all or a major portion.
Although SSB Citi generally considers such securities to be liquid because of
the availability of an institutional market for such securities, it is possible
that, under adverse market or economic conditions or in the event of adverse
changes in the financial condition of the issuer, a Fund could find it more

<PAGE>

difficult to sell these securities when SSB Citi believes it advisable to do so
or may be able to sell the securities only at prices lower than if they were
more widely held. Under these circumstances, it may also be more difficult to
determine the fair value of such securities for purposes of computing a Fund's
net asset value. In order to enforce its rights in the event of a default under
such securities, a Fund may be required to participate in various legal
proceedings or take possession of and manage assets securing the issuer's
obligations on such securities. This could increase the Fund's operating
expenses and adversely affect a Fund's net asset value. In addition, a Fund's
intention to qualify as a "regulated investment company" under the Internal
Revenue Code may limit the extent to which the Fund may exercise its rights by
taking possession of such assets.

Defensive Strategies

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

4. INVESTMENT RESTRICTIONS

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

None of the Funds may:

(1) Borrow money, if such borrowing is specifically prohibited by the 1940
Act or the rules and regulations promulgated thereunder.

(2) Make loans to other persons if such loans are specifically prohibited
by the 1940 Act or the rules and regulations promulgated thereunder.

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

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

<PAGE>

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

(6) Purchase or sell the securities of any issuer, if, as a result of such
purchase or sale, less than 25% of the assets of the Fund would be
invested in the securities of issuers principally engaged in the business
activities having the specific characteristics denoted by the Fund,
provided that the Fund may invest without limit in short-term corporate
and government bonds and notes and money market instruments for temporary
defensive purposes.

For purposes of restriction (1) above, arrangements with respect to
securities lending are not treated as borrowing.

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

5. PERFORMANCE INFORMATION AND ADVERTISING

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

Each Fund may provide its period, annualized, cumulative and average
annual "total rates of return". The "total rate of return" refers to the change
in the value of an investment in the Fund over a stated period, reflects any
change in net asset value per share and is compounded to include the value of
any shares purchased with any dividends or capital gains declared during such
period. Period total rates of return may be "annualized". An "annualized" total
rate of return assumes that the period rate of return is generated over a
one-year period. Average annual total return figures represent the average
annual percentage change over the specified period. Cumulative total return
figures are not annualized and represent the aggregate percentage or dollar
value changes over a stated period of time.

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

Average annual total return is a measure of a Fund's performance over
time. It is determined by taking a Fund's performance over a given period and

<PAGE>

expressing it as an average annual rate. The average annual total return
quotation is computed in accordance with a standardized method prescribed by
SEC rules. The average annual total return for a specific period is found by
taking a hypothetical $1,000 initial investment in Fund shares on the first day
of the period, reducing the amount to reflect the maximum sales charge, and
computing the redeemable value of the investment at the end of the period. The
redeemable value is then divided by the initial investment, and its quotient is
taken to the Nth root (N representing the number of years in the period) and is
subtracted from the result, which is then expressed as a percentage. The
calculation assumes that all income and capital gains distributions have been
reinvested in Fund shares at net asset value on the reinvestment dates during
the period.

Cumulative total return for a specific period is calculated by first
taking a hypothetical initial investment in Fund shares on the first day of a
period, deducting (as applicable) the maximum sales charge, and computing the
"redeemable value" of that investment at the end of the period. The cumulative
total return percentage is then determined by subtracting the initial
investment from the redeemable value and dividing the remainder by the initial
investment and expressing the result as a percentage. The calculation assumes
that all income and capital gains distributions by each Fund have been
reinvested at net asset value on the reinvestment dates during the period.
Cumulative total return may also be shown as the increased dollar value of the
hypothetical investment over the period.

Each Fund may provide annualized "yield" quotations. The "yield" of a Fund
refers to the income generated by an investment in the Fund over a 30-day or
one-month period (which period is stated in any such advertisement or
communication). This income is then annualized; that is, the amount of income
generated by the investment over that period is assumed to be generated each
month over a one year period and is shown as a percentage of the maximum public
offering price on the last day of that period. A "yield" quotation, unlike a
total rate of return quotation, does not reflect changes in net asset value.

Any current yield quotation for a Fund consists of an annualized
historical yield, carried at least to the nearest hundredth of one percent,
based on a 30 calendar day or one month period and is calculated by (a) raising
to the sixth power the sum of 1 plus the quotient obtained by dividing the
Fund's net investment income earned during the period by the product of the
average daily number of shares outstanding during the period that were entitled
to receive dividends and the public offering price per share on the last day of
the period, (b) subtracting 1 from the result, and (c) multiplying the result
by 2.

In computing total rates of return and yield quotations, all Fund expenses
are included. However, fees that may be charged directly to a shareholder by
other financial intermediaries are not included. Of course, any such fees will
reduce the shareholder's net return on investment.

Historic data on the GSSI Financials Index, the GSSI Healthcare Index, and
the GSTI Composite Index may be used to promote the applicable Fund. The
historical Index data presented from time to time is not intended to suggest
that an investor would have achieved comparable results by investing in any one
equity security or in managed portfolios of equity securities, such as the
Funds, during the periods shown.

The Funds are newly-offered and do not have performance information as of
the date of this Statement of Additional Information.

<PAGE>

6. DETERMINATION OF NET ASSET VALUE; VALUATION OF SECURITIES

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

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

Foreign issuers with common shares included in an Index may also have
securities that are primarily listed on foreign exchanges. Trading in
securities on most foreign exchanges and over-the-counter markets is normally
completed before the close of regular trading on the Exchange. Trading may also
take place on days on which the Exchange is closed and on which it is not
possible to purchase or redeem shares of the Funds. When reliable market prices
or quotations are not readily available, or when the value of a security has
been materially affected by events occurring after a foreign exchange closes,
such securities may be valued at fair value in accordance with procedures
established by and under the general supervision of the Board of Trustees of
the Trust.

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

<PAGE>

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

Shares of the Funds are sold at net asset value without an initial sales
charge. There are no fees or deferred sales charges when you sell your shares.

Class A shares of the Funds may pay distribution and service fees of up to
0.20% of the average daily net assets represented by these shares.

Class D shares are offered to a limited group of investors who participate
in certain investment programs which charge a fee for participation. In
addition, Class D shares are offered to certain tax-exempt employee benefit and
retirement plans. For more information about these programs, please visit the
________ website at www.______.com, or call 1-800-_________.

During periods of drastic economic or market changes or severe weather or
other emergencies, shareholders may experience difficulties implementing a
telephone or Internet exchange or redemption. In such an event, another method
of instruction, if available, should be considered. The Funds will employ
reasonable procedures to confirm that instructions communicated by telephone or
Internet are genuine. These procedures may include recording of the telephone
or Internet instructions and verification of a shareholder's identity by asking
for the shareholder's name, address, telephone number, Social Security number,
account number, or password identification number. If these or other reasonable
procedures are not followed, the Funds or their transfer agent (the "Transfer
Agent") may be liable for any losses to a shareholder due to unauthorized or
fraudulent instructions. Otherwise, the shareholders will bear all risk of loss
relating to a redemption or exchange by telephone or Internet.

Systematic Withdrawal Plan. Each Fund's Systematic Withdrawal Plan permits you
to have a specified dollar amount (minimum of $100 per withdrawal)
automatically withdrawn from your account on a regular basis if you have at
least $10,000 in your Fund account at the time of enrollment. You are limited
to one withdrawal per month under the Plan. You may receive your withdrawals by
check, or have the monies transferred directly into your bank account. Or you
may direct that payments be made directly to a third party. To participate in
the Plan, you must complete the appropriate forms provided by the Transfer
Agent or, if you hold your shares through a Service Agent, by your Service
Agent.

Systematic Investment Plan. Shareholders may make additions to their accounts
at any time by purchasing shares through a service known as the Systematic
Investment Plan. Under the Systematic Investment Plan, the Transfer Agent is
authorized through preauthorized transfers of at least $25 on a monthly basis
or at least $50 on a quarterly basis to charge the shareholder's account held
with a bank or other financial institution on a monthly or quarterly basis as
indicated by the shareholder, to provide for systematic additions to the
shareholder's Fund account. A shareholder who has insufficient funds to
complete the transfer will be charged a fee of up to $25 by the Transfer Agent.
The Systematic Investment Plan also authorizes the Funds to apply cash held in
the shareholder's ________ brokerage account to make additions to the account.
Additional information is available from the Fund , through the ________
website (www.______.com), or by calling 1-800-_________.

Subject to compliance with applicable regulations, the Trust has reserved
the right to pay the redemption price of shares of the Funds either totally or
partially, by a distribution in kind of securities (instead of cash). The

<PAGE>

securities so distributed would be valued at the same amount as that assigned
to them in calculating the net asset value for the shares being sold. If a
holder of shares received a distribution in kind, such holder could incur
brokerage or other charges in converting the securities to cash.

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

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

There are no conversion, preemptive or other subscription rights.

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

ADDITIONAL DEALER CONCESSIONS

From time to time, the Funds' Distributor or SSB Citi, at its expense, may
provide additional commissions, compensation or promotional incentives
("concessions") to dealers that sell or arrange for the sale of shares of the
Funds. Such concessions provided by the Funds' Distributor or SSB Citi may
include financial assistance to dealers in connection with pre-approved
conferences or seminars, sales or training programs for invited registered
representatives and other employees, payment for travel expenses, including
lodging, incurred by registered representatives and other employees for such
seminars or training programs, seminars for the public, advertising and sales
campaigns regarding the Funds, and/or other dealer-sponsored events. From time
to time, the Funds' Distributor or SSB Citi may make expense reimbursements for
special training of a dealer's registered representatives and other employees
in group meetings or to help pay the expenses of sales contests. Other
concessions may be offered to the extent not prohibited by state laws or any
self-regulatory agency, such as the NASD.

8. MANAGEMENT

Each Fund is supervised by the Board of Trustees of the Trust. In each
case, a majority of the Trustees are not affiliated with SSB Citi.

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

<PAGE>

TRUSTEES OF THE TRUST

PHILIP W. COOLIDGE* (age 49) -- President of the Trust; Chief Executive Officer
and President, Signature Financial Group, Inc. and CFBDS.

RILEY C. GILLEY (age 74) -- Vice President and General Counsel, Corporate
Property Investors (November 1988 to December 1991); Partner, Breed, Abbott &
Morgan (Attorneys) (retired, December 1987).

DIANA R. HARRINGTON (age 60) -- Professor, Babson College (since September
1993); Trustee, the Highland Family of Funds (March 1997 to March 1998).

SUSAN B. KERLEY (age 49) -- President, Global Research Associates, Inc.
(Investment Research) (since September 1990); Trustee, Mainstay Institutional
Funds (since December 1990).

HEATH B. MCLENDON* (age 67) - Chairman, President, and Chief Executive Officer
of SSB Citi (since March 1996); Managing Director of Salomon Smith Barney
(since August 1993); and Chairman, President and Chief Executive Officer of
fifty-eight investment companies sponsored by Salomon Smith Barney. His address
is 388 Greenwich Street, New York, New York.

C. OSCAR MORONG, JR. (age 65) - Chairman of the Board of the Trust; Managing
Director, Morong Capital Management (since February 1993); Director, Indonesia
Fund (1990 to 1999); Director, MAS Funds (since 1993).

E. KIRBY WARREN (age 66) -- Professor of Management, Graduate School of
Business, Columbia University (1987 to December 1999).

OFFICERS OF THE TRUST

PHILIP W. COOLIDGE* (age 49) -- President of the Trust; Chief Executive Officer
and President, Signature Financial Group, Inc. and CFBDS.

ROBERT I. FRENKEL, ESQ.* (age 45) -- Secretary of the Trust,
___________________.

THOMAS C. MANDIA, ESQ.* (age 38) -- Assistant Secretary of the Trust,
______________.

CHRISTINE D. DORSEY* (age 29) -- Assistant Secretary and Assistant Treasurer of
the Trust; Vice President, Signature Financial Group, Inc. (since January
1996); Paralegal and Compliance Officer, various financial companies (July 1992
to January 1996).

LINWOOD C. DOWNS* (age 39) -- Treasurer of the Trust; Chief Financial Officer
and Senior Vice President, Signature Financial Group; Treasurer, CFBDS.

TAMIE EBANKS-CUNNINGHAM* (age 27) -- Assistant Secretary of the Trust; Office
Manager, Signature Financial Group (Cayman) Ltd. (since April 1995);
Administrator, Cayman Islands Primary School (prior to April 1995). Her address
is P.O. Box 2494, Elizabethan Square, George Town, Grand Cayman, Cayman
Islands, B.W.I.

<PAGE>

SUSAN JAKUBOSKI* (age 36) -- Vice President, Assistant Secretary and Assistant
Treasurer of the Trust; Vice President, Signature Financial Group (Cayman) Ltd.

MOLLY S. MUGLER* (age 48) -- Assistant Secretary and Assistant Treasurer of the
Trust; Vice President, Signature Financial Group, Inc.; Assistant Secretary,
CFBDS.

JULIE J. WYETZNER* (age 41) -- Vice President, Assistant Secretary and
Assistant Treasurer of the Trust; Vice President, Signature Financial Group,
Inc.

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

The Trustees of the Trust received the following remuneration from the
sources indicated below during its fiscal year ended October 31, 1999:

<S> <C> <C> <C> <C>
--------------------------- -------------- -------------- --------------- --------------
Pension or Total
Retirement Compensation
Benefits Estimated from Trust
Aggregate Accrued as Annual and Fund
Compensation Part of Fund Benefits Upon Complex Paid
Trustee from Trust(1) Expenses Retirement to Trustees(1)
--------------------------- -------------- -------------- --------------- --------------
Philip W. Coolidge None None None None
--------------------------- -------------- -------------- --------------- --------------
Riley C. Gilley $2,007 None None $65,250
--------------------------- -------------- -------------- --------------- --------------
Diana R. Harrington $2,600 None None $71,250
--------------------------- -------------- -------------- --------------- --------------
Susan B. Kerley $2,562 None None $69,750
--------------------------- -------------- -------------- --------------- --------------
Heath B. McLendon None None None None
--------------------------- -------------- -------------- --------------- --------------
C. Oscar Morong, Jr. $3,053 None None $92,000
--------------------------- -------------- -------------- --------------- --------------
E. Kirby Warren $2,293 None None $62,750
--------------------------- -------------- -------------- --------------- --------------
</TABLE>

(1) Messrs. Coolidge, Gilley, McLendon, Morong and Warren and Mses. Harrington
and Kerley are trustees of 48, 35, 23, 39, 39, 30 and 30 funds, respectively,
of the family of open-end registered investment companies advised or managed by
Citibank, N.A., an affiliate of the Manager.

As of the date of this Statement of Additional Information, there are no
shareholders of the Funds.

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

<PAGE>

have not engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.

MANAGER

SSB Citi is responsible for the overall management of the Funds and
provides certain administrative services to the Funds pursuant to separate
management agreements (the "Management Agreements"). SSB Citi is a wholly owned
subsidiary of Salomon Smith Barney Holdings Inc., which in turn, is a
wholly-owned subsidiary of Citigroup Inc. Unless otherwise terminated, each
Management Agreement with the Trust will continue in effect indefinitely as
long as after the first two years such continuance is specifically approved at
least annually by the Board of Trustees of the Trust or by a vote of a majority
of the outstanding voting securities of the applicable Fund, and, in either
case, by a majority of the Trustees of the Trust who are not parties to the
Management Agreement or interested persons of any such party, at a meeting
called for the purpose of voting on the Management Agreement.

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

Each Management Agreement provides that SSB Citi may render services to
others. Each Management Agreement is terminable without penalty on not more
than 60 days' nor less than 30 days' written notice by the Trust, when
authorized either by a vote of a majority of the outstanding voting securities
of the applicable Fund or by a vote of a majority of the Board of Trustees of
the Trust, or by SSB Citi on not more than 60 days' nor less than 30 days'
written notice, and will automatically terminate in the event of its
assignment. Each Management Agreement with the Trust provides that neither SSB
Citi nor its personnel shall be liable for any error of judgment or mistake of
law or for any omission in the administration or management of the Trust or the
performance of its duties under the Management Agreement, except for willful
misfeasance, bad faith or gross negligence or reckless disregard of its or
their obligations and duties under the Management Agreement with the Trust.

The Funds pay the following aggregate management fees, which are accrued
daily and paid monthly and are based on each Fund's average daily net assets on
an annualized basis for the Fund's then-current fiscal year:

------------------------------------------- -----------------------------
Citi Financial Services Index Portfolio 0.65%
------------------------------------------- -----------------------------
Citi Health Sciences Index Portfolio 0.65%
------------------------------------------- -----------------------------
Citi Technology Index Portfolio 0.65%
------------------------------------------- -----------------------------

Pursuant to a Services Agreement with SSB Citi, CFBDS performs such
sub-administrative duties for the Trust as from time to time are agreed upon by
SSB Citi and CFBDS. For performing such sub-administrative services, CFBDS

<PAGE>

receives compensation as from time to time is agreed upon by SSB Citi, not in
excess of the amount paid to SSB Citi for its services under the Management
Agreements with the Trust. All such compensation to CFBDS is paid by SSB Citi.

DISTRIBUTOR

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

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

The Class A shares of the Funds have adopted a Service Plan (the "Service
Plan") in accordance with Rule 12b-1 under the 1940 Act. Under the Plan, the
Class A shares of a Fund may pay the Distributor, a broker-dealer or financial
institution that has entered into a service agreement with the Distributor
concerning the Class A shares of the Funds or others a monthly distribution and
service fee at an annual rate not to exceed 0.20% of the average daily net
assets represented by Class A shares of a Fund.

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

The Service Plan continues in effect if such continuance is specifically
approved at least annually by a vote of both a majority of the Trust's Trustees
and a majority of the Trustees who are not "interested persons" of the Trust
and who have no direct or indirect financial interest in the operation of the
Service Plan or in any agreement related to the Plan (for purposes of this
paragraph "Qualified Trustees"). The Service Plan requires that the Trust and
the Distributor provide to the Board of Trustees, and the Board of Trustees
review, at least quarterly, a written report of the amounts expended (and the
purposes therefor) under the Service Plan. The Service Plan further provides
that the selection and nomination of the Qualified Trustees is committed to the

<PAGE>

discretion of such Qualified Trustees then in office. The Service Plan may be
terminated with respect to the Class A shares of any Fund at any time by a vote
of a majority of the Trust's Qualified Trustees or by a vote of a majority of
the outstanding voting securities representing the Class A shares of that Fund.
The Service Plan may not be amended to increase materially the amount of a
Fund's permitted expenses thereunder without the approval of a majority of the
outstanding securities representing the Class A shares of that Fund and may not
be materially amended in any case without a vote of a majority of both the
Trustees and Qualified Trustees. The Distributor will preserve copies of any
plan, agreement or report made pursuant to the Service Plan for a period of not
less than six years, and for the first two years the Distributor will preserve
such copies in an easily accessible place.

CODE OF ETHICS

The Trust, the Manager and the Distributor each have adopted a code of
ethics pursuant to Rule 17j-1 under the 1940 Act. Each code of ethics permits
personnel subject to such code to invest in securities, including securities
that may be purchased or held by a Fund. However, the codes of ethics contain
provisions and requirements designed to identify and address certain conflicts
of interest between personal investment activities and the interests of the
Funds. Of course, there can be no assurance that the codes of ethics will be
effective in identifying and addressing all conflicts of interest relating to
personal securities transactions.

EXPENSES

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

TRANSFER AGENT AND CUSTODIAN

The Trust has entered into a Transfer Agency and Service Agreement with
Citi Fiduciary Trust Company ("Citi Fiduciary") pursuant to which Citi
Fiduciary acts as transfer agent for each Fund. Under the Transfer Agency and
Service Agreement, Citi Fiduciary maintains the shareholder account records for
the Funds, handles certain communications between shareholders and the Funds
and distributes dividends and distributions payable by the Funds. For these
services, Citi Fiduciary receives a monthly fee computed on the basis of the
number of shareholder accounts it maintains for a Fund during the month and is
reimbursed for out-of-pocket expenses.

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

The principal business address of Citi Fiduciary is 388 Greenwich Street,
New York, New York 10013. The principal business address of State Street is 225
Franklin Street, Boston, Massachusetts 02110.

<PAGE>

AUDITORS

Deloitte & Touche LLP, independent auditors, 125 Summer Street, Boston,
Massachusetts, have been selected to serve as auditors of the Funds and to
render opinions on each Fund's financial statements.

COUNSEL

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

9. PORTFOLIO TRANSACTIONS

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

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

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

It is possible that certain of the research services received primarily
will benefit one or more other accounts for which SSB Citi exercises investment
discretion. Conversely, a Fund may be the primary beneficiary of services
received as a result of portfolio transactions effected for other accounts.

In certain instances there may be securities that are suitable as an
investment for a Fund as well as for one or more of SSB Citi's other clients.
Investment decisions for each Fund and for SSB Citi's other clients are made
with a view to achieving their respective investment objectives. It may develop

<PAGE>

that a particular security is bought or sold for only one client even though it
might be held by, or bought or sold for, other clients. Likewise, a particular
security may be bought for one or more clients when one or more clients are
selling the same security. Some simultaneous transactions are inevitable when
several clients receive investment advice from the same investment adviser,
particularly when the same security is suitable for the investment objectives
of more than one client. When two or more clients are simultaneously engaged in
the purchase or sale of the same security, the securities are allocated among
clients in a manner believed to be equitable to each. It is recognized that in
some cases this system could adversely affect the price of or the size of the
position obtainable in a security for a Fund. When purchases or sales of the
same security for a Fund and for other portfolios managed by SSB Citi occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large volume purchases or sales.

Because the Funds are newly-offered, they have not paid brokerage
commissions as of the date of this Statement of Additional Information.

10. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES

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

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

The Trust may enter into a merger or consolidation, or sell all or
substantially all of its assets (or all or substantially all of the assets
belonging to any series of the Trust), if approved by a vote of the holders of

<PAGE>

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

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

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

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

11. TAX MATTERS

TAXATION OF THE FUNDS

FEDERAL TAXES. Each Fund is treated as a separate entity for federal
income tax purposes under the Internal Revenue Code of 1986, as amended (the
"Code"). Each Fund has elected to be treated, and intends to qualify each year,
as a "regulated investment company" under Subchapter M of the Code by meeting
all applicable requirements of Subchapter M, including requirements as to the
nature of the Fund's gross income, the amount of Fund distributions, and the
composition of the Fund's portfolio assets. Provided all such requirements are
met, no U.S. federal income or excise taxes generally will be required to be
paid by the Funds. If a Fund should fail to qualify as a "regulated investment
company" for any year, the Fund would incur a regular corporate federal income
tax upon its taxable income and Fund distributions would generally be taxable
as ordinary income to shareholders.

FOREIGN TAXES. Investment income and gains received by a Fund from
non-U.S. securities may be subject to non-U.S. taxes. The U.S. has entered into
tax treaties with many other countries that may entitle a Fund to a reduced
rate of tax or an exemption from tax on such income. Each Fund intends to

<PAGE>

qualify for treaty reduced rates where applicable. It is not possible, however,
to determine a Fund's effective rate of non-U.S. tax in advance since the
amount of the Fund's assets to be invested within various countries is not
known. It is not anticipated that shareholders will be able to claim any
deduction or credit for any part of the foreign taxes paid by a Fund.

TAXATION OF SHAREHOLDERS

TAXATION OF DISTRIBUTIONS. Shareholders of a Fund will generally have to
pay federal income taxes and any state or local taxes on the dividends and
capital gain distributions they receive from the Fund. Dividends from ordinary
income and any distributions from net short-term capital gains are taxable to
shareholders as ordinary income for federal income tax purposes, whether the
distributions are made in cash or in additional shares. Distributions of net
capital gains (i.e., the excess of net long-term capital gains over net
short-term capital losses), whether made in cash or in additional shares, are
taxable to shareholders as long-term capital gains without regard to the length
of time the shareholders have held their shares. Any Fund dividend that is
declared in October, November, or December of any calendar year, that is
payable to shareholders of record in such a month, and that is paid the
following January, will be treated as if received by the shareholders on
December 31 of the year in which the dividend is declared.

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

DIVIDENDS-RECEIVED DEDUCTION. The portion of each Fund's ordinary income
dividends attributable to dividends received in respect of equity securities of
U.S. issuers is normally eligible for the dividends received deduction for
corporations subject to U.S. federal income taxes. Availability of the
deduction for particular shareholders is subject to certain limitations, and
deducted amounts may be subject to the alternative minimum tax and result in
certain basis adjustments.

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

<PAGE>

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

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

EFFECTS OF CERTAIN INVESTMENTS AND TRANSACTIONS

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

CERTAIN DEBT INVESTMENTS. Any investment by a Fund in zero coupon bonds,
deferred interest bonds, payment-in-kind bonds, certain stripped securities,
and certain securities purchased at a market discount will cause a Fund to
recognize income prior to the receipt of cash payments with respect to those
securities. In order to distribute this income and avoid a tax on the Fund,
the Fund may be required to liquidate portfolio securities that it might
otherwise have continued to hold, potentially resulting in additional taxable
gain or loss to the Fund. An investment by a Fund in residual interests
of a CMO that has elected to be treated as a real estate mortgage investment
conduit, or "REMIC," can create complex tax problems, especially if the Fund has
state or local governments or other tax-exempt organizations as shareholders.

12. FINANCIAL STATEMENTS

The Funds are newly-offered and have not issued financial statements as of
the date of this Statement of Additional Information.

<PAGE>

13. OTHER INFORMATION

The Funds intend to rely on licenses related to the GSSI Financials Index,
GSSI Healthcare Index, and the GSTI Composite Index, as applicable. In the
absence of the licenses, the Funds may not be able to pursue their investment
objectives. Although not currently anticipated, the licenses can be terminated.
The Funds are not sponsored, endorsed, sold or promoted by Goldman, Sachs & Co.
("Goldman Sachs") or any of its affiliates. Neither Goldman Sachs nor any of
its affiliates makes any representation or warranty, express or implied, to the
shareholders of the Funds or any member of the public regarding the
advisability of investing in securities generally or in the Funds particularly
or the ability of the Indexes to track the stock market performance of their
respective sectors. Goldman Sachs' only relationship to the Manager or the
Funds is the licensing of certain trademarks, trade names and servicemarks of
Goldman Sachs and of the Indexes which are determined, composed and calculated
by Goldman Sachs without regard to the Manager or the Funds. Goldman Sachs has
no obligation to take the needs of the Manager, the Funds, or their
shareholders into consideration in determining, composing or calculating the
Indexes. Goldman Sachs is not responsible for and has not participated in the
determination of the prices of the Funds or the timing of the issuance or sale
of shares of the Funds or in the determination or calculation of the redemption
price per share. Goldman Sachs has no obligation or liability in connection
with the administration, marketing or trading of the Funds. Goldman Sachs does
not guarantee the accuracy and/or the completeness of the Indexes or any data
included therein, and Goldman Sachs hereby expressly disclaims any and all
liability for any errors, omissions or interruptions therein. Goldman Sachs
makes no warranty, express or implied, as to results to be obtained by the
Funds, their shareholders, or any other person or entity from the use of the
Indexes or any data included therein. Goldman Sachs makes no express or implied
warranties, and expressly disclaims all warranties of merchantability or
fitness for a particular purpose or use with respect to the Indexes or any data
included therein. Without limiting any of the foregoing, in no event shall
Goldman Sachs have any liability for any special, punitive, indirect or
consequential damages (including lost profits), even if notified of the
possibility of such damages.

Item 23. Exhibits.

* a(1) Amended and Restated Declaration of Trust of the
Registrant
**, ***,*******, a(2) Amendments to the Amended and Restated Declaration of
******** Trust of the Registrant
********* and herewith a(3) Forms of Amendments to the Amended and Restated
Declaration of Trust of the Registrant
*** b(1) Amended and Restated By-Laws of the Registrant
*** b(2) Amendments to the Amended and Restated By-Laws of the
Registrant
********* b(3) Form of Amendment to the Amended and Restated By-Laws
of the Registrant
d Form of Management Agreement between the
Registrant and SSB Citi Fund Management
LLC ("SSB Citi"), as manager to Citi
Financial Services Index Portfolio, Citi
Health Sciences Index Portfolio, and Citi
Technology Index Portfolio (collectively,
the "Funds")
********** e(1) Form of Distribution Agreement between the Registrant
and CFBDS, Inc. (the "Distributor"), as distributor
with respect to the Class A shares of the Funds
********** e(2) Form of Distribution Agreement between the Registrant
and Distributor with respect to the Class D shares of
the Funds
*** g(1) Custodian Contract between the Registrant and State
Street Bank and Trust Company ("State Street"), as
custodian
********** g(2) Form of Letter Agreement adding the Funds to the
Custodian Contract between the Registrant and State
Street
********** h(1) Transfer Agency Agreement with Citi Fiduciary Trust
Company, as transfer agent
********** h(2) Form of Letter Agreement adding the Funds to the
Transfer Agency and Servicing Agreement with Citi
Fiduciary Trust Company, as transfer agent
********** i Opinion and consent of counsel
m Form of Service Plan of the Registrant with respect
to the Class A shares of the Funds
***** o Multiple Class Plan of the Registrant
********* p(1) Code of Ethics for the Registrant and SSB Citi
********* p(2) Code of Ethics for Distributor
**** and q(1) Powers of Attorney for the Registrant
******

----------------------
* Incorporated herein by reference to Post-Effective
Amendment No. 20 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on December 31, 1996.
** Incorporated herein by reference to Post-Effective
Amendment No. 25 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on April 18, 1997.
*** Incorporated herein by reference to Post-Effective
Amendment No. 26 to the Registrant's Registration Statement

<PAGE>

on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on December 30, 1997.
**** Incorporated herein by reference to Post-Effective
Amendment No. 27 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on February 24, 1998.
***** Incorporated herein by reference to Post-Effective
Amendment No. 31 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on February 12, 1999.
****** Incorporated herein by reference to Post-Effective
Amendment No. 35 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on April 16, 1999.
******* Incorporated herein by reference to Post-Effective
Amendment No. 37 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on December 29, 1999.
******** Incorporated herein by reference to Post-Effective
Amendment No. 38 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on February 28, 2000.
********* Incorporated herein by reference to Post-Effective
Amendment No. 39 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on June 2, 2000.
********** Incorporated herein by reference to Post-Effective
Amendment No. 40 to the Registrant's Registration Statement
on Form N-1A (File No. 2-90518) as filed with the
Securities and Exchange Commission on June 16, 2000.

</TABLE>

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

Not applicable.

Item 25. Indemnification.

Reference is hereby made to (a) Article V of the Registrant's Declaration
of Trust, filed as an Exhibit to Post-Effective Amendment No. 20 to its
Registration Statement on Form N-1A; (b) Section 6 of the Distribution
Agreements between the Registrant and Distributor, filed as Exhibits to
Post-Effective Amendment No. 40 to the Trust's Registration Statement on Form
N-1A; and (c) the undertaking of the Registrant regarding indemnification set
forth in its Registration Statement on Form N-1A.

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

Item 26. Business and Other Connections of Investment Adviser.

Manager - SSB Citi Fund Management LLC (successor to SSBC Fund Management
Inc.) ("SSB Citi") (formerly known as Mutual Management Corp.)

SSB Citi was incorporated in December 1968 under the laws of the State of
Delaware and converted to a Delaware limited liability company in 1999. SSB
Citi is a wholly owned subsidiary of Salomon Smith Barney Holdings Inc.,

<PAGE>

formerly known as Smith Barney Holdings Inc., which in turn is a wholly owned
subsidiary of Citigroup Inc. ("Citigroup"). SSB Citi is registered as an
investment adviser under the Investment Advisers Act of 1940 (the "1940 Act").

The list required by this Item 26 of officers and directors of SSB Citi
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by SSB Citi pursuant to the Investment Advisers Act of 1940 Act
(the "Advisers Act") (SEC File No. 801-8314).

Item 27. Principal Underwriters.

(a) CFBDS, the Registrant's distributor, is also the distributor
for CitiFunds(SM) International Growth & Income Portfolio,
CitiFunds(SM) International Growth Portfolio, CitiFunds(SM) U.S.
Treasury Reserves, CitiFunds(SM) Cash Reserves, CitiFunds(SM) Premium
U.S. Treasury Reserves, CitiFunds(SM) Premium Liquid Reserves,
CitiFunds(SM) Institutional U.S. Treasury Reserves, CitiFunds(SM)
Institutional Liquid Reserves, CitiFunds(SM) Institutional Cash
Reserves, CitiFunds(SM) Tax Free Reserves, CitiFunds(SM)
Institutional Tax Free Reserves, CitiFunds(SM) California Tax Free
Reserves, CitiFunds(SM) Connecticut Tax Free Reserves, CitiFunds(SM)
New York Tax Free Reserves, CitiFunds(SM) Intermediate Income
Portfolio, CitiFunds(SM) Short-Term U.S. Government Income Portfolio,
CitiFunds(SM) New York Tax Free Income Portfolio, CitiFunds(SM)
National Tax Free Income Portfolio, CitiFunds(SM) California Tax Free
Income Portfolio, CitiFunds(SM) Small Cap Value Portfolio,
CitiFunds(SM) Large Cap Growth Portfolio, CitiFunds(SM) Small Cap
Growth Portfolio, CitiFunds(SM) Balanced Portfolio, CitiSelect(R)
Folio 100 Income, CitiSelect(R) Folio 200 Conservative, CitiSelect(R)
Folio 300 Balanced, CitiSelect(R) Folio 400 Growth, CitiSelect(R)
Folio 500 Growth Plus, CitiSelect(R) VIP Folio 200 Conservative,
CitiSelect(R) VIP Folio 300 Balanced, CitiSelect(R) VIP Folio 400
Growth, CitiSelect(R) VIP Folio 500 Growth Plus and CitiFunds(SM)
Small Cap Growth VIP Portfolio. CFBDS is also the placement agent for
Large Cap Growth Portfolio, Small Cap Growth Portfolio, High Yield
Portfolio, U.S. Fixed Income Portfolio, Government Income Portfolio,
International Equity Portfolio, Large Cap Value Portfolio, Small Cap
Value Portfolio, International Portfolio, Foreign Bond Portfolio, Tax
Free Reserves Portfolio, Cash Reserves Portfolio and U.S. Treasury
Reserves Portfolio. CFBDS also serves as the distributor for the
following funds: The Travelers Fund U for Variable Annuities, The
Travelers Fund VA for Variable Annuities, The Travelers Fund BD for
Variable Annuities, The Travelers Fund BD II for Variable Annuities,
The Travelers Fund BD III for Variable Annuities, The Travelers Fund
BD IV for Variable Annuities, The Travelers Fund ABD for Variable
Annuities, The Travelers Fund ABD II for Variable Annuities, The
Travelers Separate Account PF for Variable Annuities, The Travelers
Separate Account PF II for Variable Annuities, The Travelers Separate
Account QP for Variable Annuities, The Travelers Separate Account TM
for Variable Annuities, The Travelers Separate Account TM II for
Variable Annuities, The Travelers Separate Account Five for Variable
Annuities, The Travelers Separate Account Six for Variable Annuities,
The Travelers Separate Account Seven for Variable Annuities, The
Travelers Separate Account Eight for Variable Annuities, The
Travelers Fund UL for Variable Annuities, The Travelers Fund UL II
for Variable Annuities, The Travelers Variable Life Insurance
Separate Account One, The Travelers Variable Life Insurance Separate
Account Two, The Travelers Variable Life Insurance Separate Account

<PAGE>

Three, The Travelers Variable Life Insurance Separate Account Four,
The Travelers Separate Account MGA, The Travelers Separate Account
MGA II, The Travelers Growth and Income Stock Account for Variable
Annuities, The Travelers Quality Bond Account for Variable Annuities,
The Travelers Money Market Account for Variable Annuities, The
Travelers Timed Growth and Income Stock Account for Variable
Annuities, The Travelers Timed Short-Term Bond Account for Variable
Annuities, The Travelers Timed Aggressive Stock Account for Variable
Annuities, The Travelers Timed Bond Account for Variable Annuities,
Small Cap Fund, Government Fund, Growth Fund, Growth and Income Fund,
International Equity Fund, Mid Cap Fund, Municipal Bond Fund, Select
Small Cap Portfolio, Select Government Portfolio, Select Growth
Portfolio, Select Growth and Income Portfolio, Select Mid Cap
Portfolio, Balanced Investments, Emerging Markets Equity Investments,
Government Money Investments, High Yield Investments, Intermediate
Fixed Income Investments, International Equity Investments,
International Fixed Income Investments, Large Capitalization Growth
Investments, Large Capitalization Value Equity Investments, Long-
Term Bond Investments, Mortgage Backed Investments, Municipal Bond
Investments, S&P 500 Index Investments, Small Capitalization Growth
Investments, Small Capitalization Value Equity Investments,
Multi-Sector Fixed Income Investments, Multi-Strategy Market Neutral
Investments, Appreciation Portfolio, Diversified Strategic Income
Portfolio, Emerging Growth Portfolio, Equity Income Portfolio, Equity
Index Portfolio, Growth & Income Portfolio, Intermediate High Grade
Portfolio, International Equity Portfolio, Money Market Portfolio,
Total Return Portfolio, Smith Barney Adjustable Rate Government
Income Fund, Smith Barney Aggressive Growth Fund Inc., Smith Barney
Appreciation Fund Inc., Smith Barney Arizona Municipals Fund Inc.,
Smith Barney California Municipals Fund Inc., Balanced Portfolio,
Conservative Portfolio, Growth Portfolio, High Growth Portfolio,
Income Portfolio, Global Portfolio, Select Balanced Portfolio, Select
Conservative Portfolio, Select Growth Portfolio, Select High Growth
Portfolio, Select Income Portfolio, Concert Social Awareness Fund,
Smith Barney Large Cap Blend Fund, Smith Barney Fundamental Value
Fund Inc., Large Cap Value Fund, Short-Term High Grade Bond Fund,
U.S. Government Securities Fund, Smith Barney Balanced Fund, Smith
Barney Convertible Fund, Smith Barney Diversified Strategic Income
Fund, Smith Barney Exchange Reserve Fund, Smith Barney High Income
Fund, Smith Barney Municipal High Income Fund, Smith Barney Premium
Total Return Fund, Smith Barney Total Return Bond Fund, Cash
Portfolio, Government Portfolio, Municipal Portfolio, Concert
Peachtree Growth Fund, Smith Barney Contrarian Fund, Smith Barney
Government Securities Fund, Smith Barney Hansberger Global Small Cap
Value Fund, Smith Barney Hansberger Global Value Fund, Smith Barney
Investment Grade Bond Fund, Smith Barney Premier Selections Fund,
Smith Barney Small Cap Value Fund, Smith Barney Small Cap Growth
Fund, Smith Barney Intermediate Maturity California Municipals Fund,
Smith Barney Intermediate Maturity New York Municipals Fund, Smith
Barney Large Capitalization Growth Fund, Smith Barney S&P 500 Index
Fund, Smith Barney Mid Cap Blend Fund, Smith Barney EAFE Index Fund,
Smith Barney US 5000 Index Fund, Smith Barney Managed Governments
Fund Inc., Smith Barney Managed Municipals Fund Inc., Smith Barney
Massachusetts Municipals Fund, Cash Portfolio, Government Portfolio,
Retirement Portfolio, California Money Market Portfolio, Florida
Portfolio, Georgia Portfolio, Limited Term Portfolio, National
Portfolio, Massachusetts Money Market Portfolio, New York Money
Market Portfolio, New York Portfolio, Pennsylvania Portfolio, Smith
Barney Municipal Money Market Fund, Inc., Smith Barney Natural
Resources Fund Inc., Smith Barney Financial Services Fund, Smith
Barney Health Sciences Fund, Smith Barney Technology Fund, Smith
Barney New Jersey Municipals Fund Inc., Smith Barney Oregon

<PAGE>

Municipals Fund, Zeros Plus Emerging Growth Series 2000, Smith Barney
Security and Growth Fund, Smith Barney Small Cap Blend Fund, Inc.,
Smith Barney Telecommunications Income Fund, Income and Growth
Portfolio, Reserve Account Portfolio, U.S. Government/High Quality
Securities Portfolio, Emerging Markets Portfolio, European Portfolio,
Global Government Bond Portfolio, International Equity Portfolio,
Pacific Portfolio, AIM Capital Appreciation Portfolio, Smith
Aggressive Growth Portfolio, Smith Mid Cap Portfolio, Alliance Growth
Portfolio, INVESCO Global Strategic Income Portfolio, MFS Total
Return Portfolio, Putnam Diversified Income Portfolio, Smith Barney
High Income Portfolio, Smith Barney Large Cap Value Portfolio, Smith
Barney International Equity Portfolio, Smith Barney Large
Capitalization Growth Portfolio, Smith Barney Money Market Portfolio,
Smith Barney Pacific Basin Portfolio, Travelers Managed Income
Portfolio, Van Kampen Enterprise Portfolio, Centurion U.S. Equity
Fund, Centurion International Equity Fund, Centurion U.S. Contra
Fund, Centurion International Contra Fund, Global High-Yield Bond
Fund, International Equity Fund, Emerging Opportunities Fund, Core
Equity Fund, Long-Term Bond Fund, Global Dimensions Fund L.P.,
Citicorp Private Equity L.P., AIM V.I. Capital Appreciation Fund, AIM
V.I. Government Series Fund, AIM V.I. Growth Fund, AIM V.I.
International Equity Fund, AIM V.I. Value Fund, Fidelity VIP Growth
Portfolio, Fidelity VIP High Income Portfolio, Fidelity VIP Equity
Income Portfolio, Fidelity VIP Overseas Portfolio, Fidelity VIP II
Contrafund Portfolio, Fidelity VIP II Index 500 Portfolio, MFS World
Government Series, MFS Money Market Series, MFS Bond Series, MFS
Total Return Series, MFS Research Series, MFS Emerging Growth Series,
Salomon Brothers Institutional Money Market Fund, Salomon Brothers
Cash Management Fund, Salomon Brothers New York Municipal Money
Market Fund, Salomon Brothers National Intermediate Municipal Fund,
Salomon Brothers U.S. Government Income Fund, Salomon Brothers High
Yield Bond Fund, Salomon Brothers International Equity Fund, Salomon
Brothers Strategic Bond Fund, Salomon Brothers Large Cap Growth Fund,
Salomon Brothers Balanced Fund, Salomon Brothers Asia Growth Fund,
Salomon Brothers Capital Fund Inc, Salomon Brothers Investors Value
Fund Inc, Salomon Brothers Opportunity Fund Inc, Salomon Brothers
Institutional High Yield Bond Fund, Salomon Brothers Institutional
Emerging Markets Debt Fund, Salomon Brothers Variable Investors Fund,
Salomon Brothers Variable Capital Fund, Salomon Brothers Variable
Total Return Fund, Salomon Brothers Variable High Yield Bond Fund,
Salomon Brothers Variable Strategic Bond Fund, Salomon Brothers
Variable U.S. Government Income Fund, Salomon Brothers Variable Asia
Growth Fund, and Salomon Brothers Variable Small Cap Growth Fund.

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

Item 28. Location of Accounts and Records.

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

NAME ADDRESS

CFBDS, Inc. 21 Milk Street

<PAGE>

(distributor) Boston, MA 02109

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

Citi Fiduciary Trust Company 388 Greenwich Street
(transfer agent) New York, New York 10013

SSB Citi Fund Management LLC 388 Greenwich Street
(manager) New York, New York 10013

Item 29. Management Services.

Not applicable.

Item 30. Undertakings.

Not applicable.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston and Commonwealth of
Massachusetts on the 30th day of June, 2000.

CITIFUNDS TRUST I

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

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities indicated below on June 30, 2000.

Signature Title

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

Linwood C. Downs Principal Financial Officer and
---------------------------- Principal Accounting Officer
Linwood C. Downs

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

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

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

Heath B. McLendon* Trustee
----------------------------
Heath B. McLendon

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

<PAGE>

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

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

<PAGE>

EXHIBIT INDEX

Exhibit
No.: Description:

a(3) Form of Amendments to the Amended and Restated
Declaration of Trust of the Registrant
d Form of Management Agreement between the Registrant and SSB Citi
Fund Management LLC ("SSB Citi"), as manager to Citi Financial
Services Index Portfolio, Citi Health Sciences Index Portfolio,
and Citi Technology Index Portfolio (collectively, the "Funds")
m Form of Service Plan of the Registrant with respect
to the Class A shares of the Funds