Rule 497(e)
File Nos. 33-5819
811-5034
LANDMARK TAX FREE INCOME FUNDS
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A
ITEM NO. N-1A ITEM LOCATION
PART A PROSPECTUS
<S> <C> <C>
Item 1. Cover Page............................................ Cover Page
Item 2. Synopsis.............................................. Expense Summary
Item 3. Condensed Financial Information....................... Condensed Financial Information
Item 4. General Description of Registrant..................... Investment Information; General
Information; Appendix
Item 5. Management of the Fund................................ Management; Expenses
Item 5A. Management's Discussion of Fund Performance........... Not Applicable
Item 6. Capital Stock and Other Securities.................... General Information; Classes of
Shares; Voting and Other Rights;
Purchases; Exchanges; Redemptions;
Dividends and Distributions; Tax
Matters
Item 7. Purchase of Securities Being Offered................... Purchases; Exchanges; Redemptions
Item 8. Redemption or Repurchase............................... Purchases; Exchanges; Redemptions
Item 9. Pending Legal Proceedings.............................. Not Applicable
STATEMENT OF
ADDITIONAL
PART B INFORMATION
Item 10. Cover Page............................................. Cover Page
Item 11. Table of Contents...................................... Cover Page
Item 12. General Information and History........................ The Funds
Item 13. Investment Objectives and Policies..................... Investment Objective, Policies and
Restrictions
Item 14. Management of the Fund................................. Management
Item 15. Control Persons and Principal Holders of Securities.... Management
Item 16. Investment Advisory and Other Services................. Management
Item 17. Brokerage Allocation and Other Practices............... Portfolio Transactions
Item 18. Capital Stock and Other Securities..................... Description of Shares, Voting Rights
and Liabilities
Item 19. Purchase, Redemption and Pricing of Securities
Being Offered.......................................... Description of Shares, Voting Rights
and Liabilities; Determination of Net
Asset Value; Valuation of Securities;
Additional Purchase and Redemption
Information
Item 20. Tax Status............................................. Certain Additional Tax Matters
Item 21. Underwriters........................................... Management
Item 22. Calculation of Performance Data........................ Performance Information
Item 23. Financial Statements................................... Independent Accountants and Financial
Statements
</TABLE>
<PAGE>
PART C Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration
Statement.
<PAGE>
Rule 497(e)
File Nos. 33-5819
811-5034
Supplement Dated February 29, 1996 to Prospectus Dated April 3, 1995
LANDMARK TAX FREE INCOME FUNDS
Landmark National Tax Free Income Fund
Landmark New York Tax Free Income Fund
The date of the Prospectus shall now be February 29, 1996.
The first paragraph of the "Condensed Financial Information" section on page 6
of the Prospectus is hereby amended in its entirety to read as follows:
The following tables provide condensed financial information about the New
York Tax Free Income Fund and the National Tax Free Income Fund for the periods
indicated. The information below should be read in conjunction with the
financial statements appearing in the New York Tax Free Income Fund's Annual
Report to Shareholders, which is incorporated by reference in the Statement of
Additional Information, and the unaudited financial statements of the National
Tax Free Income Fund, which accompany the Statement of Additional Information.
The financial statements and notes as well as the tables below with respect to
the New York Tax Free Income Fund, have been audited by Deloitte & Touche LLP,
independent certified public accountants, whose report is included in the New
York Tax Free Income Fund's Annual Report. Copies of the Annual Report may be
obtained without charge from an investor's Shareholder Servicing Agent (see
inside of back cover for address and phone number).
The following table should precede the "Investment Information" section on page
7 of the Prospectus:
<TABLE>
<CAPTION>
NATIONAL TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS
CLASS A SHARES
(No Class B shares were outstanding during these periods.)
AUGUST 17, 1995
(COMMENCEMENT OF
OPERATIONS) TO
DECEMBER 31, 1995
<S> <C>
Net Asset Value, beginning of period......................... $10.00
------
Income from Operations:
Net investment income........................................ 0.187
Net realized and unrealized gain (loss) on investments....... 0.551
-----
Total from operations..................................... 0.738
-----
Less Dividends from:
Net investment income..................................... (0.188)
-------
Net Asset Value, end of period............................... $10.55
======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................. $1,306
Ratio of expenses to average net assets .................. 0%
Ratio of net investment income to average net assets...... 5.20%*
Portfolio turnover........................................ 0%
Total return.............................................. 7.43%**
<PAGE>
Note: If Agents of National Tax Free Income Fund had not voluntarily agreed to
waive all of their fees for the period, the expenses were not reduced for fees
paid indirectly and had net expenses been limited to that required by certain
state securities law, the net investment income per share and the ratios would
have been as follows:
Net investment income per share.............................. $0.098
RATIOS:
Expenses to average net assets............................... 2.50%*
Net investment income to average net assets.................. 2.70%*
*Annualized
**Not Annualized
<PAGE>
Rule 497(e)
File Nos. 33-5819
811-5034
Supplement Dated February 29, 1996 to Statement of Additional Information Dated April 3, 1995
LANDMARK TAX FREE INCOME FUNDS
Landmark National Tax Free Income Fund
Landmark New York Tax Free Income Fund
The date of the Statement of Information shall now be February 29, 1996.
The following paragraph shall be added at the end of the "Independent
Accountants and Financial Statements" section on page B-31 of the Statement of
Additional Information:
The unaudited financial statements of National Tax Free Income Fund
(Portfolio of Investments at December 31, 1995, Statement of Assets and
Liabilities at December 31, 1995, Statement of Operations for the period from
August 17, 1995 (commencement of operations) to December 31, 1995, Statement of
Changes in Net Assets for the period from August 17, 1995 (commencement of
operations) to December 31, 1995 and Financial Highlights for the period from
August 17, 1995 (commencement of operations) to December 31, 1995) accompany
this Statement of Additional Information.
<PAGE>
LANDMARK TAX FREE INCOME FUNDS
LANDMARK NATIONAL TAX FREE INCOME FUND
FINANCIAL STATEMENTS
(UNAUDITED)
<PAGE>
Landmark National Tax Free Income Fund
Portfolio Of Investments December 31, 1995
MOODY'S
BOND PRINCIPAL
RATING AMOUNT
(UNAUDITED) ISSUER (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS--90.7%
GENERAL OBLIGATION BONDS -- 31.3%
Aaa Massachusetts State, Construction Loan,
5.625% due 8/1/13...........................$ 50 $ 51,309
Aa Metro, Oregon Open Space Program
Series A, 5.50% due 9/1/10.................. 50 51,536
Baa1 New York, New York, 6.25% due 8/1/17 ....... 200 203,052
Aaa San Anselmo, California, 5.60% due 8/1/11.... 50 51,464
Aa1 Winston Salem, North Carolina,
5.40% due 6/1/11............................ 50 51,840
----------
409,201
----------
HOUSING REVENUE -- 3.9%
Aa Hawaii State Housing Finance & Development
Authority, 5.70% due 7/1/13................ 50 50,465
----------
POWER REVENUE -- 5.0%
A1 New York State Energy Research & Development
Authority, 7.50% due 7/1/25................. 60 65,720
----------
STATE AGENCIES -- 7.3%
Baa1 New York State Dormitory Authority,
5.50% due 5/15/23........................... 100 95,784
----------
TRANSPORTATION REVENUE -- 16.2%
Baa Arapahoe County, Colorado Capital
Improvement, 7.00% due 8/31/26.............. 150 161,394
A1 Port Authority of New York & New Jersey,
4.50% due 10/1/04........................... 50 49,507
----------
210,901
----------
WATER AND SEWER REVENUE -- 11.7%
Aaa Bexar, Texas Metropolitan Water
District, 6.00% due 5/1/15.................. 50 52,580
Aaa Pittsburgh, Pennsylvania Water & Sewer
Systems, 5.50% due 9/1/14................... 50 50,380
Aa Virginia State Resource Authority Water
& Sewer Authority, 5.60% due 10/1/25........ 50 50,255
----------
153,215
----------
OTHER REVENUE -- 15.3%
Aaa Connecticut State Special Tax Obligation,
4.70% due 10/1/04...........................$ 50 $ 50,120
Aaa Oregon State Department
Administration Services Series A, 5.375%
due 11/1/16................................ 50 49,592
Aaa Pleasanton, California School District,
5.60% due 8/1/11............................ 50 52,014
Aaa University of Montana Revenue Facility,
5.00% due 11/15/17.......................... 50 47,570
----------
199,296
----------
TOTAL MUNICIPAL BONDS (Identified Cost $1,121,666) $1,184,582
----------
VARIABLE RATE DEMAND NOTES*
AT AMORTIZED COST -- 3.8%
Jackson County, Mississippi Pollution Control
Authority, 5.90% due 6/1/23..................... 50 50,000
----------
TOTAL INVESTMENTS (Identified Cost $1,171,666)....94.5% 1,234,582
OTHER ASSETS, LESS LIABILITIES................... 5.5 71,545
----------
NET ASSETS.......................................100.0% $1,306,127
====== ==========
* 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>
Landmark National Tax Free Income Fund
Statement Of Assets And Liabilities December 31, 1995
ASSETS:
Investments, at value (Note 1A)
(Identified Cost, $1,171,666)................... $1,234,582
Cash............................................. 13,473
Interest receivable.............................. 22,154
Receivable for shares of beneficial interest sold 37,609
----------
Total assets................................. 1,307,818
----------
LIABILITIES:
Dividends Payable................................ 1,691
----------
Total liabilities............................ 1,691
----------
NET ASSETS for 123,773 shares of beneficial
interest outstanding........................... $1,306,127
==========
NET ASSETS CONSIST OF:
Paid-in capital.................................. $1,243,211
Unrealized appreciation of investments........... 62,916
----------
Total........................................ $1,306,127
==========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST......................... $10.55
======
COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a
4.00% sales charge ($10.55 / 0.96)............ $10.99
======
See notes to financial statements
<PAGE>
Landmark National Tax Free Income Fund
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Period August 17, 1995 (Commencement of Operations) to December 31, 1995
INVESTMENT INCOME (Note 1B):
Interest.................................... $22,587
EXPENSES:
Custodian fees.............................. $15,749
Auditing services........................... 15,000
Legal services.............................. 6,190
Trustee fees................................ 3,600
Transfer agent fees......................... 3,000
Shareholder reports......................... 3,000
Investment advisory fees (Note 2)........... 1,723
Shareholder servicing agents' fees (Note 3B) 1,723
Administrative fees (Note 3A)............... 862
Distribution fees (Note 4).................. 216
Miscellaneous............................... 1,080
-------
Total expenses.......................... 52,143
Less expenses assumed by the administrator.. (46,895)
Less fees paid indirectly (Note 1E)......... (724)
Less aggregate amount waived by Investment
Adviser, Administrator, Shareholder Servicing
Agents and Distributor (Notes 2, 3A, 3B, and 4) (4,524)
-------
Net expenses........................... --
-------
Net investment income.................. 22,587
-------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions............................. --
Unrealized appreciation (depreciation) of
investments--
Beginning of period...................... --
End of period............................ 62,916
-------
Net change in unrealized appreciation
(depreciation)............................ 62,916
-------
Net realized and unrealized gain (loss)
on investments........................... 62,916
-------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ......................... $85,503
=======
See notes to financial statements
<PAGE>
Landmark National Tax Free Income Fund
- ------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
AUGUST 17, 1995
(COMMENCEMENT OF
OPERATIONS) TO
DECEMBER 31, 1995
-----------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income..................................... $ 22,587
Net realized gain (loss) on investment transactions....... --
Net change in unrealized appreciation
(depreciation) of investments............................ 62,916
----------
Net increase (decrease) in net assets
resulting from operations................................ 85,503
----------
DIVIDENDS DECLARED TO SHAREHOLDERS FROM:
Net investment income..................................... (22,707)
----------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (Note 6):
Net proceeds from sale of shares.......................... 1,477,019
Net asset value of shares issued to shareholders from
reinvestment of dividends............................... 21,014
Cost of shares repurchased................................ (254,702)
----------
Net increase in net assets from
transactions in shares of beneficial interest......... 1,243,331
----------
NET INCREASE (DECREASE) IN NET ASSETS .................... 1,306,127
NET ASSETS:
Beginning of period....................................... --
----------
End of period............................................. $1,306,127
==========
See notes to financial statements
<PAGE>
Landmark National Tax Free Income Fund
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AUGUST 17, 1995
(COMMENCEMENT OF
OPERATIONS) TO
DECEMBER 31, 1995
-----------------
Net Asset Value, beginning of period.......................... $ 10.00
-------
Income From Operations:
Net investment income......................................... 0.187
Net realized and unrealized gain (loss) on investments........ 0.551
-------
Total from operations................................. 0.738
-------
Less Dividends From:
Net investment income....................................... (0.188)
-------
Net Asset Value, end of period.............................. $ 10.55
=======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)..................... $1,306
Ratio of expenses to average net assets....................... 0%
Ratio of net investment income to average net assets.......... 5.20%+
Portfolio turnover............................................ 0%
Total return.................................................. 7.43%**
Note: If Agents of the Fund had not voluntarily agreed to waive all of their
fees for the period, the expenses were not reduced for fees paid indirectly
and had expenses been limited to that required by certain state securities
law, the net investment income per share and the ratios would have been as
follows:
Net investment income per share............................... $0.098
-------
Ratios:
Expenses to average net assets................................ 2.50%+
Net investment income to average net assets................... 2.70%+
+ Annualized
** Not annualized
See notes to financial statements
<PAGE>
Landmark National Tax Free Income Fund
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
The Landmark National 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 principles 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.
D. DISTRIBUTIONS -- The Fund 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. 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.
E. FEES PAID INDIRECTLY -- The Fund's custodian bank calculates its fee based on
the Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expense on the Statement of Operations.
F. EXPENSES -- The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and LFBDS. Expenses incurred by the Trust with
respect to any two or more funds or series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that fund.
G. 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 $1,723, all of which was voluntarily
waived for the period ending December 31, 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 fis cal 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 $862, all of which was voluntarily
waived for the period ending December 31, 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, but 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 $1,723, all of which was voluntarily waived
for the period ending December 31, 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 fees 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 $216, all of
which was voluntarily waived for the period ending December 31, 1995.
(5) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $1,121,666 and $0, 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:
August 17, 1995
(Commencement of
Operations) to
December 31, 1995
------------------
Shares sold.............................. 146,053
Shares issued to shareholders from
reinvestment of dividends.............. 2,033
Shares repurchased....................... (24,313)
-------
Net increase............................. 123,773
=======
(7) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at December 31, 1995, as computed on a federal income tax
basis, are as follows:
Aggregate cost............................ $1,171,666
==========
Gross unrealized appreciation............. $ 62,916
Gross unrealized depreciation............. --
----------
Net unrealized appreciation............. $ 62,916
==========
</TABLE>
