GMO TRUST
SUPPLEMENT DATED MAY 10, 1996
TO
PROSPECTUS DATED FEBRUARY 29, 1996
GMO FOREIGN FUND
Effective May 10, 1996, GMO Foreign Fund (the "Fund") will revise its
current investment policies such that the Fund (i) will not invest in foreign
currencies (except that assets of the Fund may be held in foreign currencies
pending investment in amounts reasonably required for the efficient conduct of
the Fund's investment program); (ii) will not invest in options on foreign
currencies: (iii) will not, in the aggregate, invest greater than 10% of the
Fund's total assets in restricted securities, loans other than publicly issued
debt securities, repurchase agreements with maturities greater than thirty days,
and other "illiquid assets"; (IV) may invest in securities of issuers in newly
industrialized countries of the type invested in by the Emerging Markets Fund
("Emerging Market Securities"), although the Fund does not anticipate investing
more than 20% of its assets in Emerging Market Securities, and (v) may invest in
options on particular securities without limit (the Fund was previously
authorized to invest in options on particular securities only to the extent that
the aggregate value of the premiums paid on such options did not exceed 5% of
the Fund's total net assets). The foregoing policies are not fundamental and may
therefore be changed by vote of the Trustees without shareholder consent.
GMO TRUST
SUPPLEMENT DATED MAY 10, 1996
TO
STATEMENT OF ADDITIONAL INFORMATION DATED FEBRUARY 29, 1996
GMO FOREIGN FUND
Effective May 10, 1996, GMO Foreign Fund (the "Fund") will revise its
current investment policies such that the Fund (i) will not invest in interests
of any general partnership; (ii) will not utilize margin or other borrowings to
increase market exposure (this prohibition extends to the use of cash collateral
obtained in exchange for loaned securities but does not prohibit the use of
margin accounts for permissible futures trading; further, the Fund may borrow an
amount equal to cash receivable from sales of stocks or securities the
settlement of which is deferred under standard practice in the country of sale);
(iii) will not pledge or otherwise encumber its assets; (iv) may invest in
warrants without limit (the Funds was previously authorized to invest in
warrants only to the extent that the aggregate value of the warrants (taken at
the lower of cost of market) did not exceed 5% of the Fund's total net assets);
and (v) will not invest more than 5% of its assets in any one issuer (except
Government securities and bank certificates of deposit). The foregoing policies
are not fundamental and may therefore be changed by vote of the Trustees without
shareholder consent.
