LANDMARK FUNDS II, 485APOS, 1997-10-24

LANDMARK FUNDS II
485APOS, 1997-10-24

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As filed with the Securities and Exchange Commission on October 16, 1997

File Nos. 2-90519
811-4007
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM N-1A

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE
AMENDMENT NO. 19*
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 20

LANDMARK FUNDS II
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

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

PHILIP W. COOLIDGE, 6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(NAME AND ADDRESS OF AGENT FOR SERVICE)

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

It is proposed that this filing will become effective on December 30,
1997, pursuant to paragraph (a) of Rule 485.

Asset Allocation Portfolios, on behalf of Small Cap Value Portfolio, and
The Premium Portfolios, on behalf of Growth & Income Portfolio, have also
executed this Amendment.

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* This filing relates only to shares of CitiFunds Small Cap Value Portfolio and
CitiFunds Growth & Income Portfolio.

<PAGE>

LANDMARK FUNDS II
(CITIFUNDS SMALL CAP VALUE PORTFOLIO)
(CITIFUNDS GROWTH & INCOME PORTFOLIO)
REGISTRATION STATEMENT ON FORM N-1A

CROSS REFERENCE SHEET
<TABLE>
<CAPTION>

N-1A
ITEM NO. N-1A ITEM LOCATION

<S> <C> <C>
PROSPECTUS
PART A

Item 1. Cover Page................................................. Cover Page
Item 2. Synopsis................................................... Expense Summary
Item 3. Condensed Financial Information............................ Not Applicable
Item 4. General Description of Registrant.......................... Investment Information; General
Information; Appendix
Item 5. Management of the Fund..................................... Management; Expenses
Item 5A. Management's Discussion of Fund Performance................ Not Applicable
Item 6. Capital Stock and Other Securities......................... General Information;
Voting and Other
Rights; Purchases;
Exchanges;
Redemptions; Dividends
and Distributions; Tax
Matters
Item 7. Purchase of Securities Being Offered....................... Purchases; Exchanges; Redemptions
Item 8. Redemption or Repurchase................................... Purchases; Exchanges;
Item 9. Pending Legal Proceedings.................................. Not Applicable

STATEMENT OF
ADDITIONAL
PART B INFORMATION

Item 10. Cover Page................................................. Cover Page
Item 11. Table of Contents.......................................... Cover Page
Item 12. General Information and History............................ The Trust
Item 13. Investment Objectives and Policies......................... Investment Objective
and Policies;
Description of
Permitted Investments
and Investment
Practices; Investment
Restrictions
Item 14. Management of the Fund..................................... Management
Item 15. Control Persons and Principal Holders of Securities........ Management
Item 16. Investment Advisory and Other Services..................... Management
Item 17. Brokerage Allocation and Other Practices................... Portfolio Transactions
Item 18. Capital Stock and Other Securities......................... Description of Shares,
Voting Rights and
Liabilities
Item 19. Purchase, Redemption and Pricing of Securities
Being Offered.............................................. Description of Shares, Voting Rights
and Liabilities; Determination of Net
Asset Value; Valuation of Securities;
Additional Redemption Information
Item 20. Tax Status................................................. Certain Additional Tax Matters
Item 21. Underwriters............................................... Management
Item 22. Calculation of Performance Data............................ Performance Information
Item 23. Financial Statements....................................... Financial Statements

</TABLE>

<PAGE>

PART C Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration
Statement.

<PAGE>
PROSPECTUS

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______________ __, 199__

CITIFUNDS SMALL CAP VALUE PORTFOLIO
(A Member of the CitiFundsSM Family of Funds)

This Prospectus describes CitiFunds Small Cap Value Portfolio, a mutual fund
in the CitiFunds Family of Funds. Citibank, N.A.
is the investment manager.

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UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIOS OF SECURITIES, THE FUND MAY SEEK ITS INVESTMENT OBJECTIVE BY
INVESTING IN ONE OR MORE OTHER INVESTMENT COMPANIES. SEE "SPECIAL INFORMATION
CONCERNING INVESTMENT STRUCTURE" ON PAGE __.

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REMEMBER THAT SHARES OF THE FUND:
- ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY
- ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, CITIBANK OR ANY OF ITS AFFILIATES
- ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED

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

This Prospectus concisely sets forth information about the Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated __________ ___, 199__ (and incorporated by reference in this
Prospectus) has been filed with the Securities and Exchange Commission. Copies
of the Statement of Additional Information may be obtained without charge, and
further inquiries about the Fund may be made, by calling 1-800-625-4554.

<PAGE>

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TABLE OF CONTENTS
Prospectus Summary...........................................
Expense Summary..............................................
Investment Information.......................................
Risk Considerations..........................................
Valuation of Shares..........................................
Purchases....................................................
Exchanges....................................................
Redemptions..................................................
Dividends and Distributions..................................
Management...................................................
Tax Matters..................................................
Performance Information......................................
General Information..........................................
Appendix --
Permitted Investments and Investment Practices...............

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.

<PAGE>

PROSPECTUS SUMMARY

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See the body of the Prospectus for more information on the topics discussed
in this summary.

THE FUND: This Prospectus describes CitiFunds Small Cap Value Portfolio (the
"Fund"). Because the Fund currently invests through Small Cap Value Portfolio
(the "Portfolio"), all references in this Prospectus to the Fund include the
Portfolio, except as otherwise noted.

INVESTMENT OBJECTIVE AND POLICIES: The Fund's investment objective is long-term
capital growth. Dividend income, if any, is incidental to this investment
objective. The Fund invests primarily (i.e., at least 65% of its total assets
under normal circumstances) in equity securities of U.S. issuers that have
small market capitalizations and are deemed to be undervalued.

INVESTMENT MANAGER AND DISTRIBUTOR: Citibank, N.A. ("Citibank" or the
"Manager"), a wholly-owned subsidiary of Citicorp, is the investment manager.
Citibank and its affiliates manage more than $88 billion in assets worldwide.
Citibank has delegated the daily management of the Portfolio to Franklin
Advisory Services, Inc. (the "Subadviser"). The Landmark Funds Broker-Dealer
Services, Inc. ("LFBDS" or the "Distributor") is the distributor of shares of
the Fund. See "Management."

PURCHASES AND REDEMPTIONS: Investors may purchase and redeem shares of the Fund
through a Service Agent on any day the New York Stock Exchange is open for
trading. See "Purchases" and "Redemptions."

PRICING: Shares of the Fund are purchased and redeemed at net asset value,
without a sales load or redemption fees. Shares of the Fund are subject to a
fee of up to 0.25% per annum of the Fund's average daily net assets for
distribution, sales and marketing and shareholder services. See "Purchases" and
"Management -- Distribution Arrangements."

EXCHANGES: Shares may be exchanged for shares of the CitiSelect(R) Portfolios
and other CitiFunds. See "Exchanges."

DIVIDENDS: Dividends, if any, are declared and paid semiannually. Net capital
gains, if any, are distributed annually. See "Dividends and Distributions."

REINVESTMENT: All dividends and capital gains distributions may be received
either in cash or in Fund shares at net asset value. See "Dividends and
Distributions."

WHO SHOULD INVEST: The Fund is designed for investors seeking long-term capital
growth who are willing to commit a portion of their assets to investments in
small capitalization U.S. issuers and who do not require current income from
their investment.

RISK FACTORS: There can be no assurance that the Fund will achieve its
investment objective, and the Fund's net asset value will fluctuate based on
changes in the values of the underlying portfolio securities. Equity securities
fluctuate in value based on many factors, including actual and anticipated
earnings, changes in management, political and economic developments and the
potential for takeovers and acquisitions. The value of debt securities
generally fluctuates based on changes in the actual and perceived
credit-worthiness of issuers. Also, the value of debt securities generally goes
down when interest rates go up, and vice versa. As a result, shares may be
worth more or less at redemption than at the time of purchase.

Shareholders should be aware that the securities of companies with small
market capitalizations and the securities of certain growth companies may have

<PAGE>

more risks than the securities of other companies. Small cap companies and
certain growth companies may be more susceptible to market downturns or
setbacks because they may have limited product lines, markets, distribution
channels, and financial and management resources. Further, there is often less
publicly available information about small cap companies and many growth
companies than about more established companies. As a result of these and other
factors, the prices of securities issued by small cap companies and some growth
companies may be volatile. Shares of the Fund, therefore, may be subject to
greater fluctuation in value than shares of an equity fund investing primarily
in securities of larger, more established companies.

Certain investment practices also may entail special risks. See "Risk
Considerations" and the Appendix for more information.

EXPENSE SUMMARY

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The following table summarizes estimated shareholder transaction and annual
operating expenses for the Fund.* For more information on costs and expenses,
see "Management" on page __ and "General Information -- Expenses" on page __.

CITIFUNDS
SMALL CAP
VALUE
PORTFOLIO (1)

SHAREHOLDER TRANSACTION EXPENSES................. None
ANNUAL FUND OPERATING EXPENSES, AFTER FEE
WAIVERS AND REIMBURSEMENTS
(AS A PERCENTAGE OF AVERAGE NET ASSETS):
Management Fees.................................. 1.00%
12b-1 Fees (including service fees)(3)........... 0.25%
Other Expenses(2)................................ 0.25%
Total Fund Operating Expenses(2)................. 1.50%

* This table is intended to assist investors in understanding the various costs
and expenses that a shareholder will bear, either directly or indirectly. The
table shows the fees paid to various service providers after giving effect to
expected voluntary partial fee waivers. There can be no assurance that the
fee waivers and reimbursements reflected in the table will continue at their
these levels.
(1) Because the Fund is newly organized, all amounts in the table and the
example are estimated for the current fiscal year.
(2) Absent fee waivers and reimbursements, Other Expenses and Total Fund
Operating Expenses would be 1.11% and 2.36%, respectively.
(3) Includes fees for distribution and shareholder servicing. Long-term
shareholders in the Fund could pay more in sales charges than the economic
equivalent of the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc.

<PAGE>

EXAMPLE: A shareholder would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each period indicated
below:

One Year Three Years
CitiFunds Small Cap
Value Portfolio (1) $15 $47

The Example assumes that all dividends are reinvested. Without waivers and
reimbursements, the amounts in the Example would be $24 and $74, respectively.
The assumption of a 5% annual return is required by the Securities and Exchange
Commission for all mutual funds, and is not a prediction of the Fund's future
performance. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OF THE FUND. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.

INVESTMENT INFORMATION

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INVESTMENT OBJECTIVE: The investment objective of the Fund is long-term capital
growth. Dividend income, if any, is incidental to this investment objective.

The investment objective of the Fund may be changed by its Trustees without
approval by the 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 the Fund will achieve its investment objective.

INVESTMENT POLICIES: The Fund invests primarily (i.e., at least 65% of its
total assets under normal circumstances) in equity securities of U.S. issuers
that have small market capitalizations and are deemed to be undervalued. Equity
securities include common stocks, securities convertible into common stocks,
preferred stocks and warrants for the purchase of stock.

Small cap issuers are those with market capitalizations below the top 1,000
stocks that comprise the large and midrange capitalization sector of the equity
market. These stocks are comparable to, but not limited to, the stocks
comprising the Russell 2000 Index, an index of small capitalization stocks.
Small cap companies are generally represented in new or rapidly changing
industries. They may offer more profit opportunity in growing industries and
during certain economic conditions than do large and medium sized companies.
However, small cap companies also involve special risks. Often, liquidity and
overall business stability of a small cap company may be less than that
associated with larger capitalized companies. Small cap stocks frequently
involve smaller, rapidly growing companies with high growth rates, negligible
dividend yields and extremely high levels of volatility.

An issuer may be undervalued relative to the stock market in general,
relative to the underlying value of its assets or relative to what a
sophisticated private investor would pay for the entire company. A variety of
factors are analyzed in order to determine that an issuer is undervalued. These
factors include low price to earnings ratio relative to the market, industry
group or earnings growth; low price relative to book value or cash flow;
valuable franchises, patents, trademarks, trade names, distribution channels or
market share for particular products or services, tax loss carryforwards, or
other intangibles that may not be reflected in stock prices; ownership of
understated or underutilized tangible assets such as land, timber or minerals;
underutilized cash or investment assets; and unusually high current income.
These criteria and others, alone and in combination, may identify companies
that are attractive to financial or strategic acquirers (i.e., takeover
candidates). Issuers selected may include companies in cyclical businesses,
turnarounds and companies emerging from bankruptcy. Investment decisions may
also be influenced by a company's and its insiders' stock buy-backs.

<PAGE>

CERTAIN ADDITIONAL INVESTMENT POLICIES:

FUTURES. The Fund may purchase stock index futures in order to protect
against declines in the value of portfolio securities or increases in the cost
of securities or other assets to be acquired and, subject to applicable law, to
enhance potential gain. Futures contracts provide for the future sale by one
party and purchase by another party of a specified amount of a security at a
specified future time and price, or for making payment of a cash settlement
based on changes in the value of a security, an index of securities or other
assets. In many cases, the futures contracts that may be purchased by the Fund
are standardized contracts traded on commodities exchanges or boards of trade.
See the Appendix for more information.

TEMPORARY INVESTMENTS. During periods of unusual economic or market
conditions or for temporary defensive purposes or liquidity, the Fund may
invest without limit in cash and in U.S. dollar-denominated high quality money
market and short-term instruments. These investments may result in a lower
yield than would be available from investments with a lower quality or longer
term.

OTHER PERMITTED INVESTMENTS. For more information regarding the Fund's
permitted investments and investment practices, see the Appendix - Permitted
Investments and Investment Practices on page __. The Fund will not necessarily
invest or engage in each of the investments and investment practices described
in the Appendix but reserves the right to do so.

INVESTMENT RESTRICTIONS. The Statement of Additional Information contains a
list of specific investment restrictions which govern the investment policies
of the Fund, including a limitation that the Fund may borrow money from banks
in an amount not to exceed 1/3 of the Fund's net assets for extraordinary or
emergency purposes (e.g., to meet redemption requests). Except as otherwise
indicated, the Fund's investment objective and policies may be changed without
shareholder approval. If a percentage or rating restriction (other than a
restriction as to borrowing) is adhered to at the time an investment is made, a
later change in percentage or rating resulting from changes in the Fund's
securities will not be a violation of policy.

PORTFOLIO TURNOVER. Securities of the Fund will be sold whenever it is
appropriate to do so in light of the Fund's investment objective, without
regard to the length of time a particular security may have been held. The
turnover rate for the Fund is not expected to exceed 100% for the fiscal year
ending October 31, 1998. The amount of brokerage commissions and realization of
taxable capital gains will tend to increase as the level of portfolio activity
increases.

BROKERAGE TRANSACTIONS. In connection with the selection of brokers or
dealers for securities transactions for the Fund and the placing of such
orders, brokers or dealers may be selected who also provide brokerage and
research services to the Fund or the other accounts over which Citibank, the
Subadviser or their affiliates exercise investment discretion. The Fund 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 the Fund 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.

<PAGE>

RISK CONSIDERATIONS

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The risks of investing in the Fund vary depending upon the nature of the
securities held, and the investment practices employed, on its behalf. Certain
of these risks are described below.

CHANGES IN NET ASSET VALUE. The Fund's net asset value will fluctuate based on
changes in the values of the underlying portfolio securities. This means that
an investor's interest may be worth more or less at redemption than at the time
of purchase. Equity securities fluctuate in response to general market and
economic conditions and other factors, including actual and anticipated
earnings, changes in management, political developments and the potential for
takeovers and acquisitions. During periods of rising interest rates the value
of debt securities generally declines, and during periods of falling rates the
value of these securities generally increases. Changes by recognized rating
agencies in the rating of any debt security, and actual or perceived changes in
an issuer's ability to make principal or interest payments, also affect the
value of these investments.

SMALLER COMPANIES. Shareholders should be aware that the securities of
companies with small market capitalizations and the securities of certain
growth companies may have more risks than the securities of other companies.
Small cap companies and certain growth companies may be more susceptible to
market downturns or setbacks because they may have limited product lines,
markets, distribution channels, and financial and management resources.
Further, there is often less publicly available information about small cap
companies and many growth companies than about more established companies. As a
result of these and other factors, the prices of securities issued by small cap
companies and some growth companies may be volatile.

INVESTMENT PRACTICES. Certain of the investment practices employed for the Fund
may entail additional risks that are described in the Appendix. See the
Appendix - Permitted Investments and Investment Practices on page __.

SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE. The Fund does not invest
directly in securities. Instead, the Fund is permitted to invest all or a
portion of its assets in one or more investment companies to the extent not
prohibited by the Investment Company Act of 1940, the rules and regulations
thereunder, and exemptive orders granted under such Act. Currently, the Fund
invests all of its investable assets in the Portfolio, which is a mutual fund
having the same investment objective and policies as the Fund. The Portfolio,
in turn, buys, holds and sells securities in accordance with this objective and
these policies. Of course, there can be no assurance that the Fund or the
Portfolio will achieve its objective. The Trustees of the Fund believe that the
aggregate per share expenses of the Fund and the Portfolio will be less than or
approximately equal to the expenses that the Fund would incur if the assets of
the Fund were invested directly in the types of securities held by the
Portfolio. The Fund may withdraw its investment in the Portfolio at any time,
and will do so if the Trustees believe it to be in the best interest of the
Fund's shareholders. If the Fund were to withdraw its investment in the
Portfolio, the Fund could either invest directly in securities in accordance
with the investment policies described above or invest in another mutual fund
or pooled investment vehicle having the same investment objective and policies.
If the Fund were to withdraw, the Fund could receive securities from the
Portfolio instead of cash, causing the Fund to incur brokerage, tax and other
charges or leaving it with securities which may or may not be readily
marketable or widely diversified.

<PAGE>

The Portfolio may change its investment objective and certain of its
investment policies and restrictions without approval by its investors, but the
Portfolio will notify the Fund (which in turn will notify its shareholders) and
its other investors at least 30 days before implementing any change in its
investment objective. A change in investment objective, policies or
restrictions may cause the Fund to withdraw its investment in the Portfolio.

Certain investment restrictions of the Portfolio cannot be changed without
approval by the investors in the Portfolio. These policies are described in the
Statement of Additional Information. When the Fund is asked to vote on certain
matters concerning the Portfolio, the Fund will hold a shareholder meeting and
vote in accordance with shareholder instructions. Of course, the Fund could be
outvoted, or otherwise adversely affected, by other investors in the Portfolio.

The Portfolio may sell interests to investors in addition to the Fund. These
investors may be mutual funds which offer shares to their shareholders with
different costs and expenses than the Fund. Therefore, the investment return
for all investors in funds investing in the Portfolio may not be the same.
These differences in returns are also present in other mutual fund structures.

Information about other holders of interests in the Portfolio is available
from the Fund's distributor, LFBDS, at (617) 423-1679.

VALUATION OF SHARES

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Net asset value per share of the Fund is determined each day the New York
Stock Exchange is open for trading (a "Business Day"). This determination is
made once each day as of the close of regular trading on the Exchange (normally
4:00 p.m. Eastern time) by adding the market value of all securities and other
assets of the Fund (including the Fund's interest in the Portfolio), then
subtracting the liabilities charged to the Fund, and then dividing the result
by the number of outstanding shares of the Fund. The net asset value per share
is effective for orders received and accepted by the Transfer Agent prior to
its calculation.

Portfolio securities and other assets are valued primarily on the basis of
market quotations, or if quotations are not available, by a method believed to
accurately reflect fair value.

PURCHASES

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Shares of the Fund are offered continuously and may be purchased on any
Business Day without a sales load at the shares' net asset value next
determined after an order is transmitted to and accepted by the Transfer Agent.
The Fund and the Transfer Agent reserve the right to reject any purchase order
and to suspend the offering of Fund shares for a period of time.

While there is no sales load imposed on shares of the Fund, the Distributor
receives fees from the Fund pursuant to a Service Plan. See "Management --
Distribution Arrangements."

<PAGE>

its own terms, conditions and charges with respect to services it offers to its
customers. Charges for these services may include fixed annual fees and account
maintenance fees. The effect of any such fees will be to reduce the net return
on the investment of customers of that Service Agent. Each Service Agent has
agreed to transmit to its customers who are shareholders of the Fund
appropriate written disclosure of any fees that it may charge them directly.
Each Service Agent is responsible for transmitting promptly orders of its
customers.

From time to time LFBDS may make payments for distribution and/or
shareholder servicing activities out of its past profits and other sources
available to it. The Distributor also may make payments for marketing,
promotional or related expenses to dealers who engage in marketing efforts on
behalf of the Fund. The amounts of these payments will be determined by the
Distributor in its sole discretion and may vary among different dealers.

EXCHANGES

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Shares may be exchanged for shares of the CitiSelect Portfolios and other
CitiFunds, or may be acquired through an exchange of shares of those funds.

Shareholders may place exchange orders through the Transfer Agent or, if
they are customers of a Service Agent, through their Service Agent, and may do
so by telephone if their account applications so permit. For more information
on telephone transactions see "Redemptions." All exchanges will be effected
based on the relative net asset values per share next determined after the
exchange order is received by the Transfer Agent. See "Valuation of Shares."
Shares of the Fund may be exchanged only after payment in federal funds for the
shares has been made.

This exchange privilege may be modified or terminated at any time, upon at
least 60 days' notice when such notice is required by Securities and Exchange
Commission ("SEC") rules, and is available only in those jurisdictions where
such exchanges legally may be made. See the Statement of Additional Information
for further details. An exchange is treated as a sale of the shares exchanged
and could result in taxable gain or loss to the shareholder making the
exchange.

REDEMPTIONS

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Fund shares may be redeemed at their net asset value next determined after a
redemption request in proper form is received by the Transfer Agent. The
Transfer Agent is responsible for the prompt transmission of redemption orders
to the Fund on behalf of its customers. A Service Agent may establish
requirements or procedures regarding submission of redemption requests by its
customers that are different from those described below. Shareholders should
consult their Service Agents for details. A redemption is treated as a sale of
the shares redeemed and could result in taxable gain or loss to the shareholder
making the redemption.

REDEMPTIONS BY MAIL. Shareholders may redeem Fund shares by sending written
instructions in proper form (as determined by the Transfer Agent or a
shareholder's Service Agent) to the Transfer Agent or, if shareholders are
customers of a Service Agent, their Service Agent. Shareholders are responsible
for ensuring that a request for redemption is in proper form.

<PAGE>

emergencies, shareholders may experience difficulties implementing a telephone
exchange or redemption. In such an event, another method of instruction, such
as a written request sent via an overnight delivery service, should be
considered. The Fund, the Transfer Agent and each Service Agent will employ
reasonable procedures to confirm that instructions communicated by telephone
are genuine. These procedures may include recording of the telephone
instructions and verification of a caller's identity by asking for the
shareholder's name, address, telephone number, Social Security or taxpayer
identification number, and account number. If these or other reasonable
procedures are not followed, the Fund, the Transfer Agent or the Service Agent
may be liable for any losses to a shareholder due to unauthorized or fraudulent
instructions. Otherwise, the shareholder will bear all risk of loss relating to
a redemption or exchange by telephone.

PAYMENT OF REDEMPTIONS. The proceeds of a redemption are paid in federal funds
normally on the next Business Day, but in any event within seven days. If a
shareholder requests redemption of shares which were purchased recently, the
Fund may delay payment until it is assured that good payment has been received.
In the case of purchases by check, this can take up to ten days. See
"Determination of Net Asset Value" in the Statement of Additional Information
regarding the Fund's right to pay the redemption price in kind with securities
(instead of cash).

Questions about redemption requirements should be referred to the Transfer
Agent or, for customers of a Service Agent, their Service Agent. The right of
any shareholder to receive payment with respect to any redemption may be
suspended or the payment of the redemption price postponed during any period in
which the New York Stock Exchange is closed (other than weekends or holidays)
or trading on the Exchange is restricted or if an emergency exists.

DIVIDENDS AND DISTRIBUTIONS

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Substantially all of the Fund's net income from dividends and interest, if
any, is paid to its shareholders of record as a dividend semiannually.

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

A shareholder may elect to receive dividends and capital gains distributions
in either cash or additional shares of the Fund issued at net asset value.

MANAGEMENT

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TRUSTEES AND OFFICERS: The Fund is supervised by the Board of Trustees of
CitiFunds Trust II. The Portfolio is supervised by the Board of Trustees of
Asset Allocation Portfolios. In each case, a majority of the Trustees are not
affiliated with Citibank. In addition, a majority of the disinterested Trustees
of the Fund are different from a majority of the disinterested Trustees of the
Portfolio. More information on the Trustees and officers of the Fund and
Portfolio appears under "Management" in the Statement of Additional
Information.

INVESTMENT MANAGER: Citibank offers a wide range of banking and investment
services to customers across the United States and throughout the world, and
has been managing money since 1822. Its portfolio managers are responsible for
investing in money market, equity and fixed income securities. Citibank and its

<PAGE>

affiliates manage more than $88 billion in assets worldwide. Citibank is a
wholly-owned subsidiary of Citicorp. Citibank also serves as investment adviser
to other registered investment companies. Citibank's address is 153 East 53rd
Street, New York, New York 10043.

Subject to policies set by the Trustees, Citibank is responsible for overall
management of the Fund's business affairs, and has a Management Agreement with
the Fund. Citibank also provides certain administrative services to the Fund.
These administrative serves include providing general office facilities and
supervising the overall administration of the Fund. Pursuant to a
sub-administrative services agreement, the Distributor performs such
sub-administrative duties for the Fund as from time to time are agreed upon by
Citibank and the Distributor. The Distributor's compensation as
sub-administrator is paid by Citibank.

Citibank has also entered into a Management Agreement with respect to the
Portfolio. Pursuant to this Agreement, Citibank is responsible for managing
that portion of the Portfolio's assets allocated to cash and invested in U.S.
dollar-denominated high quality and short-term money market instruments. The
Portfolio may make such investments during periods of unusual economic or
market conditions or for temporary defensive purposes or liquidity.

Citibank has delegated the daily management of the Portfolio's assets not
managed by Citibank to Franklin Advisory Services, Inc., One Parker Plaza, 16th
Floor, Fort Lee, New Jersey 07024. Franklin Advisory Services, a wholly-owned
subsidiary of Franklin Resources, Inc., is a registered investment adviser.
William J. Lippman, President and Director of Franklin Advisory Services, has
been responsible for the daily management of U.S. small capitalization value
securities since the Fund's inception. Mr. Lippman holds a master of business
administration degree from New York University and a bachelor of business
administration degree from City College of New York. Mr. Lippman also serves as
Senior Vice President of Franklin Resources, Inc. and Franklin Management, Inc.
He has been in the securities industry for over 30 years and with the Franklin
Templeton Group since 1988.

MANAGEMENT FEES. For its services under the Management Agreements with respect
to the Fund and the Portfolio, Citibank receives fees, which are computed daily
and paid monthly, at annual rates equal to 0.25% of the Fund's average net
assets, and 0.75% of the Portfolio's average net assets less the aggregate
amount (if any) payable by Asset Allocation Portfolios pursuant to the
Submanagement Agreement with the Subadviser. These combined management fees are
higher than the management fees paid by most mutual funds. Citibank may
voluntarily agree to waive a portion of its management fees.

The Portfolio pays the Subadviser the following fees, which are accrued daily
and payable monthly and are at the annual rates equal to the percentages
specified below of the aggregate assets of the Portfolio allocated to the
Subadviser:

0.55% on first $250 million
0.50% on remaining assets

BANKING RELATIONSHIPS. Citibank and its affiliates may have deposit, loan and
other relationships with the issuers of securities purchased on behalf of the
Fund, including outstanding loans to such issuers which may be repaid in whole
or in part with the proceeds of securities so purchased. Citibank has informed
the Fund that, in making its investment decisions, it does not obtain or use
material inside information in the possession of any division or department of
Citibank or in the possession of any affiliate of Citibank.

<PAGE>

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

TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT: State Street Bank and Trust
Company acts as transfer agent, dividend disbursing agent and custodian of the
Fund's assets. Securities may be held by a sub-custodian bank approved by the
Trustees. State Street also provides fund accounting services and calculates
the daily net asset value for the Fund. The principal business address of State
Street is 225 Franklin Street, Boston, MA 02110.

DISTRIBUTION ARRANGEMENTS: LFBDS, 6 St. James Avenue, Boston, MA 02116
(telephone: (617) 423-1679) is the Distributor of the Fund's shares. Under a
Service Plan which has been adopted in accordance with Rule 12b-1 under the
1940 Act, the Fund may pay monthly fees at an annual rate not to exceed 0.25%
of the average daily net assets of the Fund. These fees may be used to make
payments to the Distributor for distribution services, to make payments to
Service Agents and others as compensation for the sale of shares of the Fund,
and to make payments for advertising, marketing or other promotional activity,
and payments for preparation, printing and distribution of prospectuses,
statements of additional information and reports for recipients other than
regulators and existing shareholders. The Fund also may make payments to the
Distributor, Service Agents and others for providing personal service or the
maintenance of shareholder accounts.

The Fund and the Distributor provide to the Trustees quarterly a written
report of amounts expended pursuant to the Service Plan and the purposes for
which the expenditures were made.

During the period they are in effect, the Service Plan and Distribution
Agreement obligate the Fund 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
under the Service 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. The Fund will pay the fees to the Distributor, Service Agents
and others until the Service Plan or Distribution Agreement is terminated or
not renewed. In that event, the Distributor's or Service Agent's expenses in
excess of fees received or accrued through the termination date will be the
Distributor's or Service Agent's sole responsibility and not obligations of the
Fund.

TAX MATTERS

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

This discussion of taxes is for general information only. Investors should
consult their own tax advisers about their particular situations.

The Fund intends to meet requirements of the Internal Revenue Code
applicable to regulated investment companies so that it will not be liable for
any federal income or excise taxes. The Fund may pay withholding or other taxes
to foreign governments during the year, however, and these taxes will reduce
the Fund's dividends.

<PAGE>

ordinary income. A portion of distributions from net investment income may be
eligible for the dividends-received deduction available to corporations.
Distributions of long-term net capital gains will be taxed as such regardless
of how long the shares of the Fund have been held. It is uncertain at this time
whether all or any part of such long-term capital gains will be eligible to be
taxed at a maximum rate below 28%.

Fund distributions will reduce the Fund's net asset value per share.
Shareholders who buy shares just before the Fund makes a 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.

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

PERFORMANCE INFORMATION

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

Fund performance may be quoted in advertising, shareholder reports and other
communications in terms of yield, effective yield or total rate of return. All
performance information is historical and is not intended to indicate future
performance. Yields and total rates of return fluctuate in response to market
conditions and other factors.

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

The Fund may provide annualized "yield" and "effective yield" quotations.
The "yield" of the 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 offering price on the last day of that period. The "effective yield"
is calculated similarly, but when annualized the income earned by the
investment during that 30-day or one month period is assumed to be reinvested.
The effective yield is slightly higher than the yield because of the
compounding effect of this assumed reinvestment. The Fund may also provide
yield and effective yield quotations for longer periods.

Of course, any fees charged by a shareholder's Service Agent will reduce
that shareholder's net return on investment. See the Statement of Additional
Information for more information concerning the calculation of yield and total
rate of return quotations for the Fund.

GENERAL INFORMATION

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

ORGANIZATION: The Fund is a diversified series of CitiFunds Trust II. CitiFunds
Trust II is a Massachusetts business trust organized on April 13, 1984; it also
is an open-end management investment company registered under the 1940 Act.
Prior to January 2, 1998 CitiFunds Trust II was known as "Landmark Funds II."
CitiFunds Trust II currently has four active series.

The Fund is a diversified mutual fund. Under the 1940 Act, a diversified
mutual fund must invest at least 75% of its assets in cash and cash items, U.S.

<PAGE>

Government securities, investment company securities and other securities
limited as to any one issuer to not more than 5% of the total assets of the
mutual fund and not more than 10% of the voting securities of the issuer.

Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the trust's
obligations. However, 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 Fund is permitted to invest all or a portion of its assets in one or
more investment companies. The Fund currently invests in the Portfolio. The
Portfolio is a series of Asset Allocation Portfolios, a New York trust.

VOTING AND OTHER RIGHTS: CitiFunds Trust II may issue an unlimited number of
shares, may create new series of shares and may divide shares in each series
into classes. Each share of the Fund gives the shareholder one vote in Trustee
elections and other matters submitted to shareholders for vote. All shares of
each series of CitiFunds Trust II have equal voting rights except that, in
matters affecting only a particular series, only shares of that particular
series are entitled to vote.

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

As a Massachusetts business trust, CitiFunds Trust II is not required to
hold annual shareholder meetings. Shareholder approval will usually be sought
only for changes in the Fund's or Portfolio's fundamental investment
restrictions and for the election of Trustees under certain circumstances.
Trustees may be removed by shareholders under certain circumstances. Each share
of the Fund is entitled to participate equally in dividends and other
distributions and the proceeds of any liquidation of the Fund.

CERTIFICATES: The Fund's Transfer Agent maintains a share
register for shareholders of record. Share certificates are not
issued.

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

EXPENSES: In addition to amounts payable under its Management Agreement and
Service Plan, the Fund is responsible for its own expenses, including among
other things, the costs of securities transactions, the compensation of
Trustees that are not affiliated with Citibank or the Fund's Distributor,
government fees, taxes, accounting and legal fees, expenses of communicating
with shareholders, interest expense, and insurance premiums.

COUNSEL AND INDEPENDENT AUDITOR: Bingham Dana LLP, Boston, MA, is counsel for
the Fund.

Price Waterhouse LLP, 160 Federal Street, Boston, MA 02110, serves as
independent auditor for the Fund.

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

The Statement of Additional Information dated the date hereof contains more
detailed information about the Fund, including information related to (i)
investment policies and restrictions, (ii) the Trustees, officers and
investment manager, (iii) securities transactions, (iv) the Fund's shares,
including rights and liabilities of shareholders, (v) the method used to
calculate performance information and (vi) the determination of net asset
value.

<PAGE>

No person has been authorized to give any information or make any
representations not contained in this Prospectus in connection with the
offering made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the Fund
or its distributor. This Prospectus does not constitute an offering by the Fund
or its distributor in any jurisdiction in which such offering may not lawfully
be made.

APPENDIX

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

PERMITTED INVESTMENTS
AND INVESTMENT PRACTICES

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements in order
to earn a return on temporarily available cash. Repurchase agreements are
transactions in which an institution sells the Fund a security at one price,
subject to the Fund's obligation to resell and the selling institution's
obligation to repurchase that security at a higher price normally within a
seven day period. There may be delays and risks of loss if the seller is unable
to meet its obligation to repurchase.

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

LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements and in order to generate additional income, the Fund may lend its
portfolio securities to broker-dealers and other institutional borrowers. Such
loans must be callable at any time and continuously secured by collateral (cash
or U.S. Government securities) in an amount not less than the market value,
determined daily, of the securities loaned. It is intended that the value of
securities loaned by the Fund would not exceed 30% of the Fund's net assets.

In the event of the bankruptcy of the other party to a securities loan or a
repurchase agreement, the Fund could experience delays in recovering either the
securities lent or cash. To the extent that, in the meantime, the value of the
securities lent have increased or the value of the securities purchased have
decreased, the Fund could experience a loss.

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

<PAGE>

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

RULE 144A SECURITIES. The Fund may purchase restricted securities that are not
registered for sale to the general public. If it is determined that there is a
dealer or institutional market in the securities, the securities will not be
treated as illiquid for purposes of the Fund's investment limitations. The
Trustees will review these determinations. These securities are known as "Rule
144A securities," because they are traded under SEC Rule 144A among qualified
institutional buyers. Institutional trading in Rule 144A securities is
relatively new, and the liquidity of these investments could be impaired if
trading in Rule 144A securities does not develop or if qualified institutional
buyers become, for a time, uninterested in purchasing Rule 144A securities.

PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS. The Fund may invest up to 15% of
its net assets in securities for which there is no readily available market.
These illiquid securities may include privately placed restricted securities
for which no institutional market exists. The absence of a trading market can
make it difficult to ascertain a market value for illiquid investments.
Disposing of illiquid investments may involve time-consuming negotiation and
legal expenses, and it may be difficult or impossible for the Fund to sell them
promptly at an acceptable price.

"WHEN-ISSUED" SECURITIES. In order to ensure the availability of suitable
securities, the Fund may purchase securities on a "when-issued" or on a
"forward delivery" basis, which means that the securities would be delivered to
the Fund at a future date beyond customary settlement time. Under normal
circumstances, the Fund takes delivery of the securities. In general, the Fund
does not pay for the securities until received and does not start earning
interest until the contractual settlement date. While awaiting delivery of the
securities, the Fund establishes a segregated account consisting of cash, cash
equivalents or high quality debt securities equal to the amount of the Fund's
commitments to purchase "when-issued" securities. An increase in the percentage
of the Fund's assets committed to the purchase of securities on a "when-issued"
basis may increase the volatility of its net asset value.

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

OTHER INVESTMENT COMPANIES. Subject to applicable statutory and regulatory
limitations, assets of the Fund may be invested in shares of other investment
companies.

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

<PAGE>

institutional investors. When the Fund purchases or sells a futures contract,
it is required to make an initial margin deposit. Although the amount may vary,
initial margin can be as low as 1% or less of the face amount of the contract.
Additional margin may be required as the contract fluctuates in value. Since
the amount of margin is relatively small compared to the value of the
securities covered by a futures contract, the potential for gain or loss on a
futures contract is much greater than the amount of the Fund's initial margin
deposit. The Fund does not currently intend to enter into a futures contract
if, as a result, the initial margin deposits on all of the Fund's futures
contracts would exceed approximately 5% of the Fund's net assets. Also, the
Fund intends to limit its futures contracts so that the value of the securities
covered by its futures contracts would not generally exceed 50% of the Fund's
other assets and to segregate sufficient assets to meet its obligations under
outstanding futures contracts.

The ability of the Fund to utilize stock index futures contracts successfully
will depend on the Fund's ability to predict stock price movements, which
cannot be assured. In addition to general risks associated with any investment,
the use of futures contracts entails the risk that, to the extent the Fund's
view as to stock price movements is incorrect, the use of futures contracts,
even for hedging purposes, could result in losses greater than if they had not
been used. This could happen, for example, if there is a poor correlation
between price movements of futures contracts and price movements in the Fund's
related portfolio position. Also, the futures markets may not be liquid in all
circumstances. As a result, in certain markets, the Fund might not be able to
close out a transaction without incurring substantial losses, if at all. When
futures contracts are used for hedging, even if they are successful in
minimizing the risk of loss due to a decline in the value of the hedged
position, at the same time they limit any potential gain which might result
from an increase in value of such position. As noted, the Fund may also enter
into transactions in futures contracts for other than hedging purposes (subject
to applicable law), including speculative transactions, which involve greater
risk. In particular, in entering into such transactions, the Fund may
experience losses which are not offset by gains on other portfolio positions,
thereby reducing its gross income. In addition, the markets for such
instruments may be extremely volatile from time to time, which could increase
the risks incurred by the Fund in entering into such transactions.

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

OPTIONS. The Fund may write (sell) covered call and put options and purchase
call and put options on securities. The Fund will write options on securities
for the purpose of increasing its return on such securities and/or to protect
the values of its portfolio. In particular, where the Fund writes an option
which expires unexercised or is closed out by the Fund at a profit, it will
retain the premium paid for the option which will increase its gross income and
will offset in part the reduced value of the portfolio security underlying the
option, or the increased cost of portfolio securities to be acquired. If the
price of the underlying security moves adversely to the Fund's position, the
option may be exercised and the Fund will be required to purchase or sell the
underlying security at a disadvantageous price, which may only be partially
offset by the amount of the premium.

By writing a call option on a security, the Fund limits its opportunity to
profit from any increase in the market value of the underlying security, since
the holder will usually exercise the call option when the market value of the
underlying security exceeds the exercise price of the call. However, the Fund
retains the risk of depreciation in value of securities on which it has written
call options.

The Fund may purchase and write options to buy or sell options on stock index
futures contracts. Such investment strategies will be used for hedging and
non-hedging purposes, subject to applicable law. Put and call options on
futures contracts may be traded by the Fund in order to protect against
declines in values of portfolio securities or against increases in the cost of

<PAGE>

securities to be acquired. Purchase of options on futures contracts may present
less risk in hedging the investment portfolio of the Fund than the purchase or
sale of the underlying futures contracts since the potential loss is limited to
the amount of the premium plus related transaction costs. The writing of such
options, however, does not present less risk than the trading of futures
contracts and will constitute only a partial hedge, up to the amount of the
premium received. In addition, if an option is exercised, the Fund may suffer a
loss on the transaction.

Transactions in options may be entered into on U.S. exchanges regulated by
the SEC and in the over-the-counter market. Futures contracts and options on
futures contracts may be entered into on U.S. exchanges regulated by the
Commodity Futures Trading Commission.

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

<PAGE>
PROSPECTUS

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

______________ __, 199__

CITIFUNDS GROWTH & INCOME PORTFOLIO
(A Member of the CitiFundsSM Family of Funds)

This Prospectus describes CitiFunds Growth & Income Portfolio, a mutual fund
in the CitiFunds Family of Funds. Citibank, N.A. is the investment manager.

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

REMEMBER THAT SHARES OF THE FUND:
- ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY
- ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, CITIBANK
OR ANY OF ITS AFFILIATES
- ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED

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

<PAGE>

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

TABLE OF CONTENTS
Prospectus Summary............................................
Expense Summary...............................................
Investment Information........................................
Risk Considerations...........................................
Valuation of Shares...........................................
Purchases.....................................................
Exchanges.....................................................
Redemptions...................................................
Dividends and Distributions...................................
Management....................................................
Tax Matters...................................................
Performance Information.......................................
General Information...........................................
Appendix --
Permitted Investments and Investment Practices................

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

INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.

<PAGE>

PROSPECTUS SUMMARY

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

See the body of the Prospectus for more information on the topics discussed
in this summary.

THE FUND: This Prospectus describes CitiFunds Growth & Income Portfolio (the
"Fund"). Because the Fund currently invests through Growth & Income Portfolio
(the "Portfolio"), all references in this Prospectus to the Fund include the
Portfolio, except as otherwise noted.

INVESTMENT OBJECTIVE AND POLICIES: The Fund's investment objective is long-term
capital growth and current income. The Fund invests primarily in common stocks
that offer potential for capital growth, current income, or both.

INVESTMENT MANAGER AND DISTRIBUTOR: Citibank, N.A. ("Citibank" or the
"Manager"), a wholly-owned subsidiary of Citicorp, is the investment manager.
Citibank and its affiliates manage more than $88 billion in assets worldwide.
The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or the "Distributor")
is the distributor of shares of the Fund. See "Management."

PURCHASES AND REDEMPTIONS: Investors may purchase and redeem shares of the Fund
through a Service Agent on any day the New York Stock Exchange is open for
trading. See "Purchases" and "Redemptions."

EXCHANGES: Shares may be exchanged for shares of the CitiSelect(R) Portfolios
and other CitiFunds. See "Exchanges."

DIVIDENDS: Dividends, if any, are declared and paid at least quarterly. Net
capital gains, if any, are distributed annually. See "Dividends and
Distributions."

REINVESTMENT: All dividends and capital gains distributions may be received
either in cash or in Fund shares at net asset value. See "Dividends and
Distributions."

WHO SHOULD INVEST: The Fund is designed for investors seeking a diversified
investment portfolio offering the opportunity for capital growth while also
providing current income.

The Fund may invest a portion of its assets in non-U.S. securities. The
special risks of investing in non-U.S. securities include possible adverse
political, social and economic developments abroad, differing regulations to
which non-U.S. issuers are subject and different characteristics of non-U.S.
economies and markets. The Fund's non-U.S. securities often will trade in

<PAGE>

non-U.S. currencies, which can be volatile and may be subject to governmental
controls or intervention. In addition, securities of non-U.S. issuers may be
less liquid and their prices more volatile then those of comparable U.S.
issuers. The Fund may invest in securities of issuers in developing countries,
and all of these risks are increased for investments in issuers in developing
countries.

Certain investment practices, such as the use of forward non-U.S. currency
exchange contracts, also may entail special risks. See "Risk Considerations"
and the Appendix for more information.

EXPENSE SUMMARY

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

CITIFUNDS
GROWTH &
INCOME
PORTFOLIO (1)

SHAREHOLDER TRANSACTION EXPENSES............... None
ANNUAL FUND OPERATING EXPENSES, AFTER FEE
WAIVERS AND REIMBURSEMENTS
(AS A PERCENTAGE OF AVERAGE NET ASSETS):
Management Fees................................ 0.80%
12b-1 Fees (including service fees)(3)......... 0.25%
Other Expenses(2).............................. 0.25%
Total Fund Operating Expenses(2)............... 1.30%

* This table is intended to assist investors in understanding the various costs
and expenses that a shareholder will bear, either directly or indirectly. The
table shows the fees paid to various service providers after giving effect to
expected voluntary partial fee waivers. There can be no assurance that the
fee waivers and reimbursements reflected in the table will continue at their
these levels.
(1) Because the Fund is newly organized, all amounts in the table and the
example are estimated for the current fiscal year.
(2) Absent fee waivers and reimbursements, Other Expenses and Total Fund
Operating Expenses would be 1.11% and 2.16%, respectively.
(3) Includes fees for distribution and shareholder servicing. Long-term
shareholders in the Fund could pay more in sales charges than the economic
equivalent of the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc.

EXAMPLE: A shareholder would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each period indicated
below:

One Three
Year Years
CitiFunds Growth &
Income Portfolio (1) $13 $41

The Example assumes that all dividends are reinvested. Without waivers and
reimbursements, the amounts in the Example would be $22 and $68, respectively.
The assumption of a 5% annual return is required by the Securities and Exchange
Commission for all mutual funds, and is not a prediction of the Fund's future
performance. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OF THE FUND. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.

<PAGE>

INVESTMENT INFORMATION

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

INVESTMENT OBJECTIVE: The Fund's investment objective is long-term capital
growth and current income.

INVESTMENT POLICIES: The Fund invests primarily in common stocks which are
deemed by Citibank to offer potential for capital growth, current income, or
both. The Fund may also purchase corporate bonds, notes and debentures,
preferred stocks, convertible securities (both debt securities and preferred
stocks) and U.S. government securities and may invest a portion of its assets
in cash or money market instruments. The Fund currently intends to invest
primarily in securities of U.S. issuers, but may also invest in securities of
foreign issuers.

At times Citibank may judge that conditions in the securities markets make
pursuing the Fund's basic investment policies inconsistent with the best
interests of its shareholders. At such times Citibank may temporarily use
alternative policies primarily designed to reduce fluctuations in the value of
Fund assets. In implementing these defensive policies, the Fund may invest
without limit in debt securities or preferred stocks, or any other securities
Citibank considers consistent with such defensive policies. It is impossible to
predict when, or for how long, alternative policies will be used.

CERTAIN ADDITIONAL INVESTMENT POLICIES:

FUTURES. The Fund may purchase or sell stock index and foreign currency
futures in order to protect against declines in the value of portfolio
securities or increases in the cost of securities or other assets to be
acquired and, subject to applicable law, to enhance potential gain. The Fund
also may use financial futures in order to protect itself from fluctuations in
interest rates (sometimes called "hedging") without actually buying or selling
securities, or to manage the effective maturity or duration of fixed income
securities in the Fund's investment portfolio in an effort to reduce potential
losses or enhance potential gain. Futures contracts provide for the future sale
by one party and purchase by another party of a specified amount of a security
at a specified future time and price, or for making payment of a cash
settlement based on changes in the value of a security, an index of securities
or other assets. In many cases, the futures contracts that may be purchased or
sold by the Fund are standardized contracts traded on commodities exchanges or
boards of trade. See the Appendix for more information.

<PAGE>

emergency purposes (e.g., to meet redemption requests). Except as otherwise
indicated, the Fund's investment objective and policies may be changed without
shareholder approval. If a percentage or rating restriction (other than a
restriction as to borrowing) is adhered to at the time an investment is made, a
later change in percentage or rating resulting from changes in the Fund's
securities will not be a violation of policy.

BROKERAGE TRANSACTIONS. In connection with the selection of brokers or
dealers for securities transactions for the Fund and the placing of such
orders, brokers or dealers may be selected who also provide brokerage and
research services to the Fund or the other accounts over which Citibank or its
affiliates exercise investment discretion. Citibank 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 Citibank 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.

RISK CONSIDERATIONS

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The risks of investing in the Fund vary depending upon the nature of the
securities held, and the investment practices employed, on its behalf. Certain
of these risks are described below.

CREDIT RISK OF DEBT SECURITIES. Investors should be aware that securities
offering above average yields may at times involve above average risks.
Securities rated Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by
Standard & Poor's Rating Services ("S&P") and equivalent securities may have
speculative characteristics. The values of lower rated fixed income securities
generally fluctuate more than those of higher-rated securities. Adverse
economic or changing circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case for higher
grade obligations. In addition, under such circumstances the values of lower
rated securities may be more volatile, and the markets for these securities may
be less liquid, than those for higher-rated securities. Therefore, the Fund may
as a result find it more difficult to determine the fair value of lower rated
securities. The Fund may invest in securities rated below Baa or BBB (commonly
known as "junk bonds"). These securities are speculative. All of the risks of
investing in lower rated investment grade securities are heightened by
investing in these securities.

ZERO-COUPON AND PAYMENT-IN-KIND BONDS. The Fund also may invest in
"zero-coupon" and "payment-in-kind" bonds. Zero-coupon bonds are issued at a
significant discount from their principal amount and pay interest only at

<PAGE>

maturity rather than at intervals during the life of the security.
Payment-in-kind bonds allow the issuer, at its option, to make current interest
payments on the bonds either in cash or in additional bonds. Both zero-coupon
bonds and payment-in-kind bonds allow an issuer to avoid the need to generate
cash to meet current interest payments. Accordingly, these bonds may involve
greater credit risks than bonds paying interest in cash currently. The values
of zero-coupon bonds and payment-in-kind bonds are also subject to greater
fluctuation in response to changes in market interest rates than bonds that pay
interest in cash currently. Even though such bonds do not pay current interest
in cash, the Fund nonetheless is required to accrue interest income on these
investments and to distribute the interest income on a current basis Thus, the
Fund could be required at times to liquidate other investments in order to
satisfy its distribution requirements.

NON-U.S. SECURITIES. Investments in non-U.S. securities involve risks relating
to political, social and economic developments abroad, as well as risks
resulting from the differences between the regulations to which U.S. and
non-U.S. issuers and markets are subject. These risks may include
expropriation, confiscatory taxation, withholding taxes on dividends and
interest, limitations on the use or transfer of portfolio assets and political
or social instability. Enforcing legal rights may be difficult, costly and slow
in non-U.S. countries, and there may be special problems enforcing claims
against non-U.S. governments. In addition, non-U.S. companies may not be
subject to accounting standards or governmental supervision comparable to U.S.
companies, and there may be less public information about their operations.
Non-U.S. markets may be less liquid and more volatile than U.S. markets, and
may offer less protection to investors such as the Fund. Prices at which the
Fund may acquire securities may be affected by trading by persons with material
non-public information and by securities transactions by brokers in
anticipation of transactions by the Fund.

Because non-U.S. securities often are denominated in currencies other than
the U.S. dollar, changes in currency exchange rates will affect the Fund's net
asset value, the value of dividends and interest earned and gains and losses
realized on the sale of securities. In addition, some non-U.S. currency values
may be volatile and there is the possibility of governmental controls on
currency exchanges or governmental intervention in currency markets.

The Fund may invest in issuers located in developing countries, which are
generally defined as countries in the initial stages of their industrialization
cycles with low per capita income. All of the risks of investing in non-U.S.
securities are heightened by investing in developing countries. Shareholders
should be aware that investing in the equity and fixed income markets of
developing countries involves exposure to economic structures that are
generally less diverse and mature, and to political systems which 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 developed countries with more mature economies;
such markets often have provided higher rates of return, and greater risks, to
investors. These heightened risks include (i) greater risks of expropriation,
confiscatory taxation and nationalization, and less social, political and
economic stability; (ii) the small current size of markets for securities of
issuers based in developing countries and the currently low or non-existent
volume of trading, resulting in a lack of liquidity and in price volatility;
(iii) certain national policies which may restrict the Fund's investment
opportunities including restrictions on investing in issuers or industries
deemed sensitive to relevant national interests; and (iv) the absence of
developed legal structures. Such characteristics can be expected to continue in
the future.

Equity securities traded in certain foreign countries may trade at
price-earnings multiples higher than those of comparable companies trading on
securities markets in the United States, which may not be sustainable. Rapid
increases in money supply in certain countries may result in speculative
investment in equity securities which may contribute to volatility of trading
markets.

The costs attributable to non-U.S. investing, such as the costs of
maintaining custody of securities in non-U.S. countries, frequently are higher
than those involved in U.S. investing. As a result, the operating expense ratio

<PAGE>

of the Fund may be higher than that of investment companies investing
exclusively in U.S. securities.

Certain investment restrictions of the Portfolio cannot be changed without
approval by the investors in the Portfolio. These policies are described in the
Statement of Additional Information. When the Fund is asked to vote on certain
matters concerning the Portfolio the Fund will hold a shareholder meeting and
vote in accordance with shareholder instructions. Of course, the Fund could be
outvoted, or otherwise adversely affected, by other investors in the Portfolio.

Information about other holders of interests in the Portfolio is available
from the Fund's distributor, LFBDS, at (617) 423-1679.

VALUATION OF SHARES

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

<PAGE>

Portfolio securities and other assets are valued primarily on the basis of
market quotations, or if quotations are not available, by a method believed to
accurately reflect fair value. Non-U.S. securities are valued based on
quotations from the primary market in which they are traded and are translated
from the local currency into U.S. dollars using current exchange rates. In
light of the non-U.S. nature of some of the Fund's investments, trading may
take place in securities held by the Fund on days that are not Business Days
and on which it will not be possible to purchase or redeem shares of the Fund.

PURCHASES

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

While there is no sales load imposed on shares of the Fund, the Distributor
receives fees from the Fund pursuant to a Service Plan. See "Management --
Distribution Arrangements."

Shares may be purchased through certain financial institutions (which may
include banks), securities dealers and other industry professionals (called
Service Agents) that have entered into service agreements with the Distributor.
Service Agents may receive certain fees from the Distributor and/or the Fund.
See "Management -- Distribution Arrangements." Customers should contact their
Service Agents for information on purchases. Each Service Agent may establish
its own terms, conditions and charges with respect to services it offers to its
customers. Charges for these services may include fixed annual fees and account
maintenance fees. The effect of any such fees will be to reduce the net return
on the investment of customers of that Service Agent. Each Service Agent has
agreed to transmit to its customers who are shareholders of the Fund
appropriate written disclosure of any fees that it may charge them directly.
Each Service Agent is responsible for transmitting promptly orders of its
customers.

EXCHANGES

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Shares may be exchanged for shares of the CitiSelect Portfolios and other
CitiFunds, or may be acquired through an exchange of shares of those funds.

This exchange privilege may be modified or terminated at any time, upon at
least 60 days' notice when such notice is required by Securities and Exchange

<PAGE>

Commission ("SEC") rules, and is available only in those jurisdictions where
such exchanges legally may be made. See the Statement of Additional Information
for further details. An exchange is treated as a sale of the shares exchanged
and could result in taxable gain or loss to the shareholder making the
exchange.

REDEMPTIONS

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

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

<PAGE>

DIVIDENDS AND DISTRIBUTIONS

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

Substantially all of the Fund's net income from dividends and interest, if
any, is paid to its shareholders of record as a dividend at least quarterly on
or about the last day of March, June, September and December.

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

A shareholder may elect to receive dividends and capital gains distributions
in either cash or additional shares of the Fund issued at net asset value.

MANAGEMENT

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

TRUSTEES AND OFFICERS: The Fund is supervised by the Board of Trustees of
CitiFunds Trust II. The Portfolio is supervised by the Board of Trustees of The
Premium Portfolios. In each case, a majority of the Trustees are not affiliated
with Citibank. In addition, a majority of the disinterested Trustees of the
Fund are different from a majority of the disinterested Trustees of the
Portfolio. More information on the Trustees and officers of the Fund and
Portfolio appears under "Management" in the Statement of Additional
Information.

INVESTMENT MANAGER: The Fund draws on the strength and experience of Citibank.
Citibank offers a wide range of banking and investment services to customers
across the United States and throughout the world, and has been managing money
since 1822. Its portfolio managers are responsible for investing in money
market, equity and fixed income securities. Citibank and its affiliates manage
more than $88 billion in assets worldwide. Citibank is a wholly-owned
subsidiary of Citicorp. Citibank also serves as investment adviser to other
registered investment companies. Citibank's address is 153 East 53rd Street,
New York, New York 10043.

Barbara G. Marcin has been the Fund's manager since its inception. Ms.
Marcin is a Senior Portfolio Manager responsible for managing over $600 million
in U.S. equity and balanced accounts for individuals. She is a member of
Citibank's Global Investment Committee. Ms. Marcin has over 10 years of
investment management experience. Prior to joining Citibank in 1993, she was a
Vice President and portfolio manager at Fiduciary Trust Company International.
She was with E.F. Hutton for three years in the Personal Financial Management
Group.

MANAGEMENT FEES. For its services under the Management Agreements with respect
to the Fund and the Portfolio, Citibank receives fees, which are computed daily
and paid monthly, at annual rates equal to 0.10% of the Fund's average net
assets, and 0.70% of the Portfolio's average net assets, respectively. These
combined management fees are higher than the management fees paid by most
mutual funds. Citibank may voluntarily agree to waive a portion of its
management fees.

<PAGE>

BANK REGULATORY MATTERS. The Glass-Steagall Act prohibits certain financial
institutions, such as Citibank, from underwriting securities of open-end
investment companies, such as the Fund. Citibank believes that its services
under the Management Agreements and the activities performed by it or its
affiliates as Service Agents are not underwriting and are consistent with the
Glass-Steagall Act and other relevant federal and state laws. However, there is
no controlling precedent regarding the performance of the combination of
investment advisory, shareholder servicing and administrative activities by
banks. State laws on this issue may differ from applicable federal law and
banks and financial institutions may be required to register as dealers
pursuant to state securities laws. Changes in either federal or state statutes
or regulations, or in their interpretations, could prevent Citibank or its
affiliates from continuing to perform these services. If Citibank or its
affiliates were to be prevented from acting as the investment manager or a
Service Agent the Fund would seek alternative means for obtaining these
services. The Fund does not expect that shareholders would suffer any adverse
financial consequences as a result of any such occurrence.

The Fund and the Distributor provide to the Trustees quarterly a written
report of amounts expended pursuant to the Service Plan and the purposes for
which the expenditures were made.

<PAGE>

TAX MATTERS

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This discussion of taxes is for general information only. Investors should
consult their own tax advisers about their particular situations.

Fund dividends and capital gains distributions are subject to federal income
tax and may also be subject to state and local taxes. Dividends and
distributions are treated in the same manner for federal tax purposes whether
they are paid in cash or as additional shares. Generally, distributions from
the Fund's net investment income and short-term capital gains will be taxed as
ordinary income. A portion of distributions from net investment income may be
eligible for the dividends-received deduction available to corporations.
Distributions of long-term net capital gains will be taxed as such regardless
of how long the shares of the Fund have been held. It is uncertain at this time
whether all or any part of such long-term capital gains will be eligible to be
taxed at a maximum rate below 28%.

PERFORMANCE INFORMATION

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The Fund may provide annualized "yield" and "effective yield" quotations.
The "yield" of the 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 offering price on the last day of the period. The "effective yield" is
calculated similarly, but when annualized the income earned by the investment
during that 30-day or one month period is assumed to be reinvested. The
effective yield is slightly higher than the yield because of the compounding
effect of this assumed reinvestment. The Fund may also provide yield and
effective yield quotations for longer periods.

<PAGE>

GENERAL INFORMATION

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

The Fund is a diversified mutual fund. Under the 1940 Act, a diversified
mutual fund must invest at least 75% of its assets in cash and cash items, U.S.
Government securities, investment company securities and other securities
limited as to any one issuer to not more than 5% of the total assets of the
mutual fund and not more than 10% of the voting securities of the issuer.

The Fund is permitted to invest all or a portion of its assets in one or
more investment companies. The Fund currently invests in the Portfolio. The
Portfolio is a series of The Premium Portfolios, a New York trust.

CERTIFICATES: The Fund's Transfer Agent maintains a share register for
shareholders of record. Share certificates are not issued.

<PAGE>

COUNSEL AND INDEPENDENT AUDITOR: Bingham Dana LLP, Boston, MA, is counsel for
the Fund.

Price Waterhouse LLP, 160 Federal Street, Boston, MA 02110, serves as
independent auditor for the Fund.

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APPENDIX

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PERMITTED INVESTMENTS
AND INVESTMENT PRACTICES

<PAGE>

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

<PAGE>

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

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

CURRENCY EXCHANGE CONTRACTS. Forward currency exchange contracts may be entered
into for the Fund for the purchase or sale of non-U.S. currency to hedge
against adverse rate changes or otherwise to achieve the Fund's investment
objective. A currency exchange contract allows a definite price in dollars to
be fixed for securities of non-U.S. issuers that have been purchased or sold
(but not settled) for the Fund. Entering into such exchange contracts may
result in the loss of all or a portion of the benefits which otherwise could
have been obtained from favorable movements in exchange rates. In addition,
entering into such contracts means incurring certain transaction costs and
bearing the risk of incurring losses if rates do not move in the direction
anticipated.

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

The Fund also may purchase securities rated lower than Baa by Moody's or BBB
by S&P or comparable securities (commonly known as "junk bonds"). These lower
rated high yielding fixed income securities generally tend to reflect economic
changes (and the outlook for economic growth), short-term corporate and
industry developments and the market's perception of their credit quality
(especially during times of adverse publicity) to a greater extent than higher
rated securities which react primarily to fluctuations in the general level of
interest rates (although these lower rated fixed income securities are also
affected by changes in interest rates). In the past, economic downturns or an
increase in interest rates have under certain circumstances caused a higher
incidence of default by the issuers of these securities and may do so in the
future, especially in the case of highly leveraged issuers. During certain
periods, the higher yields on the Fund's lower rated fixed income securities
are paid primarily because of the increased risk of loss of principal and
income, arising from such factors as the heightened possibility of default or
bankruptcy of the issuers of such securities. Due to the fixed income payments
of these securities, the Fund may continue to earn the same level of interest
income while its net asset value declines due to portfolio losses. The prices
for these securities may be affected by legislative and regulatory
developments. Changes in the value of securities subsequent to their
acquisition will not affect cash income to the Fund but will be reflected in
the net asset value of shares of the Fund. The market for these lower rated
fixed income securities may be less liquid than the market for investment grade
fixed income securities. Furthermore, the liquidity of these lower rated
securities may be affected by the market's perception of their credit quality.
Therefore, the Manager's judgment may at times play a greater role in valuing
these securities than in the case of investment grade fixed income securities,
and it also may be more difficult during times of certain adverse market
conditions to sell these lower rated securities at their fair value to meet
redemption requests or to respond to changes in the market.

<PAGE>

ASSET-BACKED SECURITIES. The Fund may invest in corporate asset-backed
securities. These securities, issued by trusts and special purpose
corporations, are backed by a pool of assets, such as credit card or automobile
loan receivables, representing the obligations of a number of different
parties. Corporate asset-backed securities present certain risks. For instance,
in the case of credit card receivables, these securities may not have the
benefit of any security interest in the related collateral.

The Fund also may purchase mortgage-backed securities issued or guaranteed as
to payment of principal and interest by the U.S. Government or one of its
agencies and backed by the full faith and credit of the U.S. Government,
including direct pass-through certificates of GNMA, as well as mortgage-backed
securities for which principal and interest payments are backed by the credit
of particular agencies of the U.S. Government. Mortgage-backed securities are
generally backed or collateralized by a pool of mortgages. These securities are
sometimes called collateralized mortgage obligations or CMOs.

Even if the U.S. Government or one of its agencies guarantees principal and
interest payments of a mortgage-backed security, the market price of a
mortgage-backed security is not insured and may be subject to market
volatility. When interest rates decline, mortgage-backed securities experience
higher rates of prepayment, because the underlying mortgages are refinanced to
take advantage of the lower rates. Thus the prices of mortgage-backed
securities may not increase as much as prices of other debt obligations when
interest rates decline, and mortgage-backed securities may not be an effective
means of locking in a particular interest rate. In addition, any premium paid
for a mortgage-backed security may be lost when it is prepaid. When interest
rates go up, mortgage-backed securities experience lower rates of prepayment.
This has the effect of lengthening the expected maturity of a mortgage-backed
security. As a result, prices of mortgage-backed securities may decrease more
than prices of other debt obligations when interest rates go up.

Additionally mortgage-backed securities are also subject to maturity
extension risk, that is, the possibility that rising interest rates may cause
prepayments to occur at a slower than expected rate. This particular risk may
effectively convert a security that was considered short or intermediate-term
at the time of purchase into a long-term security. Long-term securities
generally fluctuate more widely in response to changes in interest rates than
short or intermediate-term securities. Thus, a rising interest rate would not
only likely decrease the value of the Fund's securities, but would also
increase the inherent volatility of the Fund by effectively converting short
term debt instruments into long term debt instruments.

DOLLAR ROLLS. The Fund may enter into "dollar rolls." A dollar roll is a
transaction pursuant to which the Fund sells mortgage-backed securities for
delivery in the current month and simultaneously contracts to repurchase
substantially similar (same type, coupon and maturity) securities on a
specified future date. During the roll period, the Fund foregoes principal and
interest paid on the mortgage-backed securities. The Fund is compensated by the
difference between the current sales price and the lower forward price for the
future purchase (often referred to as the "drop") as well as by the interest
earned on the cash proceeds of the initial sale. A "covered roll" is a specific
type of dollar roll for which the Fund establishes a segregated account with
liquid high grade debt securities equal in value to the securities subject to
repurchase by the Fund. The Fund will invest only in covered rolls.

FUTURES. Because the value of a futures contract changes based on the price of
the underlying security or other asset, futures contracts are commonly referred
to as "derivatives." Futures contracts are a generally accepted part of modern
portfolio management and are regularly utilized by many mutual funds and other
institutional investors. When the Fund purchases or sells a futures contract,
it is required to make an initial margin deposit. Although the amount may vary,
initial margin can be as low as 1% or less of the face amount of the contract.
Additional margin may be required as the contract fluctuates in value. Since
the amount of margin is relatively small compared to the value of the
securities covered by a futures contract, the potential for gain or loss on a
futures contract is much greater than the amount of the Fund's initial margin
deposit. The Fund does not currently intend to enter into a futures contract
if, as a result, the initial margin deposits on all of the Fund's futures
contracts would exceed approximately 5% of the Fund's net assets. Also, the
Fund intends to limit its futures contracts so that the value of the securities

<PAGE>

covered by its futures contracts would not generally exceed 50% of the Fund's
other assets and to segregate sufficient assets to meet its obligations under
outstanding futures contracts.

The ability of the Fund to utilize futures contracts successfully will depend
on Citibank's ability to predict interest rate, stock price or currency
movements, which cannot be assured. In addition to general risks associated
with any investment, the use of futures contracts entails the risk that, to the
extent Citibank's view as to interest rate, stock price or currency movements
is incorrect, the use of futures contracts, even for hedging purposes, could
result in losses greater than if they had not been used. This could happen, for
example, if there is a poor correlation between price movements of futures
contracts and price movements in the Fund's related portfolio position. Also,
the futures markets may not be liquid in all circumstances. As a result, in
certain markets, the Fund might not be able to close out a transaction without
incurring substantial losses, if at all. When futures contracts are used for
hedging, even if they are successful in minimizing the risk of loss due to a
decline in the value of the hedged position, at the same time they limit any
potential gain which might result from an increase in value of such position.
As noted, the Fund may also enter into transactions in futures contracts for
other than hedging purposes (subject to applicable law), including speculative
transactions, which involve greater risk. In particular, in entering into such
transactions, the Fund may experience losses which are not offset by gains on
other portfolio positions, thereby reducing its gross income. In addition, the
markets for such instruments may be extremely volatile from time to time, which
could increase the risks incurred by the Fund in entering into such
transactions.

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

The Fund may purchase and write options to buy or sell interest rate futures
contracts and options on stock index futures contracts. Such investment
strategies will be used for hedging and non-hedging purposes, subject to
applicable law. Put and call options on futures contracts may be traded by the

<PAGE>

Fund in order to protect against declines in values of portfolio securities or
against increases in the cost of securities to be acquired. Purchase of options
on futures contracts may present less risk in hedging the investment portfolio
of the Fund than the purchase or sale of the underlying futures contracts since
the potential loss is limited to the amount of the premium plus related
transaction costs. The writing of such options, however, does not present less
risk than the trading of futures contracts and will constitute only a partial
hedge, up to the amount of the premium received. In addition, if an option is
exercised, the Fund may suffer a loss on the transaction.

The Fund may enter into forward foreign currency contracts for the purchase
or sale of a fixed quantity of a foreign currency at a future date at a price
set at the time of the contract. The Fund may enter into forward contracts for
hedging and non-hedging purposes including transactions entered into for the
purpose of profiting from anticipated changes in foreign currency exchange
rates. The Fund has established procedures consistent with statements of the
SEC and its staff regarding the use of forward contracts by registered
investment companies, which requires use of segregated assets or "cover" in
connection with the purchase and sale of such contracts.

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

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

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

<PAGE>

STATEMENT OF
ADDITIONAL INFORMATION
CITIFUNDS GROWTH & INCOME PORTFOLIO
CITIFUNDS SMALL CAP VALUE PORTFOLIO __________ __, 199__
(Members of the CitiFundsSM Family of Funds)

CitiFunds Growth & Income Portfolio and CitiFunds Small Cap Value Portfolio
(the "Funds") are series of CitiFunds Trust II (the "Trust"). The Trust is an
investment company which was organized as a business trust under the laws of
the Commonwealth of Massachusetts on April 13, 1984. Prior to January 2, 1998,
the Trust was known as "Landmark Funds II." The address and telephone number of
the Trust are 6 St. James Avenue, Boston, Massachusetts 02116, (617) 423-1679.
Each Fund is permitted to invest all or a portion of its assets in one or more
other investment companies. Currently, CitiFunds Growth & Income Portfolio
invests its assets in Growth & Income Portfolio, a series of The Premium
Portfolios, and CitiFunds Small Cap Value Portfolio invests its assets in Small
Cap Value Portfolio, a series of Asset Allocation Portfolios. The address of
each of The Premium Portfolios and Asset Allocation Portfolios (the "Portfolio
Trusts") is Elizabethan Square, George Town, Grand Cayman, British West Indies.

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

TABLE OF CONTENTS PAGE
The Trust........................................
Investment Objective and Policies................
Description of Permitted Investments and
Investment Practices.............................
Investment Restrictions..........................
Performance Information..........................
Determination of Net Asset Value; Valuation
of Securities; Additional Redemption
Information......................................
Management.......................................
Portfolio Transactions...........................
Description of Shares, Voting Rights and
Liabilities......................................
Certain Additional Tax Matters...................
Financial Statements.............................
Appendix I - Securities Ratings..................

This Statement of Additional Information sets forth information which may be
of interest to investors but which is not necessarily included in each Fund's
Prospectus, dated __________ ___, 199__. This Statement of Additional
Information should be read in conjunction with the Prospectus of each Fund, a
copy of which may be obtained by an investor without charge by calling
1-800-625-4554.

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 II (the "Trust") is an investment company organized as a
business trust under the laws of the Commonwealth of Massachusetts on April 13,
1984. This Statement of Additional Information describes shares of CitiFunds
Growth & Income Portfolio (the "Growth & Income Fund") and CitiFunds Small Cap
Value Portfolio (the "Small Cap Value Fund" and together with the Growth &
Income Fund, the "Funds"), which are two of four active series of the Trust.
References in this Statement of Additional Information to the "Prospectus" of a
Fund are to the Prospectus, dated __________ ___, 199__, of such Fund.

Each Fund is permitted to seek its investment objective by investing all or
a portion of its assets in one or more investment companies to the extent not
prohibited by the Investment Company Act of 1940, the rules and regulations
thereunder, and exemptive orders granted under such Act. Currently, each of the
Growth & Income Fund and the Small Cap Value Fund invests its assets in Growth
& Income Portfolio and Small Cap Value Portfolio (the "Portfolios"),
respectively. The Growth & Income Portfolio and the Small Cap Value Portfolio
are series of The Premium Portfolios and Asset Allocation Portfolios (the
"Portfolio Trusts"), respectively and are open-end, diversified management
investment companies. Each Portfolio has the same investment objective and
policies as the Fund that invests in it. Because each Fund invests through its
corresponding Portfolio, all references in this Statement of Additional
Information to a Fund include such Fund's corresponding Portfolio, except as
otherwise noted. In addition, references to the Trust include the Portfolio
Trusts, except as otherwise noted.

Citibank, N.A. ("Citibank" or the "Manager") is the investment adviser and
also provides certain administrative services to the Trust and the Portfolio
Trusts. Citibank manages the investments of the Portfolios from day to day in
accordance with each Portfolio's investment objective and policies. The
selection of investments for the Portfolios, and the way they are managed,
depend on the conditions and trends in the economy and the financial
marketplaces. Citibank has delegated the daily management of the Small Cap
Value Portfolio's assets not managed by Citibank to Franklin Advisory Services,
Inc. (the "Subadviser"), a wholly owned subsidiary of Franklin Resources, Inc.,
a publicly owned holding company whose shares are listed on the New York Stock
Exchange.

The Boards of Trustees of the Trust and the Portfolio Trusts provide broad
supervision over the affairs of the Funds and the Portfolios, respectively.
Shares of the Funds are continuously sold by The Landmark Funds Broker-Dealer
Services, Inc., the Funds' distributor ("LFBDS" or the "Distributor"). Shares
of the Funds are sold at net asset value. LFBDS may receive distribution fees
from the Funds pursuant to a Service Plan adopted in accordance with Rule 12b-1
under the Investment Company Act of 1940, as amended (the "1940 Act").

2. INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the CITIFUNDS GROWTH & INCOME PORTFOLIO is
long-term capital growth and current income. The Growth & Income Fund invests
primarily in common stocks that offer potential for capital growth, current
income, or both.

The investment objective of the CITIFUNDS SMALL CAP VALUE PORTFOLIO is
long-term capital growth. Dividend income, if any, is incidental to this
investment objective. The Small Cap Value Fund invests primarily (i.e., at
least 65% of its total assets under normal circumstances) in equity securities
of U.S. issuers that have small market capitalizations and are deemed to be
undervalued.

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.

<PAGE>

Each Fund's Prospectus contains a discussion of the various types of
securities in which that Fund may invest and the risks involved in such
investments. The following supplements the information contained in each
Prospectus concerning the investment objective, policies and techniques of each
Fund.

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

3. DESCRIPTION OF PERMITTED INVESTMENTS
AND INVESTMENT PRACTICES

OPTIONS

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

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

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

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

A Fund may write (sell) covered call and put options and purchase call and
put options on stock indices. In contrast to an option on a security, an option

<PAGE>

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

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

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

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

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

<PAGE>

The Growth & Income Fund may purchase and write options on foreign currencies
in a manner similar to that in which futures contracts on foreign currencies,
or forward contracts, will be utilized.

FUTURES CONTRACTS

Each of the Funds may enter into stock index futures contracts. The Growth &
Income Fund may also enter into interest rate futures contracts and foreign
currency futures contracts. Such investment strategies will be used for hedging
purposes and for nonhedging purposes, subject to applicable law.

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

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

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

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

Each of the Funds may enter into stock index futures contracts to gain stock
market exposure while holding cash available for investments and redemptions.

<PAGE>

The Growth & Income Fund may purchase and sell foreign currency futures
contracts to attempt to protect its current or intended investments from
fluctuations in currency exchange rates. Such fluctuations could reduce the
dollar value of portfolio securities denominated in foreign currencies, or
increase the cost of foreign-denominated securities to be acquired, even if the
value of such securities in the currencies in which they are denominated
remains constant. The Growth & Income Fund may sell futures contracts on a
foreign currency, for example, where it holds securities denominated in such
currency and it anticipates a decline in the value of such currency relative to
the dollar. In the event such decline occurs, the resulting adverse effect on
the value of foreign-denominated securities may be offset, in whole or in part,
by gains on the futures contracts.

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

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

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

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

<PAGE>

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

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

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

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

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

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

OPTIONS ON FUTURES CONTRACTS

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

<PAGE>

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

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

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

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

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

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be possible for a Fund to incur a loss on both the hedging instrument and the
futures contract being hedged.

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

SECURITIES OF NON-U.S. ISSUERS

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

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

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

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

The Growth & Income Fund may invest in securities of non-U.S. issuers that
impose restrictions on transfer within the U.S. or to U.S. persons. Although

<PAGE>

securities subject to such transfer restrictions may be marketable abroad, they
may be less liquid than securities of non-U.S. issuers of the same class that
are not subject to such restrictions.

The risks described above, including the risks of nationalization or
expropriation of assets, are typically increased to the extent that the Growth
& Income Fund invests in issuers located in less developed and developing
nations, whose securities markets are sometimes referred to as "emerging
securities markets." Investments in securities located in such countries are
speculative and subject to certain special risks. Political and economic
structures in many of these countries may be in their infancy and developing
rapidly, and such countries may lack the social, political and economic
stability characteristic of more developed countries. Certain of these
countries have in the past failed to recognize private property rights and have
at times nationalized and expropriated the assets of private companies.

In addition, unanticipated political or social developments may affect the
value of Growth & Income Fund's investments in these countries and the
availability to the Fund of additional investments in these countries. The
small size, limited trading volume and relative inexperience of the securities
markets in these countries may make the Growth & Income Fund's investment in
such countries illiquid and more volatile than investments in more developed
countries, and the Fund may be required to establish special custodial or other
arrangements before making investments in these countries. There may be little
financial or accounting information available with respect to issuers located
on these countries, and it may be difficult as a result to assess the value or
prospects of an investment in such issuers.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS

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

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

A forward contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract, agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers.
A forward contract generally has no deposit requirement, and no fees or
commissions are charged at any stage for trades.

When the Growth & Income Fund enters into a contract for the purchase or sale
of a security denominated in a non-U.S. currency, it may desire to "lock in"
the U.S. dollar price of the security. By entering into a forward contract for
the purchase or sale, for a fixed amount of U.S. dollars, of the amount of
non-U.S. currency involved in the underlying security transaction, the Fund

<PAGE>

will be able to protect against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and the non-U.S. currency
during the period between the date the security is purchased or sold and the
date on which payment is made or received.

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

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

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

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

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

<PAGE>

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

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

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

Investing in ADRs and other depositary receipts presents many of the same
risks regarding currency exchange rates as investing directly in securities
denominated in currencies other than the U.S. dollar. Because the securities
underlying these receipts are traded primarily in non-U.S. currencies, changes
in currency exchange rates will affect the value of these receipts. For
example, decline in the U.S. dollar value of another currency in which
securities are primarily traded will reduce the U.S. dollar value of such
securities, even if their value in the other non-U.S. currency remains
constant, and thus will reduce the value of the receipts covering such
securities. The Growth & Income Fund may employ any of the above described
foreign currency hedging techniques to protect the value of its assets invested
in depositary receipts.

Of course, the Growth & Income Fund is not required to enter into the
transactions described above and does not do so unless deemed appropriate by
the Manager. It should also be realized that these methods of protecting the
value of the Growth & Income Fund's securities against a decline in the value
of a currency do not eliminate fluctuations in the underlying prices of the
securities. Additionally, although such contracts tend to minimize the risk of
loss due to a decline in the value of the hedged currency, they also tend to
limit any potential gain which might result should the value of such currency
increase.

The Growth & Income Fund has established procedures consistent with policies
of the Securities and Exchange Commission ("SEC") concerning forward contracts.
Since those policies currently recommend that an amount of the Fund's assets
equal to the amount of the purchase be held aside or segregated to be used to
pay for the commitment, the Fund expects to always have cash, cash equivalents
or high quality debt securities available sufficient to cover any commitments
under these contracts or to limit any potential risk.

REPURCHASE AGREEMENTS

A Fund may invest in repurchase agreements collateralized by securities in
which the Fund may otherwise invest. Repurchase agreements are agreements by

<PAGE>

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

CONVERTIBLE SECURITIES

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

RULE 144A SECURITIES

Consistent with applicable investment restrictions, a Fund may purchase
securities that are not registered ("restricted securities") under the
Securities Act of 1933 (the "Securities Act"), but can be offered and sold to
"qualified institutional buyers" under Rule 144A under the Securities Act.
However, no Fund will invest more than 15% of its net assets in illiquid
investments, which include securities for which there is no readily available
market, securities subject to contractual restrictions on resale and restricted
securities, unless the Board of Trustees of the Trust determine, based on the
trading markets for the specific restricted security, that it is liquid. The
Trustees may adopt guidelines and delegate to the Manager or to the Subadviser
the daily function of determining and monitoring liquidity of restricted
securities. The Trustees, however, retain sufficient oversight and are
ultimately responsible for the determinations.

Since it is not possible to predict with assurance exactly how the market for
restricted securities sold and offered under Rule 144A will develop, the
Trust's Trustees will carefully monitor each Fund's investments in these
securities, focusing on such factors, among others, as valuation, liquidity and
availability of information.

<PAGE>

LENDING OF SECURITIES

Consistent with applicable regulatory requirements and in order to generate
income, a Fund may lend its securities to broker-dealers and other
institutional borrowers. Such loans will usually be made only to member banks
of the U.S. Federal Reserve System and to member firms of the New York Stock
Exchange (and subsidiaries thereof). Loans of securities would be secured
continuously by collateral in cash, cash equivalents, or U.S. Treasury
obligations maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The cash collateral would be invested in
high quality short-term instruments. Either party has the right to terminate a
loan at any time on customary industry settlement notice (which will not
usually exceed three business days). During the existence of a loan, a Fund
would continue to receive the equivalent of the interest or dividends paid by
the issuer on the securities loaned and with respect to cash collateral would
also receive compensation based on investment of cash collateral (subject to a
rebate payable to the borrower) or a fee from the borrower in the event the
collateral consists of securities. Where the borrower provides a Fund with
collateral consisting of U.S. Treasury obligations, the borrower is also
obligated to pay the Fund a fee for use of the borrowed securities. A Fund,
would not, however, have the right to vote any securities having voting rights
during the existence of the loan, but would call the loan in anticipation of an
important vote to be taken among holders of the securities or of the giving or
withholding of its consent on a material matter affecting the investment. As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower fail financially. However,
the loans would be made only to entities deemed by the Manager or the
Subadviser to be of good standing, and when, in the judgment of the Manager or
the Subadviser, the consideration which can be earned currently from loans of
this type justifies the attendant risk. In addition, a Fund could suffer loss
if the borrower terminates the loan and the Fund is forced to liquidate
investments in order to return the cash collateral to the buyer. If the Manager
or the Subadviser determines to make loans, it is not intended that the value
of the securities loaned would exceed 30% of the value of a Fund's total
assets.

WHEN-ISSUED SECURITIES

A Fund may purchase securities on a "when-issued" or on a "forward delivery"
basis. It is expected that, under normal circumstances, a Fund would take
delivery of such securities. When a Fund commits to purchase a security on a
"when-issued" or on a "forward delivery" basis, it sets up procedures
consistent with SEC policies. Since those policies currently require that an
amount of the Fund's assets equal to the amount of the purchase be held aside
or segregated to be used to pay for the commitment, each Fund expects always to
have cash, cash equivalents, or high quality debt securities sufficient to
cover any commitments or to limit any potential risk. However, even though no
Fund intends to make such purchases for speculative purposes and intends to
adhere to the provisions of SEC policies, purchases of securities on such bases
may involve more risk than other types of purchases. For example, a Fund may
have to sell assets which have been set aside in order to meet redemptions.
Also, if the Manager or the Subadviser determines it is advisable as a matter
of investment strategy to sell the "when-issued" or "forward delivery"
securities, a Fund would be required to meet its obligations from the then
available cash flow or the sale of securities, or, although it would not
normally expect to do so, from the sale of the "when-issued" or "forward
delivery" securities themselves (which may have a value greater or less than
the Fund's payment obligation).

BANK OBLIGATIONS

A Fund may invest in bank obligations, i.e., certificates of deposit, time
deposits (including, with respect to the Growth & Income Fund, Eurodollar time
deposits) and bankers' acceptances and other short-term debt obligations issued
by domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. A bankers' acceptance is a bill of
exchange or time draft drawn on and accepted by a commercial bank. It is used
by corporations to finance the shipment and storage of goods and to furnish
dollar exchange. Maturities are generally six months or less. A certificate of
deposit is a negotiable interest-bearing instrument with a specific maturity.
Certificates of deposit are issued by banks and savings and loan institutions
in exchange for the deposit of funds and normally can be traded in the
secondary market prior to maturity. A time deposit is a non-negotiable receipt

<PAGE>

issued by a bank in exchange for the deposit of funds. Like a certificate of
deposit, it earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market. Time deposits with a
withdrawal penalty are considered to be illiquid securities.

MORTGAGE-BACKED SECURITIES

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

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

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

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

Even if the U.S. government or one of its agencies guarantees principal and
interest payments of a mortgage-backed security, the market price of a
mortgage-backed security is not insured and may be subject to market
volatility. When interest rates decline, mortgage-backed securities experience
higher rates of prepayment because the underlying mortgages are refinanced to
take advantage of the lower rates. The price of mortgage-backed securities may
not increase as much as prices of other debt obligations when interest rates
decline, and mortgage-backed securities may not be an effective means of
locking in a particular interest rate. In addition, any premium paid for a
mortgage-backed security may be lost when it is prepaid. When interest rates go
up, mortgage-backed securities experience lower rates of prepayment. This has

<PAGE>

the effect of lengthening the expected maturity of a mortgage-backed security.
As a result, prices of mortgage-backed securities may decrease more than prices
of other debt obligations when interest rates go up.

MORTGAGE "DOLLAR ROLL" TRANSACTIONS

The Growth & Income Fund may enter into mortgage "dollar roll" transactions
pursuant to which it sells mortgage-backed securities for delivery in the
future and simultaneously contracts to repurchase substantially similar
securities on a specified future date. During the roll period, the Fund
foregoes principal and interest paid on the mortgage-backed securities. The
Growth & Income Fund is compensated for the lost principal and interest by the
difference between the current sales price and the lower price for the future
purchase (often referred to as the "drop") as well as by the interest earned on
the cash proceeds of the initial sale. The Growth & Income Fund may also be
compensated by receipt of a commitment fee.

CORPORATE ASSET-BACKED SECURITIES

The Growth & Income Fund may invest in corporate asset-backed securities.
These securities, issued by trusts and special purpose corporations, are backed
by a pool of assets, such as credit card and automobile loan receivables,
representing the obligations of a number of different parties.

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

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

LOWER RATED DEBT SECURITIES

The Growth & Income Fund may invest in lower rated fixed income securities
(commonly known as "junk bonds"), to the extent described in its Prospectus.
The lower ratings of certain securities held by the Fund reflect a greater
possibility that adverse changes in the financial condition of the issuer or in
general economic conditions, or both, or an unanticipated rise in interest
rates, may impair the ability of the issuer to make payments of interest and
principal. The inability (or perceived inability) of issuers to make timely
payment of interest and principal would likely make the values of such
securities held by the Fund more volatile and could limit the Fund's ability to

<PAGE>

sell its securities at prices approximating the values the Fund had placed on
such securities. In the absence of a liquid trading market for securities held
by it, the Fund at times may be unable to establish the fair value of such
securities.

Securities ratings are based largely on the issuer's historical financial
condition and the rating agencies' analysis at the time of rating.
Consequently, the rating assigned to any particular security is not necessarily
a reflection of the issuer's current financial condition, which may be better
or worse than the rating would indicate. In addition, the rating assigned to a
security by Moody's Investors Service, Inc. or Standard & Poor's Rating
Services (or by any other nationally recognized securities rating organization)
does not reflect an assessment of the volatility of the security's market value
or the liquidity of an investment in the security. See Appendix I to this SAI
for a description of security ratings.

Like those of other fixed-income securities, the values of lower rated
securities fluctuate in response to changes in interest rates. A decrease in
interest rates will generally result in an increase in the value of fixed
income securities. Conversely, during periods of rising interest rates, the
value of the Fund's fixed-income securities will generally decline. The values
of lower rated securities may often be affected to a greater extent by changes
in general economic conditions and business conditions affecting the issuers of
such securities and their industries. Negative publicity or investor
perceptions may also adversely affect the values of lower rated securities.
Changes by recognized rating services in their ratings of any fixed-income
security and changes in the ability of an issuer to make payments of interest
and principal may also affect the value of these investments. Changes in the
value of portfolio securities generally will not affect income derived from
these securities, but will affect the Fund's net asset value. The Fund will not
necessarily dispose of a security when its rating is reduced below its rating
at the time of purchase. However, the Manager will monitor the investment to
determine whether its retention will assist in meeting the Fund's investment
objective.

Issuers of lower rated securities are often highly leveraged, so that their
ability to service their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. Such issuers may
not have more traditional methods of financing available to them and may be
unable to repay outstanding obligations at maturity by refinancing. The risk of
loss due to default in payment of interest or repayment of principal by such
issuers is significantly greater because such securities frequently are
unsecured and subordinated to the prior payment of senior indebtedness.

At times, a substantial portion of the Growth & Income Fund's assets may be
invested in securities as to which the Fund, by itself or together with other
funds and accounts managed by Citibank and its affiliates, holds all or a major
portion. Although Citibank generally considers such securities to be liquid
because of the availability of an institutional market for such securities, it
is possible that, under adverse market or economic conditions or in the event
of adverse changes in the financial condition of the issuer, the Fund could
find it more difficult to sell these securities when Citibank believes it
advisable to do so or may be able to sell the securities only at prices lower
than if they were more widely held. Under these circumstances, it may also be
more difficult to determine the fair value of such securities for purposes of
computing the Fund's net asset value. In order to enforce its rights in the
event of a default under such securities, the Fund may be required to
participate in various legal proceedings or take possession of and manage
assets securing the issuer's obligations on such securities. This could
increase the Fund's operating expenses and adversely affect the Fund's net
asset value. In addition, the Fund's intention to qualify as a "regulated
investment company" under the Internal Revenue Code may limit the extent to
which the Fund may exercise its rights by taking possession of such assets.

Certain securities held by the Growth & Income Fund may permit the issuer at
its option to "call," or redeem, its securities. If an issuer were to redeem
securities held by the Fund during a time of declining interest rates, the Fund
may not be able to reinvest the proceeds in securities providing the same
investment return as the securities redeemed.

The Growth & Income Fund may invest without limit in "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount

<PAGE>

from their principal amount in lieu of paying interest periodically.
Payment-in-kind bonds allow the issuer, at its option, to make current interest
payments on the bonds either in cash or in additional bonds. Because
zero-coupon and payment-in kind bonds do not pay current interest in cash,
their value is subject to greater fluctuation in response to changes in market
interest rates than bonds that pay interest currently. Both zero-coupon and
payment-in-kind bonds allow an issuer to avoid the need to generate cash to
meet current interest payments. Accordingly, such bonds may involve greater
credit risks than bonds paying interest currently in cash. The Fund is required
to accrue interest income on such investments and to distribute such amounts at
least annually to shareholders even though such bonds do not pay current
interest in cash. Thus, it may be necessary at times for the Fund to liquidate
investments in order to satisfy its dividend requirements.

To the extent the Growth & Income Fund invests in securities in the lower
rating categories, the achievement of the Fund's objective is more dependent on
the Manager's investment analysis than would be the case if the Fund were
investing in securities in the higher rating categories. This may be
particularly true with respect to tax-exempt securities, as the amount of
information about the financial condition of an issuer of tax-exempt securities
may not be as extensive as that which is made available by corporations whose
securities are publicly traded.

4. INVESTMENT RESTRICTIONS

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

None of the Funds or the Portfolios may:

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

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

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

<PAGE>

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

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

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

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

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

PERCENTAGE AND RATING RESTRICTIONS

If a percentage restriction or rating restriction on investment or
utilization of assets set forth above or referred to in the Prospectus 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 or Portfolio is
not considered a violation of policy.

5. PERFORMANCE INFORMATION

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 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. Total rates of return also may be calculated on investments
at net asset value.

A 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

<PAGE>

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 maximum 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.

Comparative performance information may be used from time to time in
advertising shares of each Fund, including data from Lipper Analytical
Services, Inc. and other industry sources and publications. From time to time
each Fund may compare its performance against inflation with the performance of
other instruments against inflation, such as FDIC-insured bank money market
accounts. In addition, advertising for each Fund may indicate that investors
should consider diversifying their investment portfolios in order to seek
protection of the value of their assets against inflation. From time to time,
advertising materials for each Fund may refer to or discuss current or past
economic or financial conditions, developments and events.

6. DETERMINATION OF NET ASSET VALUE; VALUATION OF
SECURITIES; ADDITIONAL REDEMPTION INFORMATION

The net asset value per share of each Fund is determined each day which the
New York Stock Exchange is open for trading ("Business Day"). As of the date of
this Statement of Additional Information, such Exchange is open for trading
every weekday except for the following holidays (or the days on which they are
observed): New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. This
determination of net asset value of shares of each Fund is made once each day
as of the close of regular trading on such Exchange by adding the market value
of all securities and other assets of the Fund (including the Fund's interest
in its corresponding Portfolio), then subtracting the liabilities of the Fund,
and then dividing the result by the number of outstanding shares of the Fund.
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 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 where 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. 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 and
may also take place on days on which the Exchange is closed. 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 will 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"

<PAGE>

(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.

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

The Trust may suspend the right of redemption or postpone the date of payment
for shares of a Fund more than seven days during any period when (a) trading in
the markets 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 Exchange is closed (other than customary weekend and
holiday closings); or (c) the SEC has by order permitted such suspension.

7. MANAGEMENT

The Trustees and officers of the Trust and the Portfolio Trusts, their ages
and their principal occupations during the past five years are set forth below.
Their titles may have varied during that period. Asterisks indicate that those
Trustees and officers are "interested persons" (as defined in the 1940 Act) of
the Trust or the Portfolio Trusts. Unless otherwise indicated below, the
address of each Trustee and officer is 6 St. James Avenue, Boston,
Massachusetts. The address of each Portfolio Trust is Elizabethan Square,
George Town, Grand Cayman, British West Indies.

TRUSTEES OF THE TRUST

PHILIP W. COOLIDGE* (aged 46) - President of the Trust and the Portfolio
Trusts; Chief Executive Officer, Signature Financial Group, Inc. and LFBDS
(since December 1988).

RILEY C. GILLEY (aged 71) - Vice President and General Counsel, Corporate
Property Investors (November 1988 to December 1991); Partner, Breed, Abbott &
Morgan (Attorneys) (retired, December 1987). His address is 4041 Gulf Shore
Boulevard North, Naples, Florida.

DIANA R. HARRINGTON (aged 57) - Professor, Babson College (since September
1993); Visiting Professor, Kellogg Graduate School of Management, Northwestern
University (September 1992 to September 1993); Professor, Darden Graduate
School of Business, University of Virginia (September 1978 to September 1993);
Trustee, the Highland Family of Funds (since March 1997). Her address is 120
Goulding Street, Holliston, Massachusetts.

SUSAN B. KERLEY (aged 46) - President, Global Research Associates, Inc.
(Investment Research) (since August 1990); Manager, Rockefeller & Co. (March
1988 to July 1990); Trustee, Mainstay Institutional Funds (since December
1990). Her address is P.O. Box 9572 New Haven, Connecticut.

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

E. KIRBY WARREN (aged 63) - Professor of Management, Graduate School of
Business, Columbia University (since 1987); Samuel Bronfman Professor of
Democratic Business Enterprise (1978 to 1987). His address is Columbia
University, Graduate School of Business, 725 Uris Hall, New York, New York.

<PAGE>

WILLIAM S. WOODS, JR. (aged 77) - Vice President-Investments, Sun Company, Inc.
(retired, April 1984). His address is 35 Colwick Road, Cherry Hill, New Jersey.

TRUSTEES OF THE PORTFOLIO TRUSTS

ELLIOTT J. BERV (aged 54) - Chairman and Director, Catalyst, Inc. (Management
Consultants) (since June 1992); President, Chief Operating Officer and
Director, Deven International, Inc. (International Consultants) (June 1991 to
June 1992); President and Director, Elliott J. Berv & Associates (Management
Consultants) (since May 1984). His address is 15 Stowaway Drive, Cumberland
Foreside, Maine.

PHILIP W. COOLIDGE* (aged 46) - President of the Trust and the Portfolio
Trusts; Chief Executive Officer, Signature Financial Group, Inc. and LFBDS
(since December 1988).

MARK T. FINN (aged 54) - President and Director, Delta Financial, Inc. (since
June 1983); Chairman of the Board and Chief Executive Officer, FX 500 Ltd.
(Commodity Trading Advisory Firm) (since April 1990); Director, Vantage
Consulting Group, Inc. (since October 1988). His address is 3500 Pacific
Avenue, P.O. Box 539, Virginia Beach, Virginia.

WALTER E. ROBB, III (aged 71) - President, Benchmark Consulting Group, Inc.
(since 1991); Principal, Robb Associates (corporate financial advisers) (since
1978); President, Benchmark Advisors, Inc. (Corporate Financial Advisors)
(since 1989); Trustee of certain registered investment companies in the MFS
Family of Funds. His address is 35 Farm Road, Sherborn, Massachusetts.

OFFICERS OF THE TRUST AND THE PORTFOLIO TRUSTS

PHILIP W. COOLIDGE* (aged 46) - President of the Trust and the Portfolio
Trusts; Chairman, Chief Executive Officer and President, Signature Financial
Group, Inc. and LFBDS (since December 1988).

CHRISTINE A. DRAPEAU* (aged 27) - Assistant Secretary and Assistant Treasurer
of the Trust and the Portfolio Trusts; Assistant Vice President, Signature
Financial Group, Inc. (since January 1996); Paralegal and Compliance Officer,
various financial companies (July 1992 to January 1996); Graduate Student,
Bentley College (prior to December 1994).

JOHN R. ELDER* (aged 49) - Treasurer of the Trust and the Portfolio Trusts;
Vice President, Signature Financial Group, Inc. (since April 1995); Treasurer
of the Phoenix Family of Mutual Funds, Phoenix Home Life Mutual Insurance
Company (1983 to March 1995).

LINDA T. GIBSON* (aged 32) - Secretary of the Trust and the Portfolio Trusts;
Vice President, Signature Financial Group, Inc. (since May 1992); Assistant
Secretary, LFBDS (since October 1992); Law Student, Boston University School of
Law (September 1989 to May 1992).

JOAN R. GULINELLO* (aged 42) - Assistant Secretary and Assistant Treasurer of
the Trust and the Portfolio Trusts; Vice President, Signature Financial Group,
Inc. (since October 1993); Secretary, LFBDS (since October 1995); Vice
President and Assistant General Counsel, Massachusetts Financial Services
Company (prior to October 1993).

JAMES E. HOOLAHAN* (aged 50) - Vice President, Assistant Secretary and
Assistant Treasurer of the Trust and the Portfolio Trusts; Senior Vice
President, Signature Financial Group, Inc.

<PAGE>

SUSAN JAKUBOSKI* (aged 33) - Assistant Secretary and Assistant Treasurer of the
Trust and the Portfolio Trusts; Vice President, Signature Financial Group
(Cayman), Ltd. (since August 1994); Senior Fund Administrator, Signature
Financial Group, Inc. (since August 1994); Assistant Treasurer, Signature
Broker-Dealer Services, Inc. (since September 1994); Fund Compliance
Administrator, Concord Financial Group (November 1990 to August 1994). Her
address is Elizabethan Square, George Town, Grand Cayman, British West Indies.

MOLLY S. MUGLER* (aged 46) - Assistant Secretary and Assistant Treasurer of the
Trust and the Portfolio Trusts; Vice President, Signature Financial Group,
Inc.; Assistant Secretary, LFBDS (since December 1988).

KARYN A. NOKE* (aged 27) - Vice President, Assistant Secretary and Assistant
Treasurer of the Trust and the Portfolio Trusts; Vice President, Signature
Financial Group (Cayman), Ltd. (since September 1996); Assistant Vice
President, Signature Financial Group, Inc. (May 1993 to August 1996); Student,
University of Massachusetts (prior to May 1993).

SHARON M. WHITSON* (aged 49) - Assistant Secretary and Assistant Treasurer of
the Trust and the Portfolio Trusts; Assistant Vice President, Signature
Financial Group, Inc. (since November 1992); Associate Trader, Massachusetts
Financial Services Company (prior to November 1992).

JULIE J. WYETZNER* (aged 38) - Vice President, Assistant Secretary and
Assistant Treasurer of the Trust and the Portfolio Trusts; Vice President,
Signature Financial Group, Inc.

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

The following table shows estimated Trustee compensation for the period
indicated.

<TABLE>
<CAPTION>
TRUSTEES COMPENSATION TABLE

TOTAL
PENSION OR COMPENSATION
AGGREGATE AGGREGATE RETIREMENT ESTIMATED FROM THE
COMPENSATION COMPENSATION BENEFITS ANNUAL REGISTRANT AND
FROM SMALL FROM GROWTH ACCRUED AS BENEFITS FUND COMPLEX
CAP VALUE & INCOME PART OF FUND UPON PAID TO
TRUSTEE FUND(1) FUND(1) EXPENSES RETIREMENT TRUSTEES(1)(2)

<S> <C> <C> <C> <C> <C>
Philip W. $0 $0 None None $0
Coolidge

Riley C. $1,355 $1,355 None None $46,000
Gilley

Diana R. $1,435 $1,435 None None $47,250
Harrington

Susan B. $1,429 $1,429 None None $45,250
Kerley

C. Oscar $1,439 $1,439 None None $58,875
Morong, Jr.

E. Kirby $1,410 $1,410 None None $47,375
Warren

William S. $1,442 $1,442 None None $47,000
Woods, Jr.
</TABLE>

<PAGE>

(1) Information is estimated for the fiscal year ending October 31, 1998.

(2) Messrs. Coolidge, Gilley, Morong, Warren and Woods and Mses. Harrington and
Kerley are trustees of 48, 31, 28, 28, 30, 29 and 29 funds, respectively, of
the fund family.

As of the date of this Statement of Additional Information, all of the
outstanding shares of each Fund are owned by LFBDS.

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

MANAGER

Citibank serves as the manager of each Portfolio and provides certain
administrative services to the Trust and the Portfolio Trusts pursuant to
separate management agreements (the "Management Agreements"). Subject to
policies as the Board of Trustees of the Portfolio Trusts may determine,
Citibank manages the securities of each Portfolio and makes investment
decisions for each Portfolio. The Management Agreements with the Portfolio
Trusts provide that Citibank may delegate the daily management of the
securities of the Portfolios to one or more subadvisers. Citibank furnishes at
its own expense all services, facilities and personnel necessary in connection
with managing each Portfolio's investments and effecting securities
transactions for each Portfolio. The Management Agreement with respect to Small
Cap Value Portfolio will continue in effect until August 8, 1999 and the
Management Agreement with respect to Growth & Income Portfolio will continue in
effect until November 14, 1999, and thereafter as long as such continuance is
specifically approved at least annually by the Board of Trustees of the
applicable Portfolio Trust or by a vote of a majority of the outstanding voting
securities of the applicable Portfolio, and, in either case, by a majority of
the Trustees of the applicable Portfolio Trust who are not parties to the
Management Agreement or interested persons of any such party, at a meeting
called for the purpose of voting on the Management Agreement. The Management
Agreements with the Trust with respect to each of the Funds will continue in
effect until November 14, 1999 and thereafter as long as such continuance is
specifically approved at least annually by the Board of Trustees of the Trust
or by a vote of a majority of the outstanding voting securities of the
applicable Fund, and, in either case, by a majority of the Trustees of the
Trust who are not parties to the Management Agreement or interested persons of
any such party, at a meeting called for the purpose of voting on the Management
Agreement.

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

<PAGE>

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

The Prospectus contains a description of the fees payable to Citibank for
services under each of the Management Agreements. Citibank may reimburse any
Fund or Portfolio or waive all or a portion of its management fees.

Pursuant to separate sub-administrative services agreements with Citibank,
LFBDS and Signature Financial Group (Cayman) Ltd. ("SFG") perform such
sub-administrative duties for the Trust and the Portfolio Trusts, respectively,
as from time to time are agreed upon by Citibank, LFBDS and SFG, as
appropriate. For performing such sub-administrative services, LFBDS and SFG
receive compensation as from time to time is agreed upon by Citibank, not in
excess of the amount paid to Citibank for its services under the Management
Agreements with the Trust and the Portfolio Trusts, respectively. All such
compensation is paid by Citibank.

Pursuant to its Management Agreement with Asset Allocation Portfolios
("AAP"), Citibank is responsible for managing that portion of the Small Cap
Value Portfolio's assets allocated to cash and invested in U.S.
dollar-denominated high quality and short-term money market instruments. The
Portfolio may make such investments during periods of unusual economic or
market conditions or for temporary defensive purposes or liquidity. Pursuant to
a Submanagement Agreement with AAP, the Subadviser manages those assets of the
Small Cap Value Portfolio not managed by Citibank. The Subadviser's
compensation is described in the Prospectus for the Small Cap Value Fund and is
payable by AAP from the assets of the Small Cap Value Portfolio.

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

The Submanagement Agreement will continue in effect until May 9, 1999, and
thereafter as long as such continuance is specifically approved at least
annually by the Board of Trustees of AAP or by a vote of a majority of the
outstanding voting securities of the Small Cap Value Portfolio, and, in either
case, by a majority of the Trustees of AAP who are not parties to the
Submanagement Agreement or interested persons of any such party, at a meeting
called for the purpose of voting on the Submanagement Agreement.

The Submanagement Agreement provides that the Subadviser may render services
to others. The Submanagement Agreement is terminable without penalty on not
more than 60 days' nor less than 30 days' written notice by AAP, when
authorized either by a vote of a majority of the outstanding voting securities

<PAGE>

of the Small Cap Value Portfolio or by a vote of a majority of the Board of
Trustees of AAP, or by Citibank on not more than 60 days' nor less than 30
days' written notice, and will automatically terminate in the event of its
assignment. The Submanagement Agreement may be terminated by the Subadviser on
not less than 90 days' written notice. Upon termination of the Submanagement
Agreement, Citibank will maintain responsibility for managing those assets
formerly managed by the Subadviser. The Submanagement Agreement provides that
neither the Subadviser nor its personnel shall be liable for any error of
judgment or mistake of law or for any loss arising out of any investment or for
any act or omission in the execution of security transactions for the Small Cap
Value Portfolio, except for willful misfeasance, bad faith or gross negligence
or reckless disregard of its or their obligations and duties under the
Submanagement Agreement.

DISTRIBUTOR

LFBDS, 6 St. James Avenue, Boston, MA 02116, serves as the Distributor of
each Fund's shares pursuant to a Distribution Agreement with the Trust for
shares of each Fund (the "Distribution Agreement"). Unless otherwise terminated
the Distribution Agreement will continue from year to year upon annual approval
by the Trust's Board of Trustees and by 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 such party, cast in person at a meeting called for
the purpose of voting on such approval. The Distribution Agreement will
terminate in the event of its assignment, as defined in the 1940 Act.

Under a Service Plan for shares of the Funds (the "Service Plan") which has
been adopted in accordance with Rule 12b-1 under the 1940 Act, each Fund may
pay monthly fees at an annual rate not to exceed 0.25% of the average daily net
assets of the Fund. Such fees may be used to make payments to the Distributor
for distribution services, to securities dealers and other industry
professionals (called "Service Agents") that have entered into service
agreements with the Distributor and others in respect of the sale of shares of
the Fund, and to other parties in respect of the sale of shares of the Fund,
and to make payments for advertising, marketing or other promotional activity,
and payments for preparation, printing, and distribution of prospectuses,
statements of additional information and reports for recipients other than
regulators and existing shareholders. Each Fund also may make payments to the
Distributor, Service Agents and others for providing personal service or the
maintenance of shareholder accounts. Each Fund and the Distributor provide to
the Trustees quarterly a written report of amounts expended pursuant to the
Service Plan and the purposes for which the expenditures were made.

The Service Plan obligates each Fund 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 Service Plan for the Funds, each Fund will
not be obligated to pay more than those fees and, if their expenses are less
than the fees paid to them, they will realize a profit. Each Fund will pay the
fees to the Distributor, Service Agents and others until the Service Plan or
Distribution Agreement is terminated or not renewed. In that event, the
Distributor's or Service Agent's expenses in excess of fees received or accrued
through the termination date will be the Distributor's or Service Agent's sole
responsibility and not obligations of the Fund.

From time to time the Distributor may make payments for distribution out of
its past profits or any other sources available to it.

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 Trust's 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 such 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 the disinterested Trustees (as defined in the 1940 Act) then in
office. The Service Plan may be terminated with respect to 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 of that Fund. The Service Plan
may not be amended to increase materially the amount of any Fund's permitted
expenses thereunder without the approval of a majority of the outstanding

<PAGE>

voting securities of that Fund and may not be materially amended in any case
without a vote of the 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.

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

TRANSFER AGENT AND CUSTODIAN

The Trust has entered into a Transfer Agency and Service Agreement with
State Street Bank and Trust Company ("State Street"), pursuant to which State
Street acts as transfer agent for each Fund. The Trust also has entered into a
Custodian Agreement and a Fund Accounting Agreement with State Street, pursuant
to which custodial and fund accounting services, respectively, are provided for
each Fund. See "Transfer Agent, Custodian and Fund Accountant" in each
Prospectus for additional information.

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

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

AUDITORS

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

8. PORTFOLIO TRANSACTIONS

The Trust trades securities for a Fund if it believes that a transaction net
of costs (including custodian charges) will help achieve the Fund's investment
objective. Changes in a 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 a Fund are made by a portfolio manager who is an employee
of Citibank and who is appointed and supervised by its senior officers or in
the case of the Small Cap Value Fund, by the Subadviser. The portfolio manager
or Subadviser may serve other clients of Citibank 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

<PAGE>

accounts over which the Manager, the Subadviser or their affiliates exercise
investment discretion. The Manager and Subadviser are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for a Fund which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Manager or the Subadviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction or
the overall responsibilities which the Manager, the Subadviser and their
affiliates have with respect to accounts over which they exercise investment
discretion. The Trustees of the Trust periodically review the commissions paid
by a Fund to determine if the commissions paid over representative periods of
time were reasonable in relation to the benefits to a Fund.

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

In certain instances there may be securities that are suitable as an
investment for a Fund as well as for one or more of Citibank's or the
Subadviser's other clients. Investment decisions for a Fund and for Citibank's
and the Subadviser'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 or the size of the position obtainable
in a security for a Fund. When purchases or sales of the same security for a
Fund and for other portfolios managed by Citibank or the Subadviser occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large volume purchases or sales.

9. 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 and 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. In addition to the Funds, there are currently two other active
series of the Trust: CitiFunds Large Cap Growth Portfolio and CitiFunds Small
Cap Growth Portfolio. Each share of a Fund represents an equal proportionate
interest in the Fund with each other share. Shares of each series of the Trust
participate equally in the earnings, dividends and distribution of net assets
of the particular series upon liquidation or dissolution. Shares of each series
are entitled to vote separately to approve management agreements or changes in
investment policy, 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 series or class, only shares of that series or class are
entitled to vote.

Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the Trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Trust may elect all of the Trustees of the Trust if
they choose to do so and in such event the other shareholders in the Trust
would not be able to elect any Trustee. The Trust is not required and has no
present intention of holding annual meetings of shareholders but the Trust will
hold special meetings of a Fund's shareholders when in the judgment of the
Trust's Trustees it is necessary or desirable to submit matters for a
shareholder vote. Shareholders have under certain circumstances (e.g., upon
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

<PAGE>

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 the 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.

Share certificates will not be 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 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 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 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.

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

<PAGE>

10. CERTAIN ADDITIONAL TAX MATTERS

Each Fund has elected to be treated, and intends to qualify each year, as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (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 a Fund,
although non-U.S. source income earned by a Fund may be subject to non-U.S.
withholding or other taxes. If any 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. Each Portfolio Trust
believes its Portfolio also will not be required to pay any U.S. federal income
or excise taxes on its income.

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

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

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

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

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

<PAGE>

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

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

If a Fund holds more than 50% of its assets in foreign stock and securities
at the close of its taxable year, the Fund may elect to "pass through" to the
Fund's shareholders foreign income taxes paid. If a 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 its shareholders foreign income taxes paid by it,
shareholders will not be able to claim any deduction or credit for any part of
the foreign taxes paid by the Fund.

Each Fund 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 U.S. Distributions received from a Fund by non-U.S. persons also may be
subject to tax under the laws of their own jurisdiction.

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

11. FINANCIAL STATEMENTS

Each Fund is newly-organized and has not yet issued financial statements.

<PAGE>

APPENDIX I

SECURITIES RATINGS

THE FOLLOWING RATING SERVICES DESCRIBE RATED SECURITIES AS FOLLOWS:

MOODY'S INVESTORS SERVICE, INC.

BONDS

Aaa -- Bonds which are rated Aaa rate judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than the Aaa
securities.

A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.

Baa -- Bonds which are rated Baa are considered as medium grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba -- Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca -- Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.

C -- Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

<PAGE>

STANDARD & POOR'S RATING SERVICES

BONDS

AAA -- Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only to a small degree.

A -- Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. An obligation rated BBB exhibits adequate
protection parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to
pay interest and repay principal on obligations in this category than in higher
rated categories.

BB -- Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.

B -- Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair the capacity or
willingness to pay interest and repay principal. The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.

CCC -- Debt rated CCC has a currently identifiable vulnerability to default and
is dependent upon favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC ratings category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.

CC -- Debt rated CC is currently highly vulnerable to nonpayment. The rating CC
typically is applied to debt subordinated to senior debt that is assigned an
actual or implied CCC rating.

C -- The rating C typically is applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may be
used to cover a situation where a bankruptcy petition has been filed or similar
action has been taken, but debt service payments are continued.

D -- Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
debt service payments are jeopardized.

DUFF & PHELPS CORPORATION

LONG-TERM DEBT

AAA -- Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.

<PAGE>

AA+, AA, AA- -- High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of economic conditions.

A+, A, A- -- Protection factors are average but adequate. However, risk factors
are more variable and greater in periods of economic stress.

BBB+, BBB, BBB- -- Below-average protection factors but still considered
sufficient for prudent investment. Considerable variability in risk during
economic cycles.

BB+, BB, BB- -- Below investment grade but deemed likely to meet obligations
when due. Present or prospective financial protection factors fluctuate
according to industry conditions or company fortunes. Overall quality may move
up or down frequently within this category.

B+, B, B- -- Below investment grade and possessing risk that obligations will
not be met when due. Financial protection factors will fluctuate widely
according to economic cycles, industry conditions and/or company fortunes.
Potential exists for frequent changes in the rating within this category or
into a higher or lower rating grade.

CCC -- Well below investment-grade securities. Considerable uncertainty exists
as to timely payment of principal, interest or preferred dividends. Protection
factors are narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable company developments.

DD -- Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or interest payments.

FITCH INVESTORS SERVICE, INC.

AAA -- Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.

AA -- Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
very strong, although not quite as strong as bonds rated AAA.

A -- Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.

BBB -- Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds,
and therefore impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds with higher
ratings.

BB -- Bonds considered to be speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified which could
assist the obligor in satisfying its debt service requirements.

B -- Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited margins
of safety and the need for reasonable business and economic activity throughout
the life of the issue.

<PAGE>

CCC -- Bonds have certain characteristics which, with passing of time, could
lead to default on either principal or interest payments. The ability to meet
obligations requires an advantageous business and economic environment.

CC -- Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C -- Bonds are in imminent default in payment of interest or principal.

DDD, DD, and D -- Bonds are in default and in arrears in interest and/or
principal payments. Such bonds are extremely speculative and should be valued
only on the basis of their ultimate recovery value in liquidation or
reorganization of the obligor. DDD represents the highest potential for
recovery on these bonds, and D represents the lowest potential for recovery.

<PAGE>

CITIFUNDS GROWTH & INCOME PORTFOLIO
CITIFUNDS SMALL CAP VALUE PORTFOLIO

INVESTMENT MANAGER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

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

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

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

LEGAL COUNSEL
Bingham Dana LLP
150 Federal Street, Boston, MA 02110

PART C

Item 24. Financial Statements and Exhibits.

(a) FINANCIAL STATEMENTS INCLUDED IN PART A:
Not applicable.

FINANCIAL STATEMENTS INCLUDED IN PART B:
Not applicable.

<TABLE>
<CAPTION>
(b) Exhibits.
<S> <C> <C>

*** 1(a) Amended and Restated Declaration of Trust of the Registrant
1(b) Forms of Amendments to Amended and Restated Declaration of
Trust of the Registrant
* 2(a) Amended and Restated By-Laws of the Registrant
** and filed 2(b) Amendments to Amended and Restated By-Laws filed of the Registrant
herewith
5(a) Form of Management Agreement between the Registrant, with respect
to CitiFunds Small Cap Value Portfolio, and Citibank, N.A.
("Citibank"), as investment manager and administrator
5(b) Form of Management Agreement between the Registrant, with respect
to CitiFunds Growth & Income Portfolio, and Citibank, as investment
manager and administrator
6 Form of Distribution Agreement between the Registrant, with respect
to CitiFunds Small Cap Value Portfolio and CitiFunds Growth &
Income Portfolio, and The Landmark Funds Broker-Dealer Services,
Inc. ("LFBDS"), as distributor
8 Custodian Contract between the Registrant and State
Street Bank and Trust Company ("State Street"), as custodian
9(a) Form of Sub-Administrative Services Agreement between Citibank and LFBDS
* and filed 9(b) Transfer Agency and Service Agreement between the Registrant and
herewith State Street, as transfer agent
9(c) Accounting Services Agreement between the Registrant and State
Street, as fund accounting agent
10 Opinion and Consent of Counsel
15 Form of Service Plan of the Registrant with respect to the CitiFunds
Small Cap Value Portfolio and CitiFunds Growth & Income Portfolio
** 16 Performance Calculations
25(a) Powers of Attorney for the Registrant
25(b) Powers of Attorney for Asset Allocation Portfolios
25(c) Powers of Attorney for The Premium Portfolios
</TABLE>
- ---------------------
* Incorporated herein by reference to Post-Effective Amendment
No. 8 to the Registrant's Registration Statement on Form
N-1A (File No. 2-90519) as filed with the Securities and
Exchange Commission on March 2, 1992.
<PAGE>

** Incorporated herein by reference to Post-Effective Amendment
No. 12 to the Registrant's Registration Statement on Form
N-1A (File No. 2-90519) as filed with the Securities and
Exchange Commission on October 14, 1994.

*** Incorporated herein by reference to Post-Effective Amendment
No. 17 to the Registrant's Registration Statement on Form
N-1A (File No. 2-90519) as filed with the Securities and
Exchange Commission on February 28, 1997.

Item 25. Persons Controlled by or under Common Control with
Registrant.

Not applicable.

Item 26. Number of Holders of Securities.

Title of Class Number of Record Holders
Shares of Beneficial Interest As of October 14, 1997
(without par value)

Landmark Small Cap Equity Fund 7

Landmark Equity Fund 7

CitiFunds Small Cap Value Portfolio 0

CitiFunds Growth & Income Portfolio 0

Item 27. Indemnification.

Reference is hereby made to (a) Article V of the Registrant's Amended and
Restated Declaration of Trust, filed as an Exhibit to Amendment No. 17 to the
Registrant's Registration Statement on Form N-1A; (b) Section 6 of the
Distribution Agreement between the Registrant and The Landmark Funds
Broker-Dealer Services, Inc., 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 28. Business and Other Connections of Investment Adviser.

Citibank, N.A. ("Citibank") is a commercial bank offering a wide range of
banking and investment services to customers across the United States and
around the world. Citibank is a wholly-owned subsidiary of Citicorp, a
registered bank holding company. Citibank also serves as investment adviser to
the following registered investment companies (or series thereof): The Premium

<PAGE>

Portfolios (Balanced Portfolio, Equity Portfolio, Government Income Portfolio,
International Equity Portfolio, Emerging Asian Markets Equity Portfolio and
Small Cap Equity Portfolio), Tax Free Reserves Portfolio, U.S. Treasury
Reserves Portfolio, Cash Reserves Portfolio, Asset Allocation Portfolios (Asset
Allocation Portfolio 200, Asset Allocation Portfolio 300, Asset Allocation
Portfolio 400 and Asset Allocation Portfolio 500), Landmark Multi-State Tax
Free Funds (Landmark New York Tax Free Reserves, Landmark Connecticut Tax Free
Reserves and Landmark California Tax Free Reserves), Landmark Fixed Income
Funds (Landmark Intermediate Income Fund), Landmark Tax Free Income Funds
(Landmark National Tax Free Income Fund and Landmark New York Tax Free Income
Fund), CitiFunds Institutional Trust (CitiFunds Institutional Cash Reserves)
and Variable Annuity Portfolios (CitiSelectSM VIP Folio 200, CitiSelectSM VIP
Folio 300, CitiSelectSM VIP Folio 400, CitiSelectSM VIP Folio 500 and Landmark
Small Cap Equity VIP Fund). Citibank and its affiliates manage assets in excess
of $88 billion worldwide. The principal place of business of Citibank is
located at 399 Park Avenue, New York, New York 10043.

John S. Reed is the Chairman of the Board and a Director of Citibank. The
following are Vice Chairmen of the Board and Directors of Citibank: Paul J.
Collins, William R. Rhodes and H. Onno Ruding. Other Directors of Citibank are
Alain J.P. Belda, President and Chief Operating Officer, Alcoa Corporation; D.
Wayne Calloway, former Chairman and Chief Executive Officer, PepsiCo, Inc.,
Purchase, New York; Kenneth T. Derr, Chairman and Chief Executive Officer,
Chevron Corporation; John M. Deutch, Director, CMS Energy; Reuben Marks,
Chairman and Chief Executive Officer, Colgate-Palmolive Company; Richard D.
Parsons, Member, Board of Representatives, Time Warner Entertainment Company,
L.P.; Rozanne L. Ridgway, President, The Atlantic Council of the United States;
Robert B. Shapiro, President and Chief Operating Officer, Monsanto Company;
Frank A. Shrontz, Chairman and Chief Executive Officer, The Boeing Company,
Seattle, Washington; Roger B. Smith, Former Chairman and Chief Executive
Officer, General Motors Corporation; Franklin A. Thomas, President, The Ford
Foundation, New York, New York; and Edgar S. Woolard, Jr., Chairman and Chief
Executive Officer, E.I. DuPont de Nemours & Company.

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

D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, PepsiCo, Inc.

Paul J. Collins Director, Kimberly-Clark Corporation

Kenneth T. Derr Director, American Telephone and Telegraph, Co.
Director, Chevron Corporation
Director, Potlatch Corporation

John M. Deutch Director, Ariad Pharmaceuticals, Inc.
Director, CMS Energy
Director, Palomar Medical Technologies, Inc.

Reuben Marks Director, Colgate-Palmolive Company
Director, New York Stock Exchange
Director, Time Warner, Inc.
Non-Executive Director, Pearson, PLC

<PAGE>

Richard D. Parsons Director, Federal National Mortgage Association
Director, Philip Morris Companies Incorporated
Member, Board of Representatives, Time Warner
Entertainment Company, L.P.
Director and President, Time Warner, Inc.

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

William R. Rhodes Director, Private Export Funding Corporation

Rozanne L. Ridgway Director, 3M
Director, Bell Atlantic Corporation
Director, Boeing Company
Director, Emerson Electric Company
Member-International Advisory Board,
New Perspective Fund, Inc.
Director, RJR Nabisco, Inc.
Director, Sara Lee Corporation
Director, Union Carbide Corporation

H. Onno Ruding Member, Board of Supervisory Directors,
Amsterdam Trustee's Kantoor
Board Member, Corning Incorporated
Advisor, Intercena (C&A)(Netherlands)
Member, Pechiney S.A.
Member, Board of Advisers, Robeco N.V.
Advisory Director, Unilever N.V.
Advisory Director, Unilever PLC

Robert B. Shapiro Director, G.D. Searle & Co.
Director, Silicon Graphics
Director, Monsanto Company
Director, The Nutrasweet Company

Frank A. Shrontz Director, 3M
Director, Baseball of Seattle, Inc.
Director, Boeing Company
Director, Boise Cascade Corp.
Director, Chevron Corporation

Franklin A. Thomas Director, Aluminum Company of America
Director, Cummins Engine Company, Inc.
Lucent Technologies
Director, PepsiCo, Inc.

<PAGE>

Edgar S. Woolard, Jr. Director, E.I. DuPont de Nemours &
Company
Director, Apple Computer, Inc.
Director, Zurich Holding Company of America, Inc.
Advisory Director, Zurich Insurance Corporation

Item 29. Principal Underwriters.

(a) The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), the
Registrant's Distributor, is also the distributor for Landmark International
Equity Fund, Landmark Emerging Asian Markets Equity Fund, Landmark U.S.
Treasury Reserves, Landmark Cash Reserves, Premium U.S. Treasury Reserves,
Premium Liquid Reserves, Landmark Institutional U.S. Treasury Reserves,
Landmark Institutional Liquid Reserves, Landmark Tax Free Reserves, Landmark
Institutional Tax Free Reserves, Landmark California Tax Free Reserves,
Landmark Connecticut Tax Free Reserves, Landmark New York Tax Free Reserves,
Landmark U.S. Government Income Fund, Landmark Intermediate Income Fund,
Landmark Balanced Fund, Landmark Equity Fund, Landmark Small Cap Equity Fund,
Landmark National Tax Free Income Fund, Landmark New York Tax Free Income Fund,
CitiSelectSM VIP Folio 200, CitiSelectSM VIP Folio 300, CitiSelectSM VIP Folio
400, CitiSelectSM VIP Folio 500, Landmark Small Cap Equity VIP Fund,
CitiSelectSM Folio 200, CitiSelectSM Folio 300, CitiSelectSM Folio 400 and
CitiSelectSM Folio 500. LFBDS is also the placement agent for International
Equity Portfolio, Balanced Portfolio, Equity Portfolio, Small Cap Equity
Portfolio, Government Income Portfolio, Emerging Asian Markets Equity
Portfolio, Tax Free Reserves Portfolio, Cash Reserves Portfolio, U.S. Treasury
Reserves Portfolio, Asset Allocation Portfolio 200, Asset Allocation Portfolio
300, Asset Allocation Portfolio 400 and Asset Allocation Portfolio 500.

(b) The information required by this Item 29 with respect to each
director and officer of LFBDS is incorporated by reference to Schedule A of
Form BD filed by LFBDS pursuant to the Securities and Exchange Act of 1934
(File No. 8-32417).

Item 30. 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

The Landmark Funds Broker-Dealer Services, Inc. 6 St. James Avenue
(distributor) Boston, MA 02116

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

<PAGE>

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

Item 31. Management Services.

Not applicable.

Item 32. Undertakings.

(a) The Registrant hereby undertakes to file a post-effective amendment
to this Registration Statement, containing reasonably current
financial statements that need not be certified, within four to six
months following the commencement of operations of CitiFunds Small
Cap Value Portfolio and CitiFunds Growth & Income Portfolio.

(b) The Registrant hereby undertakes to call a meeting of shareholders
for the purpose of voting upon the question of removal of one or more
of the Trust's Trustees when requested in writing to do so by the
holders of at least 10% of the Registrant's outstanding shares, and
in connection therewith to comply with the provisions of Section
16(c) of the Investment Company Act of 1940 relating to shareholder
communication.

(c) The Registrant undertakes to furnish to each person to whom a
prospectus of CitiFunds Small Cap Value Portfolio and CitiFunds
Growth & Income Portfolio is delivered with a copy of the respective
Fund's latest Annual Report to Shareholders, upon request without
charge.

<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 the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston and
Commonwealth of Massachusetts on the 14th day of October, 1997.

LANDMARK FUNDS II

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 October 14, 1997.

<TABLE>
<CAPTION>
Signature Title
<S> <C>

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

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

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

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

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

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

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

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

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

</TABLE>

<PAGE>

SIGNATURES

The Premium Portfolios, on behalf of Growth & Income Portfolio, has duly
caused this Post-Effective Amendment to the Registration Statement on Form N-1A
of Landmark Funds II to be signed on its behalf by the undersigned, thereunto
duly authorized, in Hamilton, Bermuda, on the 14th day of October, 1997.

THE PREMIUM PORTFOLIOS
on behalf of Growth & Income Portfolio

By: Susan Jakuboski
Susan Jakuboski,
Assistant Treasurer of
The Premium Portfolios

This Post-Effective Amendment to the Registration Statement on Form N-1A
of Landmark Funds II has been signed by the following persons in the capacities
indicated on October 14, 1997.

Signature Title

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

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

Elliott J. Berv* Trustee
Elliott J. Berv

Mark T. Finn* Trustee
Mark T. Finn

Walter E. Robb, III* Trustee
Walter E. Robb, III

*By: Susan Jakuboski
Susan Jakuboski
Executed by Susan Jakuboski on
behalf of those indicated as attorney
in fact.

<PAGE>

SIGNATURES

Asset Allocation Portfolios, on behalf of Small Cap Value Portfolio, has
duly caused this Post-Effective Amendment to the Registration Statement on Form
N-1A of Landmark Funds II to be signed on its behalf by the undersigned,
thereunto duly authorized, in Hamilton, Bermuda, on the 14th day of October,
1997.

ASSET ALLOCATION PORTFOLIOS
on behalf of Small Cap Value Portfolio

By: Susan Jakuboski
Susan Jakuboski
Assistant Treasurer

This Post-Effective Amendment to the Registration Statement on Form N-1A
of Landmark Funds II has been signed by the following persons in the capacities
indicated on October 14, 1997.

Signature Title

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

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

Elliott J. Berv* Trustee
Elliott J. Berv

Mark T. Finn* Trustee
Mark T. Finn

Walter E. Robb, III* Trustee
Walter E. Robb, III

*By: Susan Jakuboski
Susan Jakuboski
Executed by Susan Jakuboski on
behalf of those indicated pursuant to
Powers of Attorney.

<PAGE>

EXHIBIT INDEX

Exhibit
No.: Description:

1(b) Forms of Amendments to Amended and Restated Declaration of Trust
of the Registrant
2(b) Amendment to Amended and Restated By-Laws of the Registrant
5(a) Form of Management Agreement between the Registrant, with respect
to CitiFunds Small Cap Value Portfolio, and Citibank, N.A.
("Citibank"), as investment manager and administrator
5(b) Form of Management Agreement between the Registrant, with respect
to CitiFunds Growth & Income Portfolio, and Citibank, as investment
manager and administrator
6 Form of Distribution Agreement between the Registrant, with respect
to CitiFunds Small Cap Value Portfolio and CitiFunds Growth &
Income Portfolio, and The Landmark Funds Broker-Dealer Services, Inc.
("LFBDS"), as distributor
8 Custodian Contract between the Registrant and State Street Bank and
Trust Company ("State Street"), as custodian
9(a) Form of Sub-Administrative Services Agreement between Citibank
and LFBDS
9(b) Transfer Agency and Service Agreement between the Registrant and
State Street, as transfer agent
9(c) Accounting Services Agreement between the Registrant and State
Street, as fund accounting agent
10 Opinion and Consent of Counsel
15 Form of Service Plan of the Registrant with respect to the CitiFunds
Small Cap Value Portfolio and CitiFunds Growth & Income Portfolio
25(a) Powers of Attorney for the Registrant
25(b) Powers of Attorney for Asset Allocation Portfolios
25(c) Powers of Attorney for The Premium Portfolios

Exhibit 1(b)

LANDMARK FUNDS II

FORM OF AMENDMENT TO
DECLARATION OF TRUST

The undersigned, constituting a majority of the Trustees of Landmark Funds
II (the "Trust"), a business trust organized under the laws of the Commonwealth
of Massachusetts, pursuant to a Declaration of Trust dated April 13, 1984, as
amended and restated (the "Declaration"), do hereby amend Section 3.2 of the
Declaration by deleting paragraph (c) thereof and replacing it in its entirety
with the following, such amendment to be subject to approval in accordance with
the Declaration of the shareholders of Landmark Equity Fund and Landmark Small
Cap Equity Fund, each a series of the Trust:

(c) Notwithstanding any other provision of this Declaration to the
contrary, the Trustees shall have the power in their discretion without
any requirement of approval by Shareholders to either invest all or a
portion of the Trust Property of Landmark Equity Fund and of each other
Series of the Trust, or sell all or a portion of such Trust Property and
invest the proceeds of such sales, in one or more investment companies to
the extent not prohibited by the 1940 Act and exemptive orders granted
under such Act.

IN WITNESS WHEREOF, the undersigned have executed this Amendment this 8th
day of August, 1997.

PHILIP W. COOLIDGE RILEY C. GILLEY
As trustee and not individually As trustee and not individually

DIANA R. HARRINGTON SUSAN B. KERLEY
As trustee and not individually As trustee and not individually

C. OSCAR MORONG, JR. E. KIRBY WARREN
As trustee and not individually As trustee and not individually

WILLIAM S. WOODS, JR.
As trustee and not individually

<PAGE>

LANDMARK FUNDS II

FORM OF AMENDMENT TO
DECLARATION OF TRUST

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

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

IN WITNESS WHEREOF, the undersigned have executed this Amendment this
_____ day of ____________, 1997.

PHILIP W. COOLIDGE RILEY C. GILLEY
As trustee and not individually As trustee and not individually

DIANA R. HARRINGTON SUSAN B. KERLEY
As trustee and not individually As trustee and not individually

C. OSCAR MORONG, JR. E. KIRBY WARREN
As trustee and not individually As trustee and not individually

WILLIAM S. WOODS, JR.
As trustee and not individually

<PAGE>

CITIFUNDS TRUST II

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

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

1. The series shall be as follows:

The new series shall be designated as:
"CitiFunds Small Cap Value Portfolio" and
"CitiFunds Growth & Income Portfolio"

The series previously designated as Landmark Equity Fund
shall be redesignated as "CitiFunds Large Cap Growth
Portfolio."

The series previously designated as Landmark Small Cap Equity
Fund shall be redesignated as "CitiFunds Small Cap Growth
Portfolio."

The series previously designated as Landmark Earnings Growth
Equity Fund, no Shares thereof being outstanding, is hereby
eliminated.

2. Each series shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then currently effective registration statement under the Securities Act of
1933 to the extent pertaining to the offering of Shares of each series. Each
Share of each series shall be redeemable, shall be entitled to one vote or

<PAGE>

fraction thereof in respect of a fractional share on matters on which shares of
that series shall be entitled to vote, shall represent a pro rata beneficial
interest in the assets allocated or belonging to such series, and shall be
entitled to receive its pro rata share of the net assets of such series upon
liquidation of the series, all as provided in Section 6.9 of the Declaration of
Trust.

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

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

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

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

PHILIP W. COOLIDGE RILEY C. GILLEY
As Trustee and Not Individually As Trustee and Not Individually

DIANA R. HARRINGTON SUSAN B.KERLEY
As Trustee and Not Individually As Trustee and Not Individually

C. OSCAR MORONG, JR. E. KIRBY WARREN
As Trustee and Not Individually As Trustee and Not Individually

<PAGE>

WILLIAM S. WOODS, JR.
As Trustee and Not Individually

Exhibit 2(b)

AMENDMENT TO THE BY-LAWS OF LANDMARK FUNDS I, LANDMARK FUNDS II, LANDMARK
INTERNATIONAL FUNDS, LANDMARK FIXED INCOME FUNDS, LANDMARK TAX FREE INCOME
FUNDS, LANDMARK FUNDS III, LANDMARK PREMIUM FUNDS, LANDMARK MULTI-STATE TAX
FREE FUNDS, LANDMARK INSTITUTIONAL TRUST, LANDMARK TAX FREE RESERVES AND
VARIABLE ANNUITY PORTFOLIOS - AS ADOPTED BY THE BOARDS OF TRUSTEES ON AUGUST 8,
1997:

VOTED: That Article III, Section 4 of the By-Laws of the Trust be and
hereby is amended in its entirety to read as follows*:

Section 4. Proxies. At any meeting of Shareholders, any holder of
Shares entitled to vote thereat may vote by proxy, provided that no proxy
shall be voted at any meeting unless it shall have been placed on file
with the Secretary, or with such other officer or agent of the Trust as
the Secretary may direct, for verification prior to the time at which
such vote shall be taken. [Any Shareholder may give authorization through
telephonic or telegraphic methods of communication for another person to
execute his or her proxy.] Pursuant to a vote of a majority of the
Trustees, proxies may be solicited in the name of one or more Trustees or
one or more of the officers of the Trust. Only Shareholders of record
shall be entitled to vote. Each full Share shall be entitled to one vote
and fractional Shares shall be entitled to a vote of such fraction. When
any Share is held jointly by several persons, any one of them may vote at
any meeting in person or by proxy in respect of such Share, but if more
than one of them shall be present at such meeting in person or by proxy,
and such joint owners or their proxies so present disagree as to any vote
to be cast, such vote shall not be received in respect of such Share.
A proxy purporting to be executed by or on behalf of a Shareholder shall
be deemed valid unless challenged at or prior to its exercise, and the
burden of proving invalidity shall rest on the challenger. If the holder
of any such Share is a minor or a person of unsound mind, and subject to
guardianship or to the legal control of any other person as regards the
charge or management of such Share, such Share may be voted by such
guardian or such other person appointed or having such control, and such
vote may be given in person or by proxy. [Unless otherwise specifically
limited by their terms, proxies shall entitle the holder thereof to vote
at any adjournment of a meeting.]

*New language is bracketed.

Exhibit 5(a)

FORM OF MANAGEMENT AGREEMENT

LANDMARK FUNDS II

CitiFunds Small Cap Value Portfolio

MANAGEMENT AGREEMENT, dated as of November 14, 1997, by and between
Landmark Funds II, a Massachusetts trust (the "Trust"), and Citibank, N.A., a
national banking association ("Citibank" or the "Manager").

W I T N E S S E T H:

WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder and any exemptive orders thereunder, the "1940 Act"), and

WHEREAS, the Trust wishes to engage Citibank to provide certain
investment advisory and administrative services for the series of the Trust
designated as CitiFunds Small Cap Value Portfolio (the "Fund"), and Citibank is
willing to provide such investment advisory and administrative services for the
Fund on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:

1. Duties of Citibank. (a) Citibank shall act as the Manager for the Fund
and as such shall furnish continuously an investment program and shall
determine from time to time what securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held uninvested,
subject always to the restrictions of the Trust's Declaration of Trust, dated
as of April 13, 1984, and By-Laws, as each may be amended from time to time
(respectively, the "Declaration" and the "By-Laws"), the provisions of the 1940
Act, and the then-current Registration Statement of the Trust with respect to
the Fund. The Manager shall also make recommendations as to the manner in which
voting rights, rights to consent to corporate action and any other rights

<PAGE>

pertaining to the Fund's portfolio securities shall be exercised. Should the
Board of Trustees of the Trust at any time, however, make any definite
determination as to investment policy applicable to the Fund and notify the
Manager thereof in writing, the Manager shall be bound by such determination
for the period, if any, specified in such notice or until similarly notified
that such determination has been revoked. The Manager shall take, on behalf of
the Fund, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders
for the purchase or sale of securities for the Fund's account with the brokers
or dealers selected by it, and to that end the Manager is authorized as the
agent of the Trust to give instructions to the custodian or any subcustodian of
the Fund as to deliveries of securities and payments of cash for the account of
the Fund. In connection with the selection of such brokers or dealers and the
placing of such orders, 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 the Fund and/or the other accounts over
which the Manager or its affiliates exercise investment discretion. The Manager
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 the Manager determines in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular transaction
or the overall responsibilities which the Manager and its affiliates have with
respect to accounts over which they exercise investment discretion. In making
purchases or sales of securities or other property for the account of the Fund,
the Manager may deal with itself or with the Trustees of the Trust or the
Trust's underwriter or distributor, to the extent such actions are permitted by
the 1940 Act. In providing the services and assuming the obligations set forth
herein, the Manager may employ, at its own expense, or may request that the
Trust employ at the Fund's expense, one or more subadvisers; provided that in
each case the Manager shall supervise the activities of each subadviser. Any
agreement between the Manager and a subadviser shall be subject to the renewal,
termination and amendment provisions applicable to this Agreement. Any
agreement between the Trust on behalf of the Fund and a subadviser may be
terminated by the Manager at any time on not more than 60 days' nor less than
30 days' written notice to the Trust and the subadviser.

<PAGE>

(b) Subject to the direction and control of the Board of Trustees of the
Trust, Citibank shall perform such administrative and management services as
may from time to time be reasonably requested by the Trust, which shall include
without limitation: (i) providing office space, equipment and clerical
personnel necessary for maintaining the organization of the Trust and for
performing the administrative and management functions herein set forth; (ii)
supervising the overall administration of the Trust, including negotiation of
contracts and fees with and the monitoring of performance and billings of the
Trust's transfer agent, shareholder servicing agents, custodian and other
independent contractors or agents; (iii) preparing and, if applicable, filing
all documents required for compliance by the Trust with applicable laws and
regulations, including registration statements, prospectuses and statements of
additional information, semi-annual and annual reports to shareholders, proxy
statements and tax returns; (iv) preparation of agendas and supporting
documents for and minutes of meetings of Trustees, committees of Trustees and
shareholders; and (v) arranging for maintenance of books and records of the
Trust. Notwithstanding the foregoing, Citibank shall not be deemed to have
assumed any duties with respect to, and shall not be responsible for, the
distribution of shares of beneficial interest in the Fund, nor shall Citibank
be deemed to have assumed or have any responsibility with respect to functions
specifically assumed by any transfer agent, fund accounting agent, custodian or
shareholder servicing agent of the Trust or the Fund. In providing
administrative and management services as set forth herein, Citibank may, at
its own expense, employ one or more subadministrators; provided that Citibank
shall remain fully responsible for the performance of all administrative and
management duties set forth herein and shall supervise the activities of each
subadministrator.

2. Allocation of Charges and Expenses. Citibank shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. Except as provided in the foregoing
sentence, it is understood that the Trust will pay from the assets of the Fund
all of its own expenses allocable to the Fund including, without limitation,
organization costs of the Fund; compensation of Trustees who are not
"affiliated persons" of Citibank; governmental fees; interest charges; loan
commitment fees; taxes; membership dues in industry associations allocable to
the Trust; fees and expenses of independent auditors, legal counsel and any
transfer agent, distributor, shareholder servicing agent, registrar or dividend
disbursing agent of the Trust; expenses of issuing and redeeming shares of
beneficial interest and servicing shareholder accounts; expenses of preparing,
typesetting, printing and mailing prospectuses, statements of additional

<PAGE>

information, shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to existing shareholders of the Fund;
expenses connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's shareholders; expenses relating
to the registration and qualification of shares of the Fund; and such
non-recurring or extraordinary expenses as may arise, including those relating
to actions, suits or proceedings to which the Trust on behalf of the Fund may
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.

3. Compensation of Citibank. For the services to be rendered and the
facilities to be provided by Citibank hereunder, the Trust shall pay to
Citibank from the assets of the Fund a management fee computed daily and paid
monthly at an annual rate equal to 0.25% of the Fund's average daily net assets
for the Fund's then-current fiscal year. If Citibank provides services
hereunder for less than the whole of any period specified in this Section 3,
the compensation to Citibank shall be accordingly adjusted and prorated.

4. Covenants of Citibank. Citibank agrees that it will not deal with
itself, or with the Trustees of the Trust or the Trust's principal underwriter
or distributor, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the 1940
Act, will not take a long or short position in shares of beneficial interest in
the Fund except as permitted by the Declaration, and will comply with all other
provisions of the Declaration and By-Laws and the then-current Registration
Statement applicable to the Fund relative to Citibank and its directors and
officers.

5. Limitation of Liability of Citibank. Citibank shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of securities
transactions for the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder. As used in this Section 5, the term
"Citibank" shall include directors, officers and employees of Citibank as well
as Citibank itself.

<PAGE>

6. Activities of Citibank. The services of Citibank to the Fund are not
to be deemed to be exclusive, Citibank being free to render investment
advisory, administrative and/or other services to others. It is understood that
Trustees, officers, and shareholders of the Trust are or may be or may become
interested in Citibank, as directors, officers, employees, or otherwise and
that directors, officers and employees of Citibank are or may become similarly
interested in the Trust and that Citibank may be or may become interested in
the Trust as a shareholder or otherwise.

7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, shall govern
the relations between the parties hereto thereafter and shall remain in force
until November 14, 1999, on which date it will terminate unless its continuance
after November 14, 1999 is "specifically approved at least annually" (a) by the
vote of a majority of the Trustees of the Trust who are not "interested
persons" of the Trust or of Citibank at a meeting specifically called for the
purpose of voting on such approval, and (b) by the Board of Trustees of the
Trust or by "vote of a majority of the outstanding voting securities" of the
Fund.

This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Fund, or by Citibank, in each case on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment."

This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Fund (except
for any such amendment as may be effected in the absence of such approval
without violating the 1940 Act).

The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.

Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the Fund; that any
liability of the Trust under this Agreement, or in connection with the

<PAGE>

transactions contemplated herein, shall be discharged only out of the assets of
the Fund; and that no other series of the Trust shall be liable with respect to
this Agreement or in connection with the transactions contemplated herein.

The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Trust individually.

8. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.

9. Use of Name. The Trust hereby acknowledges that any and all rights in
or to the name "Citi" which exist on the date of this Agreement or which may
arise hereafter are, and under any and all circumstances shall continue to be,
the sole property of Citibank; that Citibank may assign any or all of such
rights to another party or parties without the consent of the Trust; and that
Citibank may permit other parties, including other investment companies, to use
the word "Citi" in their names. If Citibank, or its assignee as the case may
be, ceases to serve as the adviser to and administrator of the Trust, the Trust
hereby agrees to take promptly any and all actions which are necessary or
desirable to change its name so as to delete the word "Citi."

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.

LANDMARK FUNDS II CITIBANK, N.A.

By:_______________________ By:_______________________

Title:____________________ Title:____________________

<PAGE>

Exhibit 5(b)

FORM OF MANAGEMENT AGREEMENT

LANDMARK FUNDS II

CitiFunds Growth & Income Portfolio

W I T N E S S E T H:

WHEREAS, the Trust wishes to engage Citibank to provide certain
investment advisory and administrative services for the series of the Trust
designated as CitiFunds Growth & Income Portfolio (the "Fund"), and Citibank is
willing to provide such investment advisory and administrative services for the
Fund on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:

<PAGE>

governmental officers and commissions and to existing shareholders of the Fund;
expenses connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's shareholders; expenses relating
to the registration and qualification of shares of the Fund; and such
non-recurring or extraordinary expenses as may arise, including those relating
to actions, suits or proceedings to which the Trust on behalf of the Fund may
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.

3. Compensation of Citibank. For the services to be rendered and the
facilities to be provided by Citibank hereunder, the Trust shall pay to
Citibank from the assets of the Fund a management fee computed daily and paid
monthly at an annual rate equal to 0.10% of the Fund's average daily net assets
for the Fund's then-current fiscal year. If Citibank provides services
hereunder for less than the whole of any period specified in this Section 3,
the compensation to Citibank shall be accordingly adjusted and prorated.

<PAGE>

8. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.

LANDMARK FUNDS II CITIBANK, N.A.

By:______________________ By:______________________

Title:___________________ Title:___________________

Exhibit 6

FORM OF DISTRIBUTION AGREEMENT

AGREEMENT , dated as of November 14, 1997, by and between Landmark Funds
II, a Massachusetts trust (the "Trust"), and The Landmark Funds Broker-Dealer
Services, Inc., a Massachusetts corporation ("Distributor").

WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "1940 Act");

WHEREAS, the Trust's shares of beneficial interest ("Shares") are divided
into separate series representing interests in separate funds of securities and
other assets;

WHEREAS, the Trust wishes to retain the services of a distributor for
Shares of each class of each of the Trust's series listed on Exhibit A hereto
(the "Funds") and has registered the Shares of the Funds under the Securities
Act of 1933, as amended (the "1933 Act");

WHEREAS, the Trust has adopted a Service Plan pursuant to Rule 12b-1
under the 1940 Act (the "Service Plan") and may enter into related agreements
providing for the distribution and servicing of Shares of the Funds;

WHEREAS, Distributor has agreed to act as distributor of the Shares of
each class of the Funds for the period of this Agreement;

NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:

1. Appointment of Distributor.

(a) The Trust hereby appoints Distributor its exclusive agent for the
distribution of Shares of each class of the Funds in jurisdictions wherein such
Shares may be legally offered for sale; provided, however, that the Trust in
its absolute discretion may issue Shares of the Funds in connection with (i)
the payment or reinvestment of dividends or distributions; (ii) any merger or
consolidation of the Trust or of the Funds with any other investment company or
trust or any personal holding company, or the acquisition of the assets of any

<PAGE>

such entity or another Fund of the Trust; or (iii) any offer of exchange
permitted by Section 11 of the 1940 Act.

(b) Distributor hereby accepts such appointment as exclusive agent for
the distribution of Shares of each class of the Funds and agrees that it will
sell the Shares as agent for the Trust at prices determined as hereinafter
provided and on the terms hereinafter set forth, all according to the
then-current prospectus and statement of additional information of each Fund
(collectively, the "Prospectus" and the "Statement of Additional Information"),
applicable laws, rules and regulations and the Declaration of Trust of the
Trust. Distributor agrees to use its best efforts to solicit orders for the
sale of Shares of the Funds, and agrees to transmit promptly to the Trust (or
to the transfer agent of the Funds, if so instructed in writing by the Trust)
any orders received by it for purchase or redemption of Shares.

(c) Distributor may sell Shares of the Funds to or through qualified
securities dealers, financial institutions or others. Distributor will require
each dealer or other such party to conform to the provisions of this Agreement,
the Prospectus, the Statement of Additional Information and applicable law; and
neither Distributor nor any such dealers or others shall withhold the placing
of purchase orders for Shares so as to make a profit thereby.

(d) Distributor shall order Shares of the Funds from the Trust only to
the extent that it shall have received unconditional purchase orders therefor.
Distributor will not make, or authorize any dealers or others to make: (i) any
short sales of Shares; or (ii) any sales of Shares to any Trustee or officer of
the Trust, any officer or director of Distributor or any corporation or
association furnishing investment advisory, managerial or supervisory services
to the Trust, or to any such corporation or association, unless such sales are
made in accordance with the Prospectus and the Statement of Additional
Information.

(e) Distributor is not authorized by the Trust to give any information or
make any representations regarding Shares of the Funds, except such information
or representations as are contained in the Prospectus, the Statement of
Additional Information or advertisements and sales literature prepared by or on
behalf of the Trust for Distributor's use.

(f) The Trust agrees to execute any and all documents, to furnish any and
all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Trust's officers in connection with the

<PAGE>

qualification of Shares of each Fund for sale in such states as Distributor and
the Trust agree.

(g) No Shares of any Fund shall be offered by either Distributor or the
Trust under this Agreement, and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Trust, if and so long as the
effectiveness of the Trust's then current registration statement as to Shares
of that Fund or any necessary amendments thereto shall be suspended under any
of the provisions of the 1933 Act, or if and so long as a current prospectus
for Shares of that Fund as required by Section 10 of the 1933 Act is not on
file with the Securities and Exchange Commission; provided, however, that
nothing contained in this paragraph (g) shall in any way restrict the Trust's
obligation to repurchase any Shares from any shareholder in accordance with the
provisions of the applicable Fund's Prospectus or charter documents.

(h) Notwithstanding any provision hereof, the Trust may terminate,
suspend or withdraw the offering of Shares of any Fund whenever, in its sole
discretion, it deems such action to be desirable.

2. Offering Price of Shares. All Fund Shares sold under this Agreement
shall be sold at the public offering price per Share in effect at the time of
the sale, as described in the Prospectus. The excess, if any, of the public
offering price over the net asset value of the Shares sold by Distributor as
agent, and any contingent deferred sales charge applicable to Shares of any
class of any Fund as set forth in the applicable Fund's Prospectus, shall be
retained by Distributor as a commission for its services hereunder. Out of such
commission Distributor may allow commissions, concessions or agency fees to
dealers or other financial institutions, including banks, and may allow them to
others in its discretion in such amounts as Distributor shall determine from
time to time. Except as may be otherwise determined by Distributor from time to
time, such commissions, concessions or agency fees shall be uniform to all
dealers and other financial institutions. At no time shall the Trust receive
less than the full net asset value of the Shares of each Fund, determined in
the manner set forth in the Prospectus and the Statement of Additional
Information. Distributor also may receive such compensation under the Trust's
Service Plan as may be authorized by the Trustees of the Trust from time to
time.

<PAGE>

3. Furnishing of Information.

(a) The Trust shall furnish to Distributor copies of any information,
financial statements and other documents that Distributor may reasonably
request for use in connection with the sale of Shares of the Funds under this
Agreement. The Trust shall also make available a sufficient number of copies of
the Funds' Prospectus and Statement of Additional Information for use by the
Distributor.

(b) The Trust agrees to advise Distributor immediately in writing:

(i) of any request by the Securities and Exchange Commission for
amendments to any registration statement concerning a Fund or to a
Prospectus or for additional information;

(ii) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of any such
registration statement or Prospectus or the initiation of any proceeding
for that purpose;

(iii)of the happening of any event which makes untrue any statement
of a material fact made in any such registration statement or Prospectus
or which requires the making of a change in such registration statement
or Prospectus in order to make the statements therein not misleading; and

(iv) of all actions of the Securities and Exchange Commission with
respect to any amendments to any such registration statement or
Prospectus which may from time to time be filed with the Securities and
Exchange Commission.

4. Expenses.

(a) The Trust will pay or cause to be paid the following expenses:
organization costs of the Funds; compensation of Trustees who are not
"affiliated persons" of the Distributor; governmental fees; interest charges;
loan commitment fees; taxes; membership dues in industry associations allocable
to the Trust; fees and expenses of independent auditors, legal counsel and any
transfer agent, distributor, shareholder servicing agent, registrar or dividend
disbursing agent of the Trust; expenses of issuing and redeeming shares of
beneficial interest and servicing shareholder accounts; expenses of preparing,
typesetting, printing and mailing prospectuses, statements of additional
information, shareholder reports, notices, proxy statements and reports to

<PAGE>

governmental officers and commissions and to existing shareholders of the
Funds; expenses connected with the execution, recording and settlement of
security transactions; insurance premiums; fees and expenses of the custodian
for all services to the Funds, including safekeeping of funds and securities
and maintaining required books and accounts; expenses of calculating the net
asset value of the Funds (including but not limited to the fees of independent
pricing services); expenses of meetings of shareholders; expenses relating to
the issuance, registration and qualification of shares; and such non-recurring
or extraordinary expenses as may arise, including those relating to actions,
suits or proceedings to which the Trust may be a party and the legal obligation
which the Trust may have to indemnify its Trustees and officers with respect
thereto.

(b) Except as otherwise provided in this Agreement and except to the
extent such expenses are borne by the Trust pursuant to the Service Plan,
Distributor will pay or cause to be paid all expenses connected with its own
qualification as a dealer under state and federal laws and all other expenses
incurred by Distributor in connection with the sale of Shares of each Fund as
contemplated by this Agreement.

(c) Distributor shall prepare and deliver reports to the Trustees of the
Trust on a regular basis, at least quarterly, showing the expenditures with
respect to each Fund pursuant to the Service Plan and the purposes therefor, as
well as any supplemental reports that the Trustees of the Trust, from time to
time, may reasonably request.

5. Repurchase of Shares. Distributor as agent and for the account of the
Trust may repurchase Shares of the Funds offered for resale to it and redeem
such Shares at their net asset value.

6. Indemnification by the Trust. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of Distributor, the Trust agrees to indemnify
Distributor, its officers and directors, and any person which controls
Distributor within the meaning of the 1933 Act against any and all claims,
demands, liabilities and expenses that any such indemnified party may incur
under the 1933 Act, or common law or otherwise, arising out of or based upon
any alleged untrue statement of a material fact contained in the registration
statement for any Fund, any Prospectus or Statement of Additional Information,
or any advertisements or sales literature prepared by or on behalf of the Trust
for Distributor's use, or any omission to state a material fact therein, the

<PAGE>

omission of which makes any statement contained therein misleading, unless such
statement or omission was made in reliance upon and in conformity with
information furnished to the Trust in connection therewith by or on behalf of
Distributor. Nothing herein contained shall require the Trust to take any
action contrary to any provision of its Declaration of Trust or any applicable
statute or regulation.

7. Indemnification by Distributor. Distributor agrees to indemnify the
Trust, its officers and Trustees and any person which controls the Trust within
the meaning of the 1933 Act against any and all claims, demands, liabilities
and expenses that any such indemnified party may incur under the 1933 Act, or
common law or otherwise, arising out of or based upon (i) any alleged untrue
statement of a material fact contained in the registration statement for any
Fund, any Prospectus or Statement of Additional Information, or any
advertisements or sales literature prepared by or on behalf of the Trust for
Distributor's use, or any omission to state a material fact therein, the
omission of which makes any statement contained therein misleading, if such
statement or omission was made in reliance upon and in conformity with
information furnished to the Trust in connection therewith by or on behalf of
Distributor; and (ii) any act or deed of Distributor or its sales
representatives that has not been authorized by the Trust in any Prospectus or
Statement of Additional Information or by this Agreement.

8. Term and Termination.

(a) Unless terminated as herein provided, this Agreement shall continue
in effect as to each Fund until November 14, 1998 and shall continue in effect
for successive periods of one year thereafter, but only so long as each such
continuance is specifically approved by votes of a majority of both the
Trustees of the Trust and the Trustees of the Trust who are not parties to this
Agreement or interested persons (as defined in the 1940 Act) of any such party
and who have no direct or indirect financial interest in this Agreement or in
the operation of the Service Plan or in any agreement related thereto
("Independent Trustees"), cast in person at a meeting called for the purpose of
voting on such approval.

(b) This Agreement may be terminated as to any Fund on not less than
thirty days' nor more than sixty days' written notice to the other party.

<PAGE>

9. Limitation of Liability. The obligations of the Trust hereunder shall
not be binding upon any of the Trustees, officers or shareholders of the Trust
personally, but shall bind only the assets and property of the particular Fund
or Funds in question, and not any other Fund or series of the Trust. The term
"Landmark Funds II" means and refers to the Trustees from time to time serving
under the Declaration of Trust of the Trust, a copy of which is on file with
the Secretary of the Commonwealth of Massachusetts. The execution and delivery
of this Agreement has been authorized by the Trustees, and this Agreement has
been signed on behalf of the Trust by an authorized officer of the Trust,
acting as such and not individually, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the Trust as
provided in the Declaration of Trust.

10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts and the
provisions of the 1940 Act.

IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.

Landmark Funds II

By:_________________________

The Landmark Funds Broker-Dealer
Services, Inc.

By:_________________________

<PAGE>

Exhibit A

Funds

CitiFunds Small Cap Value Portfolio
CitiFunds Growth & Income Portfolio

Exhibit 8

CUSTODIAN CONTRACT
Between
LANDMARK FUNDS II
and
STATE STREET BANK AND TRUST COMPANY

Global/Series/Trust
21E593

<PAGE>

TABLE OF CONTENTS

Page

1. Employment of Custodian and Property to be Held By
It......................................................... 1

2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States...... 2
2.1 Holding Securities..................................... 2
2.2 Delivery of Securities................................. 2
2.3 Registration of Securities............................. 4
2.4 Bank Accounts.......................................... 4
2.5 Availability of Federal Funds.......................... 5
2.6 Collection of Income................................... 5
2.7 Payment of Fund Monies................................. 5
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased................................... 7
2.9 Appointment of Agents.................................. 7
2.10 Deposit of Fund Assets in U.S. Securities System....... 7
2.11 Fund Assets Held in the Custodian's Direct
Paper System........................................... 8
2.12 Segregated Account..................................... 9
2.13 Ownership Certificates for Tax Purposes............... 10
2.14 Proxies............................................... 10
2.15 Communications Relating to Portfolio
Securities............................................ 10

3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States................. 10

3.1 Appointment of Foreign Sub-Custodians................. 10
3.2 Assets to be Held..................................... 10
3.3 Foreign Securities Systems............................ 11
3.4 Holding Securities.................................... 11
3.5 Agreements with Foreign Banking Institutions.......... 11
3.6 Access of Independent Accountants of the Fund......... 11
3.7 Reports by Custodian.................................. 12
3.8 Transactions in Foreign Custody Account............... 12
3.9 Liability of Foreign Sub-Custodians................... 12
3.10 Liability of Custodian................................ 12
3.11 Reimbursement for Advances............................ 13
3.12 Monitoring Responsibilities........................... 13
3.13 Branches of U.S. Banks................................ 13
3.14 Tax Law............................................... 14

<PAGE>

4. Payments for Sales or Repurchases or Redemptions
of Shares of the Fund...................................... 14

5. Proper Instructions........................................ 14

6. Actions Permitted Without Express Authority................ 15

7. Evidence of Authority...................................... 15

8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income.......... 15

9. Records.................................................... 16

10. Opinion of Fund's Independent Accountants.................. 16

11. Reports to Fund by Independent Public Accountants.......... 16

12. Compensation of Custodian.................................. 17

13. Responsibility of Custodian................................ 17

14. Effective Period, Termination and Amendment................ 18

15. Successor Custodian........................................ 19

16. Interpretive and Additional Provisions..................... 19

17. Additional Funds........................................... 20

18. Massachusetts Law to Apply................................. 20

19. Prior Contracts............................................ 20

20. No Liability of Other Series............................... 20

21 Shareholder Communications Election........................ 20

<PAGE>

CUSTODIAN CONTRACT

This Contract between Landmark Funds II, a business trust organized and
existing under the laws of Massachusetts, having its principal place of
business at 6 St. James Avenue, Boston, Massachusetts 02116 hereinafter called
the "Fund", and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Custodian",

WITNESSETH:

WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and

WHEREAS, the Fund currently offers shares in one or more series,
including, the Landmark Equity Fund and Landmark Small Cap Equity Fund (such
series together with all other series subsequently established by the Fund and
made subject to this Contract in accordance with paragraph 17, being herein
referred to as the "Portfolio(s)");

NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:

1. Employment of Custodian and Property to be Held by It

The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Declaration of
Trust. The Fund on behalf of the Portfolio(s) agrees to deliver to the
Custodian all securities and cash of the Portfolios, and all payments of
income, payments of principal or capital distributions received by it with
respect to all securities owned by the Portfolio(s) from time to time, and the
cash consideration received by it for such new or treasury shares of beneficial
interest of the Fund representing interests in the Portfolios ("Shares") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of a Portfolio held or received by the Portfolio and not delivered
to the Custodian.

Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in

<PAGE>

accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.

2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian in the United States

2.1 Holding Securities. The Custodian shall hold and physically segregate for
the account of each Portfolio all non-cash property, to be held by it in
the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of the Treasury
and certain federal agencies (each, a "U.S. Securities System") and (b)
commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
(the "Direct Paper System") pursuant to Section 2.11.

2.2 Delivery of Securities. The Custodian shall release and deliver domestic
securities owned by a Portfolio held by the Custodian or in a U.S.
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions from the Fund on behalf of the applicable
Portfolio, which may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:

1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;

2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;

3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.10 hereof;

4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;

<PAGE>

5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;

6) To the issuer thereof, or its agent, for transfer into the name of
the Portfolio or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new securities are to be
delivered to the Custodian;

7) Upon the sale of such securities for the account of the Portfolio,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided
that in any such case, the Custodian shall have no responsibility or
liability for any loss arising from the delivery of such securities
prior to receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;

8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;

9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;

10) For delivery in connection with any loans of securities made by the
Portfolio, but only against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Fund on behalf of
the Portfolio, which may be in the form of cash or obligations
issued by the United States government, its agencies or
instrumentalities, except that in connection with any loans for
which collateral is to be credited to the Custodian's account in the
book-entry system authorized by the U.S. Department of the Treasury,

<PAGE>

the Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the receipt
of such collateral;

11) For delivery as security in connection with any borrowings by the
Fund on behalf of the Portfolio requiring a pledge of assets by the
Fund on behalf of the Portfolio, but only against receipt of amounts
borrowed;

12) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Securities Exchange Act of 1934
(the "Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Portfolio of the Fund;

13) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian, and a
Futures Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Portfolio of the Fund;

14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to the
holders of shares in connection with distributions in kind, as may
be described from time to time in the currently effective prospectus
and statement of additional information of the Fund, related to the
Portfolio ("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and

15) For any other proper purpose, but only upon receipt of, in addition
to Proper Instructions from the Fund on behalf of the applicable
Portfolio, a certified copy of a resolution of the Board of Trustees
or of the Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary, specifying the
securities of the Portfolio to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such
purpose to be a proper purpose, and naming the person or persons to
whom delivery of such securities shall be made.

<PAGE>

2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as the
Portfolio, or in the name or nominee name of any agent appointed pursuant
to Section 2.9 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the Custodian
on behalf of the Portfolio under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian
shall utilize its best efforts only to timely collect income due the Fund
on such securities and to notify the Fund on a best efforts basis only of
relevant corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.

2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio of
the Fund, subject only to draft or order by the Custodian acting pursuant
to the terms of this Contract, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from
or for the account of the Portfolio, other than cash maintained by the
Portfolio in a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust company shall
be qualified to act as a custodian under the Investment Company Act of
1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall on behalf of each
applicable Portfolio be approved by vote of a majority of the Board of
Trustees of the Fund. Such funds shall be deposited by the Custodian in
its capacity as Custodian and shall be withdrawable by the Custodian only
in that capacity.

2.5 Availability of Federal Funds. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf of
a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.

<PAGE>

2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian
or its agent thereof and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith, other than
to provide the Fund with such information or data as may be necessary to
assist the Fund in arranging for the timely delivery to the Custodian of
the income to which the Portfolio is properly entitled.

2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:

1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Portfolio but
only (a) against the delivery of such securities or evidence of
title to such options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm or trust
company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as amended, to
act as a custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the Portfolio or
in the name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of a purchase
effected through a U.S. Securities System, in accordance with the
conditions set forth in Section 2.10 hereof; (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.11; (d) in the case of repurchase
agreements entered into between the Fund on behalf of the Portfolio
and the Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii)

<PAGE>

against delivery of the receipt evidencing purchase by the Portfolio
of securities owned by the Custodian along with written evidence of
the agreement by the Custodian to repurchase such securities from
the Portfolio or (e) for transfer to a time deposit account of the
Fund in any bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the Fund as
defined in Article 5;

2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;

3) For the redemption or repurchase of Shares issued by the Portfolio
as set forth in Article 4 hereof;

4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses of
the Fund whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;

5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;

6) For payment of the amount of dividends received in respect of
securities sold short;

7) For any other proper purpose, but only upon receipt of, in addition
to Proper Instructions from the Fund on behalf of the Portfolio, a
certified copy of a resolution of the Board of Trustees or of the
Executive Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying the
amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom such payment is to
be made.

2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written instructions
from the Fund on behalf of such Portfolio to so pay in advance, the

<PAGE>

Custodian shall be absolutely liable to the Fund for such securities to
the same extent as if the securities had been received by the Custodian.

2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.

2.10 Deposit of Fund Assets in U.S. Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "U.S. Securities System" in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:

1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are represented in
an account ("Account") of the Custodian in the U.S. Securities
System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;

2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the Portfolio;

3) The Custodian shall pay for securities purchased for the account of
the Portfolio upon (i) receipt of advice from the U.S. Securities
System that such securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Portfolio.
The Custodian shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the U.S. Securities System
that payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of
the Portfolio. Copies of all advices from the U.S. Securities System
of transfers of securities for the account of the Portfolio shall

<PAGE>

identify the Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Fund at its request. Upon request,
the Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transactions in the U.S.
Securities System for the account of the Portfolio;

4) The Custodian shall provide the Fund for the Portfolio with any
report obtained by the Custodian on the U.S. Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities System;

5) The Custodian shall have received from the Fund on behalf of the
Portfolio the initial certificate required by Article 14 hereof;

6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting from use
of the U.S. Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or
of any of its or their employees or from failure of the Custodian or
any such agent to enforce effectively such rights as it may have
against the U.S. Securities System; at the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of any
such loss or damage if and to the extent that the Portfolio has not
been made whole for any such loss or damage.

2.11 Fund Assets Held in the Custodian's Direct Paper System. The Custodian may
deposit and/or maintain securities owned by a Portfolio in the Direct
Paper System of the Custodian subject to the following provisions:

1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions from the
Fund on behalf of the Portfolio;

2) The Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;

<PAGE>

3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Portfolio;

4) The Custodian shall pay for securities purchased for the account of
the Portfolio upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to the
account of the Portfolio. The Custodian shall transfer securities
sold for the account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such transfer and receipt of
payment for the account of the Portfolio;

5) The Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the U.S.
Securities System for the account of the Portfolio;

6) The Custodian shall provide the Fund on behalf of the Portfolio with
any report on its system of internal accounting control as the Fund
may reasonably request from time to time.

2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf
of each such Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by
the Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund on behalf of the Portfolio,
the Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
the Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased or
sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by

<PAGE>

registered investment companies and (iv) for other proper purposes, but
only, in the case of clause (iv), upon receipt of, in addition to Proper
Instructions from the Fund on behalf of the applicable Portfolio, a
certified copy of a resolution of the Board of Trustees or of the
Executive Committee signed by an officer of the Fund and certified by the
Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes to be
proper purposes.

2.13 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.

2.14 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.

2.15 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund on behalf of the Portfolio and
the maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information received
by the Custodian from issuers of the securities whose tender or exchange
is sought and from the party (or his agents) making the tender or
exchange offer. If the Portfolio desires to take action with respect to
any tender offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian at least three business days prior
to the date on which the Custodian is to take such action.

3. Duties of the Custodian with Respect to Property of the Fund Held Outside
of the United States

3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's

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securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt
of "Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of Trustees, the
Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining custody of the
Portfolio's assets.

3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Portfolio's foreign securities transactions. The
Custodian shall identify on its books as belonging to the Fund, the
foreign securities of the Fund held by each foreign sub-custodian.

3.3 Foreign Securities Systems. Except as may otherwise be agreed upon in
writing by the Custodian and the Fund, assets of the Portfolios shall be
maintained in a clearing agency which acts as a securities depository or
in a book-entry system for the central handling of securities located
outside the United States (each a "Foreign Securities System") only
through arrangements implemented by the foreign banking institutions
serving as sub-custodians pursuant to the terms hereof (Foreign
Securities Systems and U.S. Securities Systems are collectively referred
to herein as the "Securities Systems"). Where possible, such arrangements
shall include entry into agreements containing the provisions set forth
in Section 3.5 hereof.

3.4 Holding Securities. The Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i)
the records of the Custodian with respect to securities and other
non-cash property of the Fund which are maintained in such account shall
identify by book-entry those securities and other non-cash property
belonging to the Fund and (ii) the Custodian shall require that
securities and other non-cash property so held by the foreign
sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.

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3.5 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will
be maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be
subject only to the instructions of the Custodian or its agents.

3.6 Access of Independent Accountants of the Fund. Upon request of the Fund,
the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of
any foreign banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance of such
foreign banking institution under its agreement with the Custodian.

3.7 Reports by Custodian. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities
and other assets of the Portfolio(s) held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Portfolio(s) securities and other assets and advices or
notifications of any transfers of securities to or from each custodial
account maintained by a foreign banking institution for the Custodian on
behalf of each applicable Portfolio indicating, as to securities acquired
for a Portfolio, the identity of the entity having physical possession of
such securities.

3.8 Transactions in Foreign Custody Account. (a) Except as otherwise provided
in paragraph (b) of this Section 3.8, the provision of Sections 2.2 and
2.7 of this Contract shall apply, mutatis mutandis to the foreign
securities of the Fund held outside the United States by foreign
sub-custodians.

(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary established securities trading or securities processing

<PAGE>

practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.

(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent as
set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of
such securities.

3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to which the
Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless, the
Custodian and the Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.

3.10 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.13 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions, or
acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3.10, in delegating custody duties to State
Street London Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation, except
such loss as may result from (a) political risk (including, but not
limited to, exchange control restrictions, confiscation, expropriation,
nationalization, insurrection, civil strife or armed hostilities) or (b)
other losses (excluding a bankruptcy or insolvency of State Street London
Ltd. not caused by political risk) due to Acts of God, nuclear incident
or other losses under circumstances where the Custodian and State Street
London Ltd. have exercised reasonable care.

<PAGE>

3.11 Reimbursement for Advances. If the Fund requires the Custodian to advance
cash or securities for any purpose for the benefit of a Portfolio
including the purchase or sale of foreign exchange or of contracts for
foreign exchange, or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except
such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time
held for the account of the applicable Portfolio shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of
such Portfolio's assets to the extent necessary to obtain reimbursement.

3.12 Monitoring Responsibilities. The Custodian shall furnish annually to the
Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below
$200 million (in each case computed in accordance with generally accepted
U.S. accounting principles).

3.13 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract.

(b) Cash held for each Portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for the Fund
with the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.

<PAGE>

3.14 Tax Law. The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund or the Custodian as custodian of the Fund by the tax
law of jurisdictions other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or
other governmental charges, certifications and governmental reporting.
The sole responsibility of the Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Fund with respect to any
claim for exemption or refund under the tax law of jurisdictions for
which the Fund has provided such information.

4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund

The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer
Agent of any receipt by it of payments for Shares of such Portfolio.

From such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the Board
of Trustees of the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming shareholders. In connection with
the redemption or repurchase of Shares of the Fund, the Custodian shall honor
checks drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, when presented to the Custodian
in accordance with such procedures and controls as are mutually agreed upon
from time to time between the Fund and the Custodian.

5. Proper Instructions

Proper Instructions as used throughout this Contract means a writing
signed or initialled by one or more person or persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions

<PAGE>

will be considered Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all oral instructions
to be confirmed in writing. Upon receipt of a certificate of the Secretary or
an Assistant Secretary as to the authorization by the Board of Trustees of the
Fund accompanied by a detailed description of procedures approved by the Board
of Trustees, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Trustees and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolios' assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three - party agreement which requires a segregated asset account in
accordance with Section 2.12.

6. Actions Permitted without Express Authority

The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:

1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to
the Fund on behalf of the Portfolio;

2) surrender securities in temporary form for securities in definitive
form;

3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and

4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Portfolio except as
otherwise directed by the Board of Trustees of the Fund.

7. Evidence of Authority

The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any
action by the Board of Trustees pursuant to the Declaration of Trust as

<PAGE>

described in such vote, and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.

8. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income

The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
share of the outstanding shares of each Portfolio or, if directed in writing to
do so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Portfolio as
described in the Fund's currently effective prospectus related to such
Portfolio and shall advise the Fund and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an officer of the
Fund to do so, shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations of the net asset
value per share and the daily income of each Portfolio shall be made at the
time or times described from time to time in the Fund's currently effective
prospectus related to such Portfolio.

9. Records

The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940, with particular attention to Section 31 thereof and Rules
31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund
and shall at all times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees or agents of the
Fund and employees and agents of the Securities and Exchange Commission. The
Custodian shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by each Portfolio and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall be agreed
upon between the Fund and the Custodian, include certificate numbers in such
tabulations.

10. Opinion of Fund's Independent Accountant

The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.

<PAGE>

11. Reports to Fund by Independent Public Accountants

The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on
futures contracts, including securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian under
this Contract; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so
state.

12. Compensation of Custodian

The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Fund on behalf of each applicable Portfolio and the Custodian.

13. Responsibility of Custodian

So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract,
but shall be kept indemnified by and shall be without liability to the Fund
for any action taken or omitted by it in good faith without negligence. It
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.

Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances
beyond the reasonable control of the Custodian or any sub-custodian or

<PAGE>

Securities System or any agent or nominee of any of the foregoing, including,
without limitation, nationalization or expropriation, imposition of currency
controls or restrictions, the interruption, suspension or restriction of
trading on or the closure of any securities market, power or other mechanical
or technological failures or interruptions, computer viruses or communications
disruptions, acts of war or terrorism, riots, revolutions, work stoppages,
natural disasters or other similar events or acts; (ii) errors by the Fund or
the Investment Advisor in their instructions to the Custodian provided such
instructions have been in accordance with this Contract; (iii) the insolvency
of or acts or omissions by a Securities System; (iv) any delay or failure of
any broker, agent or intermediary, central bank or other commercially prevalent
payment or clearing system to deliver to the Custodian's sub-custodian or agent
securities purchased or in the remittance or payment made in connection with
securities sold; (v) any delay or failure of any company, corporation, or other
body in charge or registering or transferring securities in the name of the
Custodian, the Fund, the Custodian's sub-custodians, nominees or agents or any
consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security
or Securities System; and (vii) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or
any other country, or political subdivision thereof or of any court of
competent jurisdiction.

The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in this Contract.

If the Fund on behalf of the Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money
or which action may, in the opinion of the Custodian, result in the Custodian
or its nominee assigned to the Fund or the Portfolio being liable for the
payment of money or incurring liability of some other form, the Fund on behalf
of the Portfolio, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.

If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the applicable
Portfolio shall be security therefor and should the Fund fail to repay the

<PAGE>

Custodian promptly, the Custodian shall be entitled to utilize available cash
and to dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement.

In no event shall the Custodian be liable for indirect, special or
consequential damages.

14. Effective Period, Termination and Amendment

This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated with respect to any Portfolio by either party by an instrument in
writing delivered or mailed, postage prepaid to the other party, such
termination to take effect not sooner than thirty (30) days after the date of
such delivery or mailing; provided, however that the Custodian shall not with
respect to a Portfolio act under Section 2.10 hereof in the absence of receipt
of an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees of the Fund has approved the initial use of a particular
Securities System by such Portfolio, as required by Rule 17f-4 under the
Investment Company Act of 1940, as amended and that the Custodian shall not
with respect to a Portfolio act under Section 2.11 hereof in the absence of
receipt of an initial certificate of the Secretary or an Assistant Secretary
that the Board of Trustees has approved the initial use of the Direct Paper
System by such Portfolio ; provided further, however, that the Fund shall not
amend or terminate this Contract in contravention of any applicable federal or
state regulations, or any provision of the Declaration of Trust, and further
provided, that the Fund on behalf of one or more of the Portfolios may at any
time by action of its Board of Trustees (i) substitute another bank or trust
company for the Custodian by giving notice as described above to the Custodian,
or (ii) immediately terminate this Contract in the event of the appointment of
a conservator or receiver for the Custodian by the Comptroller of the Currency
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.

Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.

15. Successor Custodian

If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account

<PAGE>

of the successor custodian all of the securities of each such Portfolio held in
a Securities System.

If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.

In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the Investment Company Act of
1940, doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to
transfer to an account of such successor custodian all of the securities of
each such Portfolio held in any Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.

In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.

16. Interpretive and Additional Provisions

In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal
or state regulations or any provision of the Declaration of Trust of the Fund.
No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.

<PAGE>

17. Additional Funds

In the event that the Fund establishes one or more series of Shares in
addition to Landmark Equity Fund and Landmark Small Cap Equity Fund with
respect to which it desires to have the Custodian render services as custodian
under the terms hereof, it shall so notify the Custodian in writing, and if the
Custodian agrees in writing to provide such services, such series of Shares
shall become a Portfolio hereunder.

18. Massachusetts Law to Apply

This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.

19. Prior Contracts

This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.

20. No Liability of Other Series

Notwithstanding any other provision of this Agreement, the parties agree
that the assets and liabilities of each Portfolio are separate and distinct
from the assets and liabilities of each other Portfolio and that no Portfolio
shall be charged for any debt, obligation or liability of any other Portfolio,
whether arising under this Agreement or otherwise.

21. Shareholder Communications Election

Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below,
the Custodian is required by the rule to treat the Fund as consenting to
disclosure of this information for all securities owned by the Fund or any
funds or accounts established by the Fund. For the Fund's protection, the Rule
prohibits the requesting company from using the Fund's name and address for any

<PAGE>

purpose other than corporate communications. Please indicate below whether the
Fund consents or objects by checking one of the alternatives below.

YES [ ] The Custodian is authorized to release the Fund's name,
address, and share positions.

NO [ ] The Custodian is not authorized to release the Fund's name,
address, and share positions.

IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 1st day of September, 1997.

ATTEST LANDMARK FUNDS II

________________________ By Philip Coolidge
President

ATTEST STATE STREET BANK AND TRUST COMPANY

_________________________ By Ronald E. Logue
Executive Vice President

<PAGE>

Schedule A

The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Trustees of Landmark Funds II
for use as sub-custodians for the Fund's securities and other assets:

(Insert banks and securities depositories)

Certified:

Fund's Authorized Officer

Date:
<PAGE>
Landmark Funds II
6 St. James Avenue
Boston, Massachusetts 02116

___________ ___, 199__

State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

Re: Landmark Funds II - Custodian Contract

Ladies and Gentlemen:

Pursuant to Section 17 of the Custodian Contract dated as of September 1,
1997 (the "Contract"), between Landmark Funds II (the "Trust") and State Street
Bank and Trust Company (the "Custodian"), we hereby request that CitiFunds
Small Cap Value Portfolio and CitiFunds Growth & Income Portfolio
(collectively, the "Funds") be added to the list of series of the Trust to
which the Custodian renders services as custodian under the terms of the
Contract.

Please sign below to evidence your agreement to render such services as
custodian on behalf of the Funds and to add the Funds as beneficiaries under
the Contract.

LANDMARK FUNDS II

By:__________________________

Title:_______________________

Agreed:

STATE STREET BANK AND TRUST COMPANY

By:_________________________

Title:______________________

Exhibit 9(a)

FORM OF SUB-ADMINISTRATIVE SERVICES AGREEMENT

SUB-ADMINISTRATIVE SERVICES AGREEMENT, dated as of November 14, 1997, by
and between THE LANDMARK FUNDS BROKER-DEALER SERVICES, INC., a Massachusetts
corporation (the "Sub-Administrator"), and CITIBANK, N.A., a national banking
association ("Citibank").

W I T N E S S E T H :

WHEREAS, Citibank has been retained by certain registered open-end
management investment companies under the Investment Company Act of 1940, as
amended (the "1940 Act"), as listed on Schedule A hereto (each individually a
"Trust" and collectively the "Trusts"), to provide administrative services to
its investment portfolios, as listed on Schedule A hereto (each individually a
"Fund" and collectively the "Funds"), pursuant to separate Management
Agreements (each a "Management Agreement"), and

WHEREAS, as permitted by Section 1 of each Management Agreement, Citibank
desires to subcontract some or all of the performance of its obligations
thereunder to Sub-Administrator, and Sub-Administrator desires to accept such
obligations; and

WHEREAS, Citibank wishes to engage Sub-Administrator to provide certain
administrative services on the terms and conditions hereinafter set forth, so
long as Citibank shall have found Sub-Administrator to be qualified to perform
the obligations sought to be subcontracted.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:

1. Duties as Sub-Administrator. Subject to the supervision and direction
of Citibank, Sub-Administrator will assist in supervising various aspects of
each Trust's administrative operations and undertakes to perform the following
specific services, from and after the effective date of this Agreement:

<PAGE>

(a) To the extent requested by Citibank, furnish Trust secretarial
services;

(b) To the extent requested by Citibank, furnish Trust treasury
services, including the review of financial data, tax and other
regulatory filings and audit requests;

(c) To the extent requested by Citibank, provide the services of certain
persons who may be appointed as officers or Trustees of the Trust by
the Trust's Board;

(d) To the extent requested by Citibank, participate in the preparation
of documents required for compliance by the Trust with applicable
laws and regulations, including registration statements,
prospectuses, semi-annual and annual reports to shareholders and
proxy statements;

(e) To the extent requested by Citibank, prepare agendas and supporting
documents for and minutes of meetings of the Trustees, Committees of
Trustees and shareholders;

(f) Maintain books and records of the Trust;

(g) To the extent requested by Citibank, provide advice and counsel to
the Trust with respect to regulatory matters, including monitoring
regulatory and legislative developments which may affect the Trust
and assisting the Trust in routine regulatory examinations or
investigations of the Trust, and working closely with outside
counsel to the Trust in connection with litigation in which the
Trust is involved;

(h) To the extent requested by Citibank, generally assist in all aspects
of Trust's operations and provide general consulting services on a
day to day, as needed basis;

(i) In connection with the foregoing activities, maintain office
facilities (which may be in the offices of Sub-Administrator or its
corporate affiliate); and

(j) In connection with the foregoing activities, furnishing clerical
services, and internal executive and administrative services,
stationery and office supplies.

<PAGE>

Notwithstanding the foregoing, Sub-Administrator under this Agreement
shall not be deemed to have assumed any duties with respect to, and shall not
be responsible for, the management of a Trust, or the distribution of
beneficial interests in a Trust, nor shall Sub-Administrator be deemed to have
assumed or have any responsibility with respect to functions specifically
assumed by any transfer agent or custodian of a Trust.

In performing all services under this Agreement, Sub-Administrator shall
(a) act in conformity with the Trust's charter documents and bylaws, the 1940
Act and other applicable laws, as the same may be amended from time to time,
(b) consult and coordinate with legal counsel for the Trust, as necessary or
appropriate, and (c) advise and report to the Trust and its legal counsel, as
necessary or appropriate, with respect to any material compliance or other
matters that come to its attention.

In performing its services under this Agreement, Sub-Administrator shall
cooperate and coordinate with Citibank as necessary and appropriate and shall
provide such information as its reasonably necessary or appropriate for
Citibank to perform its obligations to the Trust. Sub-Administrator shall
perform its obligations under this Agreement in a conscientious and diligent
manner consistent with prevailing industry standards.

2. Compensation of Sub-Administrator. For the services to be rendered and
the facilities to be provided by Sub-Administrator hereunder, Sub-Administrator
shall be paid an administrative fee as may from time to time be agreed to
between Citibank and Sub-Administrator.

3. Additional Terms and Conditions. The parties may amend this agreement
and include such other terms and conditions as may from time to time be agreed
to by both Citibank and Sub-Administrator.

4. Termination. This Agreement may be terminated by Citibank at any time,
in its entirety or as to one or more Funds, with or without cause. This
Agreement may be terminated by the Sub-Administrator, in its entirety or as to
one or more Funds, with or without cause, provided that Sub-Administrator has
notified Citibank of such termination in writing at least 90 days prior to the
effective date thereof.

<PAGE>

THE LANDMARK FUNDS
BROKER-DEALER SERVICES, INC. CITIBANK, N.A.

By:______________________ By:________________________

Title:___________________ Title:_____________________

<PAGE>

Schedule A
to Sub-Administrative Services Agreement
Between
The Landmark Funds Broker-Dealer Services, Inc.
and
Citibank, N.A.

Trust Series

Landmark International Funds CitiFunds International Growth
& Income Portfolio

Landmark Funds II CitiFunds Small Cap Value
Portfolio
CitiFunds Growth & Income
Portfolio

Exhibit 9(b)

Landmark Funds II
6 St. James Avenue
Boston, Massachusetts 02116

___________ ___, 199__

State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

Re: Landmark Funds II - Transfer Agency and
Service Agreement

Ladies and Gentlemen:

This letter serves as notice that CitiFunds Small Cap Value Portfolio and
CitiFunds Growth & Income Portfolio (collectively, the "Funds") are added to
the list of series of Landmark Funds II (formerly, "Landmark Capital Growth
Fund") (the "Trust") to which State Street Bank and Trust Company ("State
Street") renders services as transfer agent pursuant to the terms of the
Transfer Agency Agreement dated as of August 21, 1986 (the "Agreement") between
the Trust and State Street.

Please sign below to acknowledge your receipt of this notice adding the
Funds as beneficiaries under the Agreement.

LANDMARK FUNDS II

By:_______________________________

Title:____________________________

Acknowledgment:

STATE STREET BANK AND TRUST COMPANY

By:_________________________________

Title:______________________________

EXHIBIT 9(C)

ACCOUNTING SERVICES AGREEMENT

THIS AGREEMENT is made as of the 1st day of September, 1997 by and
between STATE STREET BANK AND TRUST COMPANY, a trust company duly organized
under the laws of the Commonwealth of Massachusetts (the "ACCOUNTING AGENT")
and LANDMARK FUNDS II, a business trust organized under the laws of the
Commonwealth of Massachusetts (the "FUND").

W I T N E S S E T H:

WHEREAS, the Fund is authorized to issue beneficial interests in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets; and

WHEREAS, the Fund currently offers beneficial interests in one or more
series, including, Landmark Equity Fund and Landmark Small Cap Equity Fund
(such series, together with all other series subsequently established by the
Fund and made subject to this Agreement in accordance with Section 7.1 below,
each a "PORTFOLIO" and collectively, the "PORTFOLIOS");

WHEREAS, each Portfolio will invest all or substantially all of its
assets in a series of beneficial interests issued by a multi-series master fund
(the "MASTER FUND"), with each such series representing interests in a separate
portfolio of securities and other assets of the Master Fund (each a "MASTER
PORTFOLIO"); and

WHEREAS, the Fund desires to retain the Accounting Agent to perform
certain accounting and recordkeeping duties on behalf of each Portfolio and the
Accounting Agent is willing to perform such services upon the terms and
conditions hereinafter set forth.

NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein (the adequacy of which consideration with respect to each
party is hereby mutually admitted), the parties hereto hereby agree as follows:

Section 0.1 DUTIES OF THE ACCOUNTING AGENT.

Section a. BOOKS OF ACCOUNT.

The Accounting Agent shall maintain the books of account of each
Portfolio and shall perform the following duties, using information provided to
the Accounting Agent by the Fund and others, in the manner prescribed by each

<PAGE>

Portfolio's currently effective Registration Statement and the Declaration of
Trust of the Fund, certified copies of which have been supplied to the
Accounting Agent (with respect to each Portfolio, the "CONSTITUTIVE DOCUMENTS")
and in accordance with such written procedures as may be agreed upon by the
Fund and the Accounting Agent from time to time:

(a) Record general ledger entries;
(b) Record daily net income;
(c) Reconcile activity to the trial balance;
(d) Calculate and publish daily net asset value; and
(e) Prepare account balances.

The Fund shall provide timely prior notice to the Accounting Agent of any
modification in the manner in which such calculations are to be performed
pursuant to any revision to the Constitutive Documents of a Portfolio and shall
supply the Accounting Agent with certified copies of all amendments and/or
supplements to each Portfolio's Constitutive Documents in a timely manner. For
purposes of calculating the net asset value of each Portfolio, the Accounting
Agent shall value such Portfolio's capital ownership in its corresponding
Master Portfolio utilizing the allocation supplied by the Master Fund or its
designated agent and shall value other portfolio securities of such Portfolio,
if any, utilizing prices obtained from sources designated by the Fund on a
Price Source Authorization substantially in the form attached hereto as Exhibit
A, as the same may be amended by the Fund and the Accounting Agent from time to
time, or otherwise designated by means of Proper Instructions (as such term is
defined in Section 2.2 below) (collectively, the "AUTHORIZED PRICE SOURCES").
The Accounting Agent shall not be responsible for any revisions to the methods
of calculation prescribed by the Constitutive Documents of any Portfolio unless
and until such revisions are communicated in writing to the Accounting Agent.
The Accounting Agent represents and warrants to the Fund that it has all
consents, approvals, licenses, rights and authority necessary to perform the
services to be provided hereunder.

<PAGE>

Section 1.2 RECORDS.

The Accounting Agent shall create and maintain all records relating to
its activities and obligations under this Agreement with respect to each
Portfolio in a manner which shall meet the obligations of such Portfolio under
its Constitutive Documents. All such records shall be the property of the
relevant Portfolio and shall at all times during the regular business hours of
the Accounting Agent be open for inspection by duly authorized officers,
employees or agents of the Fund and employees and agents of the regulatory
agencies having jurisdiction over the Portfolio. Subject to Section 3 below,
the Accounting Agent shall preserve the records required to be maintained
thereunder for the period required by law.

Section 1.3 APPOINTMENT OF AGENTS.

The Accounting Agent may at is own expense employ agents in the
performance of its duties and the exercise of its rights under this Agreement,
provided that the employment of such agents shall not reduce the Accounting
Agent's obligations or liabilities hereunder.

Section 2. DUTIES OF THE FUND.

Section 2.1 PROVISION OF INFORMATION.

The Fund shall provide to the Accounting Agent, or shall cause a third
party to so provide, certain data with respect to each Portfolio as a condition
to the Accounting Agent's obligations under Section 1 above. The data required
to be provided with respect to each Portfolio pursuant to this Section is set
forth on Schedule A hereto, which schedule may be separately amended or
supplemented by the Fund and the Accounting Agent from time to time.

The Accounting Agent is authorized and instructed to rely upon the
information it receives from the Fund or any third party authorized by the Fund
(a "THIRD PARTY AGENT") to provide such information to the Accounting Agent.
The Accounting Agent shall have no responsibility to review, confirm or
otherwise assume any duty with respect to the accuracy or completeness of any
information supplied to it by the Fund or any Third Party Agent.

Section 2.2 PROPER INSTRUCTIONS.

The term "PROPER INSTRUCTIONS" shall mean instructions received by the
Accounting Agent from the Fund, the investment advisor of the Portfolios
appointed by the Fund from time to time (the "INVESTMENT ADVISOR") or any
person duly authorized by them. Such instructions may be in writing signed by

<PAGE>

the authorized person or may be in a tested communication or in a communication
utilizing access codes effected between electro-mechanical or electronic
devices or may be by such other means as may be agreed upon from time to time
by the Accounting Agent and the party giving such instructions (including,
without limitation, oral instructions). All oral instructions shall be promptly
confirmed in writing. The Fund and the Investment Advisor shall each cause its
duly authorized representative to certify to the Accounting Agent in writing
the names and specimen signatures of persons authorized to give Proper
Instructions. The Accounting Agent shall be entitled to rely upon the identity
and authority of such persons until it receives written notice from the Fund or
the Investment Advisor, as the case may be, to the contrary. The Accounting
Agent may rely upon any Proper Instruction reasonably believed by it to be
genuine and to have been properly issued by or on behalf of the Fund or the
Investment Advisor, as the case may be. The Fund shall give timely Proper
Instructions to the Accounting Agent in regard to matters affecting accounting
practices and the Accounting Agent's performance pursuant to this Agreement.

Section 3. SUCCESSOR AGENT.

If a successor accounting agent for the Portfolios shall be appointed by
the Fund, the Accounting Agent shall upon termination of this Agreement deliver
to such successor agent at the office of the Accounting Agent all books and
records of account of each Portfolio maintained by the Accounting Agent
hereunder. In the event this Agreement is terminated by either party without
the appointment of a successor agent, the Accounting Agent shall, upon receipt
of Proper Instructions, deliver such properties at its office in accordance
with such instructions.

In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Accounting Agent on or
before the effective date of such termination, then the Accounting Agent shall
have the right to deliver to a bank or trust company of its own selection,
having aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than $2,000,000, all property of the Portfolios
held by the Accounting Agent hereunder. Thereafter, such bank or trust company
shall be the successor of the Accounting Agent under this Agreement.

<PAGE>

Section 4. STANDARD OF CARE; LIMITATION ON LIABILITY.

The Accounting Agent shall at all times exercise reasonable care and
diligence and act in good faith in the performance of its duties hereunder,
provided, however, that the Accounting Agent shall assume no responsibility and
shall be without liability for any loss, damage or expense suffered or incurred
by the Fund or any Portfolio unless caused by its own fraud, wilful default,
negligence or wrongful act or that of its agents or employees.

Without in any way limiting the generality of the foregoing, the
Accounting Agent shall in no event be liable for any loss or damage arising
from causes beyond its reasonable control, including, without limitation, delay
or cessation of services hereunder or any damages to the Fund or any Portfolio
resulting therefrom as a consequence of any work stoppage, power or other
mechanical failure, natural disaster, governmental action, communications
disruption or other impossibility of performance. The Accounting Agent shall
not be liable for any special, indirect, incidental, or consequential damages
of any kind whatsoever (including, without limitation, attorneys' fees) in any
way due to any Portfolio's use of the accounting services or the performance of
or failure to perform the Accounting Agent's obligations under this Agreement.

The Fund and any Third Party Agents or Authorized Price Sources from
which the Accounting Agent shall receive or obtain certain records, reports and
other data included in the accounting services provided hereunder are solely
responsible for the contents of such information, including, without
limitation, the accuracy thereof. The Accounting Agent shall have no
responsibility to review, confirm or otherwise assume any duty with respect to
the accuracy or completeness of any such information and shall be without
liability for any loss or damage suffered by the Fund or any Portfolio as a
result of the Accounting Agent's reasonable reliance on and utilization of such
information, except as otherwise required by the terms of the Price Source
Authorization form attached hereto as Exhibit A with respect to the use of data
obtained from Authorized Price Sources. The Accounting Agent shall have no
responsibility and shall be without liability for any loss or damage caused by
the failure of the Fund or any Third Party Agent to provide it with the
information required by Section 2.1 hereof.

Section 5. INDEMNIFICATION.

The Fund hereby agrees to indemnify and hold harmless the Accounting
Agent from and against any loss, liability, claim or expense (including
reasonable attorney's fees and disbursements) suffered or incurred by the
Accounting Agent in connection with the performance of its duties hereunder,
including, without limitation, any liability or expense suffered or incurred as

<PAGE>

a result of the acts or omissions of the Fund or any Third Party Agent or
Authorized Price Source whose data or services, including records, reports and
other information, the Accounting Agent must rely upon in performing accounting
services hereunder. Notwithstanding the immediately preceding sentence, the
Fund in no event shall indemnify or hold harmless the Accounting Agent from any
loss, liability, claim or expense involving any breach or alleged breach or
violation of U.S. Patent No. 5,193,056, entitled Data Processing System for Hub
and Spoke Financial Services Configuration.

Section 6. DATA ACCESS AND PROPRIETARY INFORMATION.

The Fund acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals which may be furnished to it by the Accounting Agent as part of the
Fund's ability to access certain Portfolios-related data ("CUSTOMER DATA")
maintained by the Accounting Agent on data bases under the control and
ownership of the Accounting Agent ("DATA ACCESS SERVICES") constitute
copyrighted, trade secret, or other proprietary information (collectively,
"PROPRIETARY INFORMATION") of substantial value to the Accounting Agent. The
Fund agrees to treat all Proprietary Information as proprietary to the
Accounting Agent and further agrees that it shall not divulge any Proprietary
Information to any person or organization except as may be provided hereunder.
Without limiting the foregoing, the Fund agrees for itself and its employees
and agents:

(a) to access Customer Data solely from locations as may be designated
in writing by the Accounting Agent and solely in accordance with the
Accounting Agent's applicable user documentation;

(b) to refrain from copying or duplicating in any way the
Proprietary Information;

(c) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently
obtained, to inform the Accounting Agent in a timely manner of such
fact and dispose of such information in accordance with the
Accounting Agent's instructions;

(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer facility or
other location, except with the prior written consent of the
Accounting Agent;

<PAGE>

(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties; and

(f) to honor all reasonable written requests made by the Accounting
Agent to protect at the Accounting Agent's expense and risk the
rights of the Accounting Agent in Proprietary Information at common
law, under federal copyright law and under other federal or state
law.

Each party shall take reasonable efforts to advise its employees and agents of
their obligations pursuant to this Section 6. The obligations of this Section
shall survive for a period of five years any earlier termination of this
Agreement.

The Fund hereby acknowledges that the data and information it may access
from the Accounting Agent utilizing the Data Access Services will be unaudited
and may not be accurate due to inaccurate pricing of securities, delays of a
day in updating a Portfolio's account and other causes for which Accounting
Agent will not be liable to the Fund or any Portfolio.

If the Fund notifies the Accounting Agent that any of the Data Access
Services do not operate in material compliance with the most recently issued
user documentation for such services, the Accounting Agent shall use its best
efforts to correct such failure as promptly as possible. Data access services
and all computer programs and software specifications used in connection
therewith are provided on an as is, as available basis. The Accounting Agent
expressly disclaims all warranties except those expressly stated herein
including, but not limited to, the implied warranties of merchantability and
fitness for a particular purpose.

If the transactions available to the Fund include the ability to
originate electronic instructions to the Accounting Agent in order to (i)
effect the transfer or movement of cash or beneficial interests or (ii)
transmit interest holder information or other information (such transactions
constituting a "COEFI"), then in such event the Accounting Agent shall be
entitled to rely on the validity and authenticity of such instruction without
undertaking any further inquiry as long as such instruction is undertaken in
conformity with mutually acceptable security procedures established by the
Accounting Agent and the Fund from time to time.

Notwithstanding anything to the contrary in this Section 6, the Fund and
its employees and agents may copy and duplicate Proprietary Information for its
own internal use in a manner consistent with this Agreement.

<PAGE>

The Fund and its employees and agents may disclose any Proprietary
Information (i) if and to the extent the Fund and its employees and agents are
required to do so by applicable law or an order of a court of competent
jurisdiction or other government agency having appropriate authority, in which
case the Fund shall provide the Accounting Agent with timely notice prior to
such disclosure and (ii) to the extent any of such documents, materials and
information are made public by means other than a breach by the Fund or its
respective employees and agents of the obligations hereunder.

Notwithstanding anything in this Section 6 to the contrary, the Fund and
its employees and agents shall have the right to independently develop
products, provided they do so without any misappropriation of the Proprietary
Information or violation of the Accounting Agent's copyright or patent rights
or interests.

Section 7. GENERAL.

Section 7.1 ADDITIONAL PORTFOLIOS

In the event that the Fund establishes one or more series of beneficial
interests in addition to Landmark Equity Fund and Landmark Small Cap Equity
Fund, with respect to which it desires to have the Accounting Agent render
services under the terms of this Agreement, it shall so notify the Accounting
Agent in writing, and if the Accounting Agent agrees in writing to provide such
services, such series shall become a Portfolio hereunder.

Section 7.2 TERM OF AGREEMENT.

This Agreement shall be effective from the date first stated above and
shall remain in full force and effect until terminated as hereinafter provided.
Either party may, in its discretion, terminate this Agreement with respect to
any Portfolio for any reason by giving the other party at least sixty (60) days
prior written notice of termination.

Section 7.3 FEES AND EXPENSES.

The Fund agrees to pay the Accounting Agent such reasonable compensation
for its services and expenses as may be agreed upon from time to time in a
written fee schedule approved by the Fund and the Accounting Agent.

<PAGE>

Section 7.4 CONFIDENTIALITY.

The Accounting Agent agrees on behalf of itself and its employees to
treat confidentially all records and other information relating to the Fund and
each Portfolio, except where required to be disclosed by law or where the
Accounting Agent has determined that such disclosure is necessary for the
protection of its interests or has received the prior written consent of the
Fund, which consent shall not be unreasonably withheld.

Section 7.5 NOTICES.

All notices shall be in writing and shall be deemed given when delivered
in person, by facsimile, by overnight delivery through a commercial courier
service, or by registered or certified mail, return receipt requested. Notices
shall be addressed to each party at its address set forth below, or such other
address as the recipient may have specified by earlier notice to the sender.

If to the Accounting Agent: STATE STREET BANK AND TRUST COMPANY
1776 Heritage Drive
North Quincy, MA 02171
Attention:
Telephone:
Telecopy:

With a copy to: STATE STREET FUND SERVICES TORONTO INC.
100 King Street, West
Suite 3600
Toronto, Ontario
Canada M5X 1A9
Attention: Mike Larkin
Telephone: (416) 956-2987
Telecopy: (416) 956-2874

If to the Fund: LANDMARK FUNDS II
6 St. James Avenue
Boston, MA 02116
Attention: Philip Coolidge
Telephone: 617-423-1679
Telecopy: 617-542-5815

With a copy to: CITIBANK GLOBAL ASSET MANAGEMENT
153 East 53rd Street
New York, NY 10043
Attention: Andrew Shoup
Telephone: 212-559-1177
Telecopy: 212-793-1812

<PAGE>

Section 7.6. ASSIGNMENT; SUCCESSORS.

This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign its
rights and obligations hereunder to a party controlling, controlled by, or
under common control with such party.

Section 7.7 ENTIRE AGREEMENT.

This Agreement (including all schedules and attachments hereto)
constitutes the entire Agreement between the parties with respect to its
subject matter.

Section 7.8 AMENDMENTS.

No amendment to this Agreement shall be effective unless it is in writing
and signed by a duly authorized representative of each party. The term
"Agreement", as used herein, includes all schedules and attachments hereto and
any future written amendments, modifications, or supplements made in accordance
herewith.

Section 7.9 HEADINGS NOT CONTROLLING.

Headings used in this Agreement are for reference purposes only and shall
not be deemed a part of this Agreement.

Section 7.10 SURVIVAL.

All provisions regarding indemnification, warranty, liability and limits
thereon shall survive following the expiration or termination of this
Agreement.

Section 7.11 SEVERABILITY.

In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.

Section 7.12 COUNTERPARTS.

This Agreement may be simultaneously executed in several counterparts,
each of which shall be deemed to be an original, and all such counterparts
shall together constitute but one and the same Agreement.

<PAGE>

Section 7.13 GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.

<PAGE>

SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first written above.

STATE STREET BANK AND TRUST COMPANY

By: Ronald E. Logue
Its: Executive Vice President

LANDMARK FUNDS II

By: Philip Coolidge
Its: President

<PAGE>

SCHEDULE A

REQUIRED INFORMATION RESPONSIBLE PARTY

Portfolio Trade Authorizations Investment Adviser
Currency Transactions Investment Adviser
Cash Transaction Report Custodian
Portfolio Prices Third Party Vendors/Investment
Adviser
Exchange Rates Third Party Vendors/Investment
Adviser
Capital Stock Activity Report Transfer Agent
Dividend/Distribution Schedule Fund
Dividend/Distribution Declaration Fund
Dividend Reconciliation/Confirmation Transfer Agent
Corporate Actions Third Party
Vendors/Custodian
Service Provider Fee Schedules Fund
Expense Budget Fund
Expense Payments and other
Cash Disbursements Fund
Amortization Policy Fund
Accounting Policy/Complex Investments Fund
Audit Management Letter Auditor
Annual Interest holder Letter Fund
Annual/Semi-Annual Reports Fund
Allocation of Capital Ownership
in Master Portfolios Master Fund

<PAGE>

EXHIBIT A

ACCOUNTING SERVICES AGREEMENT
dated
_____ __, 1997
by and between
LANDMARK FUNDS II
and
STATE STREET BANK TRUST COMPANY
(the "Accounting Agent")

Pursuant to the terms of the Accounting Services Agreement, the Fund has
directed the Accounting Agent to calculate the net asset value of each
Portfolio and to perform certain other accounting services in accordance with
the Constitutive Documents (as such term is defined therein) of each Portfolio.
The Fund hereby authorizes and instructs the Accounting Agent to utilize the
pricing sources specified on the attached forms as sources for securities
prices in calculating the net asset value of each Portfolio and acknowledges
and agrees that the Accounting Agent shall have no liability for any incorrect
data provided by pricing sources selected by the Fund or otherwise authorized
by Proper Instructions (as such term is defined in the Accounting Services
Agreement), except as may arise from the Accounting Agent's lack of reasonable
care in performing the agreed-upon tolerance checks as to the data furnished
and calculating the net asset value of a Portfolio in accordance with the data
furnished and the Accounting Agent's performance of the agreed-upon tolerance
checks.

Landmark Funds II

By:_____________________________
Title:

Date:____________________________

<PAGE>

STATE STREET BANK AND TRUST COMPANY

PRICE SOURCE AUTHORIZATION

FUND:_______________________________________ SIGNATURE:______________________________

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

SECURITY TELEKURS OPTIONS PRICE (3) (2) (1) (1)
TYPE NYSE NASDAQ REPORTING AUTHORITY MANUAL BACK-UP TOLERANCE
AMEX BID MEAN LS/BID LS/MEAN TELEKURS LS BID LS/MEAN QUOTES SOURCE INDEX PERCENTAGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
I. LISTED
EQUITIES
-----------------------------------------------------------------------------------------------------------
II. OTC
EQUITIES
-----------------------------------------------------------------------------------------------------------
III. FOREIGN
EQUITIES
-----------------------------------------------------------------------------------------------------------
IV. EQUITY
OPTIONS
-----------------------------------------------------------------------------------------------------------
V. FUTURES
N/A
-----------------------------------------------------------------------------------------------------------
</TABLE>

INSTRUCTIONS: For each security type, allowed by the Fund prospectus, please
indicate the primary price source and a back-up source to be used in
calculating Net Asset Value for the Fund identified above. Also, please
indicate a published market index and tolerance range (in terms of percent) to
be used for reasonability testing. If you do not wish to use a published index
please indicate N/A but do not leave blank.

(1) * INDEX/TOLERANCE CHECK: The price movement for a particular security is
compared to the index movement. If the security price movement exceeds the
index movement by more than the percentage authorized on this form, then the
security price will be verified using the back-up source authorized. The index
and tolerance information authorized here will be the basis for this
reasonability test.

(2) BACK-UP SOURCE: The following sources are available for back-up, price
verification and historical price and yield information: Bloomberg, Bridge,
Reuters, and Telerate. Please do not leave blank.

(3) MANUAL QUOTES AND PRIVATE PLACEMENTS: Please specify the source for private
placements or manual quotes as necessary. See page 3 to list additional
information if needed.

<PAGE>

<TABLE>
<CAPTION>
STATE STREET BANK AND TRUST COMPANY

PRICE SOURCE AUTHORIZATION

---------------------------------------------------------------------------------------------------------------
SECURITY TYPE MERRILL INTERACTIVE
LYNCH STANDARD MULLER DATA KENNY (3) (2) (1) (1)
CAPITAL & POORS DATA SERVICES INFORMATION IDC/ MANUAL BACK-UP TOLERANCE
MARKETS MEAN BID MEAN BID MEAN BID SYSTEMS EXTEL QUOTES QUOTES INDEX PERCENTAGE
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VI. LISTED BONDS
IS LAST SALE
REQUIRED
WHEN
AVAILABLE
YES_____
NO_______
---------------------------------------------------------------------------------------------------------------
VII. CORPORATE
BONDS
---------------------------------------------------------------------------------------------------------------
VIII.U.S.
GOVERNMENT
OBLIGATIONS
---------------------------------------------------------------------------------------------------------------
IX. MORTAGE
BACKED
SECURITIES
---------------------------------------------------------------------------------------------------------------
X. MUNICIPAL
BONDS
---------------------------------------------------------------------------------------------------------------
XI. FIXED INCOME
OPTIONS

---------------------------------------------------------------------------------------------------------------
XII. FOREIGN BONDS

---------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
STATE STREET BANK AND TRUST COMPANY

PRICE SOURCE AUTHORIZATION

XII. Private Placements and Other Manual Quotes Information

----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SECURITY TYPE ADVISOR BROKER OTHER ADDITIONAL INFORMATION:
CONTACT NAME, TELEPHONE NUMBER
----------------------------------------------------------------------------------------------------------------

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

----------------------------------------------------------------------------------------------------------------
</TABLE>

INSTRUCTIONS: For all securities types which require manual quotes, please list
the source of the quotes and any additional information needed to obtain these
quotes.

<PAGE>

Landmark Funds II
6 St. James Avenue
Boston, Massachusetts 02116

___________ ___, 199__

State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

Re: Landmark Funds II - Accounting
Services Agreement

Ladies and Gentlemen:

Pursuant to Section 7.1 of the Accounting Services Agreement dated as of
September 1, 1997 (the "Agreement"), between Landmark Funds II (the "Trust")
and State Street Bank and Trust Company ("State Street"), we hereby request
that CitiFunds Small Cap Value Portfolio and CitiFunds Growth & Income
Portfolio (collectively, the "Funds") be added to the list of series of the
Trust to which State Street renders services as accounting agent pursuant to
the terms of the Agreement.

Please sign below to evidence your agreement to provide such services to
the Funds and to add the Funds as beneficiaries under the Agreement.

LANDMARK FUNDS II

By:_________________________

Title:______________________

Agreed:

STATE STREET BANK AND TRUST COMPANY

By:___________________________

Title:________________________

<PAGE>

BD DRAFT
10/1/97

Exhibit 10

October __, 1997

Landmark Funds II
6 St. James Avenue
Boston, Massachusetts 02116

Ladies and Gentlemen:

We have acted as counsel to Landmark Funds II, a Massachusetts business
trust (the "Trust"), in connection with Post-Effective Amendment No. 19 to the
Trust's Registration Statement on Form N-1A filed with the Securities and
Exchange Commission (the "Commission") on October __, 1997 (the "Registration
Statement"), with respect to an indefinite number of Shares of Beneficial
Interest (no par value) (the "Shares") of two separate series of the Trust
designated as CitiFunds Small Cap Value Portfolio and CitiFunds Growth & Income
Portfolio (collectively the "Funds").

In connection with this opinion, we have examined the following described
documents:

(a) the Registration Statement;

(b) a certificate of the Secretary of State of the Commonwealth of
Massachusetts as to the existence of the Trust;

(c) copies, certified by the Secretary of State of the Commonwealth of
Massachusetts, of the Trust's Declaration of Trust and of all amendments
thereto on file in the office of the Secretary of State; and

(d) a Certificate executed by Linda T. Gibson, Secretary of the Trust,
certifying as to, and attaching copies of, the Trust's By-Laws and certain
votes of the Trustees of the Trust authorizing the issuance of the Shares.

In such examination, we have assumed the genuineness of all signatures,
the conformity to the originals of all of the documents reviewed by us as
copies, the authenticity and completeness of all original documents reviewed by

<PAGE>

us in original or copy form and the legal competence of each individual
executing any document.

This opinion is based entirely on our review of the documents listed
above. We have made no other review or investigation of any kind whatsoever,
and we have assumed, without independent inquiry, the accuracy of the
information set forth in such documents.

This opinion is limited solely to the laws of the Commonwealth of
Massachusetts (other than the Massachusetts Uniform Securities Act, as to which
we express no opinion) as applied by courts in such Commonwealth to the extent
such laws may apply to or govern the matters covered by this opinion.

We understand that all of the foregoing assumptions and limitations are
acceptable to you.

Based upon and subject to the foregoing, please be advised that it is our
opinion that the Shares, when issued and sold in accordance with the
Registration Statement and the Trust's Declaration of Trust and By-laws, will
be legally issued, fully paid and non-assessable, except that, as set forth in
the Registration Statement, shareholders of the Funds may under certain
circumstances be held personally liable for the Trust's obligations.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.

Very truly yours,

BINGHAM DANA LLP

Exhibit 15

FORM OF SERVICE PLAN

SERVICE PLAN, dated as of November 14, 1997, of Landmark Funds II, a
Massachusetts trust (the "Trust"), with respect to shares of beneficial
interest ("Shares") of its series CitiFunds Small Cap Value Portfolio,
CitiFunds Growth & Income Portfolio, and any other series of the Trust adopting
this plan (collectively, the "Series").

WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "1940 Act");

WHEREAS, the Trust's shares of beneficial interest are divided into
separate series representing interests in separate funds of securities and
other assets;

WHEREAS, the Trust intends to distribute Shares in accordance with Rule
12b-1 under the 1940 Act, and wishes to adopt this Plan as a plan of
distribution pursuant to Rule 12b-1;

WHEREAS, the Trustees of the Trust as a whole, and the Trustees who are
not interested persons of the Trust (as defined in the 1940 Act) and who have
no direct or indirect financial interest in the operation of this Plan or in
any agreement relating hereto (the "Non-Interested Trustees"), having
determined, in the exercise of reasonable business judgment and in light of
their fiduciary duties under state law and under Section 36(a) and (b) of the
1940 Act, that there is a reasonable likelihood that this Plan will benefit the
Trust and the shareholders of the Series, have approved this Plan by votes cast
at a meeting called for the purpose of voting hereon and on any agreements
related hereto;

NOW, THEREFORE, the Trust hereby adopts this Plan as a plan of
distribution in accordance with Rule 12b-1 under the 1940 Act, with the terms
of the Plan being as follows:

1. Distribution and Servicing Activities. Subject to the supervision of
the Trustees of the Trust, the Trust may:

(a) engage, directly or indirectly, in any activities primarily
intended to result in the sale of Shares of the Series, which activities
may include, but are not limited to (i) payments to the Trust's
Distributor for distribution services, (ii) payments to securities

<PAGE>

dealers, financial institutions (which may include banks) and others in
respect of the sale of Shares of the Series, (iii) payments for
advertising, marketing or other promotional activity, and (iv) payments
for preparation, printing, and distribution of prospectuses and
statements of additional information and reports of the Trust for
recipients other than regulators and existing shareholders of the Trust;
and

(b) make payments, directly or indirectly, to the Trust's
Distributor, securities dealers, financial institutions (which may
include banks) and others for providing personal service and/or the
maintenance of
shareholder accounts.

The Trust is authorized to engage in the activities listed above either
directly or through other persons with which the Trust has entered into
agreements related to this Plan.

2. Maximum Expenditures. The expenditures to be made by the Trust
pursuant to this Plan shall be determined by the Trustees of the Trust, but in
no event may such expenditures exceed an amount calculated at the rate of 0.25%
per annum of the average daily net assets of each Series attributable to Shares
of that Series. Payments pursuant to this Plan may be made directly by the
Trust or to other persons with which the Trust has entered into agreements
related to this Plan. For purposes of determining the fees payable under this
Plan, the value of each Series' average daily net assets attributable to Shares
shall be computed in the manner specified in the applicable Series'
then-current prospectus and statement of additional information.

3. Trust's Expenses. The Trust shall pay all expenses of its operations,
including the following, and such expenses shall not constitute expenditures
under this Plan: organization costs of each series; compensation of Trustees
who are not "interested persons" of the Trust; governmental fees; interest
charges; loan commitment fees; taxes; membership dues in industry associations
allocable to the Trust; fees and expenses of independent auditors, legal
counsel and any transfer agent, distributor, shareholder servicing agent,
registrar or dividend disbursing agent of the Trust; expenses of issuing and
redeeming shares of beneficial interest and servicing shareholder accounts;
expenses of preparing, typesetting, printing and mailing prospectuses,
statements of additional information, shareholder reports, notices, proxy
statements and reports to governmental officers and commissions and to existing
shareholders of the Series; expenses connected with the execution, recording
and settlement of security transactions; insurance premiums; fees and expenses

<PAGE>

of the custodian for all services to the Series, including safekeeping of funds
and securities and maintaining required books and accounts; expenses of
calculating the net asset value of the Series (including but not limited to the
fees of independent pricing services); expenses of meetings of shareholders;
expenses relating to the issuance, registration and qualification of shares;
and such non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Trust may be a party and
the legal obligation which the Trust may have to indemnify its Trustees and
officers with respect thereto.

4. Term and Termination. (a) This Plan shall become effective as to a
Series upon (i) approval by a vote of at least a majority of the outstanding
voting securities (as defined in the 1940 Act) of Shares of the particular
Series, and (ii) approval by a majority of the Trustees of the Trust and a
majority of the Non-Interested Trustees cast in person at a meeting called for
the purpose of voting on this Plan. Unless terminated as herein provided, this
Plan shall continue in effect for one year from the date hereof and shall
continue in effect for successive periods of one year thereafter, but only so
long as each such continuance is specifically approved by votes of a majority
of both the Trustees of the Trust and the Non-Interested Trustees, cast in
person at a meeting called for the purpose of voting on such approval.

(b) This Plan may be terminated at any time with respect to any Series by
a vote of a majority of the Non-Interested Trustees or by a vote of a majority
of the outstanding voting securities, as defined in the 1940 Act, of Shares of
the applicable Series.

5. Amendments. This Plan may not be amended to increase materially the
maximum expenditures permitted by Section 2 hereof unless such amendment is
approved by a vote of the majority of the outstanding voting securities, as
defined in the 1940 Act, of Shares of the applicable Series, and no material
amendment to this Plan shall be made unless approved in the manner provided for
annual renewal of this Plan in Section 4(a) hereof.

6. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of the Non-Interested Trustees of the Trust shall
be committed to the discretion of such Non-Interested Trustees.

7. Quarterly Reports. The Treasurer of the Trust shall provide to the
Trustees of the Trust and the Trustees shall review quarterly a written report

<PAGE>

of the amounts expended pursuant to this Plan and any related agreement and the
purposes for which such expenditures were made.

8. Recordkeeping. The Trust shall preserve copies of this Plan and any
related agreement and all reports made pursuant to Section 7 hereof, for a
period of not less than six years from the date of this Plan. Any such related
agreement or such reports for the first two years will be maintained in an
easily accessible place.

9. Governing Law. This Plan shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts and the
provisions of the 1940 Act.

Exhibit 25(a)

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as her true and lawful attorneys and agents to
execute in her name and on her behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, Landmark Equity Fund, Landmark Small Cap
Equity Fund and CitiFunds Small Cap Value Portfolio, and any series of Landmark
Funds II hereinafter created) (the "Registrant") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as her own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 25th day of
September, 1997.

Susan Kerley
Susan B. Kerley

<PAGE>

LANDMARK FUNDS II

IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 25th day of
September, 1997.

Diana R. Harrington
Diana R. Harrington

<PAGE>

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on
Form N-1A, and any and all amendments thereto, filed by Landmark Funds II (on
behalf of its series, Landmark Equity Fund, Landmark Small Cap Equity Fund and
CitiFunds Small Cap Value Portfolio, and any series of Landmark Funds II
hereinafter created) (the "Registrant") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as his own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day of
September, 1997.

Philip Coolidge
Philip W. Coolidge

<PAGE>

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, Landmark Equity Fund, Landmark Small Cap
Equity Fund and CitiFunds Small Cap Value Portfolio, and any series of Landmark
Funds II hereinafter created) (the "Registrant") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as his own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day of
September, 1997.

Riley C. Gilley
Riley C. Gilley

<PAGE>

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, Landmark Equity Fund, Landmark Small Cap
Equity Fund and CitiFunds Small Cap Value Portfolio, and any series of Landmark
Funds II hereinafter created) (the "Registrant") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as his own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day of
September, 1997.

C. Oscar Morong, Jr.
C. Oscar Morong, Jr.

<PAGE>

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, Landmark Equity Fund, Landmark Small Cap
Equity Fund and CitiFunds Small Cap Value Portfolio, and any series of Landmark
Funds II hereinafter created) (the "Registrant") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as his own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day of
September, 1997.

E. Kirby Warren
E. Kirby Warren

<PAGE>

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, Landmark Equity Fund, Landmark Small Cap
Equity Fund and CitiFunds Small Cap Value Portfolio, and any series of Landmark
Funds II hereinafter created) (the "Registrant") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as his own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day of
September, 1997.

William S. Woods, Jr.
William S. Woods, Jr.

<PAGE>

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them, with full
powers of substitution as his true and lawful attorneys and agents to execute
in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, Landmark Equity Fund, Landmark Small Cap
Equity Fund and CitiFunds Small Cap Value Portfolio, and any series of Landmark
Funds II hereinafter created) (the "Registrant") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as his own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day of
September, 1997.

John R. Elder
John R. Elder

Exhibit 25(b)

ASSET ALLOCATION PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, CitiFunds Small Cap Value Portfolio, and any
other series of Landmark Funds II now existing or hereinafter created that
invests or will invest its assets in a series of Asset Allocation Portfolios)
(the "Registrant") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, and any and all other instruments which such attorneys and
agents, or any of them, deem necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities laws of any state or
other jurisdiction; and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day
of September, 1997.

Mark T. Finn
Mark T. Finn

<PAGE>

ASSET ALLOCATION PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Funds II (on behalf of its series, CitiFunds Small Cap Value
Portfolio, and any other series of Landmark Funds II now existing or
hereinafter created that invests or will invest its assets in a series of Asset
Allocation Portfolios) (the "Registrant") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as his own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day of
September, 1997.

Elliott J. Berv
Elliott J. Berv

<PAGE>

ASSET ALLOCATION PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, CitiFunds Small Cap Value Portfolio, and any
other series of Landmark Funds II now existing or hereinafter created that
invests or will invest its assets in a series of Asset Allocation Portfolios)
(the "Registrant") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, and any and all other instruments which such attorneys and
agents, or any of them, deem necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities laws of any state or
other jurisdiction; and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th
day of September, 1997.

Walter E. Robb, III
Walter E. Robb, III

<PAGE>

ASSET ALLOCATION PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on
Form N-1A, and any and all amendments thereto, filed by Landmark Funds II (on
behalf of its series, CitiFunds Small Cap Value Portfolio, and any other series
of Landmark Funds II now existing or hereinafter created that invests or will
invest its assets in a series of Asset Allocation Portfolios) (the "Registrant")
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as amended, and any
and all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended, the
rules, regulations and requirements of the Securities and Exchange Commission,
and the securities laws of any state or other jurisdiction; and the undersigned
hereby ratifies and confirms as his own act and deed any and all that such
attorneys and agents, or any of them, shall do or cause to be done by virtue
hereof. Any one of such attorneys and agents shall have, and may exercise, all
of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th
day of September, 1997.

Philip Coolidge
Philip W. Coolidge

<PAGE>

ASSET ALLOCATION PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them, with full
powers of substitution as his true and lawful attorneys and agents to execute
in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, CitiFunds Small Cap Value Portfolio, and any
other series of Landmark Funds II now existing or hereinafter created that
invests or will invest its assets in a series of Asset Allocation Portfolios)
(the "Registrant") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, and any and all other instruments which such attorneys and
agents, or any of them, deem necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities laws of any state or
other jurisdiction; and the undersigned hereby ratifies and confirms as his own
act and deed any and all that such attorneys and agents, or any of them, shall
do or cause to be done by virtue hereof. Any one of such attorneys and agents
shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
October, 1997.

John R. Elder
John R. Elder

Exhibit 25(c)

THE PREMIUM PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, CitiFunds Growth & Income Portfolio, and any
other series of Landmark Funds II now existing or hereinafter created that
invests or will invest its assets in a series of The Premium Portfolios) (the
"Registrant") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrant to comply
with the Securities Act of 1933, as amended and the Investment Company Act of
1940, as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities laws of any state or other jurisdiction;
and the undersigned hereby ratifies and confirms as his own act and deed any
and all that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 15th day
of October, 1997.

Mark T. Finn
Mark T. Finn

<PAGE>

THE PREMIUM PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, CitiFunds Growth & Income Portfolio, and any
other series of Landmark Funds II now existing or hereinafter created that
invests or will invest its assets in a series of The Premium Portfolios) (the
"Registrant") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrant to comply
with the Securities Act of 1933, as amended and the Investment Company Act of
1940, as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities laws of any state or other jurisdiction;
and the undersigned hereby ratifies and confirms as his own act and deed any
and all that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 15th day of
October, 1997.

Elliott J. Berv
Elliott J. Berv

<PAGE>

THE PREMIUM PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the
Registration Statements on Form N-1A, and any and all amendments thereto, filed
by Landmark Funds II (on behalf of its series, CitiFunds Growth & Income
Portfolio, and any other series of Landmark Funds II now existing or
hereinafter created that invests or will invest its assets in a series of The
Premium Portfolios) (the "Registrant") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities laws
of any state or other jurisdiction; and the undersigned hereby ratifies and
confirms as his own act and deed any and all that such attorneys and agents, or
any of them, shall do or cause to be done by virtue hereof. Any one of such
attorneys and agents shall have, and may exercise, all of the powers hereby
conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 15th day of
October, 1997.

Walter E. Robb, III
Walter E. Robb, III

<PAGE>

THE PREMIUM PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on
Form N-1A, and any and all amendments thereto, filed by Landmark Funds II (on
behalf of its series, CitiFunds Growth & Income Portfolio, and any other series
of Landmark Funds II now existing or hereinafter created that invests or will
invest its assets in a series of The Premium Portfolios) (the "Registrant")
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as amended, and any
and all other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended,
the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities laws of any state or other jurisdiction; and
the undersigned hereby ratifies and confirms as his own act and deed any and
all that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents shall have, and
may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 15th day of
October, 1997.

Philip Coolidge
Philip W. Coolidge

<PAGE>

THE PREMIUM PORTFOLIOS for

LANDMARK FUNDS II

The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them, with full
powers of substitution as his true and lawful attorneys and agents to execute
in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Funds II (on behalf of its series, CitiFunds Growth & Income Portfolio, and any
other series of Landmark Funds II now existing or hereinafter created that
invests or will invest its assets in a series of The Premium Portfolios) (the
"Registrant") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrant to comply
with the Securities Act of 1933, as amended and the Investment Company Act of
1940, as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do
or cause to be done by virtue hereof. Any one of such attorneys and agents
shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 15th day of
October, 1997.

John R. Elder
John R. Elder