LANDMARK FIXED INCOME FUNDS /MA/, N-30B-2, 1996-08-28

LANDMARK FIXED INCOME FUNDS /MA/
N-30B-2, 1996-08-28

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<PAGE>

- --------------------------------------------------------------------------------
A LETTER TO OUR SHAREHOLDERS

Dear Shareholder:

The first half of 1996 represented a difficult time for the U.S. bond
markets. Stronger-than-expected economic growth produced fear among fixed-income
investors that the rate of inflation might accelerate, causing them to bid down
prices of most bonds. Shorter term fixed-income investments such as those in
which Government Income Portfolio invests, however, were less severely affected
by inflation fears, making them a relatively safe haven in a turbulent market.

As described in the Fund's prospectus, the Landmark Funds' investment
adviser, Citibank, N.A., manages the Landmark U.S. Government Income Fund to
generate current income and to preserve the value of its shareholders'
investment. Through its investment in Government Income Portfolio, the Fund
seeks to provide a higher level of current income than is generally available
from money market funds by investing in a high-quality investment portfolio of
securities backed as to the timely payment of principal and interest by the full
faith and credit of the U.S. government.

This Semi-Annual Report reviews the Portfolio's investment activities and
performance and provides a summary of Citibank's perspective on and outlook for
the U.S. financial markets. On behalf of the Board of Trustees of the Landmark
Funds, I want to thank you for your confidence and participation. We look
forward to serving you in the months and years ahead.

/s/ Philip W. Coolidge

Philip W. Coolidge
President
July 19, 1996

- ----------------------------------------
Remember that Mutual Fund Shares:
o Are not bank deposits or FDIC insured
o Are not obligations of or guaranteed
by Citibank or Citicorp Investment
Services
o Are subject to investment risks,
including possible loss of the
principal amount invested

TABLE OF CONTENTS
1 Letter to Shareholders
- ----------------------------------------
2 Market Environment
Fund Snapshot
- ----------------------------------------
3 Portfolio Manager
The Portfolio Manager Responds
- ----------------------------------------
4 Quotes From the Portfolio Manager
Strategy and Outlook
- ----------------------------------------
5 Fund Data
Performance Highlights

LANDMARK U.S. GOVERNMENT INCOME FUND
- ----------------------------------------
6 Statement of Assets and Liabilities
- ----------------------------------------
7 Statement of Operations
- ----------------------------------------
8 Statement of Changes in Net Assets
- ----------------------------------------
9 Financial Highlights
- ----------------------------------------
10 Notes to Financial Statements
- ----------------------------------------
GOVERNMENT INCOME PORTFOLIO
- ----------------------------------------
12 Portfolio of Investments
- ----------------------------------------
13 Statement of Assets and Liabilities
- ----------------------------------------
14 Statement of Operations
- ----------------------------------------
15 Statement of Changes in Net Assets
Financial Highlights
- ----------------------------------------
16 Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT

When the year began, many market-watchers, including Citibank, called for
slow economic growth during the first half of 1996. We expected inflation
pressures to remain low, giving the officials at the Federal Reserve the
elbow-room they needed to lower short-term interest rates further. As a result,
long-term bond yields were expected to fall slightly, creating a positive
environment for both stocks and bonds.

The consensus forecast proved inaccurate. The economy grew faster than we
expected, fueled by higher spending among both businesses and consumers. In
addition, stronger-than-expected employment figures caused concern that the rate
of inflation would accelerate. As a result, the yield on the 30-year U.S.
Treasury bond, considered a benchmark for long-term interest rates, rose during
the period from around 6.0% to almost 6.9%.

However, because of their shorter lives, the short- and intermediate-term
securities in which the Portfolio invests were less severely affected by adverse
economic conditions than their long-term counterparts. While prices on U.S.
Treasury securities with 10-year maturities fell more than eight points,
two-year U.S. Treasury prices fell only about 2.5 points.

- --------------------------------------------------------------------------------
FUND SNAPSHOT

COMMENCEMENT OF OPERATIONS
September 8, 1986

NET ASSETS AS OF 6/30/96
$28.9 million

FUND OBJECTIVE
To generate current income and preserve the value of its
shareholders' investment.

DIVIDENDS
Paid monthly, if any

CAPITAL GAINS
Paid annually, if any

BENCHMARKS
o Lipper Short U.S. Government Funds Average
o Lehman 1-3 Year U.S. Government Index

INVESTMENT ADVISER,
GOVERNMENT INCOME PORTFOLIO
Citibank, N.A.
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER

THOMAS HALLEY
Vice President, Citibank, N.A.

Mr. Halley has been responsible for managing the Portfolio since its inception
after serving as the manager of the Fund since December 1988. He also manages
other commingled investment funds at Citibank as well as institutional insurance
portfolios. Mr. Halley authors the commentary on economic trends for Citibank
Global Asset Management publications. Prior to joining Citibank in 1988, Mr.
Halley was a Senior Fixed Income Portfolio Manager with Brown Brothers Harriman
& Company. He has more than 20 years of experience in the management of taxable
fixed income investments.

- --------------------------------------------------------------------------------
THE PORTFOLIO MANAGER RESPONDS

We actively managed Government Income Portfolio to take advantage of
changing market conditions. Although we maintained the Portfolio's average
duration (a measure of sensitivity to changes in interest rates) on the longer
end of neutral for most of the period in anticipation of a bond market rally, we
offset some of the effects of higher interest rates by shifting assets to the
better performing sectors of the U.S. government securities marketplace.

We increased our investments in government-guaranteed mortgage-backed
securities during the period, reducing our holdings of U.S. Treasury securities
commensurately. As a result, mortgage-backed securities such as those issued by
the Government National Mortgage Association (Ginnie Mae) increased from
approximately 10% of the Portfolio in January to about 15% in June. This shift
benefitted the Portfolio because mortgage-backed securities tend to outperform
U.S. Treasury securities when interest rates are stable or rise modestly.
<PAGE>
- --------------------------------------------------------------------------------
QUOTES FROM THE PORTFOLIO MANAGER

"Despite the recent strength of the economy, there is little evidence that
the underlying structural rate of inflation is rising."

"Our emphasis on mortgage-backed securities benefitted the Portfolio when
short- and intermediate-term interest rates rose."

"If the rate of economic growth continues to rise, chances are good that the
Federal Reserve will raise key short-term interest rates later this year."

- --------------------------------------------------------------------------------
STRATEGY AND OUTLOOK

We expect a relatively strong rate of economic growth to persist through
the second half of 1996. These conditions should continue to fuel concerns about
rising inflation among economists and bond investors and cause the Federal
Reserve to reverse direction and raise short-term interest rates sooner rather
than later this year. If such a change in monetary policy occurs, bond yields --
including those of shorter term bonds -- should rise from current levels.
However, the dramatic rise in yields that has already occurred this year has
left bonds fairly valued, which should limit the risk of further declines even
if the Federal Reserve begins to raise short-term interest rates.

In anticipation of these influences, we are reducing the average duration
of the Portfolio toward the short end of neutral. In addition, we will continue
to shift funds between Treasuries and mortgage-backed securities in order to
participate in those with the most promising prospects in the prevailing
economic environment. Indeed, we strongly believe that such active management of
conservative fixed-income investments makes Landmark U.S. Government Income Fund
an excellent alternative for those who require competitive levels of income and
capital preservation regardless of changes in the economic environment.

<PAGE>

- --------------------------------------------------------------------------------
FUND DATA All Periods Ended June 30, 1996
<TABLE>
<CAPTION>
TOTAL RETURNS
----------------------------------------------------
SINCE
SIX ONE FIVE 9/8/86
MONTHS** YEAR YEARS* INCEPTION*
-------- ---- ------ ----------
<S> <C> <C> <C> <C>
Landmark U.S. Government Income Fund
without Sales Charge ....................... (0.16)% 3.59% 6.19% 6.27%
Lipper Short U.S. Government Funds Average ... 0.96% 4.72% 5.52% 6.45%+
Lehman 1-3 Year U.S. Government Index ........ 1.43% 5.47% 6.27% 7.09%+
Landmark U.S. Government Income Fund
with Maximum Sales Charge of 1.50% ......... (1.66)% 2.03% 5.87% 6.11%

* Average Annual Total Return.
** Not Annualized
+ From 8/31/86

30-Day SEC Yield 5.41%
Income Dividends Per Share $0.234
</TABLE>

- --------------------------------------------------------------------------------
PERFORMANCE HIGHLIGHTS

A $10,000 investment in the Fund made on inception date would have grown to
$17,896 with sales charge (as of 6/30/96). The graph shows how this compares
to our benchmarks over the same period.

The graph includes the initial sales 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.

Landmark
U.S. Landmark
Government U.S. Lipper
Income Government Short Term Lehman 1-3
Fund - Income US Yr. US
Without Fund - Government Government
Sales With Sales Funds Index
Charge Charge Average (Unmanaged)
--------- ---------- ---------- ----------
Aug-86 $10,000 $9,850 $10,000 $10,000
Sep-86 $9,660 $9,515 $9,975 $9,987
Oct-86 $9,682 $9,537 $10,085 $10,074
Nov-86 $9,847 $9,700 $10,193 $10,134
Dec-86 $9,881 $9,733 $10,225 $10,157
Jan-87 $9,982 $9,832 $10,322 $10,228
Feb-87 $10,053 $9,902 $10,383 $10,274
Mar-87 $9,985 $9,835 $10,373 $10,295
Apr-87 $9,792 $9,646 $10,208 $10,223
May-87 $9,788 $9,641 $10,212 $10,238
Jun-87 $9,909 $9,761 $10,325 $10,351
Jul-87 $9,904 $9,755 $10,353 $10,408
Aug-87 $9,866 $9,718 $10,348 $10,424
Sep-87 $9,655 $9,511 $10,263 $10,385
Oct-87 $9,965 $9,816 $10,492 $10,596
Nov-87 $10,025 $9,874 $10,555 $10,665
Dec-87 $10,151 $9,999 $10,634 $10,737
Jan-88 $10,479 $10,322 $10,860 $10,897
Feb-88 $10,619 $10,459 $10,965 $10,991
Mar-88 $10,523 $10,365 $10,953 $11,014
Apr-88 $10,495 $10,337 $10,956 $11,026
May-88 $10,455 $10,298 $10,938 $11,020
Jun-88 $10,633 $10,473 $11,060 $11,130
Jul-88 $10,592 $10,433 $11,062 $11,135
Aug-88 $10,574 $10,415 $11,079 $11,163
Sep-88 $10,744 $10,583 $11,222 $11,293
Oct-88 $10,869 $10,706 $11,341 $11,407
Nov-88 $10,780 $10,618 $11,294 $11,378
Dec-88 $10,785 $10,624 $11,314 $11,403
Jan-89 $10,922 $10,758 $11,413 $11,493
Feb-89 $10,818 $10,656 $11,407 $11,495
Mar-89 $10,856 $10,693 $11,452 $11,543
Apr-89 $11,044 $10,878 $11,606 $11,731
May-89 $11,305 $11,136 $11,781 $11,896
Jun-89 $11,595 $11,421 $11,995 $12,118
Jul-89 $11,818 $11,641 $12,165 $12,296
Aug-89 $11,596 $11,422 $12,079 $12,223
Sep-89 $11,628 $11,453 $12,138 $12,294
Oct-89 $11,955 $11,776 $12,335 $12,485
Nov-89 $12,061 $11,880 $12,437 $12,597
Dec-89 $12,080 $11,899 $12,486 $12,645
Jan-90 $11,867 $11,689 $12,467 $12,659
Feb-90 $11,880 $11,702 $12,524 $12,726
Mar-90 $11,864 $11,686 $12,562 $12,764
Apr-90 $11,671 $11,496 $12,576 $12,795
May-90 $12,059 $11,878 $12,763 $12,992
Jun-90 $12,265 $12,081 $12,893 $13,128
Jul-90 $12,441 $12,254 $13,044 $13,287
Aug-90 $12,260 $12,077 $13,065 $13,335
Sep-90 $12,357 $12,172 $13,162 $13,440
Oct-90 $12,523 $12,336 $13,296 $13,589
Nov-90 $12,807 $12,615 $13,442 $13,721
Dec-90 $13,034 $12,839 $13,593 $13,883
Jan-91 $13,183 $12,985 $13,716 $14,014
Feb-91 $13,258 $13,059 $13,795 $14,103
Mar-91 $13,309 $13,110 $13,870 $14,198
Apr-91 $13,442 $13,240 $13,998 $14,334
May-91 $13,510 $13,307 $14,078 $14,420
Jun-91 $13,454 $13,252 $14,107 $14,474
Jul-91 $13,659 $13,454 $14,244 $14,598
Aug-91 $13,982 $13,772 $14,445 $14,798
Sep-91 $14,324 $14,109 $14,613 $14,955
Oct-91 $14,459 $14,242 $14,762 $15,116
Nov-91 $14,535 $14,317 $14,902 $15,272
Dec-91 $14,833 $14,610 $15,152 $15,504
Jan-92 $14,733 $14,512 $15,063 $15,484
Feb-92 $14,802 $14,580 $15,024 $15,530
Mar-92 $14,777 $14,555 $14,937 $15,526
Apr-92 $14,863 $14,640 $15,059 $15,667
May-92 $15,058 $14,832 $15,217 $15,813
Jun-92 $15,215 $14,987 $15,375 $15,973
Jul-92 $15,410 $15,179 $15,560 $16,156
Aug-92 $15,512 $15,279 $15,687 $16,287
Sep-92 $15,649 $15,414 $15,816 $16,440
Oct-92 $15,502 $15,270 $15,693 $16,346
Nov-92 $15,483 $15,251 $15,668 $16,322
Dec-92 $15,657 $15,422 $15,818 $16,474
Jan-93 $15,866 $15,628 $16,017 $16,647
Feb-93 $16,022 $15,781 $16,170 $16,780
Mar-93 $16,078 $15,837 $16,221 $16,832
Apr-93 $16,177 $15,934 $16,312 $16,935
May-93 $16,125 $15,883 $16,293 $16,894
Jun-93 $16,303 $16,059 $16,444 $17,021
Jul-93 $16,295 $16,051 $16,488 $17,058
Aug-93 $16,534 $16,286 $16,650 $17,200
Sep-93 $16,600 $16,351 $16,697 $17,255
Oct-93 $16,637 $16,387 $16,725 $17,293
Nov-93 $16,555 $16,307 $16,677 $17,296
Dec-93 $16,609 $16,359 $16,737 $17,365
Jan-94 $16,709 $16,458 $16,850 $17,473
Feb-94 $16,524 $16,276 $16,711 $17,366
Mar-94 $16,330 $16,085 $16,538 $17,278
Apr-94 $16,208 $15,965 $16,421 $17,212
May-94 $16,240 $15,997 $16,391 $17,236
Jun-94 $16,238 $15,995 $16,390 $17,279
Jul-94 $16,408 $16,162 $16,523 $17,435
Aug-94 $16,441 $16,194 $16,561 $17,492
Sep-94 $16,353 $16,108 $16,503 $17,452
Oct-94 $16,369 $16,123 $16,512 $17,492
Nov-94 $16,280 $16,036 $16,446 $17,419
Dec-94 $16,324 $16,079 $16,483 $17,452
Jan-95 $16,569 $16,320 $16,687 $17,689
Feb-95 $16,797 $16,545 $16,926 $17,930
Mar-95 $16,884 $16,631 $17,014 $18,030
Apr-95 $17,060 $16,804 $17,160 $18,191
May-95 $17,452 $17,190 $17,498 $18,502
Jun-95 $17,540 $17,277 $17,586 $18,602
Jul-95 $17,520 $17,258 $17,607 $18,676
Aug-95 $17,646 $17,381 $17,735 $18,788
Sep-95 $17,735 $17,469 $17,836 $18,880
Oct-95 $17,879 $17,611 $17,995 $19,037
Nov-95 $18,061 $17,790 $18,168 $19,199
Dec-95 $18,198 $17,925 $18,319 $19,345
Jan-96 $18,327 $18,052 $18,450 $19,509
Feb-96 $18,175 $17,902 $18,366 $19,433
Mar-96 $18,098 $17,827 $18,343 $19,417
Apr-96 $18,059 $17,788 $18,347 $19,437
May-96 $18,056 $17,786 $18,369 $19,480
Jun-96 $18,169 $17,896 $18,492 $19,622

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>

Landmark U.S. Government Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1996 (unaudited)

<TABLE>
<S> <C>
ASSETS:
Investment in Government Income Portfolio, at value (Note 1) ............... $28,954,575
Receivable for shares of beneficial interest sold .......................... 100
Receivable from the Administrator .......................................... 58,675
-----------
Total assets ........................................................... 29,013,350
-----------

LIABILITIES:
Payable for shares of beneficial interest repurchased ...................... 129,540
Accrued expenses and other liabilities ..................................... 26,063
-----------
Total liabilities ...................................................... 155,603
-----------
NET ASSETS for 3,027,913 shares of beneficial interest outstanding ......... $28,857,747
===========

NET ASSETS CONSIST OF:
Paid-in capital ............................................................ $32,606,609
Accumulated net realized loss .............................................. (2,959,167)
Unrealized depreciation .................................................... (877,237)
Undistributed net investment income ........................................ 87,542
-----------
Total .................................................................. $28,857,747
===========

NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST ...... $9.53
=====

COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a 1.50% sales charge ($9.53/0.985) $9.68
=====

See notes to financial statements
</TABLE>
<PAGE>

Landmark U.S. Government Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (unaudited)

<TABLE>
<S> <C> <C>
INVESTMENT INCOME (Note 1B):
Interest Income from Government Income Portfolio ............ $958,550
Allocated Expenses from Government Income Portfolio ......... (55,076)
--------
Net investment income from Government Income Portfolio .. $ 903,474

EXPENSES:
Shareholder Servicing Agents' fees (Note 2B) ................ 39,223
Administrative fees (Note 2A) ............................... 39,223
Distribution fees (Note 3) .................................. 23,534
Shareholder reports ......................................... 12,787
Auditing fees ............................................... 11,200
Legal fees .................................................. 8,500
Trustees' fees .............................................. 6,753
Custodian fees .............................................. 3,000
Transfer agent fees ......................................... 2,000
Miscellaneous ............................................... 5,416
--------
Total expenses .......................................... 151,636
Less aggregate amount waived by Administrator and Distributor
(Notes 2A and 3) (62,757)
Expenses Assumed by the Administrator (Note 6) .......... (18,275)
--------
Net expenses ............................................ 70,604
---------
Net investment income ................................... 832,870
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM GOVERNMENT
INCOME PORTFOLIO:
Net realized gain (loss) .................................... $ (44,277)
Net change in unrealized appreciation (depreciation) ........ (843,791)
---------
Net realized and unrealized gain (loss) from Government
Income Portfolio ..................................... (888,068)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ........ $ (55,198)
=========

See notes to financial statements
</TABLE>

<PAGE>

Landmark U.S. Government Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income ........................................... $ 832,870 $ 2,428,120
Net realized gain (loss) ........................................ (44,277) 696,470
Net change in unrealized appreciation (depreciation) ............ (843,791) 2,013,487
----------- -----------
Net increase (decrease) in net assets resulting from operations (55,198) 5,138,077
----------- -----------

DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income ........................................... (764,137) (2,440,326)
----------- -----------

TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (Note 5):
Net proceeds from sale of shares ................................ 1,443,847 3,008,033
Net asset value of shares issued to shareholders
from reinvestment of dividends ................................ 754,504 2,420,954
Cost of shares repurchased ...................................... (7,846,653) (25,734,586)
----------- -----------
Net decrease in net assets from transactions in shares of
beneficial interest ........................................... (5,648,302) (20,305,599)
----------- -----------
NET DECREASE IN NET ASSETS ...................................... (6,467,637) (17,607,848)

NET ASSETS:
Beginning of period ............................................. 35,325,384 52,933,232
----------- -----------

End of period (including undistributed net investment
income of $87,542 and $18,809, respectively) .................. $28,857,747 $35,325,384
=========== ===========

See notes to financial statements
</TABLE>

<PAGE>

Landmark U.S. Government Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOUR MONTHS
SIX MONTHS YEAR ENDED ENDED
ENDED DECEMBER 31, DECEMBER 31, YEAR ENDED AUGUST 31,
JUNE 30, 1996 -------------------- 1993++ --------------------------
(UNAUDITED) 1995 1994++ (NOTE 1F) 1993++ 1992++ 1991++
------------- ---- ------ -------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period ...... $ 9.78 $ 9.28 $ 9.91 $10.01 $ 9.85 $ 9.42 $ 8.93
------ ------ ------ ------ ------ ------ ------
Income From Operations:
Net investment income ..................... 0.258 0.543 0.466 0.183 0.448 0.591 0.710
Net realized and unrealized gain (loss) ... (0.274) 0.500 (0.635) (0.138) 0.183 0.413 0.499
------ ------ ------ ------ ------ ------ ------
Total from operations ................ (0.016) 1.043 (0.169) 0.045 0.631 1.004 1.209
------ ------ ------ ------ ------ ------ ------
Less Distributions From:
Net investment income ................... (0.234) (0.543) (0.461) (0.145) (0.464) (0.574) (0.719)
In excess of net investment income ...... -- -- -- -- (0.007) -- --
------ ------ ------ ------ ------ ------ ------
Total from distributions ............ (0.234) (0.543) (0.461) (0.145) (0.471) (0.574) (0.719)
------ ------ ------ ------ ------ ------ ------
Net Asset Value, end of period ............ $ 9.53 $ 9.78 $ 9.28 $ 9.91 $10.01 $ 9.85 $ 9.42
====== ====== ====== ====== ====== ====== ======

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) . $28,858 $35,325 $52,933 $79,306 $82,114 $56,159 $25,556
Ratio of expenses to average net assets ... 0.80%(A)+ 0.80%(A) 0.80%(A) 0.80%+ 0.80% 0.51% 0.97%
Ratio of net investment income to average
net assets .............................. 5.31%+ 5.38% 4.72% 4.34%+ 4.46% 6.03% 7.71%
Portfolio turnover (B) .................... -- -- 22% 26% 111% 161% 42%
Total return .............................. (0.16)%** 11.48% (1.72)% 0.45%** 6.59% 10.94% 14.04%

Note: If Agents of the Fund for the periods indicated and Agents of Government Income Portfolio for the period May 1, 1994 to
December 31, 1994, for the year ended December 31, 1995 and for the six months ended June 30, 1996 had not voluntarily waived
a portion of their fees and assumed Fund expenses, the net investment income per share and the ratios would have been as
follows:

Net investment income per share ........... $0.231 $0.499 $0.421 $0.164 $0.400 $0.503 $0.659
Ratios:
Expenses to average net assets ............ 1.32%(A)+ 1.23%(A) 1.26%(A) 1.27%+ 1.27% 1.41% 1.52%
Net investment income to average net assets 4.79%+ 4.95% 4.26% 3.88%+ 3.98% 5.13% 7.16%

<FN>
** Not annualized
+ Annualized
(A)Includes the Fund's share of Government Income Portfolio allocated expenses for the periods subsquent to May, 1 1994.
(B)Portfolio turnover represents the rate of portfolio activity for the period while the Fund was making investments directly
in securities. The portfolio turnover rate for the period since the Fund transferred all of its investable assets to the
Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report.
++ On May 1, 1994, the Fund began investing all its investable assets in Government Income Portfolio.

See notes to financial statements
</TABLE>

<PAGE>

Landmark U.S. Government Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(1) SIGNIFICANT ACCOUNTING POLICIES
The Landmark U.S. Government Income Fund (the "Fund") is a separate diversified
series of Landmark Fixed 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 Fund invests all of
its investable assets in Government Income Portfolio (the "Portfolio"), a
management investment company for which Citibank, N.A. ("Citibank") serves as
Investment Adviser. Landmark Funds Broker-Dealer Services, Inc. ("LFBDS") acts
as the Trust's Administrator and Distributor. Citibank also serves as
Sub-Administrator and makes Fund shares available to customers as Shareholder
Servicing Agent.

The Trust seeks to achieve the Fund's investment objective to provide
shareholders with monthly dividends, as well as to protect the value of the
investment of shareholders by investing all of its investable assets in the
Portfolio, an open-end, diversified management investment company having the
same investment objective and policies and substantially the same investment
restrictions as the Fund. The value of such investment reflects the Fund's
proportionate interest (56.4% at June 30, 1996) in the net assets of the
Portfolio.

The financial statements of the Portfolio, including the portfolio of
investments, are contained elsewhere in this report and should be read in
conjunction with the Fund's financial statements.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosure in the financial statements. Actual
results could differ from those estimates.

The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting principles and are as follows:

A. INVESTMENT VALUATION -- Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements, which are included
elsewhere in this report.

B. INVESTMENT INCOME -- The Fund earns income, net of Portfolio expenses, daily
based on its investment in the Portfolio.

C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable 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. At December 31, 1995, the Fund, for federal income tax
purposes, had a capital loss carryover of $2,906,093, of which $835,037 will
expire on December 31, 1996, $1,741,548 will expire on December 31, 2002 and
$329,508 will expire on December 31, 2003. Such capital loss carryover will
reduce the Fund's taxable income arising from future net realized capital 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. 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. The Fund's share of the Portfolio's expenses are
charged against and reduce the amount of the Fund's investment in the Portfolio.

E. DISTRIBUTIONS -- Distributions to shareholders are recorded on ex-dividend
date. The amount and character of income and net realized gains to be
distributed are determined in accordance with income tax rules and regulations,
which may differ from generally accepted accounting principles. These
differences are attributable to permanent book and tax accounting differences.

Reclassifications are made to the Fund's capital accounts to reflect income and
net realized gains available for distribution (or available capital loss
carryovers) under income tax rules and regulations. For the year ended December
31, 1995, the fund reclassified $730,266 to accumulated net realized loss on
investments from paid-in capital.

F. CHANGE IN FISCAL YEAR END -- Effective September 1, 1993, the Fund changed
its fiscal year end from August 31 to December 31.

G. OTHER -- All the net investment income and realized and unrealized gain and
loss of the Portfolio is allocated pro rata, based on respective ownership
interests, among the Fund and the other investors in the Portfolio at the time
of such determination. Investment transactions are accounted for on a trade date
basis.

(2) ADMINISTRATIVE SERVICES PLAN
The Trust has adopted an Administrative Services Plan which provides that the
Trust, on behalf of the Fund, 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
Trust Administrative Services Plan, the aggregate of the fees paid to the
Administrator from the Fund, the fees paid to the Shareholder Servicing Agents
from the Fund under such Plan 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 fees paid to the Administrator, as compensation
for overall administrative services and general office facilities, may not
exceed an annual rate of 0.25% of the Fund's average daily net assets. The
Administrative fees amounted to $39,223, all of which was voluntarily waived for
the six months ended June 30, 1996. 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 or 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
0.25% 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 $39,223, for the six months ended June 30,
1996.

(3) 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 distribution fees amounted to $23,534, all of which was
voluntarily waived for the six months ended June 30, 1996. The Distributor may
also receive an additional fee from the Fund 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.

(4) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio for the six
months ended June 30, 1996 aggregated $1,446,444 and $8,039,390, respectively.

(5) 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:

SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
-------- ----------
Shares sold ........................ 149,958 311,521
Shares issued to shareholders
from reinvestment of dividends ... 78,438 51,882
Shares repurchased ................. (811,670) (2,655,041)
-------- ----------
Net decrease ....................... (583,274) (2,091,638)
======== ==========

(6) ASSUMPTION OF EXPENSES
LFBDS has voluntarily agreed to pay a portion of the unwaived expenses of the
Fund for the six months ended June 30, 1996 which amounted to $18,275.
<PAGE>
Government Income Portfolio
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited)

PRINCIPAL
AMOUNT
ISSUER (000 OMITTED) VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION--15.9%
6.50%, 2009 ........................ $ 285 $ 265,143
6.50%, 2011 ........................ 4,732 4,597,048
6.50%, 2019 ........................ 1,545 1,501,529
8.00%, 2006 ........................ 250 256,506
8.00%, 2007 ........................ 241 247,113
8.00%, 2017 ........................ 568 573,113
8.00%, 2021 ........................ 261 263,255
8.00%, 2022 ........................ 202 203,833
9.50%, 2016 ........................ 3 3,140
9.50%, 2017 ........................ 63 67,454
9.50%, 2018 ........................ 49 52,509
9.50%, 2019 ........................ 65 69,432
9.50%, 2020 ........................ 59 63,240
-----------
8,163,315
-----------
U.S. GOVERNMENT
OBLIGATIONS--77.4%
United States Treasury Notes,
7.25% due 8/31/96 .................. $ 6,605 $ 6,622,569
5.125% due 2/28/98 ................. 8,000 7,882,480
6.125% due 5/15/98 ................. 8,000 8,000,000
5.375% due 5/31/98 ................. 1,675 1,652,756
6.875% due 3/31/00 ................. 14,100 14,304,873
5.875% due 11/15/05 ................ 1,400 1,318,842
-----------
39,781,520
-----------
SHORT-TERM OBLIGATIONS--5.4%
United States Treasury Bill
due 8/29/96 ....................... 55 54,300
United States Treasury Bill
due 9/12/96 ....................... 55 54,302
United States Treasury Bill
due 9/19/96 ....................... 2,681 2,649,723
-----------
2,758,325
-----------
TOTAL INVESTMENTS
(Identified Cost $52,161,236) ..... 98.7% 50,703,160
OTHER ASSETS
LESS LIABILITIES .................. 1.3 673,931
------ -----------
NET ASSETS ......................... 100.0% $51,377,091
===== ===========
FUTURES CONTRACTS
UNDERLYING
FACE
EXPIRATION AMOUNT AT UNREALIZED
DATE VALUE GAIN/LOSS
---------- ---------- ----------
Purchased
200 U.S. Treasury Note ............. Sept 96 7,826,813 $ 2,375
100 U.S. Treasury Note ............. Sept 96 3,762,500 (83,125)
--------
$(80,750)
========

See notes to financial statements
<PAGE>
Government Income Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1996 (unaudited)

Assets:
Investments at value (Note 1A) (Identified Cost, $52,161,236) ... $50,703,160
Cash ............................................................ 60,515
Interest receivable ............................................. 670,571
-----------
Total assets ................................................ 51,434,246
-----------

LIABILITIES:
Payable to affiliates--Investment advisory fees (Note 2) ........ 16,127
Payable for daily variation on futures contracts ................ 41,028
-----------
Total Liabilities ............................................. 57,155
-----------
NET ASSETS ...................................................... $51,377,091
===========

REPRESENTED BY:
Paid-in capital for beneficial interests ........................ $51,377,091
===========

See notes to financial statements

<PAGE>

Government Income Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (unaudited)

<TABLE>
<S> <C> <C>
INTEREST INCOME (Note 1B): $1,719,905

EXPENSES:
Investment advisory fees (Note 2) .......................... $ 98,581
Administrative fees (Note 3) ............................... 14,106
Expense fees (Note 6) ...................................... 1,000
---------
Total expenses ........................................... 113,687

Less aggregate amount waived by the Investment Adviser and
Administrator (Note 2 and Note 3) ........................ (14,945)
---------
Net Expense ............................................... 98,742
----------
Net investment income .................................... 1,621,163
----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from investment transactions and
futures contracts ........................................ (69,631)
Unrealized appreciation (depreciation) of investments and
futures contracts--
Beginning of period .................................... 55,675
End of period ........................................... (1,538,826)
---------
Net change in unrealized appreciation (depreciation) of
investments and futures contracts ...................... (1,594,501)
----------
Net realized and unrealized loss on investments and
futures contracts ...................................... (1,664,132)
----------

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $ (42,969)
==========

See notes to financial statements
</TABLE>

<PAGE>

Government Income Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1995
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income ................................................... $ 1,621,163 $ 2,972,965
Net realized gain (loss) on investment transactions and futures contracts (69,631) 883,687
Net change in unrealized appreciation (depreciation) of investments and
futures contracts ...................................................... (1,594,501) 2,133,343
----------- -----------
Net increase (decrease) in net assets resulting from operations (42,969) 5,989,995
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from contributions ............................................. 14,736,415 18,686,471
Value of withdrawals .................................................... (16,461,648) (27,204,245)
----------- -----------
Net increase (decrease) in net assets from capital transactions ..... (1,725,233) (8,517,774)
----------- -----------
NET DECREASE IN NET ASSETS: ............................................. (1,768,202) (2,527,779)
NET ASSETS:
Beginning of period ..................................................... 53,145,293 55,673,072
----------- -----------
End of period ........................................................... $51,377,091 $53,145,293
=========== ===========

See notes to financial statements
</TABLE>

Government Income Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 1, 1994
SIX MONTHS ENDED (COMMENCMENT OF
JUNE 30, 1995 YEAR ENDED OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995 DECEMBER 31, 1994
-------------- ----------------- -----------------
<S> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000's omitted) .................. $51,377 $53,145 55,673
Ratio of expenses to average net assets .................... 0.35%* 0.36% 0.43%*
Ratio of net investment income to average net assets ....... 5.75%* 5.80% 5.27%*
Portfolio turnover ......................................... 67% 284% 40%

Note: If Agents of the Portfolio had not voluntarily waived a portion of their fees during the period indicated,
the ratios would have been as follows:

RATIOS:
Expenses to average net assets ............................. 0.40%* 0.40% 0.44%*
Net investment income to average net assets ................ 5.70%* 5.76% 5.26%*
* Annualized

See notes to financial statements
</TABLE>

<PAGE>

Government Income Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)

(1) SIGNIFICANT ACCOUNTING POLICIES
Government Income Portfolio (the "Portfolio"), a separate series of The Premium
Portfolios (the "Portfolio Trust"), is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company which was organized as a trust under the laws of the State of New York.
The Declaration of Trust permits the Trustees to issue beneficial interests in
the Portfolio. The Investment Adviser of the Portfolio is Citibank, N.A.
("Citibank"). Signature Financial Group (Grand Cayman), Ltd. ("SFG") acts as the
Portfolio's Administrator.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts to and disclosure in the financial statements.
Actual results could differ from those estimates.

The significant accounting policies consistently followed by the Portfolio 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 pricing services approved by the Board of Trustees, which take 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 on quoted prices or exchange or over-the
counter prices. 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 consists of interest accrued and discount earned,
adjusted for amortization of premium or discount on long-term debt securities
when required for U.S. federal income tax purposes. Gain and loss from principal
paydowns are recorded as income.

C. U.S. FEDERAL INCOME TAXES -- The Portfolio is considered a partnership under
the U.S. Internal Revenue Code. Accordingly, no provision for federal income
taxes is necessary.

D. EXPENSES -- The Portfolio bears all costs of its operations other than
expenses specifically assumed by Citibank and SFG. Expenses incurred by the
Portfolio Trust with respect to any two or more portfolios or series are
allocated in proportion to the average net assets of each portfolio, except when
allocations of direct expenses to each portfolio can otherwise be made fairly.
Expenses directly attributable to a portfolio are charged to that portfolio.

E. REPURCHASE AGREEMENTS -- It is the policy of the Portfolio to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System or to have segregated within the custodian bank's
vault, all securities held as collateral in support of repurchase agreements.
Additionally, procedures have been established by the Portfolio to monitor, on a
daily basis, the market value of the repurchase agreement's underlying
investments to ensure the existence of a proper level of collateral.

F. TBA PURCHASE COMMITMENTS -- The Portfolio enters into "TBA" (to be announced)
purchase commitments to purchase securities for a fixed unit price at a future
date beyond customary settlement time. Although the unit price has been
established, the principal value has not been finalized. However, the amount of
the commitment will not fluctuate more than 2.0% from the principal amount. The
Portfolio holds, and maintains until the settlement date, cash or high-grade
debt obligations in an amount sufficient to meet the purchase price. TBA
purchase commitments may be considered securities in themselves, and involve a
risk of loss if the value of the security to be purchased declines prior to the
settlement date, which risk is in addition to the risk of decline in the value
of the Portfolio's other assets. Unsettled TBA purchase commitments are valued
at the current market value of the underlying securities, generally according to
the procedures described under Note 1A.

Although the Portfolio will generally enter into TBA purchase commitments with
the intention of acquiring securities for its portfolio, the Portfolio may
dispose of a commitment prior to settlement if the Portfolio's Adviser deems it
appropriate to do so.

G. FUTURES CONTRACTS -- The Portfolio may engage in futures transactions.The
Portfolio may use futures contracts in order to protect the Portfolio from
fluctuation in interest rates without actually buying or selling debt
securities, or to manage the effective maturity or duration of fixed income
securities in the Portfolio in an effort to reduce potential losses or enhance
potential gains. The underlying value of a futures contract is incorporated
within unrealized appreciation/depreciation in the Portfolio of Investments
under the caption "Futures Contracts" The Portfolio had open futures contracts
at June 30, 1996 with an unrealized depreciation of $80,750. Buying futures
contracts tends to increase the Portfolio's exposure to the underlying
instrument.Selling futures contracts tends to either decrease the Portfolio's
exposure to the underlying instrument, or to hedge other fund investments.

Upon entering into a futures contract, the Portfolio is required to deposit with
the broker an amount of cash or cash equivalents equal to a certain percentage
of the contract amount. This is known as the "initial margin". Subsequent
payments ("variation margin") are made or received by the Portfolio each day,
depending on the daily fluctuation of the value of the contract.The daily
changes in contract value are recorded as unrealized gains or losses and the
Portfolio recognizes a realized gain or loss when the contract is closed.
Futures contracts are valued at the settlement price established by the board of
trade or exchange on which they are traded.

There are several risks in connection with the use of futures contracts as a
hedging device. The change in the value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in the value of the hedged instruments. In addition,
there is the risk the Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market. Futures contracts involve,
to varying degrees, risk of loss in excess of the futures variation margin
reflected in the Statement of Assets and Liabilities.

H. 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.

(2) INVESTMENT ADVISORY FEES
The investment advisory fees paid to Citibank, as compensation for overall
investment management services, amounted to $98,581, of which $1,479 was
voluntarily waived for the six months ended June 30, 1996. The investment
advisory fees are computed at the annual rate of 0.35% of the Portfolio's
average daily net assets.

(3) ADMINISTRATIVE FEES
Under the terms of an Administrative Services Agreement, the administrative fees
paid to the Administrator, as compensation for overall administrative services
and general office facilities, are computed at the annual rate of 0.05% of the
Portfolio's average daily net assets. The administrative fees amounted to
$14,106 of which $13,466 was voluntarily waived, for the six months ended June
30, 1996. Citibank acts as Sub-Administrator and performs such duties and
receives such compensation from SFG as from time to time is agreed to by SFG and
Citibank. The Portfolio 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 Portfolio from the Administrator or its
affiliates. Certain of the officers and a Trustee of the Portfolio are officers
or directors of the Administrator or its affiliates.

(4) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of U.S. Government securities, other than short-term
obligations, aggregated $32,813,985 and $33,145,469, respectively, for the six
months ended June 30, 1996.

(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at June 30, 1996, as computed on a federal income tax basis,
are as follows:

Aggregate cost $52,161,236
===========
Gross unrealized appreciation $ 25,194
Gross unrealized depreciation (1,483,270)
-----------
Net unrealized depreciation $(1,458,076)
===========

(6) EXPENSE FEES
SFG has entered into an expense agreement with the Portfolio. SFG has agreed to
pay all of the ordinary operating expenses (excluding interest, taxes, brokerage
commissions, litigation costs or other extraordinary costs or expenses) of the
Portfolio, other than fees paid under the Advisory Agreement and Administrative
Services Agreement. The Agreement may be terminated by either party upon not
less than 30 days nor more than 60 days written notice.

The Portfolio has agreed to pay SFG an expense fee on an annual basis, accrued
daily and paid monthly; provided, however, that such fee shall not exceed the
amount such that immediately after any such payment the aggregate ordinary
expenses of the Portfolio and expenses waived by the Administrator would, on an
annual basis, exceed an agreed upon rate, currently 0.40% of the Portfolio's
average daily net assets.

(7) LINE OF CREDIT
The Portfolio, 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 $15 million 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, 1996 the commitment fee
allocated to the Portfolio was $157. 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:
Citibank, N.A.
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT, (800) 285-1701,
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,
Registered Representative 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
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Donald B. Otis
E. Kirby Warren
William S. Woods, Jr.

SECRETARY
Thomas M. Lenz*

TREASURER
John R. Elder*

*Affiliated Person of Administrator and Distributor

- --------------------------------|--|---------------------------------

INVESTMENT ADVISER
(OF GOVERNMENT INCOME PORTFOLIO)
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
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

CUSTODIAN
Investors Bank and Trust Company
One Lincoln Plaza, Boston, MA 02111

AUDITORS
Price Waterhouse LLP
160 Federal 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.

FI/USG/S/96 Printed on Recycled Paper [symbol]

[LOGO] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.

LANDMARK
U.S. GOVERNMENT
INCOME FUND

SEMI-ANNUAL
REPORT
June 30, 1996
<PAGE>
- --------------------------------------------------------------------------------
A LETTER TO OUR SHAREHOLDERS

Dear Shareholder:

The first half of 1996 represented a difficult time for the U.S. bond
markets. Stronger-than-expected economic growth produced fear among fixed-income
investors that the rate of inflation might accelerate, causing them to bid down
prices of most bonds. Intermediate and long-term bonds, such as those in which
the Landmark Intermediate Income Fund invests, were among the most significantly
affected.

As the Fund's prospectus describes, The Landmark Funds' investment adviser,
Citibank, N.A., manages the Landmark Intermediate Income Fund to generate a high
level of current income and preserve the value of its shareholders' investment.
The Fund seeks to provide an attractive yield from a high-quality investment
portfolio consisting primarily of intermediate-term securities from a number of
fixed-income market sectors.

This Semi-Annual Report reviews the Fund's investment activities and
performance and provides a summary of Citibank's perspective on and outlook for
the U.S. financial markets. On behalf of the Board of Trustees of the Landmark
Funds, I want to thank you for your confidence and participation. We look
forward to serving you in the months and years ahead.

/s/ Philip W. Coolidge

Philip W. Coolidge
President
July 19, 1996

- ------------------------------------------
Remember that Mutual Fund Shares:
o Are not bank deposits or FDIC insured
o Are not obligations of or guaranteed by
Citibank or Citicorp Investment Services
o Are subject to investment risks,
including possible loss of the principal
amount invested.
- ------------------------------------------
TABLE OF CONTENTS
1 Letter to Shareholders
- ------------------------------------------
2 Market Environment
Fund Snapshot
- ------------------------------------------
Portfolio Manager
3 The Portfolio Manager Responds
Quotes from the Portfolio Manager
- ------------------------------------------
Strategy and Outlook
4 Landmark Intermediate
Income Fund--by the Numbers
- ------------------------------------------
5 Fund Data
Performance Highlights
- ------------------------------------------
6 Portfolio of Investments
- ------------------------------------------
8 Statement of Assets and Liabilities
- ------------------------------------------
9 Statement of Operations
- ------------------------------------------
10 Statement of Changes in Net Assets
- ------------------------------------------
11 Financial Highlights
- ------------------------------------------
12 Notes to Financial Statements
<PAGE>
- -------------------------------------------------------------------------------
MARKET ENVIRONMENT

The consensus forecast proved inaccurate. The economy grew faster than we
expected, fueled by higher spending among both businesses and consumers. In
addition, stronger-than-expected employment figures caused concern among
fixed-income investors that the rate of inflation would accelerate. As a result,
the yield on the 30-year U.S. Treasury bond, considered a benchmark for
long-term interest rates, rose during the period from around 6.0% to almost
6.9%.

Prices of the intermediate and long-term bonds in which the Fund invests
were among the most severely affected by higher interest rates. Prices of U.S.
Treasury securities with 10-year maturities fell about eight points and prices
of 30-year Treasury bonds fell more than 13 points, significantly more than the
2.5 point decrease in prices of two-year U.S. Treasuries.

- --------------------------------------------------------------------------------
FUND SNAPSHOT

COMMENCEMENT OF OPERATIONS
June 25, 1993

NET ASSETS AS OF 6/30/96
$46.0 million

FUND OBJECTIVE
To generate a high level of current income and preserve the value of its
shareholders' investments

DIVIDENDS
Paid monthly

CAPITAL GAINS
Distributed annually, if any

BENCHMARKS
o Lipper Intermediate Investment Grade Funds Average
o Lehman Aggregate Bond Index

INVESTMENT ADVISER
Citibank, N.A.
<PAGE>

- --------------------------------------------------------------------------------
PORTFOLIO MANAGER

MARK LINDBLOOM
Vice President, Citibank, N.A.

Mr. Lindbloom has been responsible for managing the Landmark Intermediate Income
Fund since its inception in June 1993. He also manages the fixed income portion
of the Balanced Portfolio and intermediate maturity fixed income portfolios for
investment advisory and institutional accounts at Citibank. Prior to joining
Citibank in 1986, Mr. Lindbloom was employed by Brown Brothers Harriman
& Company, where he managed discretionary corporate portfolios, holding fixed
income assets.

- --------------------------------------------------------------------------------
THE PORTFOLIO MANAGER RESPONDS

We actively managed the Intermediate Income Fund to take advantage of
changing market conditions. Although we maintained the Fund's average duration
(a measure of sensitivity to changes in interest rates) on the longer end of
neutral for most of the period in anticipation of a bond market rally, we offset
some of the effects of higher long-term interest rates by shifting assets to the
better performing sectors of the overall bond market.

We reduced our investments in U.S. Treasury securities and corporate bonds
in favor of mortgage-backed and asset-backed securities, enabling us to capture
incrementally higher yields in a rising interest-rate environment. We reduced
our corporate bond holdings as the difference in yields between corporate bonds
and U.S. Treasury securities narrowed to the point at which we are no longer
adequately compensated for the greater risks corporate bonds entail. In
addition, the shift toward asset-backed and mortgage-backed securities
benefitted the Fund as these securitized investments tend to outperform U.S.
Treasury securities when interest rates are stable or rise modestly.

- --------------------------------------------------------------------------------
QUOTES FROM THE PORTFOLIO MANAGER

"Despite the recent strength of the economy, there is little evidence that the
underlying structural rate of inflation is rising."

"Our emphasis on mortgage-backed and asset-backed securities helped the
Portfolio when long-term interest rates rose."

"If the rate of economic growth continues to rise, chances are good that the
Federal Reserve will raise key short-term interest rates later this year."
<PAGE>
- --------------------------------------------------------------------------------
STRATEGY AND OUTLOOK

We expect a relatively strong rate of economic growth to persist through
the second half of 1996. These conditions should continue to fuel concerns about
rising inflation among economists and bond investors and may cause the Federal
Reserve to reverse direction and raise short-term interest rates sooner rather
than later this year. If such a change in monetary policy occurs, bond yields --
including those of intermediate and long-term bonds -- should rise from current
levels. However, the dramatic rise in yields that has already occurred this year
has left bonds fairly valued, which should limit the risk of further declines
even if the Federal Reserve begins to raise short-term interest rates.

In anticipation of these influences, we are reducing the average duration
of the Portfolio toward the short end of neutral. In addition, we will continue
to shift funds among the various types of assets in the Portfolio in order to
participate in those with the most promising prospects in the prevailing
economic environment.

Landmark Intermediate Income Fund
- --------------------------------------------------------------------------------
BY THE NUMBERS

Portfolio of Investments
as of 6/30/96 ... Compared to 12/31/95

Cash/Short Term/Other (3)% Cash/Short Term/Other 6%
Asset-Backed Securities 4% Asset-Backed Securities 4%
Mortgage Obligations 66% Mortgage Obligations 38%
Yankees 1% Corporate Bonds 5%
U.S. Treasury Issues 32% U.S. Treasury Issues 47%
<PAGE>

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND DATA All Periods Ending June 30, 1996 (unaudited)
<CAPTION>
TOTAL RETURNS
------------------------------
SINCE
SIX ONE 6/25/93
MONTHS** YEAR (INCEPTION)*
-------- ---- ------------
<S> <C> <C> <C>
Landmark Intermediate Income Fund without Sales Charge ................ (1.84)% 2.31% 3.97%
Lipper Intermediate Investment Grade Funds Average .................... (1.40)% 4.27% 4.42%+
Lehman Aggregate Bond Index ........................................... (1.21)% 5.02% 5.69%+
Landmark Intermediate Income Fund with Maximum Sales Charge of 4.00% .. (5.77)% (1.78)% 2.57%

* Average Annual Total Return
** Not Annualized
+ From 6/30/93
</TABLE>

30-Day SEC Yield 5.86%
Income Dividends Per Share $0.27

- --------------------------------------------------------------------------------
PERFORMANCE HIGHLIGHTS

A $10,000 investment in the Fund made on inception date would have grown to
$10,796 with sales charge (as of 6/30/96). The graph shows how this compares to
our benchmarks over the same period.

Landmark Landmark Lipper
Intermediate Intermediate Intermediate
Income Fund - Income Fund - Investment Lehman Aggregate
Without Sales With Sales Grade Funds Bond Index
Charge Charge Average (Unmanaged)
------------- ------------- ------------ ---------------
5/31/93 10,000.00 9,600.00 10,000.00 10,000.00

6/30/93 10,030.00 9,629.00 10,000.00 10,000.00

7/31/93 10,073.00 9,670.00 10,042.00 10,064.00

8/31/93 10,325.00 9,912.00 10,228.00 10,295.00

9/30/93 10,406.00 9,989.00 10,268.00 10,332.00

10/31/93 10,416.00 9,999.00 10,301.00 10,374.00

11/30/93 10,246.00 9,836.00 10,209.00 10,251.00

12/31/93 10,299.00 9,887.00 10,257.00 10,295.00

1/31/94 10,445.00 10,027.00 10,387.00 10,451.00

2/28/94 10,215.00 9,806.00 10,202.00 10,223.00

3/31/94 9,968.00 9,569.00 9,980.00 9,973.00

4/30/94 9,868.00 9,473.00 9,890.00 9,890.00

5/31/94 9,841.00 9,447.00 9,875.00 9,871.00

6/30/94 9,810.00 9,417.00 9,856.00 9,847.00

7/31/94 9,976.00 9,577.00 10,004.00 10,044.00

8/31/94 10,003.00 9,603.00 10,024.00 10,048.00

9/30/94 9,836.00 9,442.00 9,911.00 9,897.00

10/31/94 9,798.00 9,406.00 9,896.00 9,886.00

11/30/94 9,760.00 9,370.00 9,867.00 9,709.00

12/31/94 9,838.00 9,445.00 9,915.00 9,773.00

1/31/95 10,021.00 9,620.00 10,072.00 9,960.00

2/28/95 10,249.00 9,839.00 10,282.00 10,191.00

3/31/95 10,322.00 9,909.00 10,346.00 10,260.00

4/30/95 10,439.00 10,021.00 10,479.00 10,403.00

5/31/95 10,930.00 10,492.00 10,849.00 10,839.00

6/30/95 10,992.00 10,552.00 10,917.00 10,926.00

7/31/95 10,941.00 10,503.00 10,888.00 10,883.00

8/31/95 11,039.00 10,597.00 11,010.00 11,023.00

9/30/95 11,159.00 10,713.00 11,107.00 11,135.00

10/31/95 11,199.00 10,751.00 11,244.00 11,299.00

11/30/95 11,310.00 10,857.00 11,402.00 11,485.00

12/31/95 11,456.00 10,998.00 11,547.00 11,654.00

1/31/96 11,509.00 11,049.00 11,623.00 11,726.00

2/29/96 11,279.00 10,828.00 11,424.00 11,478.00

3/31/96 11,190.00 10,743.00 11,346.00 11,381.00

4/30/96 11,113.00 10,668.00 11,277.00 11,303.00

5/31/96 11,083.00 10,639.00 11,257.00 11,284.00

6/30/96 11,245.00 10,796.00 11,385.00 11,434.00

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>
Landmark Intermediate Income Fund
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited)

PRINCIPAL
AMOUNT
ISSUER (000'S OMITTED) VALUE
- --------------------------------------------------------------
FIXED INCOME--102.4%

ASSET BACKED SECURITIES -- 3.6%
Contimortgage Home Equity Loan
6.95% due 4/15/14 .................... $1,700 $1,646,609
-----------

MORTGAGE OBLIGATIONS -- 65.6%

COLLATERALIZED MORTGAGE OBLIGATIONS -- 14.2%
Asset Securitization Corp. Series 95
7.384% due 8/13/29 ................... 1,000 973,750
Bank America Manufactured Housing
7.55% due 10/10/26 ................... 1,500 1,500,000
Lehman Brothers Mortgage Trust
Series 95 7.144% due 8/25/04 ......... 1,981 1,970,210
Nomura Asset Securities Corp.
8.15% due 4/04/27 .................... 2,000 2,084,375
-----------
6,528,335
-----------
MORTGAGE BACKED SECURITIES -- 38.2%
Federal Home Loan Mortgage Association
8.50% due 4/01/01 .................... 37 37,487
Federal Home Loan Mortgage Corp.
8.00% due 8/15/06 .................... 2,000 2,076,860
6.50% due 4/01/11 .................... 274 264,964
6.50% due 5/01/11 .................... 713 690,069
Federal National Mortgage Association
Remic, 5.00% due 10/25/21 ........... 2,300 1,908,264
Federal National Mortgage Association
(TBA) 8.00% due 1/1/99 .............. 1,500 1,511,250
Federal National Mortgage Association
5.50% due 3/01/11 ................... 768 710,865
5.50% due 4/01/11 ................... 356 329,901
5.50% due 5/01/11 ................... 888 821,789
6.50% due 12/1/23 ................... 3,498 3,283,072
7.00% due 12/1/25 ................... 712 685,176
7.00% due 5/01/03 .................... 2,779 2,676,394
7.00% due 6/01/03 .................... 189 281,918
7.00% due 4/01/26 .................... 158 152,155
7.00% due 5/01/26 .................... 134 128,501
7.50% due 10/1/25 .................... 1,708 1,685,142
7.50% due 5/01/26 .................... 252 248,849
7.50% due 6/01/26 .................... 57 56,613
8.00% due 6/01/02 .................... 20 20,815
-----------
17,570,084
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 13.2%
6.50% due 9/15/25 .................... 750 698,204
6.50% due 4/15/26 .................... 249 231,547
7.50% due 9/15/25 .................... 2,467 2,431,262
7.50% due 5/15/26 .................... 1,998 1,969,622
8.00% due 12/15/07 ................... 95 97,433
8.25% due 7/15/05 .................... 653 656,786
-----------
6,084,854
-----------
TOTAL MORTGAGE OBLIGATIONS 30,183,273
-----------
YANKEES -- 1.0%

Midland Bank, PLC
6.95% due 3/15/11 .................... 500 469,005
-----------
UNITED STATES GOVERNMENT
OBLIGATIONS -- 30.0%

UNITED STATES TREASURY BONDS -- 10.2%
6.25% due 8/15/23 .................... 3,000 2,719,680
6.875% due 8/15/25 ................... 2,000 1,979,680
-----------
4,699,360
-----------
UNITED STATES TREASURY NOTES -- 19.8%
5.625% due 1/31/98 ................... 2,800 2,782,948
5.125% due 2/28/98 ................... 1,400 1,379,434
6.25% due 4/30/01 .................... 5,000 4,952,350
-----------
9,114,732
-----------
TOTAL UNITED STATES
GOVERNMENT OBLIGATIONS 13,814,092
-----------

UNITED STATES AGENCY OBLIGATIONS -- 2.2%

Tennessee Valley Authority 1996 Ser A,
5.98% due 4/01/36 .................... $1,000 1,002,630
-----------

TOTAL INVESTMENTS
(Identified Cost $47,314,329) ........ 102.4% 47,115,609

OTHER ASSETS, LESS LIABILITIES ........ (2.4) (1,119,855)
----- -----------
TOTAL NET ASSETS ...................... 100.0% $45,995,754
===== ===========

TBA's are mortgage-backed securities traded under delayed
delivery commitments, settling after June 30, 1996.
Although the unit price for the trade has been established,
the principal value has not been finalized. However, the
amount of the commitment will not fluctuate more than 2%
from the principal amount. Income on TBA's is not earned
until settlement date.

See notes to financial statements.
<PAGE>
Landmark Intermediate Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1996 (unaudited)
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Note 1A)(Identified Cost, $47,314,329) ............... $47,115,609
Cash ........................................................................ 110,037
Receivable for securities sold .............................................. 2,437,500
Interest receivable ......................................................... 464,300
-----------
Total assets ............................................................ 50,127,446
-----------

LIABILITIES:
Payable for securities purchased ............................................ 3,933,555
Payable for shares of beneficial interest repurchased ....................... 131,658
Payable to affiliates:
Investment advisory fee (Note 2) .......................................... $7,156
Shareholder Servicing Agents' fee (Note 3B) ............................... 9,383 16,539
------
Accrued expenses and other liabilities ...................................... 49,940
-----------
Total liabilities ....................................................... 4,131,692
-----------

NET ASSETS for 4,933,583 shares of beneficial interest outstanding .......... $45,995,754
===========

NET ASSETS CONSIST OF:
Paid-in capital ............................................................. $49,637,154
Accumulated net realized loss on investments ................................ (3,377,427)
Unrealized depreciation of investments ...................................... (198,720)
Distributions in excess of net investment income ............................ (65,253)
-----------
Total $45,995,754
===========

NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST ....... $9.32
=====

COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a 4.00% sales charge ($9.32 / 0.96) $9.71
=====

See notes to financial statements
</TABLE>
<PAGE>
Landmark Intermediate Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30,1996 (unaudited)

<TABLE>
<S> <C> <C>
INVESTMENT INCOME (Note 1B) ............................................ $1,482,247

EXPENSES:
Investment advisory fees (Note 2) ...................................... $ 82,792
Administrative fees (Note 3A) .......................................... 59,137
Shareholder servicing agents' fees (Note 3B) ........................... 59,137
Distribution fees (Note 4) ............................................. 35,482
Custodian fees ......................................................... 34,382
Auditing services ...................................................... 15,200
Shareholder reports .................................................... 11,492
Legal services ......................................................... 9,845
Trustees fees .......................................................... 10,302
Transfer agent fees .................................................... 6,000
Miscellaneous .......................................................... 2,139
---------
Total expenses ................................................ 325,908
Less aggregate amount waived by Investment Adviser, Administrator,
and Distributor (Notes 2, 3A, and 4) .................................. (112,184)
Less fees paid indirectly (Note 1H) .................................... (818)
---------
Net expenses ................................................... 212,906
----------
Net investment income .......................................... 1,269,341
----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from investment transactions and futures contracts ... (948,404)
Unrealized appreciation (depreciation) of investments:
Beginning of period .............................................. 1,014,631
End of period .................................................... (198,720)
---------
Net change in unrealized appreciation (depreciation) of investments .... (1,213,351)
----------
Net realized and unrealized gain (loss) on investments and
futures contracts ............................................. (2,161,755)
----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ................... $ (892,414)
==========

See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Landmark Intermediate Income Fund
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1996 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1995
------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:

OPERATIONS:
Net investment income ..................................................... $(41,269,341 $ 2,919,822
Net realized gain (loss) from investment transactions and futures contracts (948,404) 2,369,867
Net change in unrealized appreciation (depreciation) of investments ....... (1,213,351) 2,122,816
------------ -----------
Net increase (decrease) in net assets resulting from operations ... (892,414) 7,412,505
------------ -----------

DISTRIBUTIONS DECLARED TO SHAREHOLDERS FROM:
Net investment income ..................................................... (1,353,287) (2,928,567)
Net realized gain on investments .......................................... -- --
------------ -----------
Decrease in net assets from distributions declared to shareholders (1,353,287) (2,928,567)
------------ -----------

TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (Note 6):
Net proceeds from sale of shares .......................................... 1,383,393 902,835
Net asset value of shares issued to
shareholders from reinvestment of distributions ......................... 1,142,589 2,894,283
Cost of shares repurchased ................................................ (3,902,349) (6,244,911)
------------ -----------
Net decrease in net assets from transactions in shares of
beneficial interest ............................................. (1,376,367) (2,447,793)
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS ..................................... (3,622,068) 2,036,145

NET ASSETS:
Beginning of period ....................................................... 49,617,822 47,581,677
------------ -----------
End of period (including undistributed (distributions in excess of)
net investment income of $(65,253) and $18,693, respectively) ........... $ 45,995,754 $49,617,822
======== ======== ============ ===========

See notes to financial statements
</TABLE>

<PAGE>

<TABLE>
Landmark Intermediate Income Fund
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<CAPTION>
FOR THE PERIOD
SIX MONTHS YEAR ENDED JUNE 25, 1993
ENDED DECEMBER 31, (COMMENCEMENT OF
JUNE 30, 1996 --------------------- OPERATIONS) TO
(UNAUDITED) 1995 1994 DECEMBER 31, 1993
------------- ------ ------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period ................. $ 9.77 $ 8.91 $ 9.880 $10.000
------ ------ ------- -------
Income From Operations:
Net investment income ................................ 0.26 0.57 0.521 0.261
Net realized and unrealized gain (loss) on investments (0.44) 0.86 (0.959) 0.037
------ ------ ------- -------
Total from operations ........................ (0.18) 1.43 (0.438) 0.298
------ ------ ------- -------
Less Distributions From:
Net investment income ............................ (0.27) (0.57) (0.516) (0.261)
In excess of net investment income ............... -- -- -- (0.006)
Net realized gain on investments ................. -- -- (0.016) (0.151)
------ ------ ------- -------
Total distributions .............................. (0.27) (0.57) (0.532) (0.418)
------ ------ ------- -------
Net Asset Value, end of period ................... $ 9.32 $ 9.77 $ 8.91 $ 9.88
====== ====== ======= =======

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) ............ $45,996 $49,618 $47,582 $61,183
Ratio of expenses to average net assets .............. 0.90%* 0.90% 0.90% 0.90%*
Ratio of net investment income to average net assets . 5.37%* 5.97% 5.52% 4.95%*
Portfolio turnover ................................... 300% 396% 291% 103%
Total return ......................................... (1.84)%+ 16.45% (4.48)% 2.99%+

Note: If Agents of the Fund had not voluntarily agreed to waive a portion of their fees for the periods
indicated and the expenses were not reduced for fees paid indirectly for the fiscal year ended December
31, 1995 and six months ended June 30, 1996, the net investment income per share and the ratios would
have been as follows:
Net investment income per share ...................... $0.23 $0.52 $0.475 $0.236
Ratios:
Expenses to average net assets ....................... 1.38%* 1.42% 1.39% 1.38%*
Net investment income to average net assets .......... 4.89%* 5.45% 5.03% 4.47%*

*Annualized
+Not annualized

See notes to financial statements
</TABLE>

<PAGE>

Landmark Intermediate Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)

(1) SIGNIFICANT ACCOUNTING POLICIES
Landmark Intermediate Income Fund (the "Fund") is a separate diversified series
of Landmark Fixed Income Funds (the "Trust") which is organized as a
Massachusetts business trust and 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 Fund shares
available to customers as Shareholder Servicing Agent.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from these estimates.

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. Gain and loss
from principal paydowns are recorded as ordinary income.

C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable 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. At December 31, 1995, the Fund, for federal income tax
purposes, had a capital loss carryover of $2,182,200, which will expire 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.

E. 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.

F. FUTURES CONTRACTS: -- The Fund may engage in futures transactions. The Funds
may use futures contracts in order to protect the Fund from fluctuation in
interest rates without actually buying or selling debt securities, or to manage
the effective maturity or duration of fixed income securities in the Fund's
Portfolio in an effort to reduce potential losses or enhance potential gains.
The underlying value of a futures contract is incorporated within unrealized
appreciation/depreciation in the Portfolio of Investments under the caption
"Futures Contracts". The Fund had no open Futures Contracts at June 30, 1996.
Buying futures contracts tends to increase the Fund's exposure to the underlying
instrument. Selling futures contracts tends to either decrease the Fund's
exposure to the underlying instrument, or to hedge other fund investments.

Upon entering into a futures contract, the Fund is required to deposit with the
broker an amount of cash or cash equivalents equal to a certain percentage of
the contract amount. This is known as the "initial margin". Subsequent payments
("variation margin") are made or received by the Fund each day, depending on the
daily fluctuation of the value of the contract. The daily changes in contract
value are recorded as unrealized gains or losses and the Fund recognizes a
realized gain or loss when the contract is closed. Futures contracts are valued
at the settlement price established by the board of trade or exchange on which
they are traded.

There are several risks in connection with the use of futures contracts as a
hedging device. The change in the value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in the value of the hedged instruments. In addition,
there is the risk the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. Futures contracts involve, to varying
degrees, risk of loss in excess of the futures variation margin reflected in the
Statement of Assets and Liabilities.

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.

H. FEES PAID INDIRECTLY -- The Fund's custodian bank calculates its fees 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.

(2) INVESTMENT ADVISORY FEES
The investment advisory fee paid to Citibank, as compensation for overall
investment management services, amounted to $82,792, of which $42,698 was
voluntarily waived for the six months ended June 30, 1996. The investment
advisory fee is computed at the annual rate of 0.35% of average daily net
assets.

(3) ADMINISTRATIVE SERVICES PLAN
The Trust has adopted an Administrative Services Plan (the "Administrative
Services Plan") which provides that the Trust on behalf of the Fund 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 under such Plan 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 services fee payable to the Administrator, as
compensation for overall administrative services and general office facilities,
is computed at an annual rate of 0.25% of the Fund's average daily net assets.
The Administrator fees amounted to $59,137, of which $35,701 was voluntarily
waived for six months ended June 30, 1996. 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 or directors of the Administrator or its affiliates.

B. SHAREHOLDER SERVICING AGENTS FEES -- The Fund has entered into shareholder
servicing agreements with each Shareholder Servicing Agent pursuant to which the
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 0.25% of the average daily net assets
of the Fund represented by shares owned during the period by investors for whom
such Shareholder Servicing Agent maintains a servicing relationship. Shareholder
Servicing Agents' fees amounted to $59,137 for the six months ended June 30,
1996.

(4) DISTRIBUTION FEES
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, under 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 for distribution of the Fund's shares. The Distributor may also
receive an additional fee from the Fund 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. The Distribution fees amounted to $35,482, of which $33,785 was
voluntarily waived for the six months ended June 30, 1996.

(5) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of securities, other than short-term obligations, aggregated
$138,651,636 and $135,863,940, respectively, for the six months ended June 30,
1996.

(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:

SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
------------- ------------
Shares sold ...................... 147,055 94,442
Shares issued to shareholders from
reinvestment of distributions .. 120,695 306,199
Shares repurchased ............... (414,144) (662,943)
-------- --------
Net decrease ..................... (146,394) (262,302)
======== ========

(7) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at June 30, 1996, as computed on a federal income tax basis,
are as follows:

Aggregate cost ................... $47,314,329
===========
Gross unrealized appreciation .... $ 145,405
Gross unrealized depreciation .... (344,125)
-----------
Net unrealized depreciation .. $ (198,720)
===========

(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 $15 million 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, 1996, the commitment
fee allocated to the Fund was $137. 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:
Citibank, N.A.
Citigold
P.O. Box 5130, New York, NY 10150-5130
Call Your Citigold Executive or, in NY or CT, (800) 285-1701
For all other states, (800) 285-1707

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 Funds
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
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Donald B. Otis
E. Kirby Warren
William S. Woods, Jr.

SECRETARY
Thomas M. Lenz*

TREASURER
John R. Elder*

*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.

FI/INTI/S/96 Printed on Recycled Paper [symbol]

[LOGO] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.

LANDMARK
INTERMEDIATE
INCOME FUND

SEMI-ANNUAL
REPORT
June 30, 1996