CITIFUNDS TRUST I, 485APOS, 2000-06-16

CITIFUNDS TRUST I
485APOS, 2000-06-16

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As filed with the Securities and Exchange Commission on June 16, 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. 40

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
AMENDMENT NO. 41

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 seventy-five days after
filing pursuant to paragraph (a) of Rule 485.

---------------
* This filing relates only to the series of the Trust designated as Citi
Financial Services Portfolio, Citi Health Sciences Portfolio and Citi
Technology Portfolio.

<PAGE>

PROSPECTUS
SEPTEMBER __, 2000

CITI SECTOR FUNDS

Citi Financial Services Portfolio

Citi Health Sciences Portfolio

Citi Technology 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..................................................

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................................................................

<PAGE>

THE FUNDS

GOALS

Each Fund seeks long-term capital appreciation by investing primarily in common
stocks. Each Fund may change its objective without shareholder approval.

PRINCIPAL INVESTMENT STRATEGIES

CITI FINANCIAL SERVICES PORTFOLIO

Key investments. The Fund normally invests at least 80% of its assets in
securities of companies principally engaged in the financial services business.
These companies may include, for example, commercial banks, savings and loan
associations, broker-dealers, investment banks, investment advisers, insurance
companies, real estate-related companies, leasing companies, and consumer and
industrial finance companies. The Fund may invest its assets in securities of
foreign issuers in addition to securities of domestic issuers. The Fund invests
primarily in companies with medium and large market capitalizations. To a
lesser extent, the Fund also may invest in common stocks of companies with
small market capitalizations. Small and medium market capitalization companies
are those companies with market capitalizations under $5 billion.

Selection process. The Fund normally invests at least 80% of its assets in
companies whose principal business is in the financial services sector. The
remainder of the Fund's assets are not required to be invested in that sector.
The Fund generally maintains a portion of its assets in cash and liquid
securities to meet redemption requests and pay the Fund's expenses. To
determine whether a company's principal business is in the sector, the company
must meet at least one of the following tests:

[] At least 50% of its gross income or its net sales must come from activities
in the sector;

[] At least 50% of its assets must be devoted to producing revenues from the
sector; or

[] Based on other available information, the manager determines that the
company's primary business is within the sector.

In buying and selling securities, the Fund relies on fundamental analysis of
each issuer and its potential for success in light of its current financial
condition and its industry position. Factors considered, among other things,
include long-term growth potential, earnings estimates and quality of
management.

The Fund may lend its securities to earn income for the Fund.

The Fund may, but it is not required to, use various techniques, such as buying
and selling options and futures contracts, to increase or decrease its exposure
to changing security prices or other factors that affect security values. The
Fund may engage in foreign currency transactions solely to manage its exposure
to foreign securities. If the Fund's strategies do not work as intended, the
Fund may not achieve its objective.

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

<PAGE>

[] Are looking for an investment with potentially greater return but higher
risk than a fund investing primarily in fixed income securities

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

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

CITI HEALTH SCIENCES PORTFOLIO

Key investments. The Fund normally invests at least 80% of its assets in
securities of companies principally engaged in the design, manufacture or sale
of products or services used for or in connection with health care or medicine.
These companies may include, for example, pharmaceutical companies; companies
involved in biotechnology, medical diagnostic, biochemical or other health care
research and development; companies involved in the operation of health care
facilities; and other companies involved in the design, manufacture or sale of
health care-related products or services such as medical, dental and optical
products, hardware, insurance or services. The Fund may invest its assets in
securities of foreign issuers in addition to securities of domestic issuers.
The Fund invests primarily in companies with medium and large market
capitalization. To a lesser extent, the Fund also may invest in common stocks
of companies with small market capitalizations. Small and medium market
capitalization companies are those companies with market capitalizations under
$5 billion.

Selection process. The Fund normally invests at least 80% of its assets in
companies whose principal business is in the health sciences sector. The
remainder of the Fund's assets are not required to be invested in that sector.
The Fund generally maintains a portion of its assets in cash and liquid
securities to meet redemption requests and pay the Fund's expenses. To
determine whether a company's principal business is in the sector, the company
must meet at least one of the following tests:

[] At least 50% of its gross income or its net sales must come from activities
in the sector;

[] At least 50% of its assets must be devoted to producing revenues from the
sector; or

[] Based on other available information, the manager determines that the
company's primary business is within the sector.

The Fund may lend its securities to earn income for the Fund.

The Fund may, but is not required to, use various techniques, such as buying
and selling options and futures contracts, to increase or decrease the Fund's
exposure to changing security prices or other factors that affect security
values. The Fund may engage in foreign currency transactions solely to manage
its exposure to foreign securities. If the Fund's strategies do not work as
intended, the Fund may not achieve its objective.

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

<PAGE>

[] Are looking for an investment with potentially greater return but higher
risk than a fund investing primarily in fixed income securities

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

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

CITI TECHNOLOGY PORTFOLIO

Key investments. The Fund normally invests at least 80% of its assets in
securities of companies principally engaged in offering, using or developing
products, processes or services that will provide or will benefit significantly
from technological advances and improvements. These companies may include, for
example, companies that develop, produce or distribute products or services in
the computer, semi-conductor, software, electronics, media, communications,
health care and biotechnology sectors. The Fund may invest its assets in
securities of foreign issuers in addition to securities of domestic issuers.
The Fund invests primarily in companies with medium and large market
capitalizations. To a lesser extent, the Fund also may invest in common stocks
of companies with small market capitalizations. Small and medium market
capitalization companies are those companies with market capitalizations under
$5 billion.

Selection process. The Fund normally invests at least 80% of its assets in
companies whose principal business is in the technology sector. The remainder
of the Fund's assets are not required to be invested in that sector. The Fund
generally maintains a portion of its assets in cash and liquid securities to
meet redemption requests and pay the Fund's expenses. To determine whether a
company's principal business is in the sector, the company must meet at least
one of the following tests:

[] At least 50% of its gross income or its net sales must come from activities
in the sector;

[] At least 50% of its assets must be devoted to producing revenues from the
sector; or

[] Based on other available information, the manager determines that the
company's primary business is within the sector.

The Fund may lend its securities to earn income for the Fund.

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

<PAGE>

[] Are looking for an investment with potentially greater return but higher
risk than a fund investing primarily in fixed income securities

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

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

PRINCIPAL RISKS

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

[] Stock markets are volatile and can decline significantly in response to
adverse issuer, political, regulatory, market or economic developments.
Different parts of the market can react differently to these developments.

[] Foreign markets can be 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.
Currency fluctuations may adversely impact a Fund's investments.

[] The value of an individual security or particular type of security can be
more volatile than the market as a whole and can perform differently than
the market as a whole. The value of smaller capitalized companies may
involve greater risks such as limited product lines, markets and financial
or managerial resources.

[] 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. Each Fund's
investments are spread across the sector on which it focuses. However,
because those investments are limited to a comparatively narrow segment of
the economy, the Fund's investments are not as diversified as most mutual
funds, and far less diversified than the broad securities markets. This
means that each Fund tends to be more volatile than other mutual funds, and
the values of its portfolio investments tend to go up and down more rapidly.
As a result, the value of your investment in a Fund may rise or fall
rapidly.

[] The manager's judgment about the attractiveness, growth prospects, value or
potential appreciation of a particular stock may prove to be incorrect.

Each Fund is also exposed to the special risks of investing in its sector:

[] CITI FINANCIAL SERVICES 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.

[] CITI HEALTH SCIENCES 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 issuer of a security may adversely affect the
issuer, the market value of the security 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.

<PAGE>

[] CITI TECHNOLOGY 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.

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

<S> <C> <C> <C> <C> <C> <C>
------------------------- ------------------------ ------------------------------ --------------------------
Citi Financial Services Citi Health Sciences Portfolio Citi Technology Portfolio
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 0.80% 0. 80% 0. 80% 0. 80% 0.95% 0.95%
------------------------- ------------ ----------- -------------- --------------- ------------ -------------
Distribution and
Service (12b-1) Fees 0.25% None 0.25% None 0.25% None
------------------------- ------------ ----------- -------------- --------------- ------------ -------------
Other Expenses
(administrative and
other expenses) 0.45% 0.45% 0.45% 0.45% 0.40% 0.40%
------------------------- ------------ ----------- -------------- --------------- ------------ -------------
TOTAL ANNUAL FUND
OPERATING EXPENSES* 1.50% 1.25% 1.50% 1.25% 1.60% 1.35%
------------------------- ------------ ----------- -------------- --------------- ------------ -------------
</TABLE>

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

<S> <C> <C> <C> <C> <C> <C>
------------------------ -------------------------------- ---------------------------
Citi Financial Citi Health Sciences Portfolio Citi Technology Portfolio
Services 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 Portfolio
Class A $153 $474
Class D $127 $397
------------------------------------------- ----------------- -----------------
Citi Health Sciences Portfolio
Class A $153 $474
Class D $127 $397
------------------------------------------- ----------------- -----------------
Citi Technology Portfolio
Class A $163 $505
Class D $137 $428
------------------------------------------- ----------------- -----------------

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, utilizing a portfolio management team
approach, manages each Fund's investment portfolio and its general operations.
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 Portfolio 0.80%
----------------------------------- -------------------------------------
Citi Health Sciences Portfolio 0.80%
----------------------------------- -------------------------------------
Citi Technology Portfolio 0.95%
----------------------------------- -------------------------------------

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 0.25% 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.

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.

INVESTMENT STRATEGIES

FOREIGN INVESTMENTS

Each Fund's investments in securities of foreign issuers involve greater risk
than investments in securities of U.S. issuers. Many foreign countries the
Funds may invest in have markets that are less liquid and more volatile than
markets in the U.S. In some foreign countries, less information is available
about foreign issuers and markets because of less rigorous accounting and
regulatory standards than in the U.S. Currency fluctuations could erase
investment gains or add to investment losses. The risks of investing in foreign
securities are greater for securities of emerging market issuers because
political or economic instability, lack of market liquidity, and negative
government actions like currency controls or seizure of private businesses or
property are more likely.

<PAGE>

DERIVATIVES AND HEDGING TECHNIQUES

Each Fund may, but need not, use derivatives, such as futures and options on
securities, securities indices or currencies; options on futures contracts;
forward currency contracts; and interest rate or currency swaps for any of the
following purposes:

[] To hedge against the economic impact of adverse changes in the market
value of its securities, because of changes in stock market prices,
currency exchange rates or interest rates

[] Settle transactions in securities quoted in foreign currencies

[] As a substitute for buying or selling securities

A derivative contract will obligate or entitle the Fund to deliver or receive
an asset or cash payment based on the change in value of one or more
securities, currencies, or indices. Evan a small investment in derivative
contracts can have a big impact on each Fund's stock market, currency and
interest rate exposure. Therefore, using derivatives can disproportionately
increase losses and reduce opportunities for gains when stock prices, currency
rates or interest rates 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.

DEFENSIVE INVESTING

Each Fund may depart from its principal investment strategies in response to
adverse market, economic or political conditions by taking temporary defensive
positions in all types of money market and short-term debt securities. If a
Fund takes a temporary defensive position, it may be unable to achieve its
investment goal.

MASTER/FEEDER OPTION

Each Fund may in the future seek to achieve its investment objective by
investing all of its net assets in another investment company having a similar
investment objective and investment policies as those of the Fund.

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.

<PAGE>

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
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 Funds' 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.

<PAGE>

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
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.

Each Fund's currency conversions are done when the London Stock Exchange
closes. 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

<PAGE>

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,
investors may want to consider effecting redemptions by calling 1-800-______.
However, investors 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.

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.

<PAGE>

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.

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 Portfolio
Citi Health Sciences Portfolio
Citi Technology 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 Portfolio, Citi Health
Sciences Portfolio, and Citi Technology 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 ..............................................__

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 Portfolio, Citi Health Sciences Portfolio, and Citi Technology
Portfolio (collectively, the "Funds").

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
on 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").

2. INVESTMENT OBJECTIVES AND POLICIES

The investment objective (or goal) of each Fund is to seek long-term
capital appreciation by investing primarily in common stocks.

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

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

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 portfolio managers' investment strategies for the
Funds, 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 PORTFOLIO

Financial Services Portfolio seeks long-term capital appreciation by
investing primarily in common stocks. The Fund normally invests at least 80% of
its assets in securities of companies principally engaged in the financial

<PAGE>

services business. These companies may include, for example, commercial banks,
savings and loan associations, broker-dealers, investment banks, investment
advisers, insurance companies, real estate-related companies, leasing
companies, and consumer and industrial finance companies.

HEALTH SCIENCES PORTFOLIO

Health Sciences Portfolio seeks long-term capital appreciation by
investing primarily in common stocks. The Fund normally invests at least 80% of
its assets in securities of companies principally engaged in the design,
manufacture, or sale of products or services used for or in connection with
health care or medicine. These companies may include, for example,
pharmaceutical companies; companies involved in biotechnology, medical
diagnostic, biochemical or other health care research and development;
companies involved in the operation of health care facilities; and other
companies involved in the design, manufacture, or sale of health care-related
products or services such as medical, dental and optical products, hardware,
insurance or services.

TECHNOLOGY PORTFOLIO

Technology Portfolio seeks long-term capital appreciation by investing its
assets primarily in common stocks. The Fund normally invests at least 80% of
its assets in securities of companies principally engaged in offering, using or
developing products, processes or services that will provide or will benefit
significantly from technological advances and improvements. These companies may
include, for example, companies that develop, produce or distribute products or
services in the computer, semi-conductor, software, electronics, media,
communications, health care, and biotechnology sectors.

EACH FUND

Each Fund may invest its assets in securities of foreign issuers in
addition to securities of domestic issuers. Because each Fund is considered
non-diversified, a Fund may invest a significant percentage of its assets in a
single issuer.

In buying and selling securities for each Fund, the Manager relies on
fundamental analysis of each issuer and its potential for success in light of
its current financial condition and its industry position. Factors considered
include long-term growth potential, earnings estimates and quality of
management.

The Manager may lend each Fund's securities to broker-dealers or other
institutions to earn income for the Fund. The Manager may, but is not required
to, use various techniques, such as buying and selling options and futures
contracts, to increase or decrease a Fund's exposure to changing security
prices or other factors that affect security values. Each Fund may engage in
foreign currency transactions solely to manage its exposure to foreign
securities. If the Manager's strategies do not work as intended, a Fund may not
achieve its objective.

Under normal market conditions, the majority of a Fund's portfolio will
consist of common stock, but it also may contain money market instruments for
cash management purposes. Each Fund reserves the right, as a defensive measure,
to hold money market securities, including repurchase agreements or cash, in
such proportions as, in the opinion of management, prevailing market or
economic conditions warrant. If a Fund takes a temporary defensive position, it
may be unable to achieve its investment goal.

<PAGE>

EQUITY SECURITIES. Each Fund will normally invest at least 80% of its
assets in equity securities, including primarily common stocks and, to a lesser
extent, securities convertible into common stock and rights to subscribe for
common stock. Common stocks represent an equity (ownership) interest in a
corporation. Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's financial
condition and on overall market and economic conditions.

WHEN-ISSUED SECURITIES AND DELAYED-DELIVERY TRANSACTIONS. Each Fund may
purchase securities on a "when-issued" basis, for delayed delivery (i.e.,
payment or delivery occur beyond the normal settlement date at a stated price
and yield) or on a forward commitment basis. No Fund intends to engage in these
transactions for speculative purposes, but only in furtherance of its
investment goal. These transactions occur when securities are purchased or sold
by a Fund with payment and delivery taking place in the future to secure what
is considered an advantageous yield and price to a Fund at the time of entering
into the transaction. The payment obligation and the interest rate that will be
received on when-issued securities are fixed at the time the buyer enters into
the commitment. Because of fluctuations in the value of securities purchased or
sold on a when-issued, delayed-delivery basis or forward commitment basis, the
prices obtained on such securities may be higher or lower than the prices
available in the market on the dates when the investments are actually
delivered to the buyers.

When the Fund agrees to purchase when-issued or delayed-delivery
securities, the Fund will set aside cash or liquid securities equal to the
amount of the commitment in a segregated account on the Fund's books. Normally,
the custodian will set aside portfolio securities to satisfy a purchase
commitment, and in such a case the Fund may be required subsequently to place
additional assets in the segregated account in order to ensure that the value
of the account remains equal to the amount of the Fund's commitment. The assets
contained in the segregated account will be marked-to-market daily. It may be
expected that the Fund's net assets will fluctuate to a greater degree when it
sets aside portfolio securities to cover such purchase commitments than when it
sets aside cash. When the Fund engages in when-issued or delayed-delivery
transactions, it relies on the other party to consummate the trade. Failure of
the seller to do so may result in the Fund's incurring a loss or missing an
opportunity to obtain a price considered to be advantageous.

FOREIGN SECURITIES. Each Fund may invest in securities of foreign issuers.
Such investments involve certain risks not ordinarily associated with
investments in securities of domestic issuers. Such risks include currency
exchange control regulations and costs, the possibility of expropriation,
seizure, or nationalization of foreign deposits, less liquidity and volume and
more volatility in foreign securities markets and the impact of political,
social, economic or diplomatic developments or the adoption of other foreign
government restrictions that might adversely affect the payment of principal
and interest on or market value of securities. If it should become necessary, a
Fund might encounter greater difficulties in invoking legal processes abroad
than would be the case in the United States. In addition, there may be less
publicly available information about a non-U.S. company, and non-U.S. companies
are not generally subject to uniform accounting and financial reporting
standards, practices and requirements comparable to those applicable to U.S.
companies. Furthermore, some of these securities may be subject to foreign
brokerage and withholding taxes.

Each Fund may also invest in securities of foreign issuers in the form of
American Depository Receipts ("ADRs"), European Depository Receipts ("EDRs") or
similar securities representing interests in the common stock of foreign

<PAGE>

issuers. ADRs are receipts, typically issued by a U.S. bank or trust company,
which evidence ownership of underlying securities issued by a foreign
corporation. EDRs are receipts issued in Europe which evidence a similar
ownership arrangement. Generally, ADRs, in registered form, are designed for
use in the U.S. securities markets and EDRs are designed for use in European
securities markets. The underlying securities are not always denominated in the
same currency as the ADRs or EDRs. Although investment in the form of ADRs or
EDRs facilitates trading in foreign securities, it does not mitigate the risks
associated with investing in foreign securities. However, by investing in ADRs
or EDRs rather than directly in foreign issuers' stock, a Fund can avoid
currency risks during the settlement period for either purchases or sales. In
general, there is a large, liquid market in the United States for many ADRs and
EDRs. The information available for ADRs and EDRs is subject to the accounting,
auditing and financial reporting standards of the domestic market or exchange
on which they are traded, which standards are more uniform and more exacting
than those to which many foreign issuers may be subject. Information on
over-the-counter ADRs is more limited as trading data is not well publicized,
company financials do not conform to U.S. standards and the Securities and
Exchange Commission ("SEC") does not require companies to communicate with
shareholders on a regular basis.

Investments in foreign securities incur higher costs than investments in
U.S. securities, including higher costs in making securities transactions as
well as foreign government taxes, which may reduce the investment return of a
Fund. In addition, foreign investments may include additional risks associated
with currency exchange rates, less complete financial information about
individual companies, less market liquidity and political instability.

CURRENCY RISKS. The U.S. dollar value of securities denominated in a
foreign currency will vary with changes in currency exchange rates, which can
be volatile. Accordingly, changes in the value of the currency in which a
Fund's investments are denominated relative to the U.S. dollar will affect the
Fund's net asset value. Exchange rates are generally affected by the forces of
supply and demand in the international currency markets, the relative merits of
investing in different countries and the intervention or failure to intervene
of U.S. or foreign governments and central banks. However, currency exchange
rates may fluctuate based on factors intrinsic to a country's economy. Some
emerging market countries also may have managed currencies, which are not free
floating against the U.S. dollar. In addition, emerging markets are subject to
the risk of restrictions upon the free conversion of their currencies into
other currencies. Any devaluations relative to the U.S. dollar in the
currencies in which a Fund's securities are quoted would reduce the Fund's net
asset value per share.

SECURITIES OF DEVELOPING/EMERGING MARKETS COUNTRIES. A developing or
emerging markets country generally is considered to be a country that is in the
initial stages of its industrialization cycle. Investing in the equity markets
of developing countries involves exposure to economic structures that are
generally less diverse and mature, and to political systems that can be
expected to have less stability, than those of developed countries. Historical
experience indicates that the markets of developing countries have been more
volatile than the markets of the more mature economies of developed countries;
however, such markets often have provided higher rates of return to investors.

One or more of the risks discussed above could affect adversely the
economy of a developing market or a Fund's investments in such a market. The
claims of many property owners against those of governments may remain
unsettled. There can be no assurance that any investments that a Fund might
make in such emerging markets would not be expropriated, nationalized or

<PAGE>

otherwise confiscated at some time in the future. In such an event, the Fund
could lose its entire investment in the market involved. Moreover, changes in
the leadership or policies of such markets could halt the expansion or reverse
the liberalization of foreign investment policies now occurring in certain of
these markets and adversely affect existing investment opportunities.

MONEY MARKET INSTRUMENTS. Each Fund may invest for temporary defensive
purposes in short-term corporate and government bonds and notes and money
market instruments. Money market instruments include: obligations issued or
guaranteed by the United States government, its agencies or instrumentalities
("U.S. government securities"); certificates of deposit, time deposits and
bankers' acceptances issued by domestic banks (including their branches located
outside the United States and subsidiaries located in Canada), domestic
branches of foreign banks, savings and loan associations and similar
institutions; high grade commercial paper; and repurchase agreements with
respect to the foregoing types of instruments. Certificates of deposit ("CDs")
are short-term, negotiable obligations of commercial banks. Time deposits
("TDs") are non-negotiable deposits maintained in banking institutions for
specified periods of time at stated interest rates. Bankers' acceptances are
time drafts drawn on commercial banks by borrowers, usually in connection with
international transactions.

REPURCHASE AGREEMENTS. Each Fund may agree to purchase securities from a
bank or recognized securities dealer and simultaneously commit to resell the
securities to the bank or dealer at an agreed-upon date and price reflecting a
market rate of interest unrelated to the coupon rate or maturity of the
purchased securities ("repurchase agreements"). The Fund would maintain custody
of the underlying securities prior to their repurchase; thus, the obligation of
the bank or dealer to pay the repurchase price on the date agreed to would be,
in effect, secured by such securities. If the value of such securities were
less than the repurchase price, plus interest, the other party to the agreement
would be required to provide additional collateral so that at all times the
collateral is at least 102% of the repurchase price plus accrued interest.
Default by or bankruptcy of a seller would expose a Fund to possible loss
because of adverse market action, expenses and/or delays in connection with the
disposition of the underlying obligations. The financial institutions with
which the Funds may enter into repurchase agreements will be banks and non-bank
dealers of U.S. Government securities on the Federal Reserve Bank of New York's
list of reporting dealers, if such banks and non-bank dealers are deemed
creditworthy by the Manager. The Manager will continue to monitor
creditworthiness of the seller under a repurchase agreement, and will require
the seller to maintain during the term of the agreement the value of the
securities subject to the agreement to equal at least 102% of the repurchase
price (including accrued interest). In addition, the Manager will require that
the value of this collateral, after transaction costs (including loss of
interest) reasonably expected to be incurred on a default, be equal to 102% or
greater than the repurchase price (including accrued premium) provided in the
repurchase agreement or the daily amortization of the difference between the
purchase price and the repurchase price specified in the repurchase agreement.
The Manager will mark-to-market daily the value of the securities. Repurchase
agreements are considered to be loans by a Fund under the Investment Company
Act of 1940, as amended (the "1940 Act").

REVERSE REPURCHASE AGREEMENTS. Each Fund may enter into reverse repurchase
agreements which involve the sale of Fund securities with an agreement to
repurchase the securities at an agreed-upon price, date and interest payment
and have the characteristics of borrowing. Since the proceeds of borrowings
under reverse repurchase agreements are invested, this would introduce the
speculative factor known as "leverage." The securities purchased with the funds
obtained from the agreement and securities collateralizing the agreement will

<PAGE>

have maturity dates no later than the repayment date. Generally the effect of
such a transaction is that a Fund can recover all or most of the cash invested
in the portfolio securities involved during the term of the reverse repurchase
agreement, while in many cases it will be able to keep some of the interest
income associated with those securities. Such transactions are only
advantageous if a Fund has an opportunity to earn a greater rate of interest on
the cash derived from the transaction than the interest cost of obtaining that
cash. Opportunities to realize earnings from the use of the proceeds equal to
or greater than the interest required to be paid may not always be available,
and the Funds intend to use the reverse repurchase technique only when the
Manager believes it will be advantageous to the Funds. The use of reverse
repurchase agreements may exaggerate any interim increase or decrease in the
value of a Fund's assets. A Fund's custodian bank will maintain a separate
account for the Fund with securities having a value equal to or greater than
such commitments.

LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements, each Fund may lend portfolio securities to brokers, dealers and
other financial organizations that meet capital and other credit requirements
or other criteria established by the Board. The Funds will not lend portfolio
securities to affiliates of the Manager unless they have applied for and
received specific authority to do so from the SEC. Loans of portfolio
securities will be collateralized by cash, letters of credit or U.S. Government
Securities, which are maintained at all times in an amount equal to at least
102% of the current market value of the loaned securities. Any gain or loss in
the market price of the securities loaned that might occur during the term of
the loan would be for the account of the Fund. From time to time, a Fund may
return a part of the interest earned from the investment of collateral received
for securities loaned to the borrower and/or a third party that is unaffiliated
with the Fund and that is acting as a "finder."

By lending its securities, a Fund can increase its income by continuing to
receive interest and any dividends on the loaned securities as well as by
either investing the collateral received for securities loaned in short-term
instruments or obtaining yield in the form of interest paid by the borrower
when U.S. Government Securities are used as collateral. Although the generation
of income is not the primary investment goal of a Fund, income received could
be used to pay the Fund's expenses and would increase an investor's total
return. Each Fund will adhere to the following conditions whenever its
portfolio securities are loaned: (i) the Fund must receive at least 102% cash
collateral or equivalent securities of the type discussed in the preceding
paragraph from the borrower; (ii) the borrower must increase such collateral
whenever the market value of the securities rises above the level of such
collateral; (iii) the Fund must be able to terminate the loan at any time; (iv)
the Fund must receive reasonable interest on the loan, as well as any
dividends, interest or other distributions on the loaned securities and any
increase in market value; (v) the Fund may pay only reasonable custodian fees
in connection with the loan; and (vi) voting rights on the loaned securities
may pass to the borrower, provided, however, that if a material event adversely
affecting the investment occurs, the Board must terminate the loan and regain
the right to vote the securities. Loan agreements involve certain risks in the
event of default or insolvency of the other party including possible delays or
restrictions upon a Fund's ability to recover the loaned securities or dispose
of the collateral for the loan.

BORROWING. Each Fund may borrow money up to such amounts and in such
manner as permitted by the 1940 Act and the rules and regulations promulgated
thereunder. If a Fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a Fund makes additional
investments while borrowings are outstanding, this may be considered a form of
leverage.

<PAGE>

ILLIQUID SECURITIES. Each Fund may invest up to an aggregate amount of 15%
of its net assets in illiquid securities, which term includes securities
subject to contractual or other restrictions on resale and other instruments
that lack readily available markets.

RISK FACTORS

FINANCIAL SERVICES PORTFOLIO

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
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.

The Manager will seek to invest in those financial services companies that
it believes are well positioned to take advantage of the ongoing changes in the
financial services sector. A financial services company may be well positioned
for a number of reasons. It may be an attractive acquisition for another
company wishing to strengthen its presence in a line of business or a
geographic region or to expand into new lines of business or geographic
regions, or it may be planning a merger to strengthen its position in a line of
business or a geographic area. The financial services company may be engaged in
a line or lines of business experiencing or likely to experience strong
economic growth; it may be linked to a geographic region experiencing or likely
to experience strong economic growth and may be actively seeking to participate
in such growth; or it may be expanding into financial services or geographic
regions previously unavailable to it (because of an easing of regulatory
constraints) in order to take advantage of new market opportunities.

<PAGE>

HEALTH SCIENCES PORTFOLIO

Many faster-growing health care 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 PORTFOLIO

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 consists of securities of
faster-growing, more volatile technology companies that the Manager believes to
be emerging leaders in their fields. 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
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. Industries
likely to be represented in the portfolio include computers, networking and
internetworking software, computer aided design, telecommunications, media and
information services, medical devices and biotechnology. A Fund may also invest
in the stocks of companies that should benefit from the commercialization of
technological advances, although they may not be directly involved in research
and development.

The technology and science areas have exhibited and continue to exhibit
rapid growth, both through increasing demand for existing products and services
and the broadening of the technology market. In general, the stocks of large
capitalized companies that are well established in the technology market can be
expected to grow with the market and will frequently be found in a Fund's
portfolio. The expansion of technology and its related industries, however,
also provides a favorable environment for investment in small to medium
capitalized companies. A Fund's investment policy is not limited to any minimum
capitalization requirement and a Fund may hold securities without regard to the
capitalization of the issuer. Overall stock selection for a Fund is not based
on the capitalization or size of the company but rather on an assessment of the
company's fundamental prospects.

Companies in the rapidly changing fields of technology and 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 science areas
and to greater risk and market fluctuation than an investment in a fund that

<PAGE>

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 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.

RISKS ASSOCIATED WITH PARTICULAR INVESTMENTS

MARKET RISK. Equity stock prices vary and may fall, thus reducing the
value of your Fund's investment. Certain stocks selected for any Fund's
portfolio may decline in value more than the overall stock market.

FOREIGN SECURITIES. Investments in foreign and emerging markets carry
special risks, including currency, political, regulatory and diplomatic risks.
Each Fund has the ability to invest more than 25% of their respective assets in
the securities of non-U.S. issuers.

CURRENCY RISK. A change in the exchange rate between U.S. dollars and a
foreign currency may reduce the value of a Fund's investment in a security
valued in the foreign currency, or based on that currency value.

POLITICAL RISK. Political actions, events or instability may result in
unfavorable changes in the value of a security.

REGULATORY RISK. Government regulations may affect the value of a
security. In foreign countries, securities markets that are less regulated than
those in the U.S. may permit trading practices that are not allowed in the U.S.

DIPLOMATIC RISK. A change in diplomatic relations between the U.S. and a
foreign country could affect the value or liquidity of investments.

LIQUIDITY RISK. A Fund's portfolio is liquid if the Fund is able to sell
the securities it owns at a fair price within a reasonable time. Liquidity is
generally related to the market trading volume for a particular security.
Investments in smaller companies or in foreign companies or companies in
emerging markets are subject to a variety of risks, including potential lack of
liquidity.

SMALLER CAPITALIZED COMPANIES. The Manager believes that smaller
capitalized companies generally have greater earnings and sales growth
potential than larger capitalized companies. The level of risk will be
increased to the extent each Fund has significant exposure to smaller
capitalized or unseasoned companies (those with less than a three-year
operating history). Investments in smaller capitalized companies may involve
greater risks, such as limited product lines, markets and financial or
managerial resources. In addition, less frequently traded securities may be
subject to more abrupt price movements than securities of larger capitalized
companies.

DERIVATIVES RISK. A Fund's use of options, futures and options on futures,
forward currency contracts and interest rate or currency swaps ("derivatives")
involves additional risks and transaction costs, such as, (i) adverse changes

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in the value of these instruments, (ii) imperfect correlation between the price
of derivatives and movements in the price of the underlying securities, index
or futures contracts, (iii) the fact that use of derivatives requires different
skills than those needed to select portfolio securities, and (iv) the possible
absence of a liquid secondary market for a particular derivative at any moment
in time.

COUNTERPARTY RISK. This is a risk associated primarily with repurchase
agreements and some derivatives transactions. It is the risk that the other
party in such a transaction will not fulfill its contractual obligation to
complete a transaction with a Fund.

LACK OF TIMELY INFORMATION RISK. Timely information about a security or
its issuer may be unavailable, incomplete or inaccurate. This risk is more
common to smaller company securities issued by foreign companies and companies
in emerging markets than it is to the securities of U.S.-based companies.

NON-DIVERSIFIED CLASSIFICATION. Each Fund is classified as a
non-diversified fund under the 1940 Act which means the Fund is not limited by
the Act in the proportion of its assets it may invest in the obligations of a
single issuer. As a result, the Funds may be subject to greater volatility with
respect to their portfolio securities than funds that are more broadly
diversified. Each Fund intends to conduct its operations, however, so as to
qualify as a "regulated investment company" for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), which will relieve the Fund of
any liability for Federal income tax to the extent its earnings are distributed
to shareholders. To qualify as a regulated investment company, the Fund will,
among other things, limit its investments so that, at the close of each quarter
of the taxable year (a) not more than 25% of the market value of the Fund's
total assets will be invested in the securities of a single issuer and (b) with
respect to 50% of the market value of its total assets, not more than 5% of the
market value of its total assets will be invested in the securities of a single
issuer and the Fund will not own more than 10% of the outstanding voting
securities of a single issuer.

MASTER/FEEDER FUND STRUCTURE. The Board of Trustees has the discretion to
invest each Fund's assets in a master fund in a master/feeder fund structure. A
master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing directly in a portfolio of securities, invests most or all of its
investment assets in a separate registered investment company (the "master
fund") with a similar investment objective and policies as the feeder fund.
Such a structure permits the pooling of assets of two or more feeder funds,
preserving separate identities or distribution channels at the feeder fund
level. Based on the premise that certain of the expenses of operating an
investment portfolio are relatively fixed, a larger investment portfolio may
eventually achieve a lower ratio of operating expenses to average net assets.
An existing investment company is able to convert to a feeder fund by selling
all of its investments, which involves brokerage and other transaction costs
and realization of a taxable gain or loss, or by contributing its assets to the
master fund and avoiding transaction costs and, if proper procedures are
followed, the realization of taxable gain or loss.

OPTIONS, FUTURES AND CURRENCY STRATEGIES. Each Fund may, but is not
required to, use forward currency contracts and certain options and futures
strategies to seek to increase total return or hedge its portfolio, i.e.,
reduce the overall level of investment risk normally associated with the Fund.
There can be no assurance that such efforts will succeed.

In order to assure that a Fund will not be deemed to be a "commodity pool"
for purposes of the Commodity Exchange Act, regulations of the Commodity
Futures Trading Commission ("CFTC") require that the Fund enter into

<PAGE>

transactions in futures contracts and options on futures only (i) for bona fide
hedging purposes (as defined in CFTC regulations), or (ii) for non-hedging
purposes, provided the aggregate initial margin and premiums on such
non-hedging positions do not exceed 5% of the liquidation value of the Fund's
assets.

To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. For example, when the Manager anticipates making a
purchase or sale of a security, it may enter into a forward currency contract
in order to set the rate (either relative to the U.S. dollar or another
currency) at which the currency exchange transaction related to the purchase or
sale will be made ("transaction hedging"). Further, when the Manager believes a
particular currency may decline compared to the U.S. dollar or another
currency, the Fund may enter into a forward contract to sell the currency
expected to decline in an amount approximating the value of some or all of the
Fund's securities denominated in that currency, or when the Manager believes
one currency may decline against a currency in which some or all of the
portfolio securities held by the Fund are denominated, it may enter into a
forward contract to buy the currency expected to decline for a fixed amount
("position hedging"). In this situation, the Fund may, in the alternative,
enter into a forward contract to sell a different currency for a fixed amount
of the currency expected to decline where the Manager believes the value of the
currency to be sold pursuant to the forward contract will fall whenever there
is a decline in the value of the currency in which portfolio securities of the
Fund are denominated ("cross hedging"). The Fund places (i) cash, (ii) U.S.
Government securities or (iii) equity securities or debt securities (of any
grade) in certain currencies provided such assets are liquid, unencumbered and
marked to market daily, or other high-quality debt securities denominated in
certain currencies in a separate account of the Fund having a value equal to
the aggregate amount of the Fund's commitments under forward contracts entered
into with respect to position hedges and cross-hedges. If the value of the
securities placed in a separate account declines, additional cash or securities
are placed in the account on a daily basis so that the value of the amount will
equal the amount of the Fund's commitments with respect to such contracts.

For hedging purposes, a Fund may write covered call options and purchase
put and call options on currencies to hedge against movements in exchange rates
and on debt securities to hedge against the risk of fluctuations in the prices
of securities held by the Fund or which the Manager intends to include in its
portfolio. The Fund also may use interest rates futures contracts and options
thereon to hedge against changes in the general level in interest rates.

A Fund may write call options on securities and currencies only if they
are covered, and such options must remain covered so long as the Fund is
obligated as a writer. A call option written by a Fund is "covered" if the Fund
owns the securities or currency underlying the option or has an absolute and
immediate right to acquire that security or currency without additional cash
consideration (or for additional cash consideration held in a segregated
account on the Fund's books) upon conversion or exchange of other securities or
currencies held in its portfolio. A call option is also covered if the Fund
holds on a share-for-share basis a call on the same security or holds a call on
the same currency as the call written where the exercise price of the call held
is equal to less than the exercise price of the call written or greater than
the exercise price of the call written if the difference is maintained by the
Fund in cash, Treasury bills or other high-grade, short-term obligations in a
segregated account on the Fund's books.

<PAGE>

A Fund may purchase put and call options in anticipation of declines in
the value of portfolio securities or increases in the value of securities to be
acquired. If the expected changes occur, the Fund may be able to offset the
resulting adverse effect on its portfolio, in whole or in part, through the
options purchased. The risk assumed by the Fund in connection with such
transactions is limited to the amount of the premium and related transaction
costs associated with the option, although the Fund may lose such amounts if
the prices of securities underlying the options do not move in the direction or
to the extent anticipated.

Although the portfolio managers may decide not to use forward currency
contracts, options and futures, the use of any of these strategies would
involve certain investment risks and transaction costs. These risks include:
dependence on the Manager's ability to predict movements in the prices of
individual securities, fluctuations in the general fixed-income markets and
movements in interest rates and currency markets, imperfect correlation between
movements in the price of currency, options, futures contracts or options
thereon and movements in the price of the currency or security hedged or used
for cover; the fact that skills and techniques needed to trade options, futures
contracts and options thereon or to use forward currency contracts are
different from those needed to select the securities in which the Fund invests;
and lack of assurance that a liquid market will exist for any particular
option, futures contract or option thereon at any particular time.

Over-the-counter options in which a Fund may invest differ from exchange
traded options in that they are two-party contracts, with price and other terms
negotiated between buyer and seller, and generally do not have as much market
liquidity as exchange-traded options. A Fund may be required to treat as
illiquid over-the-counter options purchased and securities being used to cover
certain written over-the-counter options.

OPTIONS ON SECURITIES. As discussed more generally above, each Fund may
engage in writing covered call options. Each Fund may also purchase put options
and enter into closing transactions. The principal reason for writing covered
call options on securities is to attempt to realize, through the receipt of
premiums, a greater return than would be realized on the securities alone. In
return for a premium, the writer of a covered call option forgoes the right to
any appreciation in the value of the underlying security above the strike price
for the life of the option (or until a closing purchase transaction can be
effected). Nevertheless, the call writer retains the risk of a decline in the
price of the underlying security. Similarly, the principal reason for writing
covered put options is to realize income in the form of premiums. The writer of
a covered put option accepts the risk of a decline in the price of the
underlying security. The size of the premiums the Fund may receive may be
adversely affected as new or existing institutions, including other investment
companies, engage in or increase their option-writing activities.

Options written by the Fund will normally have expiration dates between
one and six months from the date written. The exercise price of the options may
be below, equal to, or above the current market values of the underlying
securities when the options are written. In the case of call options, these
exercise prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively.

A Fund may write (a) in-the-money call options when the Manager expects
the price of the underlying security to remain flat or decline moderately
during the option period, (b) at-the-money call options when the Manager
expects the price of the underlying security to remain flat or advance
moderately during the option period and (c) out-of-the-money call options when

<PAGE>

the Manager expects that the price of the security may increase but not above a
price equal to the sum of the exercise price plus the premiums received from
writing the call option. In any of the preceding situations, if the market
price of the underlying security declines and the security is sold at this
lower price, the amount of any realized loss will be offset wholly or in part
by the premium received. Out-of-the-money, at-the-money and in-the-money put
options (the reverse of call options as to the relation of exercise price to
market price) may be utilized in the same market environments as such call
options are used in equivalent transactions.

So long as the obligation of a Fund as the writer of an option continues,
the Fund may be assigned an exercise notice by the broker-dealer through which
the option was sold, requiring it to deliver, in the case of a call, or take
delivery of, in the case of a put, the underlying security against payment of
the exercise price. This obligation terminates when the option expires or the
Fund effects a closing purchase transaction. The Fund can no longer effect a
closing purchase transaction with respect to an option once it has been
assigned an exercise notice. To secure its obligation to deliver the underlying
security when it writes a call option, or to pay for the underlying security
when it writes a put option, the Fund will be required to deposit in escrow the
underlying security or other assets in accordance with the rules of the Options
Clearing Corporation ("Clearing Corporation") or similar clearing corporation
and the securities exchange on which the option is written.

An option position may be closed out only where there exists a secondary
market for an option of the same series on a recognized securities exchange or
in the over-the-counter market. Each Fund expects to write options only on
national securities exchanges or in the over-the-counter market. A Fund may
purchase put options issued by the Clearing Corporation or in the
over-the-counter market.

A Fund may realize a profit or loss upon entering into a closing
transaction. In cases in which the Fund has written an option, it will realize
a profit if the cost of the closing purchase transaction is less than the
premium received upon writing the original option and will incur a loss if the
cost of the closing purchase transaction exceeds the premium received upon
writing the original option. Similarly, when the Fund has purchased an option
and engages in a closing sale transaction, whether it recognizes a profit or
loss will depend upon whether the amount received in the closing sale
transaction is more or less than the premium the Fund initially paid for the
original option plus the related transaction costs.

Although a Fund generally will purchase or write only those options for
which the Manager believes there is an active secondary market so as to
facilitate closing transactions, there is no assurance that sufficient trading
interest to create a liquid secondary market on a securities exchange will
exist for any particular option or at any particular time, and for some options
no such secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher than
anticipated trading activity or order flow, or other unforeseen events, have at
times rendered certain of the facilities of the Clearing Corporation and
national securities exchanges inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, a Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise.

<PAGE>

Securities exchanges generally have established limitations governing the
maximum number of calls and puts of each class which may be held or written, or
exercised within certain periods, by an investor or group of investors acting
in concert (regardless of whether the options are written on the same or
different securities exchanges or are held, written or exercised in one or more
accounts or through one or more brokers). It is possible that the Fund and
other clients of the Manager and certain of their affiliates may be considered
to be such a group. A securities exchange may order the liquidation of
positions found to be in violation of these limits, and it may impose certain
other sanctions.

In the case of options written by a Fund that are deemed covered by virtue
of the Fund's holding convertible or exchangeable preferred stock or debt
securities, the time required to convert or exchange and obtain physical
delivery of the underlying common stocks with respect to which the Fund has
written options may exceed the time within which the Fund must make delivery in
accordance with an exercise notice. In these instances, the Fund may purchase
or temporarily borrow the underlying securities for purposes of physical
delivery. By so doing, the Fund will not bear any market risk because the Fund
will have the absolute right to receive from the issuer of the underlying
security an equal number of shares to replace the borrowed stock, but the Fund
may incur additional transaction costs or interest expenses in connection with
any such purchase or borrowing.

Although the Manager will attempt to take appropriate measures to minimize
the risks relating to a Fund's writing of call options and purchasing of put
and call options, there can be no assurance that the Fund will succeed in its
option-writing program.

STOCK INDEX OPTIONS. As described generally above, each Fund may purchase
put and call options and write call options on domestic stock indexes listed on
domestic exchanges in order to realize its investment objective of long-term
capital appreciation or for the purpose of hedging its portfolio. A stock index
fluctuates with changes in the market values of the stocks included in the
index. Some stock index options are based on a broad market index such as the
New York Stock Exchange Composite Index or the Canadian Market Portfolio Index,
or a narrower market index such as the Standard & Poor's 100. Indexes also are
based on an industry or market segment such as the American Stock Exchange Oil
and Gas Index or the Computer and Business Equipment Index.

Options on stock indexes are generally similar to options on stock except
that the delivery requirements are different. Instead of giving the right to
take or make delivery of stock at a specified price, an option on a stock index
gives the holder the right to receive a cash "exercise settlement amount" equal
to (a) 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
(b) a fixed "index multiplier." Receipt of this cash amount will depend upon
the closing level of the stock 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 amount of cash received will be equal to such
difference between the closing price of the index and the exercise price of the
option expressed in dollars or a foreign currency, as the case may be, times a
specified multiple. 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 stock index options prior to expiration by entering into a closing
transaction on an exchange or it may let the option expire unexercised.

<PAGE>

The effectiveness of purchasing or writing stock index options as a
hedging technique will depend upon the extent to which price movements in the
portion of the securities portfolio of a Fund correlate with price movements of
the stock index selected. Because the value of an index option depends upon
movements in the level of the index rather than the price of a particular
stock, whether a Fund will realize a gain or loss from the purchase or writing
of options on an index depends upon movements in the level of stock prices in
the stock market generally or, in the case of certain indexes, in an industry
or market segment, rather than movements in the price of a particular stock.
Accordingly, successful use by a Fund of options on stock indexes will be
subject to the Manager's ability to predict correctly movements in the
direction of the stock market generally or of a particular industry. This
requires different skills and techniques than predicting changes in the price
of individual stocks.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. As described generally
above, each Fund may invest in stock index futures contracts and options on
futures contracts traded on a domestic exchange or board of trade. Futures
contracts provide for the future sale by one party and purchase by another
party of a specified amount of a specific security at a specified future time
and at a specified price. The primary purpose of entering into a futures
contract by a Fund is to protect the Fund from fluctuations in the value of
securities without actually buying or selling the securities. A Fund may enter
into futures contracts and options on futures to seek higher investment returns
when a futures contract is priced more attractively than stocks comprising a
benchmark index, to facilitate trading or to reduce transaction costs. A Fund
will only enter into futures contracts and options on futures contracts that
are traded on a domestic exchange and board of trade. Assets committed to
futures contracts will be segregated on a Fund's books to the extent required
by law.

The purpose of entering into a futures contract by a Fund is to protect
the Fund from fluctuations in the value of securities without actually buying
or selling the securities. For example, in the case of stock index futures
contracts, if a Fund anticipates an increase in the price of stocks it intends
to purchase at a later time, the Fund could enter into contracts to purchase
the stock index (known as taking a "long" position) as a temporary substitute
for the purchase of stocks. If an increase in the market occurs that influences
the stock index as anticipated, the value of the futures contracts increases
and thereby serves as a hedge against the Fund's not participating in a market
advance. The Fund then may close out the futures contracts by entering into
offsetting futures contracts to sell the stock index (known as taking a "short"
position) as it purchases individual stocks. A Fund can accomplish similar
results by buying securities with long maturities and selling securities with
short maturities. But by using futures contracts as an investment tool to
reduce risk, given the greater liquidity in the futures market, it may be
possible to accomplish the same result more easily and more quickly.

No consideration will be paid or received by a Fund upon the purchase or
sale of a futures contract. Initially, the Fund will be required to deposit
with the broker an amount of cash or cash equivalents equal to approximately 1%
to 10% of the contract amount (this amount is subject to change by the exchange
or board of trade on which the contract is traded and brokers or members of
such board of trade may charge a higher amount). This amount is known as
"initial margin" and is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund, upon termination of the
futures contract, assuming all contractual obligations have been satisfied.
Subsequent payments, known as "variation margin," to and from the broker, will
be made daily as the price of the index or securities underlying the futures
contract fluctuates, making the long and short positions in the futures
contract more or less valuable, a process known as "marking-to-market." In
addition, when a Fund enters into a long position in a futures contract or an
option on a futures contract, it must deposit into a segregated account with

<PAGE>

the Fund's custodian an amount of cash or cash equivalents equal to the total
market value of the underlying futures contract, less amounts held in the
Fund's commodity brokerage account at its broker. At any time prior to the
expiration of a futures contract, a Fund may elect to close the position by
taking an opposite position, which will operate to terminate the Fund's
existing position in the contract.

There are several risks in connection with the use of futures contracts as
a hedging device. Successful use of futures contracts by a Fund is subject to
the ability of the Manager to predict correctly movements in the stock market
or in the direction of interest rates. These predictions involve skills and
techniques that may be different from those involved in the management of
investments in securities. In addition, there can be no assurance that there
will be a perfect correlation between movements in the price of the securities
underlying the futures contract and movements in the price of the securities
that are the subject of the hedge. A decision of whether, when and how to hedge
involves the exercise of skill and judgment, and even a well-conceived hedge
may be unsuccessful to some degree because of market behavior or unexpected
trends in market behavior or interest rates.

Positions in futures contracts may be closed out only on the exchange on
which they were entered into (or through a linked exchange) and no secondary
market exists for those contracts. In addition, although the Funds intend to
enter into futures contracts only if there is an active market for the
contracts, there is no assurance that an active market will exist for the
contracts at any particular time. Most futures exchanges and boards of trade
limit the amount of fluctuation permitted in futures contract prices during a
single trading day. Once the daily limit has been reached in a particular
contract, no trades may be made that day at a price beyond that limit. It is
possible that futures contract prices could move to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of futures positions and subjecting some futures traders to
substantial losses. In such event, and in the event of adverse price movements,
a Fund would be required to make daily cash payments of variation margin; in
such circumstances, an increase in the value of the portion of the portfolio
being hedged, if any, may partially or completely offset losses on the futures
contract. As described above, however, no assurance can be given that the price
of the securities being hedged will correlate with the price movements in a
futures contract and thus provide an offset to losses on the futures contract.

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

<PAGE>

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.

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

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

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

<PAGE>

and to sell real estate acquired as a result of the ownership of
securities by the Fund).

(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, covered mortgage dollar rolls and
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.

<PAGE>

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
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.

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

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

<PAGE>

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.

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

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

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

<PAGE>

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

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
0.25% 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.

Investors 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. Investors should consult with the
Transfer Agent and their 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). His address is 4041 Gulf Shore
Boulevard North, Naples, Florida.

DIANA R. HARRINGTON (age 60) -- Professor, Babson College (since September
1993); Trustee, the Highland Family of Funds (March 1997 to March 1998). Her
address is 120 Goulding Street, Holliston, Massachusetts.

SUSAN B. KERLEY (age 49) -- President, Global Research Associates, Inc.
(Investment Research) (since September 1990); Trustee, Mainstay Institutional
Funds (since December 1990). Her address is P.O. Box 9572, New Haven,
Connecticut.

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). His address is 1385
Outlook Drive West, Mountainside, New Jersey.

E. KIRBY WARREN (age 66) -- Professor of Management, Graduate School of
Business, Columbia University (1987 to December 1999). His address is Laurel
Road, P.O. Box 146, Tuxedo Park, New York.

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 ___) -- 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);

<PAGE>

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.

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.

<PAGE>

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
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

<PAGE>

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 Portfolio 0.80%
------------------------------------- -----------------------------------
Citi Health Sciences Portfolio 0.80%
------------------------------------- -----------------------------------
Citi Technology Portfolio 0.95%
------------------------------------- -----------------------------------

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
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.

<PAGE>

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 0.25% 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
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

<PAGE>

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.

AUDITORS

_________, independent auditors, _______________, 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

<PAGE>

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
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.

<PAGE>

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
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

<PAGE>

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
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. Shareholders will not be able to claim any deduction or credit for any
part of the foreign taxes paid by a Fund.

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

<PAGE>

income taxes paid by it, shareholders will not be able to claim any deduction
or credit for any part of the foreign taxes paid by the Fund.

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.

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

<PAGE>

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.

FOREIGN INVESTMENTS. The Funds may make non-U.S. investments. Special tax
considerations apply with respect to such investments. Foreign exchange gains
and losses realized by a Fund will generally be treated as ordinary income and
loss. Use of non-U.S. currencies for non-hedging purposes and investment by a
Fund in certain "passive foreign investment companies" may have to be limited
in order to avoid a tax on a Fund. A Fund may elect to mark to market any
investments in "passive foreign investment companies" on the last day of each
taxable year. This election may cause the Fund to recognize ordinary income
prior to the receipt of cash payments with respect to those investments; in
order to distribute this income and avoid a tax on the Fund, the Fund may be
required to liquidate portfolio securities that it might otherwise have
continued to hold potentially resulting in additional taxable gain or loss to
the Fund.

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>

PART C

<S> <C> <C> <C>
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 Portfolio, Citi Health
Sciences Portfolio, and Citi Technology
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
******
</TABLE>

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

<PAGE>

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.

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 an Exhibit hereto;
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.,
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

<PAGE>

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 Three,
The Travelers Variable Life Insurance Separate Account Four, The Travelers

<PAGE>

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

<PAGE>

Fund, Smith Barney Health Sciences Fund, Smith Barney Technology Fund,
Smith Barney New Jersey Municipals Fund Inc., Smith Barney Oregon
Municipals Fund, Zeros Plus Emerging Growth Series 2000, Smith Barney
Security and Growth Fund, Smith Barney Small Cap Blend Fund, Inc., Smith
Barney Telecommunications Income Fund, Income and Growth Portfolio,
Reserve Account Portfolio, U.S. Government/High Quality Securities
Portfolio, Emerging Markets Portfolio, European Portfolio, Global
Government Bond Portfolio, International 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
(distributor) Boston, MA 02109

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

<PAGE>

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 16th 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 16, 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 Amendment 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 Portfolio, Citi Health Sciences
Portfolio, and Citi Technology 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(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