LANDMARK FUNDS III, 497, 1995-06-02

LANDMARK FUNDS III
497, 1995-06-02

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Supplement Dated May 24, 1995 to Prospectus Dated January 3, 1995

For

LANDMARK CASH RESERVES
LANDMARK U.S. TREASURY RESERVES

PREMIUM LIQUID RESERVES
PREMIUM U.S. TREASURY RESERVES

LANDMARK INSTITUTIONAL LIQUID RESERVES
LANDMARK INSTITUTIONAL U.S. TREASURY RESERVES

The determination of net asset value per share and net income per share of each
of Landmark Cash Reserves, Premium Liquid Reserves and Landmark Institutional
Liquid Reserves shall be made once each day as of 3:00 p.m. Eastern time.

<PAGE>
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PROSPECTUS
January 3, 1995
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Landmark Cash Reserves
Landmark U.S. Treasury Reserves
(Members of the Landmark(SM) Family of Funds)

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

This Prospectus describes two diversified money market mutual funds in the
Landmark Family of Funds: Landmark Cash Reserves and Landmark U.S. Treasury
Reserves. Each Fund has its own investment objectives and policies. Landmark
Cash Reserves offers both Class A and Class B shares. Citibank, N.A. is the
investment adviser.

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

Unlike other mutual funds which directly acquire and manage their own
portfolios of securities, Landmark Cash Reserves and Landmark U.S. Treasury
Reserves seek their investment objectives by investing all of their investable
assets in Cash Reserves Portfolio and U.S. Treasury Reserves Portfolio,
respectively (each called a "Portfolio"). Each Portfolio has the same investment
objectives and policies as its corresponding Fund. See "Special Information
Concerning Investment Structure" on page 9.

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

Investments in the Funds are neither insured nor guaranteed by the U.S.
Government. Each Fund attempts to maintain a stable net asset value of $1.00 per
share; however, there can be no assurance that either Fund will be able to do
so. Prospective investors should also be aware that shares of the Funds 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.

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

This Prospectus concisely sets forth information about the Funds that a
prospective investor should know before investing. A Statement of Additional
Information dated January 3, 1995 (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 Funds may be made, by contacting the investor's
shareholder servicing agent (see inside back cover for address and phone
number).

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Table of Contents
Prospectus Summary ........................................................ 2
Expense Summary ........................................................... 4
Condensed Financial Information ........................................... 6
Investment Information .................................................... 8
Valuation of Shares ....................................................... 10
Classes of Shares ......................................................... 11
Purchases ................................................................. 12
Exchanges ................................................................. 13
Redemptions ............................................................... 14
Net Income and Distributions .............................................. 14
Management ................................................................ 15
Tax Matters ............................................................... 18
Performance Information ................................................... 18
General Information ....................................................... 19
Appendix .................................................................. 20

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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>

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Prospectus Summary
- --------------------------------------------------------------------------------

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

The Funds: This Prospectus describes two money market mutual funds: Landmark
Cash Reserves and Landmark U.S. Treasury Reserves. Each Fund has its own
investment objectives and policies. Each Fund seeks its objectives by investing
its investable assets in a Portfolio having the same investment objectives and
policies as that Fund. There can be no assurance that either Fund will achieve
its objectives.

Investment Objectives and Policies: Landmark Cash Reserves. To provide its
shareholders with liquidity and as high a level of current income as is
consistent with the preservation of capital. Through Cash Reserves Portfolio,
the Fund invests in U.S. dollar-denominated money market obligations with
maturities of 397 days or less issued by U.S. and non-U.S. issuers.

Landmark U.S. Treasury Reserves. To provide its shareholders with liquidity and
as high a level of current income from U.S. Government obligations as is
consistent with the preservation of capital. Through U.S. Treasury Reserves
Portfolio, the Fund invests in obligations issued by the U.S. Government with
maturities of 397 days or less.

Investment Adviser and Distributor: Citibank, N.A., ("Citibank" or the
"Adviser"), a wholly-owned subsidiary of Citicorp, is the investment adviser of
each Portfolio. Citibank and its affiliates manage more than $73 billion in
assets worldwide. The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or
the "Distributor") is the distributor of shares of each Fund. See "Management."

Purchases and Redemptions: Customers of Shareholder Servicing Agents may
purchase and redeem shares of the Funds on any Business Day. See "Purchases" and
"Redemptions."

Pricing: Landmark Cash Reserves. Investors may select Class A or Class B shares,
with different expense levels and sales charges (if made available by the
investors' Shareholder Servicing Agents). Class A shares are offered at net
asset value (normally $1.00 per share), without a sales load, and are subject to
a distribution fee at the annual rate of 0.10% (0.05% after anticipated waivers)
of the average daily net assets represented by the Class A shares. Class B
shares are offered at net asset value (normally $1.00 per share), and investors
pay a contingent deferred sales charge not to exceed 5% of the lesser of the
shares' net asset value at redemption or their original purchase price if the
shares are redeemed within six years of the date of purchase. Class B shares are
subject to a distribution fee at the annual rate of 0.75% of the average daily
net assets represented by the Class B shares. Class B shares automatically
convert into Class A shares approximately eight years after purchase. Class B
shares may only be purchased by exchange of Class B shares of another Landmark
Fund. See "Classes of Shares," "Purchases," "Redemptions" and "Management --
Distribution Arrangements."

Landmark U.S. Treasury Reserves. Shares of the Fund are purchased and redeemed
at net asset value (normally $1.00 per share), without a sales load or
redemption fees. While there are no sales loads, shares of the Fund are subject
to a distribution fee at the annual rate of 0.10% (0.05% after anticipated
waivers) of the average daily net assets of the Fund. See "Purchases" and
"Management -- Distribution Arrangements."

Exchanges: Shares may be exchanged for shares of most other Landmark Funds. See
"Exchanges."

Dividends: Declared daily and distributed monthly. Shares begin accruing
dividends on the day they are purchased. See "Net Income and Distributions."

Reinvestment: Dividends may be received either in cash or in Fund shares at net
asset value, subject to the policies of a shareholder's Shareholder Servicing
Agent. See "Net Income and Distributions."

Who Should Invest: Each Fund is designed for investors seeking liquidity,
preservation of capital and current income, and for whom growth of capital is
not a consideration. Landmark Cash Reserves is also designed for investors
seeking a convenient means of accumulating an interest in a professionally
managed, diversified portfolio consisting of short-term U.S. dollar-denominated
money market obligations issued by U.S. and non-U.S. issuers. Landmark U.S.
Treasury Reserves is designed for investors seeking a convenient means of
accumulating an interest in a professionally managed, diversified portfolio
consisting of short-term U.S. Government obligations. See "Investment
Information."

Risk Factors: There can be no assurance that either Fund or its corresponding
Portfolio will achieve its investment objectives. In addition, while each Fund
intends to maintain a stable net asset value of $1.00 per share, there can be no

<PAGE>

assurance that either Fund will be able to do so. Investments in high quality,
short-term instruments may, in many circumstances, result in a lower yield than
would be available from investments with a lower quality or a longer term.

Investors in Cash Reserves should be able to assume the special risks of
investing in non-U.S. securities, which 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. In addition, the prices of securities of non-U.S. issuers may be more
volatile than those of comparable U.S. issuers.

Certain investment practices also may entail special risks. Prospective
investors should read "Investment Information -- Certain Risk Considerations"
for more information about risk factors.

<PAGE>

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Expense Summary
- -----------------------

The following table summarizes estimated shareholder transaction and annual
operating expenses for each Fund and for its corresponding Portfolio. Each Fund
invests all of its investable assets in its corresponding Portfolio. The
Trustees of each Fund believe that the aggregate per share expenses of that Fund
and its corresponding 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 its Portfolio. For more information
on costs and expenses, see "Management" -- page 15 and "General
Information-Expenses" -- page 19.*

<TABLE>
<CAPTION>
---------------------------
Cash U.S.
Reserves Treasury
Class A Class B Reserves
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases (as a percentage of offering price) ............................. None None None
Maximum Contingent Deferred Sales Charge (as a percentage of original purchase price or redemption
proceeds, whichever is less) ......................................................................... None 5.00%** None
Annual Fund Operating Expenses, after fee waivers and reimbursements (as a
percentage of average net assets):
Investment Management Fee(1) ............................................................................ .06% .06% .05%
12b-1 Fees(1)(2) ........................................................................................ .05% .75% .05%
Other Expenses
Administrative Services Fees(1) ...................................................................... .25% .25% .23%
Shareholder Servicing Agent Fees(1) .................................................................. .25% .25% .25%
Other Operating Expenses(1) .......................................................................... .09% .14% .12%
--- ---- ---
Total Fund Operating Expenses(3) ........................................................................ .70% 1.45% .70%
=== ==== ===
</TABLE>

(1) After fee waivers and reimbursements.
(2) Fees under the 12b-1 distribution plans are asset-based sales charges.
Long-term shareholders in a 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.
(3) Absent fee waivers and reimbursements, "Total Fund Operating Expenses"
would have been:

* This table is intended to assist investors in understanding the various
costs and expenses that a shareholder of a Fund will bear, either directly
or indirectly. Because Class B shares were not offered during Cash
Reserves' most recent fiscal year, certain figures in the table are based
on estimated amounts for the current fiscal year. There can be no assurance
that the fee waivers and reimbursements reflected in the table will
continue at their present levels.

** Maximum of 5.0% in the first year, declining to a maximum of 1.0% in the
sixth year and eliminated thereafter. Class B shares are available only by
exchange from Class B shares of other Landmark Funds. The applicable
contingent deferred sales charge for Class B shares will depend on the fund
or funds from which the investor exchanged. See "Purchases."

More complete descriptions of the following expenses of the Funds and the
Portfolios are set forth on the following pages: (i) investment management fees
- -- page 15, (ii) distribution fees -- page 17, (iii) administrative services
fees -- page 16, and (iv) shareholder servicing agent fees -- page 16.

<PAGE>

Example: A shareholder would pay the following expenses on a $1,000 investment,
assuming redemption at the end of each period the end of each period indicated
below:

<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Reserves
Class A shares .......................................................... $ 7 $ 22 $ 37 $ 87
Class B shares:
Assuming complete redemption at end of period(1)(2) .................. $ 65 $ 76 $ 99 $153
Assuming no redemption(2) ............................................ $ 15 $ 46 $ 79 $153
U.S. Treasury Reserves ..................................................... $ 7 $ 22 $ 39 $ 87
</TABLE>

(1) Assumes deduction at the time of redemption of the maximum applicable
contingent deferred sales charge.
(2) Ten-year figures assume conversion of Class B shares to Class A shares
approximately eight years after purchase.

The Example assumes that all dividends are reinvested, and expenses are based on
each Fund's fiscal year ended August 31, 1994, after waivers and reimbursements.
If waivers and reimbursements were not in place, the amounts in the example
would be $11, $35, $60 and $133 for Landmark Cash Reserves -- Class A, $69, $88,
$120 and $196 for Landmark Cash Reserves -- Class B (assuming complete
redemption at the end of each period) and $11, $36, $62 and $136 for Landmark
U.S. Treasury Reserves. 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 either Fund's future performance. The Example should not be considered a
representation of past or future expenses of either Fund. Actual expenses may be
greater or less than those shown.

5
<PAGE>

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Condensed Financial Information
- -------------------------------

The following tables provide condensed financial information about the Funds for
the periods indicated. This information should be read in conjunction with the
financial statements appearing in each Fund's Annual Report to Shareholders,
which are incorporated by reference in the Statement of Additional Information.
The financial statements and notes, as well as the table below, covering periods
through August 31, 1994 have been audited by Price Waterhouse LLP (for the
fiscal year ended August 31, 1994) and Deloitte & Touche LLP (for periods prior
to the fiscal year ended August 31, 1994), independent certified public
accountants, on behalf of Cash Reserves, and by Deloitte & Touche LLP on behalf
of U.S. Treasury Reserves. The accountants' reports are included in the
applicable Fund's Annual Report. Copies of the Annual Reports may be obtained
without charge from an investor's Shareholder Servicing Agent (see inside of
back cover for address and phone number).

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Cash Reserves Financial Highlights
Year Ended August 31,
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of
period ......... $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
Net investment
income ......... 0.03137 0.02671 0.04010 0.06606 0.07785 0.08354 0.06483 0.05520 0.06732 0.08380
Less dividends
from net
investment
income ......... (0.03137) (0.02671) (0.04010) (0.06606) (0.07785) (0.08354) (0.06483) (0.05520) (0.06732) (0.08380)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value,
end of period .. $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Ratios/Supplemental
Data:
Net assets, end
of period
(000's omitted) .. $445,600 $470,758 $498,447 $580,052 $413,756 $322,469 $264,728 $159,823 $154,245 $159,755
Ratio of expenses
to average net
assets* ........ 0.69% 0.69% 0.67% 0.61% 0.73% 0.80% 0.81% 0.81% 0.81% 0.91%
Ratio of net
investment
income to
average
net assets ..... 3.12% 2.67% 4.05% 6.48% 7.80% 8.39% 6.48% 5.54% 6.76% 8.32%
Total return .... 3.18% 2.70% 4.13% 6.81% 8.04% 8.66% 6.62% 5.68% 6.93% 8.75%

Note: If agents of the Fund and agents of Cash Reserves Portfolio had not waived
all or a portion of their fees during the periods indicated, the net investment
income per share and the ratios would have been as follows:

Net investment
income per share $0.02840 $0.02381 $0.03753 $0.06025 $0.07466 $0.08195 $0.06323 $0.05341 $0.06533 $0.08239
Ratios:
Expenses to average
net assets* .... 0.99% 0.98% 0.93% 0.94% 0.97% 0.96% 0.97% 0.99% 1.01% 1.05%
Net investment
income to
average net
assets ......... 2.82% 2.38% 3.79% 5.91% 7.48% 8.23% 6.32% 5.36% 6.56% 8.18%
</TABLE>

* Includes the Fund's share of Cash Reserve Portfolio's allocated expenses
after May 4, 1990 (date of the Fund's investment of all of its assets in
the Portfolio).

/6/

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------
U.S. Treasury Reserves Financial Highlights
Eight Months
Year Ended Ended Year Ended Year Ended
August 31, August 31, December 31, December 31,
1994 1993*** 1992 1991+
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period ........................... $1.00000 $1.00000 $1.00000 $1.00000
Net investment income .......................................... 0.02837 0.01662 0.03117 0.03411
Less dividends from net investment income ...................... (0.02837) (0.01662) (0.03117) (0.03411)
-------- -------- -------- --------
Net Asset Value, end of period ........................... $1.00000 $1.00000 $1.00000 $1.00000
======== ======== ======== ========

Ratios/Supplemental Data:
Net Assets, end of period (000 omitted) ........................ $203,400 $249,466 $338,719 $548,722
Ratio of expenses to average net assets* ....................... 0.70% 0.66%** 0.70% 0.53%**
Ratio of net investment income to average net assets ........... 2.81% 2.49%** 3.19% 4.89%**
Total return ................................................... 2.87% 2.53%** 3.16% 3.46%**

Note: If certain agents of the Fund and agents of U.S. Treasury Reserves
Portfolio had not waived all or a portion of their fees during the periods
indicated, the net investment income per share and the ratios would have been as
follows:

Net investment income per share ................................ $0.02514 $0.01455 $0.02853 $0.03076
Ratios:
Expenses to average net assets* .......................... 1.02% 0.97%** 0.96% 1.02%**
Net investment income to average net assets .............. 2.49% 2.18%** 2.92% 4.41%**
</TABLE>

* Includes the Fund's share of U.S. Treasury Reserves Portfolio's allocated
expenses.
** Annualized.
*** On April 15, 1993, the Fund changed its fiscal year end from December 31 to
August 31. For the period from the start of business, May 3, 1991, to
December 31, 1991.

<PAGE>

- --------------------------------------------------------------------------------
Investment Information
- --------------------------------------------------------------------------------

Investment Objectives: The investment objective of Cash Reserves is to provide
its shareholders with liquidity and as high a level of current income as is
consistent with the preservation of capital.

The investment objective of U.S. Treasury Reserves is to provide its
shareholders with liquidity and as high a level of current income from U.S.
Government obligations as is consistent with the preservation of capital.

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 either Fund will achieve its investment
objective.

Investment Policies: Cash Reserves seeks its objective by investing all of its
investable assets in Cash Reserves Portfolio. Cash Reserves Portfolio seeks the
same objective as the Fund by investing in high quality U.S. dollar-denominated
money market instruments. These instruments include short-term obligations of
the U.S. Government and repurchase agreements covering these obligations, bank
obligations (such as certificates of deposit, bankers' acceptances and fixed
time deposits) of U.S. and non-U.S. banks and obligations issued or guaranteed
by the governments of Western Europe, Scandinavia, Australia, Japan and Canada.
The U.S. Government obligations in which the Portfolio invests include U.S.
Treasury bills, notes and bonds, and instruments issued by U.S. Government
agencies or instrumentalities. Some obligations of U.S. Government agencies and
instrumentalities are supported by the "full faith and credit" of the United
States, others by the right of the issuer to borrow from the U.S. Treasury and
others only by the credit of the agency or instrumentality. For more information
regarding the Portfolio's permitted investments and investment practices, see
the Appendix.

U.S. Treasury Reserves seeks its objective by investing all of its
investable assets in U.S. Treasury Reserves Portfolio. U.S. Treasury Reserves
Portfolio seeks the same objective as the Fund by investing in U.S. Treasury
bills, notes and bonds, and instruments issued by U.S. Government agencies or
instrumentalities which are supported by the "full faith and credit" of the
United States. U.S. Treasury Reserves Portfolio will not enter into repurchase
agreements. For more information regarding the Portfolio's permitted investments
and investment practices, see the Appendix. Although the Portfolio invests in
U.S. Government obligations, neither an investment in the Fund nor an investment
in the Portfolio is insured or guaranteed by the U.S. Government.

Certain Additional Investment Policies:

$1.00 Net Asset Value. Each Fund employs specific investment policies and
procedures designed to maintain a constant net asset value of $1.00 per share.
There can be no assurance, however, that a constant net asset value will be
maintained on a continuing basis. See "Net Income and Distributions."

Maturity and Quality. All of the Portfolios' investments mature or are
deemed to mature within 397 days from the date of acquisition, and the average
maturity of the investments held by each Portfolio (on a dollar-weighted basis)
is 90 days or less. All of the Portfolios' investments are in high quality
securities which have been determined by the Adviser to present minimal credit
risks. To meet a Portfolio's high quality standards a security must be rated in
the highest rating category for short-term obligations by at least two
nationally recognized statistical rating organizations (each, an "NRSRO")
assigning a rating to the security or issuer or, if only one NRSRO assigns a
rating, that NRSRO or, in the case of an investment which is not rated, of
comparable quality as determined by the Adviser. Investments in high quality,
short-term instruments may, in many circumstances, result in a lower yield than
would be available from investments in instruments with a lower quality or a
longer term.

Permitted Investments. For more information regarding permitted investments
and investment practices, see the Appendix. The Funds will not necessarily
invest or engage in each of the investments and investment practices in the
Appendix but reserve 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 Funds and the Portfolios. Certain of these specific restrictions may not be

<PAGE>

changed without shareholder approval. Except as otherwise indicated, the Funds'
and Portfolios' investment objectives 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 Portfolios'
securities will not be a violation of policy.

Brokerage Transactions. The primary consideration in placing the
Portfolios' security transactions with broker-dealers for execution is to obtain
and maintain the availability of execution at the most favorable prices and in
the most effective manner possible.

Certain Risk Considerations: The risks of investing in each 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.

"Concentration" in Bank Obligations. Cash Reserves Portfolio invests at
least 25% of its assets, and may invest up to 100% of its assets, in bank
obligations. This concentration policy is fundamental, and may not be changed
without the consent of the Portfolio's investors. Banks are subject to extensive
governmental regulation which may limit both the amounts and types of loans and
other financial commitments which may be made and interest rates and fees which
may be charged. The profitability of this industry is largely dependent upon the
availability and cost of capital funds for the purpose of financing lending
operations under prevailing money market conditions. Also, general economic
conditions play an important part in the operation of this industry and exposure
to credit losses arising from possible financial difficulties of borrowers might
affect a bank's ability to meet its obligations.

Non-U.S. Securities. Investors in Cash Reserves should be aware that
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. 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 Portfolio.

Investment Practices. Certain of the investment practices employed for the
Portfolios may entail certain risks. See the Appendix.

Special Information Concerning Investment Structure: Unlike other mutual funds
which directly acquire and manage their own portfolio securities, each Fund
seeks its investment objective by investing all of its investable assets in its
corresponding Portfolio, a registered investment company. Each Portfolio has the
same investment objective and policies as its corresponding Fund. In addition to
selling beneficial interests to a Fund, a Portfolio may sell beneficial
interests to other mutual funds, collective investment vehicles, or
institutional investors. Such investors will invest in the Portfolio on the same
terms and conditions and will pay a proportionate share of the Portfolio's
expenses. However, the other investors investing in the Portfolio are not
required to sell their shares at the same public offering price as the Fund due
to variations in sales commissions and other operating expenses. Therefore,
investors in a Fund should be aware that these differences may result in
differences in returns experienced by investors in the different funds that
invest in that Portfolio. Such differences in returns are also present in other
mutual fund structures. Information concerning other holders of interests in the
Portfolios is available from the Funds' distributor, LFBDS, at the address and
telephone number indicated on the back cover of this Prospectus.

The investment objective of each Fund may be changed by its Trustees
without the approval of the Fund's shareholders, but not without written notice
thereof to shareholders at least 30 days prior to implementing the change. If
there is a change in a Fund's investment objective, shareholders should consider
whether the Fund remains an appropriate investment in light of their then
current financial positions and needs. The investment objective of each
Portfolio may also be changed without the approval of the investors in the
Portfolio, but not without written notice thereof to the investors in the
Portfolio (and, if a Fund is then invested in the Portfolio, notice to Fund

<PAGE>

shareholders) at least 30 days prior to implementing the change. There can, of
course, be no assurance that the investment objective of either a Fund or its
Portfolio will be achieved. See "Investment Objective, Policies and Restrictions
- -- Investment Restrictions" in the Statement of Additional Information for a
description of the fundamental policies of each Fund and its Portfolio that
cannot be changed without approval by the holders of a "majority of the
outstanding voting securities" (as defined in the Investment Company Act of 1940
(the "1940 Act")) of the Fund or Portfolio. Except as stated otherwise, all
investment guidelines, policies and restrictions described herein and in the
Statement of Additional Information are non-fundamental.

Certain changes in a Portfolio's investment objective, policies or
restrictions or a failure by a Fund's shareholders to approve a change in the
Portfolio's investment objective or restrictions, may preclude the Fund from
investing its investable assets in the Portfolio or require the Fund to withdraw
its interest in the Portfolio. Any such withdrawal could result in an "in-kind"
distribution of securities (as opposed to a cash distribution) from the
Portfolio which may or may not be readily marketable. If securities are
distributed, the Fund could incur brokerage, tax or other charges in converting
the securities to cash. The in kind distribution may result in the Fund having a
less diversified portfolio of investments or adversely affect the liquidity of
the Fund. Notwithstanding the above, there are other means for meeting
shareholder redemption requests, such as borrowing. The absence of substantial
experience with this investment structure could have an adverse effect on an
investment in the Funds.

Smaller funds investing in a Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining funds may subsequently experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, because the Portfolio would become smaller, it may become less
diversified, resulting in increased portfolio risk; however, these possibilities
exist for traditionally structured funds which have large or institutional
investors who may withdraw from a fund. Also, funds with a greater pro rata
ownership in the Portfolio could have effective voting control of the operations
of the Portfolio. If a Fund is requested to vote on matters pertaining to its
Portfolio (other than a vote by the Fund to continue the operation of the
Portfolio upon the withdrawal of another investor in the Portfolio), the Fund
will hold a meeting of its shareholders and will cast all of its votes
proportionately as instructed by such shareholders. The Fund will vote the
shares held by Fund shareholders who do not give voting instructions in the same
proportion as the shares of Fund shareholders who do give voting instructions.
Shareholders of the Fund who do not vote will have no effect on the outcome of
such matters.

Each Fund may withdraw its investment from its Portfolio at any time, if
the Fund's Board of Trustees determines that it is in the best interest of the
Fund to do so. Upon any such withdrawal, the Board of Trustees would consider
what action might be taken, including the investment of all of the investable
assets of the Fund in another pooled investment entity having the same
investment objective as the Fund or the retaining of an investment adviser to
manage the Fund's assets in accordance with the investment policies described
above. In the event the Fund's Trustees were unable to find a substitute
investment company in which to invest the Fund's assets or were unable to secure
directly the services of an investment adviser, the Trustees would determine the
best course of action.

For a description of the management of the Portfolios, see "Management" --
page 15. For descriptions of the expenses of the Portfolios, see "Management"
and "General Information -- Expenses" -- page 19. For a description of the
investment objectives, policies and restrictions of the Portfolios, see
"Investment Information" -- page 8.

- --------------------------------------------------------------------------------
Valuation of Shares
- --------------------------------------------------------------------------------

Net asset value per share of each 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 2:00 p.m., Eastern time, for Cash Reserves, and 12:00
noon, Eastern time, for U.S. Treasury Reserves, by adding the market value of
all securities and other assets of a Fund (including its interest in its
Portfolio), then subtracting the liabilities charged to the Fund, and then
dividing the result by the number of outstanding shares of the Fund. Net asset
value is calculated separately for Class A and Class B shares of Cash Reserves.

<PAGE>

The amortized cost method of valuing Portfolio securities is used in order to
stabilize the net asset value of shares of each Fund at $1.00; however, there
can be no assurance that a Fund's net asset value will always remain at $1.00
per share. The net asset value per share is effective for orders received and
accepted by the Distributor prior to its calculation.

The amortized cost method involves valuing a security at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. Although the amortized cost method provides certainty in valuation, it
may result in periods during which the stated value of a security is higher or
lower than the price the Portfolio would receive if the security were sold.

- --------------------------------------------------------------------------------
Classes of Shares
- --------------------------------------------------------------------------------

Differences Between the Classes: Cash Reserves offers two classes of shares to
investors, Class A and Class B shares, which represent interests in the same
mutual fund. The primary distinctions between these classes lie in the
contingent deferred sales charge applicable to Class B shares and in the
classes' ongoing expenses, including asset-based sales charges in the form of
distribution fees. Each class has distinct advantages and disadvantages for
different investors, and investors may choose the class that best suits their
circumstances and objectives. Class B shares may only be purchased by exchange
of Class B shares of another Landmark Fund.

U.S. Treasury Reserves offers a single class of shares to investors.

Sales Charges. Class A shares are sold at net asset value, without a sales
load. Class B shares are sold with no initial sales charge, but a contingent
deferred sales charge (up to 5% of the lesser of the shares' net asset value
at redemption or the original purchase price) applies to redemptions made within
six years of purchase. The contingent deferred sales charge may be waived upon
redemption of certain Class B shares. See "Purchases" below.

Ongoing Annual Expenses.Class A shares pay an annual 12b-1 distribution fee
of 0.10% (0.05% after anticipated waivers) of average daily net assets. Class B
shares pay an annual 12b-1 distribution fee of 0.75% of average daily net
assets. Annual 12b-1 distribution fees are a form of asset-based sales charge.
An investor should consider both ongoing annual expenses and any contingent
deferred sales charges in estimating the costs of investing in the different
classes of Fund shares over various time periods.

Conversion of Class B Shares: A shareholder's Class B shares in Cash Reserves
will automatically convert to Class A shares in Cash Reserves approximately
eight years after the date of issuance, together with a pro rata portion of all
Class B shares representing dividends and other distributions paid in additional
Class B shares. The conversion will be effected at the relative net asset values
per share of the two classes on the first Business Day of the month in which the
eighth anniversary of the issuance of the Class B shares occurs. If a
shareholder effects one or more exchanges among Class B shares of the Landmark
Funds during the eight-year period, the holding periods for the shares so
exchanged will be counted toward the eight-year period. The conversion of Class
B shares to Class A shares is subject to the continuing availability of a ruling
from the Internal Revenue Service or an opinion of counsel that such conversion
will not constitute a taxable event for federal tax purposes. There can be no
assurance that such ruling or opinion will be available, and the conversion of
Class B shares to Class A shares will not occur if such ruling or opinion is not
available. In that event, Class B shares would continue to be subject to higher
expenses than Class A shares for an indefinite period.

Other Information: See "Purchases," "Redemptions" and "Management --
Distribution Arrangements" for a more complete description of the contingent
deferred sales charges applicable to Class B shares of Cash Reserves, and
distribution fees for both classes of shares of Cash Reserves.

<PAGE>

- --------------------------------------------------------------------------------
Purchases
- --------------------------------------------------------------------------------

Cash Reserves offers two classes of shares, Class A and B shares, with
different expense levels and sales charges. See "Classes of Shares" above for
more information. U.S. Treasury Reserves offers one class of shares. When
placing purchase orders for Cash Reserves, investors should specify whether the
order is for Class A or Class B shares. All share purchase orders that fail to
specify a class automatically will be invested in Class A shares. Class B shares
may only be purchased by exchange of Class B shares of another Landmark Fund.

Shares of the Funds are offered continuously and may be purchased on any
Business Day without a sales load at the shares' net asset value (normally $1.00
per share) next determined after an order is transmitted to and accepted by the
Distributor. Shares may be purchased either through a securities broker which
has a sales agreement with the Distributor or through a bank or other financial
institution which has an agency agreement with the Distributor. Shares of the
Funds are being offered exclusively to customers of a Shareholder Servicing
Agent (i.e., a financial institution, such as a federal or state-chartered bank,
trust company, savings and loan association or savings bank, or a securities
broker, that has entered into a shareholder servicing agreement concerning a
Fund). An investor's Shareholder Servicing Agent may not make available both
classes of shares of Cash Reserves. Each Fund and the Distributor 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 Funds, the
Distributor receives fees from each Fund pursuant to a Distribution Plan. See
"Management -- Distribution Arrangements." In addition, Class B shares may be
subject to a contingent deferred sales charge upon redemption.

Each shareholder's account is established and maintained by his or her
Shareholder Servicing Agent, which will be the shareholder of record of the
Fund. Each Shareholder Servicing 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 Shareholder Servicing Agent.

Shareholder Servicing Agents will not transmit purchase orders to the
Distributor until they have received the purchase price in federal or other
immediately available funds. If Fund shares are purchased by check, there will
be a delay (usually not longer than two business days) in transmitting the
purchase order until the check is converted into federal funds.

Purchasing Class A Shares: Class A shares of Cash Reserves may be purchased at
their next determined net asset value (normally $1.00 per share), without a
sales load.

Purchasing Class B Shares: Contingent Deferred Sales Charge -- Class B Shares.
Class B shares of Cash Reserves may be purchased at their next determined net
asset value (normally $1.00 per share), without a sales load, but only by
exchange of Class B shares of another Landmark Fund. A contingent deferred sales
charge, however, is imposed upon certain redemptions of Class B shares.

Class B shares that are redeemed will not be subject to a contingent
deferred sales charge to the extent that the value of such shares represents (i)
capital appreciation of Fund assets, (ii) reinvestment of dividends or capital
gain distributions or (iii) shares redeemed more than six years after their
purchase. Otherwise, redemptions of Class B shares purchased through an exchange
of another Landmark Fund will be subject to a contingent deferred sales charge.
Upon redemption, the applicable contingent deferred sales charge will be
calculated as if no exchange had taken place and the investor were redeeming
shares of that fund. The amount of the contingent deferred sales charge will
depend on the number of years since the investor has invested and the dollar
amount being redeemed. When determining the amount of the contingent deferred
sales charge, the Fund will use the contingent deferred sales charge schedule of
any fund from which the investor has exchanged shares that would result in the
investor paying the highest contingent deferred sales charge. An investor should
consult the prospectus of the fund from which shares were exchanged to determine
the applicable contingent deferred sales charge.

<PAGE>

In determining the applicability and rate of any contingent deferred sales
charge, it will be assumed that a redemption is made first of Class B shares
representing the reinvestment of dividends and capital gains distributions
followed by Class B shares held by the shareholder for the longest period of
time. The holding period of Class B shares will be calculated from the date that
the Class B shares were initially acquired in one of the other Landmark Funds,
and Class B shares being redeemed will be considered to represent, as
applicable, capital appreciation or dividend and capital gains distribution
reinvestments in such other funds. This will result in any contingent deferred
sales charge being imposed at the lowest possible rate. For federal income tax
purposes, the amount of the contingent deferred sales charge will reduce the
gain or increase the loss, as the case may be, on the amount realized on
redemption. Any contingent deferred sales charges will be paid to the
Distributor.

Sales Charge Waivers -- Class B Shares. The contingent deferred sales
charge will be waived for exchanges. In addition, the contingent deferred sales
charge will be waived for a total or partial redemption made within one year of
the death of the shareholder. This waiver is available where the deceased
shareholder is either the sole shareholder or owns the shares with his or her
spouse as a joint tenant with right of survivorship, and applies only to
redemption of shares held at the time of death. The contingent deferred sales
charge also will be waived in connection with:

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

(ii) a total or partial redemption resulting from any distribution following
retirement in the case of a tax-qualified retirement plan, and

(iii)a redemption resulting from a tax-free return of an excess contribution to
an IRA.

Contingent deferred sales charge waivers will be granted subject to
confirmation by a shareholder's Shareholder Servicing Agent of the shareholder's
status or holdings, as the case may be.

Securities dealers and other financial institutions may receive different
compensation with respect to sales of Class A and Class B shares.

- --------------------------------------------------------------------------------
Exchanges
- --------------------------------------------------------------------------------

Shares of each Fund may be exchanged for shares of other Landmark Funds
that are made available by a shareholder's Shareholder Servicing Agent, or may
be acquired through an exchange of shares of those funds. No initial sales
charge is imposed on shares being acquired through an exchange unless the shares
being acquired are subject to a sales charge that is greater than the current
sales charge of the Fund (in which case an initial sales charge will be imposed
at a rate equal to the difference). No contingent deferred sales charge is
imposed on Class B shares of Cash Reserves being disposed of though an exchange;
however, contingent deferred sales charges may apply to redemptions of Class B
shares of other Landmark Funds disposed of or acquired through an exchange.

In general, shares of a particular class may be exchanged only for shares
of another fund of the same class. Investors should note that Class A shares of
Cash Reserves may not be exchanged for Class A shares of another fund without a
sales charge, but may be exchanged for shares of certain other Landmark money
market funds without a sales charge.

Shareholders must place exchange orders through their Shareholder Servicing
Agents, 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 Distributor. See "Valuation of
Shares." Shares of the Funds 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 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. Before making
any exchange, shareholders should contact their Shareholder Servicing Agents to

<PAGE>

obtain more information and prospectuses of the Landmark Funds to be acquired
through the exchange.

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

Fund shares may be redeemed at their net asset value (normally $1.00 per
share) next determined after a redemption request in proper form is received by
a shareholder's Shareholder Servicing Agent (subject to any applicable
contingent deferred sales charge for Class B shares of Cash Reserves). Shares of
U.S. Treasury Reserves and Class A shares of Cash Reserves may be redeemed
without a sales charge. Shareholders may redeem shares of a Fund only by
authorizing their Shareholder Servicing Agents to redeem such shares on their
behalf through the Distributor. If a redeeming shareholder owns shares of more
than one class, Class A shares will be redeemed first unless the shareholder
specifically requests otherwise.

Redemptions by Mail. Shareholders may redeem Fund shares by sending written
instructions in proper form (as determined by a shareholder's Shareholder
Servicing Agent) to their Shareholder Servicing Agents. Shareholders are
responsible for ensuring that a request for redemption is in proper form.

Redemptions by Telephone. Shareholders may redeem or exchange Fund shares
by telephone, if their account applications so permit, by calling their
Shareholder Servicing Agents. During periods of drastic economic or market
changes or severe weather or other emergencies, shareholders may experience
difficulties implementing a telephone exchange or redemption. In such an event,
another method of instruction, such as a written request sent via an overnight
delivery service, should be considered. The Funds and each Shareholder Servicing
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 number, and
account number. If these or other reasonable procedures are not followed, the
Fund or the Shareholder Servicing 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 Business Day the redemption is effected, but in any event
within seven days. If a shareholder requests redemption of shares which were
purchased recently, a 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 Funds' right to pay the redemption price in
kind with securities (instead of cash).

Questions about redemption requirements should be referred to the
shareholder's Shareholder Servicing 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.

- --------------------------------------------------------------------------------
Net Income and Distributions
- --------------------------------------------------------------------------------

The net income of each Fund is determined each Business Day (and on such
other days as is necessary in order to comply with the 1940 Act). This
determination is made once during each such day as of 2:00 p.m., Eastern time,
for Cash Reserves and 12:00 noon, Eastern time, for U.S. Treasury Reserves. All
the net income of each Fund is declared as a dividend to shareholders of record
at the time of such determination. Shares begin accruing dividends on the day
they are purchased, and accrue dividends up to and including the day prior to
redemption. Dividends are distributed monthly on or prior to the last Business
Day of each month. Unless a shareholder elects to receive dividends in cash
(subject to the policies of the shareholder's Shareholder Servicing Agent),
dividends are distributed in the form of full and fractional additional shares
of the applicable Fund at the rate of one share of the Fund for each one dollar
of dividend income.

<PAGE>

Since the net income of each Fund is declared as a dividend each time the
net income of the Fund is determined, the net asset value per share of each Fund
is expected to remain at $1.00 per share immediately after each such
determination and dividend declaration. Any increase in the value of a
shareholder's investment in a Fund, representing the reinvestment of dividend
income, is reflected by an increase in the number of shares of the Fund in the
shareholder's account.

It is expected that each Fund will have a positive net income at the time
of each determination thereof. If for any reason a Fund's net income is a
negative amount, which could occur, for instance, upon default by an issuer of a
portfolio security, the Fund would first offset the negative amount with respect
to each shareholder account from the dividends declared during the month with
respect to those accounts. If and to the extent that negative net income exceeds
declared dividends at the end of the month, the Fund would reduce the number of
outstanding Fund shares by treating each shareholder as having contributed to
the capital of the Fund that number of full and fractional shares in the
shareholder's account which represents the shareholder's share of the amount of
such excess. Each shareholder would be deemed to have agreed to such
contribution in these circumstances by investment in a Fund.

- --------------------------------------------------------------------------------
Management
- --------------------------------------------------------------------------------

Trustees and Officers: Each Fund is supervised by the Board of Trustees of
Landmark Funds III. Each Portfolio is supervised by its own Board of Trustees.
In each case, a majority of the Trustees are not affiliated with the Adviser. In
addition, a majority of the disinterested Trustees of the Funds are different
from a majority of the disinterested Trustees of their corresponding Portfolios.
More information on the Trustees and officers of the Funds and the Portfolios
appears under "Management" in the Statement of Additional Information.

Investment Adviser: Citibank. Each 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 $73 billion in assets worldwide. Citibank is a wholly-owned
subsidiary of Citicorp. Citibank also serves as investment adviser to fourteen
other Landmark Funds or portfolios.

Citibank manages the assets of each Portfolio pursuant to separate
investment advisory agreements ("Advisory Agreements"). Subject to policies set
by the Portfolios' Trustees, Citibank makes investment decisions for the
Portfolios.

Advisory Fees. For its services under the Advisory Agreements, the Adviser
receives investment advisory fees, which are accrued daily and paid monthly, of
0.15% of each Portfolio's average daily net assets on an annualized basis for
the Portfolio's then-current fiscal year. The Adviser has voluntarily agreed to
waive a portion of its investment advisory fee.

For the fiscal year ended August 31, 1994, the investment advisory fees
payable to Citibank were as follows: for Cash Reserves Portfolio, $1,806,314, of
which $943,419 was voluntarily waived (after waiver, 0.07% of the Portfolio's
average daily net assets for that fiscal year); and for U.S. Treasury Reserves
Portfolio, $850,924, of which $506,109 was voluntarily waived (after waiver,
0.06% of the Portfolio's average daily net assets for that fiscal year).

Banking Relationships. Citibank and its affiliates may have deposit, loan
and other relationships with the issuers of securities purchased on behalf of
the Portfolios, 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 Funds and the Portfolios 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.

Bank Regulatory Matters. The Glass-Steagall Act prohibits certain financial
institutions, such as Citibank, from underwriting securities of open-end
investment companies, such as the Funds or the Portfolios. Citibank believes
that its services under the Advisory Agreements and the activities performed by
it or its affiliates as Shareholder Servicing Agents and sub-administrator are

<PAGE>

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 sub-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
Adviser, sub-administrator or a Shareholder Servicing Agent, the affected Funds
or Portfolios would seek alternative means for obtaining these services. The
Funds do not expect that shareholders would suffer any adverse financial
consequences as a result of any such occurrence.

Administrative Services Plans: The Funds and Portfolios have administrative
services plans ("Administrative Services Plans") which provide that the
applicable Fund or Portfolio may obtain the services of an administrator, a
transfer agent, a custodian, a fund accountant, and, in the case of the Funds,
one or more Shareholder Servicing Agents, and may enter into agreements
providing for the payment of fees for such services. Under the Funds'
Administrative Services Plan, the total of the fees paid to each Fund's
Administrator and Shareholder Servicing Agents and the distribution fee paid to
the Distributor (other than fees paid with respect to Class B shares of Cash
Reserves and other than any fee concerning electronic or other media
advertising) may not exceed 0.70% of a Fund's average daily net assets on an
annualized basis for the Fund's then-current fiscal year. Within this overall
limitation, individual fees may vary. Under each Portfolio's Administrative
Services Plan, fees paid to the Portfolio's Administrator may not exceed 0.05%
of the Portfolio's average daily net assets on an annualized basis for the
Portfolio's then-current fiscal year. See "Administrators," "Shareholder
Servicing Agents" and "Transfer Agent, Custodian and Fund Accountant."

Administrators: LFBDS provides certain administrative services to the Funds and
U.S. Treasury Reserves Portfolio, and Signature Financial Group (Grand Cayman),
Ltd., either directly or through a wholly-owned subsidiary ("SFG"), provides
certain administrative services to Cash Reserves Portfolio, in each case under
administrative services agreements. These administrative services include
providing general office facilities, supervising the overall administration of
the Funds and Portfolios, and providing persons satisfactory to the Boards of
Trustees to serve as Trustees and officers of the Funds and Portfolios. These
Trustees and officers may be directors, officers or employees of LFBDS, SFG or
their affiliates.

For these services, the Administrators receive fees accrued daily and paid
monthly of 0.25% of the average daily net assets of each Fund and 0.05% of the
assets of each Portfolio, in each case on an annualized basis for the Fund's or
the Portfolio's then-current fiscal year. However, each of the Administrators
may voluntarily agree to waive a portion of the fees payable to it.

LFBDS and SFG are wholly-owned subsidiaries of Signature Financial Group,
Inc. "Landmark" is a service mark of LFBDS.

Sub-Administrator: Pursuant to sub-administrative services agreements, Citibank
performs such sub-administrative duties for the Funds and Portfolios as from
time to time are agreed upon by Citibank and LFBDS or SFG. Citibank's
compensation as sub-administrator is paid by LFBDS or SFG.

Shareholder Servicing Agents: The Funds have entered into separate shareholder
servicing agreements with each Shareholder Servicing Agent pursuant to which
that Shareholder Servicing Agent provides shareholder services, including
answering customer inquiries, assisting in processing purchase, exchange and
redemption transactions and furnishing Fund communications to shareholders. For
these services, each Shareholder Servicing Agent receives a fee from each Fund
at an annual rate of 0.40% of the average daily net assets of the Fund
represented by shares owned by investors for whom such Shareholder Servicing
Agent maintains a servicing relationship. However, each Shareholder Servicing
Agent voluntarily has agreed to waive a portion of its fee.

Some Shareholder Servicing Agents may impose certain conditions on their
customers in addition to or different from those imposed by the Funds, such as
requiring a minimum initial investment or charging their customers a direct fee
for their services. Each Shareholder Servicing Agent has agreed to transmit to
its customers who are shareholders of a Fund appropriate prior written

<PAGE>

disclosure of any fees that it may charge them directly and to provide written
notice at least 30 days prior to imposition of any transaction fees.

Transfer Agent, Custodian and Fund Accountant: State Street Bank and Trust
Company (or its affiliate State Street Canada, Inc.) acts as transfer agent and
dividend disbursing agent for each Fund. State Street (or its affiliate State
Street Canada, Inc.) acts as the custodian of each Fund's and each Portfolio's
assets. Securities held for a Portfolio may be held by a sub-custodian bank
approved by the Portfolio's Trustees. State Street also provides fund accounting
services to the Funds and the Portfolios and calculates the daily net asset
value for the Funds and the Portfolios.

Distribution Arrangements: LFBDS is the distributor of each Fund's shares and
also serves as distributor for each of the other Landmark Funds and as a
Shareholder Servicing Agent for certain investors. LFBDS receives distribution
fees from the Funds pursuant to Distribution Plans adopted in accordance with
Rule 12b-1 under the 1940 Act, and also collects any contingent deferred sales
charges imposed on redemptions of Class B shares of Cash Reserves. In those
states where LFBDS is not a registered broker-dealer, shares of the Funds are
sold through Signature Broker-Dealer Services, Inc., as dealer.

Under a single plan of distribution for U.S. Treasury Reserves and the
Class A shares of Cash Reserves and a separate plan of distribution for the
Class B shares of Cash Reserves (collectively "Plans"), the Funds pay the
Distributor a fee at an annual rate not to exceed 0.10% of the average daily net
assets of U.S. Treasury Reserves, 0.10% of the average daily net assets of Cash
Reserves represented by Class A shares and 0.75% of the average daily net assets
of Cash Reserves represented by Class B shares. However, the Distributor has
agreed to waive a portion of these fees on a month-to-month basis for U.S.
Treasury Reserves and for the Class A shares of Cash Reserves. The Plan for U.S.
Treasury Reserves and the Class A shares of Cash Reserves also permits the Funds
to pay the Distributor an additional fee (not to exceed 0.10% of the average
daily net assets of the applicable shares) in anticipation of or as
reimbursement for print or electronic media advertising expenses incurred in
connection with the sale of the shares. The Funds did not pay anything under
this provision during their fiscal years ended August 31, 1994 and do not
anticipate doing so during the current fiscal year. The Plan for Class B shares
of Cash Reserves also provides that Cash Reserves may pay the Distributor a
monthly service fee at an annual rate not to exceed 0.25% of the average daily
net assets represented by the Class B shares. However, Cash Reserves has not
entered into any agreement to pay any such service fee to the Distributor.

The Distributor uses the distribution fees under the Plans to offset each
Fund's marketing costs attributable to such classes, such as preparation of
sales literature, advertising, and printing and distributing prospectuses and
other shareholder materials to prospective investors. In addition, the
Distributor may use the distribution fees to pay costs related to distribution
activities, including employee salaries, bonuses and other overhead expenses.
The Funds and the Distributor provide to the Trustees quarterly a written report
of amounts expended pursuant to the Plans and the purposes for which the
expenditures were made.

From time to time LFBDS may make payments for distribution and/or
shareholder servicing activities out of its past profits or any other services
available to it.

During the period they are in effect, the Plans and related distribution
agreements ("Distribution Agreements") obligate the Funds to pay distribution
fees to LFBDS as compensation for its distribution activities, not as
reimbursement for specific expenses incurred. Thus, even if LFBDS's expenses
exceed its distribution fees for any Fund, the Fund will not be obligated to pay
more than those fees and, if LFBDS's expenses are less than such fees, it will
retain its full fees and realize a profit. Each Fund will pay the distribution
fees to LFBDS until either the applicable Plan or Distribution Agreement is
terminated or not renewed. In that event, LFBDS's expenses in excess of
distribution fees received or accrued through the termination date will be
LFBDS's sole responsibility and not obligations of the Fund. In their annual
consideration of the continuation of the Plans, the Trustees of Cash Reserves
will review each Plan and LFBDS's expenses for each class separately.

Each class of shares of Cash Reserves has exclusive voting rights with
respect to the Plan for that class.

<PAGE>

- --------------------------------------------------------------------------------
Tax Matters
- --------------------------------------------------------------------------------

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

Each 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.

Shareholders are required to pay federal income tax on any dividends and
other distributions received. Generally, distributions from a Fund's net
investment income and short-term capital gains will be taxed as ordinary income.
Distributions from long-term net capital gains will be taxed as such regardless
of how long the shares of a Fund have been held. Dividends and distributions are
treated in the same manner for federal tax purposes whether they are paid in
cash or as additional shares.

Distributions derived from interest on U.S. Government obligations may be
exempt from state and local taxes in certain states. Early each year, each Fund
will notify its shareholders of the amount and tax status of distributions paid
to shareholders for the preceding year.

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. A Fund may be required to withhold (and pay over to
the IRS for the shareholder's credit) 31% of certain distributions paid to
shareholders who fail to provide this information or otherwise violate IRS
regulations.

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, tax equivalent yield,
total rate of return or tax equivalent 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.

Each Fund may provide its period and average annualized "total rates of
return" and U.S. Treasury Reserves may also provide "tax equivalent 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 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 "tax equivalent total rate of return"
refers to the total rate of return that a fully taxable money market fund would
have to generate in order to produce an after-tax total rate of return
equivalent to that of U.S. Treasury Reserves. The use of a tax equivalent total
rate of return allows investors to compare the total rates of return of U.S.
Treasury Reserves, the dividends from which may be exempt from state personal
income taxes, with the total rates of return of funds the dividends from which
are not so tax exempt.

Each Fund may provide annualized "yield" and "effective yield" quotations,
and U.S. Treasury Reserves may also provide "tax equivalent yield" quotations.
The "yield" of a Fund refers to the income generated by an investment in the
Fund over a seven-day 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
week over a 365-day period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly, but when annualized the income earned
by the investment during that seven-day 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 "tax equivalent yield" refers to the
yield that a fully taxable money market fund would have to generate in order to
produce an after-tax yield equivalent to that of U.S. Treasury Reserves. The use
of a tax equivalent yield allows investors to compare the yield of U.S. Treasury
Reserves, the dividends from which may be exempt from state personal income tax,
with yields of funds the dividends from which are not so tax exempt. A Fund may

<PAGE>

also provide yield, effective yield and tax equivalent yield quotations for
longer periods.

Cash Reserves will include performance data for both classes of Fund shares
in any advertisements, reports or communications including Fund performance
data. Of course, any fees charged by a shareholder's Shareholder Servicing Agent
will reduce that shareholder's net return on his or her investment. See the
Statement of Additional Information for more information concerning the
calculation of yield and total rate of return quotations for the Funds.

- --------------------------------------------------------------------------------
General Information
- --------------------------------------------------------------------------------

Organization: Each Fund is a diversified series of Landmark Funds III. Landmark
Funds III, which was known as "Landmark Cash Reserves" until its name changed
effective January 17, 1991, is a Massachusetts business trust which was
organized on June 28, 1985; it also is an open-end management investment company
registered under the 1940 Act.

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

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.

Each Portfolio is a separate trust organized under the laws of the State of
New York. The Declaration of Trust of each Portfolio provides that a Fund and
other entities investing in a Portfolio are each liable for all obligations of
that Portfolio. However, it is not expected that the liabilities of a Portfolio
would ever exceed its assets.

Voting and Other Rights: Landmark Funds III (the "Trust") 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 each Fund gives the shareholder one vote in
Trustee elections and other matters submitted to shareholders for vote. All
shares of each series of the Trust have equal voting rights except that, in
matters affecting only a particular Fund or class, only shares of that
particular Fund or class are entitled to vote.

At any meeting of shareholders of a Fund, a Shareholder Servicing 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 Shareholder Servicing Agent is the
holder of record.

The Trust's activities are supervised by the Trust's Board of Trustees. As
a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will usually be sought only for
changes in a 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 each Fund is entitled to
participate equally in dividends and other distributions and the proceeds of any
liquidation of that Fund.

Certificates: The Funds' Transfer Agent maintains a share register for
shareholders of record, i.e., Shareholder Servicing Agents. Share certificates
are not issued.

Retirement Plans: Investors may be able to establish new accounts in a 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 Shareholder Servicing Agents and tax and retirement advisers.

Expenses: For the fiscal year ended August 31, 1994, total operating expenses of
the Funds, after allocating to each Fund its share of its Portfolio's expenses

<PAGE>

and after giving effect to fee waivers or reimbursements, were as follows: for
Cash Reserves, 0.69% of the Fund's average daily net assets for that fiscal
year; and for U.S. Treasury Reserves, 0.70% of the Fund's average daily net
assets for that fiscal year. All fee waivers and reimbursements are voluntary
and may be reduced or terminated at any time.

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

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

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 Funds
or their distributor. This Prospectus does not constitute an offering by the
Funds or their distributor in any jurisdiction in which such offering may not
lawfully be made.

- --------------------------------------------------------------------------------
Appendix
- --------------------------------------------------------------------------------

Treasury Receipts. Each Portfolio may invest in Treasury Receipts, which
are unmatured interest coupons of U.S. Treasury bonds and notes which have been
separated and resold in a custodial receipt program administered by the U.S.
Treasury.

Commercial Paper. Cash Reserves Portfolio may invest in commercial paper,
which is unsecured debt of corporations usually maturing in 270 days or less
from its date of issuance.

Asset-Backed Securities. Cash Reserves Portfolio may invest in asset-backed
securities, which represent fractional interests in underlying pools of assets,
such as car installment loans or credit card receivables. The rate of return on
asset-backed securities may be affected by prepayment of the underlying loans or
receivables. Reinvestment of principal may occur at higher or lower rates than
the original yield.

Repurchase Agreements. Cash Reserves Portfolio may enter into repurchase
agreements. Repurchase agreements are transactions in which an institution sells
the Portfolio a security at one price, subject to the Portfolio'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.

Lending of Portfolio Securities. Consistent with applicable regulatory
requirements and in order to generate additional income, each Portfolio 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 a Portfolio would not exceed 33 1/3% of the Portfolio's
net assets.

In the event of the bankruptcy of the other party to a securities loan or a
repurchase agreement, the Portfolio 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 Portfolio could experience a loss.

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

<PAGE>

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<PAGE>

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<PAGE>

- --------------------------------------------------------------------------------
Shareholder
Servicing Agents
- --------------------------------------------------------------------------------

For Citibank New York Retail Banking and
Business and Professional Customer:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

For Citigold Customers:
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executor or (212) 974-0900 or (800) 285-1701

For Citibank Private Banking Clients:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer,
Investment Specialist or (212) 559-5959

For Citigold Global Asset Management Clients:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

For Citibank North American Investor
Services Clients:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

For Citicorp Investment Services Customers:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200
(212) 736-8170 in New York City

[LOGO] Landmark
Funds

Money Market Funds:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves

U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves

Tax Free Reserves
California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves

Stock & Bond Funds:
U.S. Government Income Fund
Intermediate Income Fund
New York Tax Free Income Fund

Balanced Fund
Equity Fund
International Equity Fund

<PAGE>

TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
H. B. Alvord
C. Oscar Morong, Jr.
E. Kirby Warren

SECRETARY AND TREASURER
James B. Craver*

ASSISTANT TREASURERS
Barbara M. ODette*
Donald S. Rumery*

ASSISTANT SECRETARY
Molly S. Mugler*
*Affiliated Person of Administrator and Distributor

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

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

ADMINISTRATOR AND 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
(FOR LANDMARK CASH RESERVES)
Price Waterhouse LLP
160 Federal Street, Boston, MA 02110
(FOR LANDMARK U.S. TREASURY
RESERVES)
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110

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

SHAREHOLDER SERVICING AGENTS
(See inside of cover)

[LOGO] Landmark(SM) Funds
Advised by Citibank, N.A.

- -------------------------------------------------
Landmark Cash Reserves
- -------------------------------------------------
Landmark U.S. Treasury
Reserves
- -------------------------------------------------

- -------------------------------------------------
PROSPECTUS
January 3, 1995
- -------------------------------------------------

EQ/P/95

Printed on Recycled Paper [Recycled Logo]

EQ/P/95