<PAGE>
[LOGO] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.
--------------------------
LANDMARK
NEW YORK TAX FREE
INCOME FUND
--------------------------
--------------------------
SEMI-ANNUAL
REPORT
June 30, 1995
--------------------------
<PAGE>
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A LETTER TO OUR SHAREHOLDERS
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Dear Shareholder:
The first six months of 1995 saw higher prices for most financial assets,
including the tax-exempt securities in which the Landmark New York Tax Free
Income Fund primarily invests. In fact, municipal bonds have rallied
significantly since the beginning of the year, virtually erasing any declines
posted in 1994.
The Landmark Funds' investment adviser, Citibank, N.A., manages the
Landmark New York Tax Free Income Fund to generate high levels of current income
exempt from federal, New York State and New York City personal income taxes, and
to preserve the value of its shareholders' investment. Consistent with this
objective, the Fund seeks to provide an attractive tax-free yield from a high
quality investment portfolio consisting of municipal obligations primarily of
New York State, its municipalities and their agencies.
This Semi-Annual Report for the period ended June 30, 1995, reviews the
Fund's investment activities and performance over the past six months and
provides a summary of Citibank's perspective on the financial markets and
outlook for the foreseeable future. On behalf of the Board of Trustees of the
Landmark Funds, we want to thank our shareholders for their participation and
support. We look forward to serving you in the months and years ahead.
/s/Philip W. Coolidge
Philip W. Coolidge
President
July 20, 1995
-------------------------------------------
Remember that Mutual Fund Shares:
* Are not bank deposits or FDIC insured
* Are not obligations of or guaranteed by
Citibank or Citicorp Investment Services
* Are subject to investment risks,
including possible loss of the
principal amount invested.
TABLE OF CONTENTS
1 Letter to Shareholders
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2 Market Environment
Fund Snapshot
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3 Portfolio Manager
The Portfolio Manager Responds
Fund Quotes
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4 Strategy and Outlook
Landmark New York Tax Free
Income Fund--by the Numbers
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5 Fund Data
Performance Highlights
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6 Portfolio of Investments
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8 Statement of Assets and Liabilities
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9 Statement of Operations
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10 Statement of Changes in Net Assets
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11 Financial Highlights
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12 Notes to Financial Statements
<PAGE>
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MARKET ENVIRONMENT
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The first half of 1995 saw a substantial improvement in the municipal bond
marketplace as slower economic growth helped reduce inflation fears. Investors
in both taxable and tax-exempt fixed-income securities appear to be convinced
that the Federal Reserve has been largely successful in its efforts to constrain
economic growth without causing either a recession or an acceleration of
inflation. Recent economic data suggests that the U.S. is experiencing a "soft
landing" after 1994's torrid pace of economic growth, a state of affairs that
raises expectations for continued economic expansion with low inflation and,
perhaps most important, no need for the Federal Reserve to raise short-term
interest rates further.
Nonetheless, municipal bonds did not fare quite as well as their taxable
counterparts during the second quarter, principally because of the prospect of
federal tax reform legislation. If current proposals that eliminate taxes on
investment income are enacted, the tax advantages municipal bonds now enjoy
would disappear. In our opinion, this is unlikely to happen.
Closer to home, the New York State legislature passed a budget acceptable
to Governor Pataki, although several months late, containing the first cuts in
overall spending and taxes in many years. The effects of the new budget on state
and New York City finances remain to be seen. At this point, it appears that the
state's credit rating is secure, but New York City may receive a downgrade from
A- to BBB+ if it fails to offset reductions in state revenue with spending cuts.
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FUND SNAPSHOT
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COMMENCEMENT OF OPERATIONS
September 8, 1986
NET ASSETS AS OF 6/30/95
$88.0 million
FUND OBJECTIVE
To generate high levels of current income exempt from federal, New York State
and New York City personal income taxes,+ and to preserve the value of its
shareholders' investment through investing in debt obligations consisting
primarily of municipal bonds and notes.
DIVIDENDS
Paid monthly
CAPITAL GAINS
Distributed annually, if any
BENCHMARKS
* Lipper New York Municipal Bond Funds Average
* Lehman Municipal Bond Index
INVESTMENT ADVISER
Citibank, N.A.
+ A portion of the income may be subject to the Federal Alternative Minimum Tax.
Consult your personal tax advisor.
<PAGE>
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PORTFOLIO MANAGER
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CARLA WROCKLAGE
Vice President, Citibank, N.A.
On July 1, 1995, Ms. Wrocklage will assume responsibility for the management of
the Fund. Ms. Wrocklage has over 9 years of tax exempt portfolio management
experience. Prior to joining the Adviser in 1995, she was a municipal bond fund
portfolio manager for Prudential Insurance Company of America. Previously, she
was associated with Keystone Group.
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THE PORTFOLIO MANAGER RESPONDS
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In the wake of last year's severe bond market declines, we began to
increase the portfolio's duration (a measure of sensitivity to changes in
interest rates) from 8.32 years on January 1 to 9.20 years on March 1 in order
to keep higher-yielding securities for as long as possible. In our view,
municipal bond prices had declined farther than economic and market conditions
warranted, and we expected a rebound as inflation fears abated. This stance put
us in a good position not just to take advantage of the market's overreaction to
inflation fears, but also to capture further gains as yields continued to fall.
In addition, we continued to reposition our holdings to capture
incrementally higher yields while maintaining high levels of credit quality. For
example, as of June 30, 15% of the portfolio's assets were invested in Puerto
Rico bonds that are exempt from federal, state and local taxes. As of June 30,
1995, all securities held by the Fund were rated investment grade or its
equivalent by major rating agencies such as Moody's and Standard & Poor's.
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FUND QUOTES FROM THE PORTFOLIO MANAGER
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"The municipal bond market has gained back all of what it lost in 1994 and then
some during the first six months of 1995."
"Although yields on tax-exempt bonds declined, they haven't declined as much as
taxable securities. So we think they are very attractively valued right now."
"If New York State can cut spending and keep revenues up, it should augur well
for future investment. But the combination of income tax cuts and less aid from
the federal government could make New York State and City more vulnerable to a
possible recession if economic growth doesn't meet expectations."
<PAGE>
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STRATEGY AND OUTLOOK
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Because federal tax reform proposals have constrained prices, we believe
that municipal bonds represent exceptionally good values in the current market
environment. As of June 30, 10-year AA-rated New York municipal bonds yielded
5.07%. For investors in the 44.19% combined federal and state income tax
bracket, a taxable bond would have to yield 9.08% to provide an equivalent
after-tax return. As investors come to realize that the elimination of income
taxes on investments is unlikely, the relationship between municipal bonds and
taxable bonds should return to more normal levels.
If, however, the new state budget requires municipalities, agencies and
authorities to finance revenue shortfalls in the municipal bond marketplace, a
surge of new supply could cause yields to rise temporarily. If such a scenario
occurs, we will reduce the portfolio's average duration in order to keep funds
available for higher yielding investments as they become available. Over the
longer term, however, we expect New York's municipal bond market to benefit from
a sustained economic deceleration, decreasing supply of new issues and declining
inflation fears.
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Landmark New York Tax Free Income Fund
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BY THE NUMBERS
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CHANGES IN PORTFOLIO COMPOSITION
Portfolio Of Investments
as of 6/30/95
[Graphic Omitted: Pie Charts]
Cash/Short-Term/Other ....................... 6%
General Obligation Bonds .................... 9%
Gtd./Prerefunded ............................ 23%
Housing Revenue ............................. 9%
Power Revenue ............................... 2%
State Agencies .............................. 18%
Transport Revenue ........................... 11%
Water/Sewer Revenue ......................... 12%
Other Revenue ............................... 10%
... Compared to 12/31/94
Cash/Short-Term/Other ....................... 1%
General Obligation Bonds .................... 7%
Gtd./Prerefunded ............................ 20%
Housing Revenue ............................. 10%
Power Revenue ............................... 4%
State Agencies .............................. 17%
Transport Revenue ........................... 12%
Water/Sewer Revenue ......................... 16%
Other Revenue ............................... 13%
<PAGE>
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FUND DATA All Periods Ending June 30, 1995 (unaudited)
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<TABLE>
<CAPTION>
TOTAL RETURNS
---------------------------------------------------------
SIX MONTHS SINCE
ENDED ONE FIVE 9/8/86
JUNE 30, 1995** YEAR YEARS* (INCEPTION)*
--------------- ---- ------ ------------
<S> <C> <C> <C> <C>
Landmark New York Tax Free Income Fund
without Sales Charge........................... 9.62% 8.10% 7.45% 6.75%
Lipper New York Municipal Bond Funds Average..... 9.00% 6.96% 7.84% 7.03%+
Lehman Municipal Bond Index...................... 9.65% 8.82% 8.26% 7.94%+
Landmark New York Tax Free Income Fund
with Maximum Sales Charge of 4.00%............. 5.21% 3.74% 6.57% 6.25%
** Not Annualized
* Annualized
+ From 8/31/86
</TABLE>
30-Day SEC Yield 5.13%
Income Dividends Per Share $0.30
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PERFORMANCE HIGHLIGHTS
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A $10,000 investment in the Fund made on inception date would have grown to
$17,069 with sales charge (as of 6/30/95). The graph shows how this compares to
our bench mark over the same period.
The graph includes the initial charge on the Fund (no comparable charge exists
for the other indices) and assumes all dividends and distributions from the Fund
are reinvested at Net Asset Value.
[The following data is presented as a paragraph in the printed report.]
Landmark Landmark
N.Y. Tax N.Y. Tax Lipper
Free Free New York Lehman
Income - Income - Municipal Municipal
Without With Bond Bond
Sales Sales Funds Index
Charge Charge Average (Unmanaged)
--------- -------- -------- ----------
Aug-86 $10,000 $ 9,600 $10,000 $10,000
Sep-86 $ 9,900 $ 9,504 $ 9,956 $ 9,958
Oct-86 $10,141 $ 9,735 $10,198 $10,065
Nov-86 $10,329 $ 9,915 $10,370 $10,136
Dec-86 $10,331 $ 9,917 $10,375 $10,155
Jan-87 $10,535 $10,113 $10,586 $10,233
Feb-87 $10,603 $10,179 $10,679 $10,283
Mar-87 $10,556 $10,134 $10,631 $10,289
Apr-87 $ 9,731 $ 9,342 $ 9,887 $10,176
May-87 $ 9,608 $ 9,224 $ 9,779 $10,178
Jun-87 $ 9,973 $ 9,574 $10,019 $10,294
Jul-87 $10,042 $ 9,641 $10,120 $10,339
Aug-87 $10,053 $ 9,651 $10,157 $10,340
Sep-87 $ 9,453 $ 9,075 $ 9,681 $10,267
Oct-87 $ 9,430 $ 9,052 $ 9,725 $10,515
Nov-87 $ 9,804 $ 9,412 $ 9,991 $10,583
Dec-87 $ 9,996 $ 9,596 $10,205 $10,665
Jan-88 $10,399 $ 9,983 $10,608 $10,863
Feb-88 $10,514 $10,094 $10,709 $10,963
Mar-88 $10,187 $ 9,779 $10,480 $10,959
Apr-88 $10,219 $ 9,810 $10,529 $10,961
May-88 $10,249 $ 9,839 $10,535 $10,935
Jun-88 $10,431 $10,014 $10,701 $11,100
Jul-88 $10,490 $10,071 $10,766 $11,091
Aug-88 $10,523 $10,102 $10,805 $11,103
Sep-88 $10,737 $10,308 $11,012 $11,255
Oct-88 $11,011 $10,571 $11,255 $11,385
Nov-88 $10,879 $10,444 $11,123 $11,325
Dec-88 $11,111 $10,666 $11,293 $11,339
Jan-89 $11,250 $10,800 $11,454 $11,433
Feb-89 $11,082 $10,639 $11,353 $11,414
Mar-89 $11,120 $10,675 $11,336 $11,463
Apr-89 $11,443 $10,986 $11,626 $11,675
May-89 $11,713 $11,245 $11,846 $11,857
Jun-89 $11,862 $11,388 $12,003 $12,115
Jul-89 $12,017 $11,536 $12,128 $12,329
Aug-89 $11,837 $11,363 $12,009 $12,208
Sep-89 $11,696 $11,228 $11,955 $12,271
Oct-89 $11,862 $11,387 $12,058 $12,493
Nov-89 $12,073 $11,591 $12,242 $12,608
Dec-89 $12,191 $11,704 $12,341 $12,654
Jan-90 $12,058 $11,576 $12,210 $12,627
Feb-90 $12,111 $11,627 $12,314 $12,684
Mar-90 $12,115 $11,630 $12,283 $12,709
Apr-90 $11,924 $11,447 $12,130 $12,711
May-90 $12,246 $11,756 $12,442 $12,938
Jun-90 $12,415 $11,919 $12,588 $13,090
Jul-90 $12,691 $12,183 $12,823 $13,265
Aug-90 $12,389 $11,893 $12,558 $13,280
Sep-90 $12,319 $11,826 $12,507 $13,392
Oct-90 $12,485 $11,986 $12,631 $13,560
Nov-90 $12,888 $12,372 $12,919 $13,716
Dec-90 $12,915 $12,398 $12,961 $13,893
Jan-91 $13,131 $12,606 $13,138 $14,029
Feb-91 $13,114 $12,589 $13,210 $14,113
Mar-91 $13,113 $12,588 $13,259 $14,201
Apr-91 $13,318 $12,785 $13,466 $14,345
May-91 $13,432 $12,895 $13,571 $14,430
Jun-91 $13,420 $12,883 $13,557 $14,465
Jul-91 $13,618 $13,073 $13,777 $14,609
Aug-91 $13,816 $13,264 $13,975 $14,850
Sep-91 $14,036 $13,474 $14,185 $15,052
Oct-91 $14,183 $13,616 $14,321 $15,228
Nov-91 $14,197 $13,629 $14,341 $15,401
Dec-91 $14,508 $13,928 $14,636 $15,698
Jan-92 $14,457 $13,879 $14,556 $15,618
Feb-92 $14,493 $13,914 $14,610 $15,658
Mar-92 $14,449 $13,871 $14,656 $15,621
Apr-92 $14,542 $13,961 $14,812 $15,772
May-92 $14,787 $14,195 $15,028 $15,965
Jun-92 $15,086 $14,482 $15,339 $16,172
Jul-92 $15,605 $14,981 $15,900 $16,424
Aug-92 $15,379 $14,764 $15,659 $16,590
Sep-92 $15,431 $14,814 $15,706 $16,791
Oct-92 $15,153 $14,547 $15,445 $16,623
Nov-92 $15,498 $14,878 $15,823 $16,567
Dec-92 $15,648 $15,022 $16,026 $16,752
Jan-93 $15,896 $15,260 $16,223 $17,017
Feb-93 $16,505 $15,845 $16,866 $17,216
Mar-93 $16,369 $15,714 $16,694 $17,275
Apr-93 $16,494 $15,834 $16,877 $17,406
May-93 $16,531 $15,869 $16,995 $17,347
Jun-93 $16,804 $16,132 $17,281 $17,534
Jul-93 $16,810 $16,138 $17,276 $17,566
Aug-93 $17,099 $16,415 $17,652 $17,776
Sep-93 $17,297 $16,605 $17,848 $17,835
Oct-93 $17,327 $16,633 $17,882 $17,878
Nov-93 $17,170 $16,483 $17,682 $17,838
Dec-93 $17,530 $16,829 $18,053 $17,910
Jan-94 $17,700 $16,992 $18,245 $18,058
Feb-94 $17,264 $16,573 $17,787 $17,874
Mar-94 $16,482 $15,822 $16,986 $17,699
Apr-94 $16,512 $15,852 $17,003 $17,596
May-94 $16,651 $15,985 $17,170 $17,616
Jun-94 $16,449 $15,791 $17,050 $17,642
Jul-94 $16,777 $16,106 $17,350 $17,835
Aug-94 $16,856 $16,182 $17,407 $17,890
Sep-94 $16,525 $15,864 $17,073 $17,793
Oct-94 $16,209 $15,561 $16,701 $17,816
Nov-94 $15,845 $15,211 $16,246 $17,727
Dec-94 $16,220 $15,572 $16,696 $17,768
Jan-95 $16,672 $16,005 $17,167 $18,038
Feb-95 $17,161 $16,474 $17,720 $18,330
Mar-95 $17,356 $16,662 $17,871 $18,433
Apr-95 $17,371 $16,676 $17,892 $18,623
May-95 $18,027 $17,306 $18,468 $19,001
Jun-95 $17,780 $17,069 $18,221 $19,115
Notes: All Fund performance numbers represent past performance, and are no
guarantee of future results. The Fund's share price and investment return will
fluctuate, so that the value of an investor's shares, when redeemed, may be
worth more or less than their original cost. Total returns include change in
share price and reinvestment of dividends and distributions, if any. Total
return figures "with sales charge" are provided in accordance with SEC
guidelines for comparative purposes for prospective investors.
<PAGE>
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Landmark New York Tax Free Income Fund
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PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited)
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MOODY'S PRINCIPAL
BOND AMOUNT
RATING ISSUER (000'S OMITTED) VALUE
--------------------------------------------------------------------------------
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MUNICIPAL BONDS--94.5%
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GENERAL OBLIGATION BONDS -- 8.6%
BAA1 New York City, NY Series F,
7.65% due 2/1/06......... $3,000 $ 3,283,500
BAA1 New York City, NY Series F,
8.40% due 11/15/06....... 2,000 2,253,780
BAA1 New York City, NY Series F,
6.625% due 2/15/25....... 1,250 1,244,300
BAA1 New York City, NY Series B,
5.75% due 8/15/13........ 900 821,313
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7,602,893
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GUARANTEED/PREREFUNDED AND ETM -- 23.0%
AAA New York State Housing
Finance Agency, ETM,
7.90% due 11/1/06........ 5,750 6,991,540
BAA1 Puerto Rico Commonwealth,
5.50% due 7/1/13......... 1,125 1,061,021
BAA1 Puerto Rico Commonwealth,
6.00% due 7/1/14......... 1,600 1,588,800
AAA Puerto Rico Commonwealth
Highway Authority,
8.00% due 7/1/05......... 2,900 3,263,573
BAA1 Puerto Rico Commonwealth
Highway Authority,
5.50% due 7/1/15......... 1,000 934,350
BAA1 Puerto Rico Commonwealth
Highway Authority,
5.25% due 7/1/20......... 2,010 1,771,091
BAA1 Puerto Rico Electric
Power Authority,
6.125% due 7/1/09........ 1,000 1,023,790
AAA Puerto Rico Public
Buildings Authority,
6.125% due 7/1/13........ 1,700 1,794,316
BAA1 Puerto Rico Public
Buildings Authority,
6.25% due 7/1/21......... 2,000 1,834,720
-----------
20,263,201
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HOUSING REVENUE -- 9.2%
AA New York State Mortgage
Agency Revenue, AMT,
7.25% due 10/1/07........ 6,075 6,523,396
AA New York State Mortgage
Agency Revenue, AMT,
7.75% due 10/1/23........ 1,480 1,581,780
-----------
8,105,176
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POWER REVENUE -- 2.1%
AAA New York State Energy
Research & Development
Authority, AMT,
5.95% due 12/1/27........ 2,000 1,831,840
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STATE AGENCIES -- 18.1%
BAA1 New York State Dormitory
Authority, 5.25% due 5/15/13 2,000 1,783,940
BAA1 New York State Dormitory
Authority, 5.625% due 5/15/13 1,000 915,880
BAA1 New York State Dormitory
Authority, 5.375% due 5/15/16 2,000 1,750,580
BAA1 New York State Dormitory
Authority, 5.75% due 7/1/18 3,000 2,793,810
BAA1 New York State Dormitory
Authority, 5.00% due 7/1/20 2,000 1,644,180
BAA1 New York State Dormitory
Authority, 5.25% due 5/15/21 1,000 847,540
BAA1 New York State Dormitory
Authority, 5.40% due 5/15/23 1,690 1,463,456
BAA1 New York State Urban
Development Revenue,
5.875% due 4/1/09........ 1,245 1,206,243
BAA1 New York State Urban
Development Revenue,
5.50% due 1/1/14......... 2,000 1,828,260
BAA1 New York State Urban
Development Revenue,
5.25% due 1/1/21......... 2,000 1,701,380
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15,935,269
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<PAGE>
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Landmark New York Tax Free Income Fund
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PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) continued
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MOODY'S PRINCIPAL
BOND AMOUNT
RATING ISSUER (000'S OMITTED) VALUE
--------------------------------------------------------------------------------
TRANSPORTATION REVENUE -- 10.9%
BAA1 Metropolitan Transportation
Authority, NY, 5.75% due 7/1/13 $4,000 $ 3,797,280
BAA1 New York State Thruway
Authority, 5.875% due 4/1/14 1,000 955,450
BAA1 Triborough Bridge & Tunnel
Authority, 7.25% due 1/1/10 3,500 3,907,820
AA Triborough Bridge & Tunnel
Authority, 5.00% due 1/1/15 1,000 885,790
-----------
9,546,340
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WATER AND SEWER REVENUE -- 12.2%
AAA New York City Municipal Water
Finance, 5.50% due 6/15/15 1,500 1,424,880
AA New York State Environmental
Facilities, 7.00% due 6/15/12 3,360 3,694,589
AA New York State Environmental
Facilities, 7.50% due 6/15/12 3,000 3,362,310
A1 New York State Environmental
Facilities, 7.125% due 7/1/12 2,100 2,266,656
-----------
10,748,435
-----------
OTHER REVENUE -- 10.4%
N/R New York City Industrial
Development Agency,
7.00% due 5/1/08......... 800 822,984
A New York City Industrial
Development Agency, AMT,
6.00% due 1/1/15......... 2,000 1,904,820
A New York City Industrial
Development Agency, AMT,
6.00% due 1/1/19......... 2,000 1,884,740
AAA New York State Medical Care
Facilities, 5.75% due 2/15/25 1,000 957,580
AAA New York State Medical
Care Facilities,
6.90% due 8/15/34....... 1,000 1,066,230
BAA Onondaga County, NY Resource
Recovery Revenue, AMT,
7.00% due 5/1/15......... 2,500 2,495,024
-----------
9,131,378
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TOTAL MUNICIPAL BONDS
(Identified Cost - $79,123,120) $83,164,532
-----------
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VARIABLE RATE DEMAND NOTES*--5.5%
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New York City, N.Y., due 8/1/15 $ 600 600,000
New York City, N.Y., due 8/1/17 300 300,000
New York City, N.Y., due 8/15/18 1,000 1,000,000
New York City, N.Y., due 8/1/20 600 600,000
New York City Municipal Water
Finance Authority,
due 6/15/24.................. 200 200,000
New York State Energy Research &
Development Authority,
due 12/1/26.................. 100 100,000
New York State Local
Government Assistance,
due 4/1/23................... 2,000 2,000,000
-----------
TOTAL VARIABLE RATE DEMAND NOTES
AT AMORTIZED COST............ 4,800,000
-----------
TOTAL INVESTMENTS
(Identified Cost-$83,923,120) 100.0% $87,964,532
OTHER ASSETS -
LESS LIABILITIES.............. - (9,123)
----- -----------
NET ASSETS..................... 100.0% $87,955,409
===== ===========
AMT - Subject to Alternate Minimum Tax
ETM - Escrow to Maturity for timely payment of principal
* Variable rate demand notes have a demand feature under which the Fund could
tender them back to the issuer on no more than 7 days' notice.
See notes to financial statements
<PAGE>
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Landmark New York Tax Free Income Fund
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STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (unaudited)
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<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Note 1A) (Identified Cost, $83,923,120)............. $87,964,532
Cash....................................................................... 144,793
Interest receivable........................................................ 1,713,399
Receivable for investment sold............................................. 1,996,813
Receivable for shares of beneficial interest sold.......................... 17,538
-----------
Total assets........................................................... 91,837,075
-----------
LIABILITIES:
Payable for investments purchased.......................................... 3,713,299
Payable for shares of beneficial interest repurchased...................... 78,553
Payable to affiliates:
Investment advisory fees (Note 2)........................................ $13,709
Shareholder servicing agents' fees (Note 3B)............................. 18,454 32,163
-------
Accrued expenses and other liabilities..................................... 57,651
-----------
Total liabilities...................................................... 3,881,666
-----------
NET ASSETS for 8,183,795 shares of beneficial interest outstanding......... $87,955,409
===========
NET ASSETS CONSIST OF:
Paid-in capital............................................................ $91,559,329
Accumulated net realized loss on investments............................... (7,788,655)
Unrealized appreciation of investments..................................... 4,041,412
Undistributed net investment income........................................ 143,323
-----------
Total.................................................................. $87,955,409
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST .... $10.75
======
COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a 4.00% sales charge ($10.75 / 0.96) $11.20
======
See notes to financial statements
</TABLE>
<PAGE>
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Landmark New York Tax Free Income Fund
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Six Months Ended June 30, 1995 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (Note 1B):
Interest................................................................... $2,952,130
EXPENSES:
Investment advisory fees (Note 2).......................................... $176,026
Shareholder servicing agents' fees (Note 3B)............................... 176,026
Administrative fees (Note 3A).............................................. 88,013
Custodian fees............................................................. 32,710
Distribution fees (Note 4)................................................. 22,003
Auditing services.......................................................... 21,300
Shareholder reports........................................................ 16,223
Legal services............................................................. 11,116
Trustee fees............................................................... 10,775
Transfer agent fees........................................................ 6,000
Miscellaneous.............................................................. 4,260
---------
Total expenses......................................................... 564,452
Less aggregate amount waived by Investment Adviser,
Administrator, Shareholder Servicing Agents and Distributor
(Notes 2, 3A, 3B, and 4)................................................. (208,587)
---------
Net expenses........................................................... 355,865
----------
Net investment income.................................................. 2,596,265
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions............................... 1,233,237
Unrealized appreciation (depreciation) of investments--
Beginning of period...................................................... (166,553)
End of period............................................................ 4,041,412
- ---------
Net change in unrealized appreciation (depreciation)....................... 4,207,965
----------
Net realized and unrealized gain (loss) on investments..................... 5,441,202
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................... $8,037,467
==========
See notes to financial statements
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
Landmark New York Tax Free Income Fund
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income..................................................... $ 2,596,265 $ 5,816,426
Net realized gain (loss) on investment transactions....................... 1,233,237 (6,997,961)
Net change in unrealized appreciation (depreciation) of investments....... 4,207,965 (7,584,448)
----------- ------------
Net increase (decrease) in net assets resulting from operations........... 8,037,467 (8,765,983)
----------- ------------
DIVIDENDS DECLARED TO SHAREHOLDERS FROM:
Net investment income..................................................... (2,497,798) (5,834,049)
----------- ------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (Note 6):
Net proceeds from sale of shares.......................................... 1,647,910 10,231,447
Net asset value of shares issued to shareholders from
reinvestment of dividends............................................... 2,492,323 5,829,596
Cost of shares repurchased................................................ (8,123,569) (35,886,289)
----------- ------------
Net decrease in net assets from
transactions in shares of beneficial interest......................... (3,983,336) (19,825,246)
----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS .................................... 1,556,333 (34,425,278)
NET ASSETS:
Beginning of period....................................................... 86,399,076 120,824,354
----------- ------------
End of period (including undistributed net investment
income of $143,323 and $44,856, respectively)........................... $87,955,409 $ 86,399,076
=========== ============
See notes to financial statements
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
Landmark New York Tax Free Income Fund
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS FOUR MONTHS
ENDED YEAR ENDED
JUNE 30, ENDED DECEMBER 31, YEAR ENDED AUGUST 31
1995 DECEMBER 31, 1993 --------------------------------------
(UNAUDITED) 1994 (NOTE 1D) 1993 1992 1991 1990
----------- ----------- ----------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period .. $ 10.09 $ 11.54 $ 11.44 $ 10.82 $ 10.27 $ 9.77 $ 9.89
------- ------- -------- -------- ------- ------- -------
Income From Operations:
Net investment income.................. 0.312 0.566 0.210 0.567 0.589 0.583 0.565
Net realized and unrealized gain (loss)
on investments....................... 0.648 (1.415) 0.076 0.610 0.541 0.510 (0.117)
------- ------- -------- -------- ------- ------- -------
Total from operations.............. 0.960 (0.849) 0.286 1.177 1.130 1.093 0.448
------- ------- -------- -------- ------- ------- -------
Less Dividends From:
Net investment income................ (0.300) (0.601) (0.186) (0.557) (0.580) (0.593) (0.568)
------- ------- -------- -------- ------- ------- -------
Net Asset Value, end of period ...... $ 10.75 $ 10.09 $ 11.54 $ 11.44 $ 10.82 $ 10.27 $ 9.77
======= ======= ======== ======== ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $87,955 $86,399 $120,824 $111,583 $81,185 $73,884 $76,442
Ratio of expenses to average net assets 0.80%+ 0.80% 0.80%+ 0.80% 0.80% 0.81% 1.37%
Ratio of net investment income to
average net assets................... 5.90%+ 5.52% 4.84%+ 5.11% 5.58% 5.82% 5.73%
Portfolio turnover..................... 71%+ 150% 46% 149% 143% 337% 170%
Total return........................... 9.62%** (7.47)% 2.52%** 11.19% 11.31% 11.52% 4.66%
Note: If Agents of the Fund had not voluntarily agreed to waive all or a portion of their fees for the periods
indicated, the net investment income per share and the ratios would have been as follows:
Net investment income per share........ $0.287 $0.508 $0.191 $0.515 $0.537 $0.540 $0.561
Ratios:
Expenses to average net assets......... 1.28%+ 1.27% 1.23%+ 1.27% 1.30% 1.24% 1.40%
Net investment income to
average net assets................... 5.42%+ 5.05% 4.40%+ 4.64% 5.09% 5.39% 5.69%
+ Annualized
** Not annualized
See notes to financial statements
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
Landmark New York Tax Free Income Fund
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Landmark New York Tax Free Income Fund (the "Fund") is a separate
non-diversified series of Landmark Tax Free Income Funds (the "Trust"), a
Massachusetts business trust. The Trust is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Investment Adviser of the Fund is Citibank, N.A. ("Citibank"). The Landmark
Funds Broker-Dealer Services, Inc. ("LFBDS") acts as the Fund's Administrator
and Distributor. Citibank also serves as Sub-Administrator and makes shares
available to customers as Shareholder Servicing Agent.
The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting prin ciples and are as follows:
A. INVESTMENT SECURITY VALUATIONS -- Debt securities (other than short-term
obligations maturing in 60 days or less) are valued on the basis of valuations
furnished by a pricing service which takes into account appropriate factors such
as institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, 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 the
securities. Short-term obligations (maturing in 60 days or less) are valued at
amortized cost, which approximates market value. Securities, if any, for which
there are no such valuations or quotations are valued at fair value as
determined in good faith by or under guidelines established by the Trustees.
B. INCOME -- Interest income is determined on the basis of interest accrued and
discount earned, adjusted for amortization of premium or discount on long-term
debt securities when required for federal income tax purposes.
C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code available to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investment transactions. Accordingly, no provision for federal income or
excise tax is necessary. Dividends by the Fund from net interest received on
tax-exempt municipal bonds are not includable by shareholders as gross income
for federal income tax purposes because the Fund intends to meet certain
requirements of the Internal Revenue Code applicable to regulated investment
companies which will enable the Fund to pay exempt interest dividends. The
portion of such interest, if any, earned on private activity bonds issued after
August 7, 1986, may be considered a tax preference item to shareholders. At
December 31, 1994, the Fund, for federal income tax purposes, had a capital loss
carryover of $8,989,415, of which $610,517 will expire on December 31, 1995,
$1,380,937 will expire on December 31, 1996 and $6,997,961 will expire on
December 31, 2002. Such capital loss carryover will reduce the Fund's taxable
income arising from future net realized gain on investment transactions, if any,
to the extent permitted by the Internal Revenue Code, and thus will reduce the
amount of the distributions to shareholders which would otherwise be necessary
to relieve the Fund of any liability for federal income or excise tax.
D. CHANGE IN FISCAL YEAR END -- Effective September 1, 1993, the Fund changed
its fiscal year end from August 31 to December 31.
E. DISTRIBUTIONS -- Effective September 1, 1993, the Fund adopted Statement of
Position (SOP) 93-2, Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions by
Investment Companies. The SOP distinguishes between distributions on a tax basis
and a financial reporting basis and requires that only distributions in excess
of tax basis earnings and profits be reported in the financial statements as a
return of capital. The SOP also requires that differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in temporary over-distributions for financial statement
purposes, are classified as distributions in excess of net investment income or
accumulated net realized gains. The cumulative effect of adopting the SOP
increased undistributed net investment income, decreased accumulated realized
gain on investments and decreased paid-in capital by $240,751, $4,784 and
$235,967, respectively. During the year ended December 31, 1994, $360,884 was
reclassified from undistributed net investment income to paid-in capital due to
differences between book and tax accounting for equalization. These changes had
no effect on the net assets and the net asset value per share.
F. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Realized gains and losses are determined on
the identified cost basis. Distributions to shareholders and shares issuable to
shareholders electing to receive distributions in shares are recorded on the
ex-dividend date.
(2) INVESTMENT ADVISORY FEES
The investment advisory fee paid to Citibank, as compensation for overall
investment management services amounted to $176,026, of which $95,099 was
voluntarily waived for the six months ended June 30, 1995. The investment
advisory fee is computed at the annual rate of 0.40% of average daily net
assets.
(3) ADMINISTRATIVE SERVICES PLAN
The Trust, on behalf of the Fund, has adopted an Administrative Services Plan
(the "Administrative Services Plan") which provides that the Trust may obtain
the services of an Administrator, one or more Shareholder Servicing Agents and
other Servicing Agents and may enter into agreements providing for the payment
of fees for such services. Under the Administrative Services Plan, the aggregate
of the fee paid to the Administrator from the Fund, the fees paid to the
Shareholder Servicing Agents from the Fund and the Basic Distribution Fee paid
from the Fund to the Distributor under the Distribution Plan may not exceed
0.65% of the Fund's average daily net assets on an annualized basis for the
Fund's then-current fiscal year.
A. ADMINISTRATIVE FEES -- Under the terms of an Administrative Services
Agreement, the administrative fee paid to the Administrator, as compensation for
overall administrative services and general office facilities, is accrued daily
and paid monthly at an annual rate of 0.20% of the Fund's average daily net
assets. The Administrative fee amounted to $88,013, of which $25,475 was
voluntarily waived for the six months ended June 30, 1995. Citibank acts as
Sub-Administrator and performs such duties and receives such compensation from
LFBDS as from time to time is agreed to by LFBDS and Citibank. The Fund pays no
compensation directly to any Trustee or any officer who is affiliated with the
Administrator, all of whom receive remuneration for their services to the Fund
from the Administrator or its affiliates. Certain of the officers and a Trustee
of the Fund are officers and directors of the Administrator or its affiliates.
B. SHAREHOLDER SERVICING AGENTS FEES -- The Trust, on behalf of the Fund, has
entered into shareholder servicing agreements with each Shareholder Servicing
Agent pursuant to which that Shareholder Servicing Agent acts as an agent for
its customers and provides other related services. For their services, each
Shareholder Servicing Agent receives fees from the Fund, which may be paid
periodically, which may not exceed, on an annualized basis, an amount equal to
0.40% of the average daily net assets of the Fund represented by shares owned
during the period for which payment is being made by investors for whom such
Shareholder Servicing Agent maintains a servicing relationship. Shareholder
Servicing Agents' fees amounted to $176,026, of which $66,010 was voluntarily
waived for the six months ended June 30, 1995.
(4) DISTRIBUTION FEES
The Trust has adopted a Plan of Distribution pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, in which the Fund
reimburses the Distributor for expenses incurred or anticipated in connection
with sales of shares of the Fund, at an annual rate not to exceed 0.15% of the
Fund's average daily net assets. The Distributor may also receive an additional
fee from the Fund at an annual rate not to exceed 0.05% of the Fund's average
daily net assets in anticipation of, or as reimbursement for, advertising
expenses incurred by the Distributor in connection with the sale of shares of
the Fund. No payment of such additional fee has been made during the period.
Under the Administrative Services Plan distribution fees were computed at an
annual rate of 0.05% of the Fund's average daily net assets, which amounted to
$22,003, all of which was voluntarily waived for the six months ended June 30,
1995.
(5) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $60,868,839 and $68,579,792, respectively.
(6) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional Shares of Beneficial Interest (without par value).
Transactions in shares of beneficial interest were as follows:
For Six Months
Ended Year Ended
June 30, 1995 December 31,
(unaudited) 1994
-------- --------
Shares sold............ 153,852 921,675
Shares issued to
shareholders from
reinvestment of
dividends............ 235,039 549,080
Shares repurchased..... (765,212) (3,381,031)
-------- ----------
Net increase
(decrease)........... (376,321) (1,910,276)
======== ==========
(7) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at June 30, 1995, as computed on a federal income tax basis,
are as follows:
Aggregate cost...................... $83,923,120
===========
Gross unrealized appreciation....... $4,182,848
Gross unrealized depreciation....... (141,436)
-----------
Net unrealized appreciation....... $ 4,041,412
===========
(8) LINE OF CREDIT
The Fund, along with other Landmark Funds, entered into an ongoing agreement
with a bank which allows the Funds collectively to borrow up to $40 million for
temporary or emergency purposes. Interest on borrowings, if any, is charged to
the specific fund executing the borrowing at the base rate of the bank. In
addition, the committed portion of the line of credit requires a quarterly
payment of a commitment fee based on the average daily unused portion of the
line of credit. For the six months ended June 30, 1995, the commitment fee
allocated to the Fund was $353. Since the line of credit was established there
have been no borrowings.
<PAGE>
--------------------------------------------------------------------------------
SHAREHOLDER
SERVICING AGENTS
--------------------------------------------------------------------------------
FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
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 Executive or, in NY or CT (800) 285-1701, or for all other
states, (800) 285-1707.
FOR 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 CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117
FOR 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
National Tax Free Income Fund
New York Tax Free Income Fund
Balanced Fund
Equity Fund
International Equity Fund
Small Cap Equity Fund
Emerging Asian Markets Equity Fund
<PAGE>
TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
H. B. Alvord
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.
SECRETARY AND TREASURER
James B. Craver*
ASSISTANT TREASURER
Barbara M. O'Dette*
ASSISTANT SECRETARIES
Susan Jakuboski*
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
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 Cover)
This report is prepared for the information of shareholders. It is authorized
for distribution to prospective investors only when preceded or accompanied by
an effective prospectus.
This Report is Prepared & Printed on Recycled Paper [LOGO]
NYTFI/S/95
