<PAGE>
As filed with the Securities and Exchange Commission on December 28, 1999
File Nos. 33-38848*
811-5812
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 13*
AND
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 20
CITIFUNDS PREMIUM TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
21 MILK STREET, 5TH FLOOR, BOSTON, MASSACHUSETTS 02109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 617-423-1679
PHILIP W. COOLIDGE, 21 MILK STREET, 5TH FLOOR, BOSTON, MASSACHUSETTS 02109
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
ROGER P. JOSEPH, BINGHAM DANA LLP, 150 FEDERAL STREET,
BOSTON, MASSACHUSETTS 02110
It is proposed that this filing will become effective on December 31, 1999
pursuant to paragraph (b) of Rule 485.
Cash Reserves Portfolio and U.S. Treasury Reserves Portfolio have executed
this Registration Statement.
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* Pursuant to Rule 429 under the Securities Act of 1933, this Post-Effective
Amendment also serves as Post-Effective Amendment No. 12 to the Registrant's
Registration Statement under the Securities Act of 1933 at File No.
33-28844.
<PAGE>
----------
PROSPECTUS
----------
DECEMBER 31, 1999
CitiFunds(SM)
Premium Money Market Funds
CITIBANK, N.A., INVESTMENT ADVISER
CITIFUNDS(SM) PREMIUM LIQUID RESERVES
CITIFUNDS(SM) PREMIUM U.S. TREASURY RESERVES
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the accuracy of this prospectus, and
any representation to the contrary is a criminal offense.
<PAGE>
Table of Contents
FUNDS AT A GLANCE ...................................................... 3
CITIFUNDS PREMIUM LIQUID RESERVES ................................... 4
CITIFUNDS PREMIUM U.S. TREASURY RESERVES ............................ 13
YOUR CITIFUNDS ACCOUNT ................................................. 20
HOW TO BUY SHARES ................................................... 20
HOW THE PRICE OF YOUR SHARES IS CALCULATED .......................... 20
HOW TO SELL SHARES .................................................. 21
EXCHANGES ........................................................... 22
DIVIDENDS ........................................................... 23
RETIREMENT ACCOUNTS ................................................. 23
TAX MATTERS ......................................................... 23
MANAGEMENT OF THE FUNDS ................................................ 25
INVESTMENT ADVISER .................................................. 25
ADVISORY FEES ....................................................... 25
DISTRIBUTION ARRANGEMENTS ........................................... 26
MORE ABOUT THE FUNDS ................................................... 27
PRINCIPAL INVESTMENT STRATEGIES ..................................... 27
FINANCIAL HIGHLIGHTS ................................................... A-1
<PAGE>
-----------------
FUNDS AT A GLANCE
-----------------
Funds at a Glance
Each of the Funds described in this prospectus is a money
market fund. Money market funds must follow strict rules about
the quality, maturity and other features of securities they
purchase. The Funds also try to maintain a share price of
$1.00 while paying income to shareholders. However, no money
market fund guarantees that you will receive your money back.
Each Fund has its own goals and investment strategies and each
offers a different mix of investments. Of course, there is no
assurance that either Fund will achieve its investment goals.
<PAGE>
---------------------------------
CITIFUNDS PREMIUM LIQUID RESERVES
---------------------------------
CitiFunds Premium Liquid Reserves
This summary briefly describes CitiFunds Premium Liquid
Reserves and the principal risks of investing in it. For more
information, see MORE ABOUT THE FUNDS on page 27.
FUND GOAL
The Fund's goal is to provide shareholders with liquidity and
as high a level of current income as is consistent with
preservation of capital. Of course, there is no assurance that
the Fund will achieve its goal.
MAIN INVESTMENT STRATEGIES
CitiFunds Premium Liquid Reserves invests only in high
quality, short-term money market instruments denominated in
U.S. dollars. These may include:
o obligations of U.S. and non-U.S. banks;
o commercial paper and asset backed securities;
o short-term obligations of the U.S. government and its agencies and
instrumentalities, and repurchase agreements for these obligations;
and
o obligations issued or guaranteed by the governments of Western
Europe, Australia, Japan and Canada.
The Fund invests at least 25%, and may invest up to 100%, of
its assets in bank obligations, such as certificates of
deposit, fixed time deposits and bankers' acceptances.
Please note that the Fund invests in securities through an
underlying mutual fund.
MAIN RISKS
Investing in a mutual fund involves risk. Although CitiFunds
Premium Liquid Reserves seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by
investing in this Fund. Please remember that an investment in
the Fund is not a deposit of Citibank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
The principal risks of investing in the Fund are described
below. Please note that there are many other factors that
could adversely affect your investment, and that could prevent
the Fund from achieving its goals, which are not described
here. More information about risks appears in the Funds'
Statement of Additional Information. Before investing, you
should carefully consider the risks that you will assume.
YIELD FLUCTUATION. The Fund invests in short term money market
instruments. As a result, the amount of income paid to you by
the Fund will go up or down depending on day-to-day variations
in short term interest rates. Investing in high quality,
short-term instruments may result in a lower yield (the income
on your investment) than investing in lower quality or longer-
term instruments.
CREDIT RISK. The Fund invests in high quality debt securities,
meaning securities that are rated, when the Fund buys them, in
one of the two highest short term rating categories by
nationally recognized rating agencies or, in Citibank's
opinion, are of comparable quality. However, it is possible
that some issuers will be unable to make the required payments
on debt securities held by the Fund. Debt securities also
fluctuate in value based on the perceived creditworthiness of
issuers. A default on an investment held by the Fund could
cause the value of your investment in the Fund, or its yield,
to decline.
INTEREST RATE AND MARKET RISK. A major change in interest
rates or a significant decline in the market value of a Fund
investment, or other market event could cause the value of
your investment in the Fund, or its yield, to decline.
FOREIGN SECURITIES. You should be aware that investments in
foreign securities involve risks relating to political, social
and economic developments abroad, as well as risks resulting
from the differences between the regulations to which U.S. and
non-U.S. issuers and markets are subject. These risks may
include expropriation of assets, confiscatory taxation,
withholding taxes on dividends and interest paid on fund
investments, fluctuations in currency exchange rates, currency
exchange controls and other limitations on the use or transfer
of assets by the Fund or issuers of securities, and political
or social instability. In addition, foreign companies may not
be subject to accounting standards or governmental supervision
comparable to U.S. companies, and there may be less public
information about their operations. Foreign markets may be
less liquid and more volatile than U.S. markets. As a result,
there may be rapid changes in the value of foreign securities.
Non-U.S. markets also may offer less protection to investors
such as the Fund.
CONCENTRATION IN BANK OBLIGATIONS. CitiFunds Premium Liquid
Reserves concentrates in bank obligations. This means that an
investment in the Fund is particularly susceptible to adverse
events affecting the banking industry. Banks are highly
regulated. Decisions by regulators may limit the loans banks
make and the interest rates and fees they charge, and may
reduce bank profitability. Banks also depend on being able to
obtain funds at reasonable costs to finance their lending
operations. This makes them sensitive to changes in money
market and general economic conditions. When a bank's
borrowers get in financial trouble, their failure to repay the
bank will also affect the bank's financial situation.
YEAR 2000 RISK. The Fund could be adversely affected if the
computer systems used by the Fund or its service providers
have not been programmed to process information accurately on
or after January 1, 2000. The Fund, and its service providers,
have made efforts to resolve any potential Year 2000 problems.
While it is likely these efforts will be succesful, the
failure to implement any necessary modifications could have an
adverse impact on the Fund. The Fund also could be adversely
affected if the issuers of securities held by the Fund or the
markets on which those securities are traded do not solve
their Year 2000 problems, or if it costs them large amounts of
money to do so.
$1.00 NET ASSET VALUE. In order to maintain a $1.00 per share
net asset value, the Fund could reduce the number of its
outstanding shares. The Fund could do this if there were a
default on an investment held by the Fund, or if the
investment declined significantly in value. If this happened,
you would own fewer shares. By investing in the Fund, you
agree to this reduction should it become necessary.
WHO MAY WANT TO INVEST
You should keep in mind that an investment in a money market
fund is not a complete investment program.
You should consider investing in CitiFunds Premium Liquid
Reserves if:
o You're seeking current income and a stabilized share price.
o You want to be able to convert your investment to cash quickly with
reduced risk to principal.
o You're seeking higher returns than are usually available from U.S.
Treasury money market funds.
Don't invest in the Fund if:
o You're seeking long term growth of capital or high current income
and you can tolerate daily share price fluctuation.
<PAGE>
Fund Performance
The following bar chart and table can help you evaluate the
risks and performance of the Fund. The bar chart shows the
Fund's total returns for the calendar years indicated. The
table compares the average annual returns for the Fund to the
performance of the IBC Financial Data 1st Tier Taxable Money
Market Funds Average. When you consider this information,
please remember that the Fund's past performance is not
necessarily an indication of how it will perform in the
future. The Fund's performance reflects certain fee waivers
and reimbursements. If these are reduced or terminated, the
Fund's performance may go down. For current yield information,
please call 800-625-4554 toll free, or contact your account
representative.
CITIFUNDS PREMIUM LIQUID RESERVES
ANNUAL TOTAL RETURNS
1991 6.07%
1992 3.60%
1993 3.00%
1994 4.15%
1995 5.88%
1996 5.28%
1997 5.45%
1998 5.37%
As of September 30, 1999, the Fund had a year-to-date return of 3.62%
- --------------------------------------------------------------------------------
FUND'S HIGHEST AND LOWEST RETURNS
FOR CALENDAR QUARTERS COVERED BY THE BAR CHART
................................................................................
Quarter Ending
................................................................................
Highest 1.72% March 31, 1991
................................................................................
Lowest 0.71% March 31, 1993
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
AS OF DECEMBER 31, 1998
................................................................................
Life of
Fund Since
1 Year 5 Years May 3, 1990
................................................................................
CITIFUNDS PREMIUM LIQUID RESERVES 5.37% 5.22% 5.09%
................................................................................
IBC Financial Data 1st Tier Taxable
Money Market Funds Average 4.97% 4.79% *
- --------------------------------------------------------------------------------
*Information regarding performance for this period is not available.
<PAGE>
Fund Fees and Expenses
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.
- --------------------------------------------------------------------------------
CITIFUNDS PREMIUM LIQUID RESERVES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
FEES PAID DIRECTLY FROM YOUR INVESTMENT
................................................................................
Maximum Sales Charge (Load) Imposed on Purchases None
................................................................................
Maximum Deferred Sales Charge (Load) None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(1)
EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
................................................................................
Management Fees 0.15%
................................................................................
Distribution (12b-1) Fees 0.10%
................................................................................
Other Expenses (administrative, shareholder
servicing and other expenses) 0.54%
................................................................................
Total Annual Fund Operating Expenses* 0.79%
- --------------------------------------------------------------------------------
* Because some of the Fund's expenses were waived or reimbursed,
actual total operating expenses for the prior fiscal year were: 0.40%
These fee waivers and reimbursements may be reduced or terminated
at any time.
(1) The Fund invests in securities through an underlying mutual fund, Cash
Reserves Portfolio. This table reflects the expenses of both the Fund
and Cash Reserves Portfolio.
- --------------------------------------------------------------------------------
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of
investing in the Fund to the cost of investing in other mutual
funds. The example assumes that:
o you invest $10,000 in the Fund for the time periods indicated;
o you reinvest all dividends;
o you then sell all of your shares at the end of those periods;
o your investment has a 5% return each year -- the assumption of a 5%
return is required by the SEC for the purpose of this example and
is not a prediction of the Fund's future performance; and
o the Fund's operating expenses as shown in the table without waivers
remain the same.
Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
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CITIFUNDS PREMIUM LIQUID RESERVES
................................................................................
1 Year 3 Years 5 Years 10 Years
................................................................................
$81 $252 $439 $978
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<PAGE>
----------------------------------------
CITIFUNDS PREMIUM U.S. TREASURY RESERVES
----------------------------------------
CitiFunds Premium U.S. Treasury Reserves
This summary briefly describes CitiFunds Premium U.S. Treasury
Reserves and the principal risks of investing in it. For more
information, see MORE ABOUT THE FUNDS on page 27.
FUND GOAL
The Fund's goal is to provide its shareholders with liquidity
and as high a level of current income from U.S. government
obligations as is consistent with the preservation of capital.
Of course, there is no assurance that the Fund will achieve
its goal.
MAIN INVESTMENT STRATEGIES
U.S. Treasury Reserves may invest in:
o U.S. Treasury bills, notes and bonds;
o Treasury receipts; and
o securities issued by U.S. government agencies and instrumentalities
that are backed by the full faith and credit of the U.S.
government.
Although the Fund is permitted to maintain a weighted average
maturity of up to 90 days, under normal conditions the Fund
will maintain a shorter maturity. In the event that interest
rates decline, the Fund may not generate as high a yield as
other funds with longer weighted average maturities.
Please note that the Fund invests in securities through an
underlying mutual fund.
MAIN RISKS
Investing in a mutual fund involves risk. Although CitiFunds
Premium U.S. Treasury Reserves seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose
money by investing in this Fund. Please remember that an
investment in the Fund is not a deposit of Citibank and is not
insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
The principal risks of investing in the Fund are described
below. Please note that there are many other factors that
could adversely affect your investment, and that could prevent
the Fund from achieving its goals, which are not described
here. More information about risks appears in the Funds'
Statement of Additional Information. Before investing, you
should carefully consider the risks that you will assume.
YIELD FLUCTUATION. The Fund invests in short term money market
instruments. As a result, the amount of income paid to you by
the Fund will go up or down depending on day-to-day variations
in short term interest rates. Investing in high quality,
short-term instruments may result in a lower yield (the income
on your investment) than investing in lower quality or longer-
term instruments.
INTEREST RATE AND MARKET RISK: A major change in interest
rates or a significant decline in the value of a Fund
investment, or other market event could cause the value of
your investment in the Fund, or its yield, to decline.
YEAR 2000 RISK: The Fund could be adversely affected if the
computer systems used by the Fund or its service providers
have not been programmed to process information accurately on
or after January 1, 2000. The Fund, and its service providers,
have made efforts to resolve any potential Year 2000 problems.
While it is likely these efforts will be successful, the
failure to implement any necessary modifications could have an
adverse impact on the Fund. The Fund also could be adversely
affected if the issuers of securities held by the Fund or the
markets on which those securities are traded do not solve
their Year 2000 problems, or if it costs them large amounts of
money to do so.
$1.00 NET ASSET VALUE. In order to maintain a $1.00 per share
net asset value, the Fund could reduce the number of its
outstanding shares. The Fund could do this if there were a
default on an investment held by the Fund, or if the
investment declined significantly in value. If this happened,
you would own fewer shares. By investing in the Fund, you
agree to this reduction should it become necessary.
WHO MAY WANT TO INVEST
You should keep in mind that an investment in a money market
fund is not a complete investment program.
You should consider investing in CitiFunds Premium U.S.
Treasury Reserves if:
o You're seeking current income and a stabilized share price.
o You want to be able to convert your investment to cash quickly with
reduced risk to principal.
o You want the added safety of a fund that invests only in U.S.
government securities.
Don't invest in the Fund if:
o You're seeking long-term growth of capital or high current income
and you can tolerate daily share price fluctuation.
<PAGE>
Fund Performance
The following bar chart and table can help you evaluate the
risks and performance of the Fund. The bar chart shows the
Fund's total returns for the calendar years indicated. The
table compares the average annual returns for the Fund to the
performance of the IBC Financial Data 100% U.S. Treasury Rated
Money Market Funds Average. When you consider this
information, please remember that the Fund's past performance
is not necessarily an indication of how the Fund will perform
in the future. The Fund's performance reflects certain fee
waivers and reimbursements. If these are reduced or
terminated, the Fund's performance may go down. For current
yield information, please call 800-625-4554 toll free, or
contact your account representative.
CITIFUNDS PREMIUM U.S. TREASURY RESERVES
ANNUAL TOTAL RETURNS
1992 3.42%
1993 2.77%
1994 3.70%
1995 5.35%
1996 4.85%
1997 4.90%
1998 4.76%
As of September 30, 1999, the Fund had a year-to-date return of 3.14%.
- --------------------------------------------------------------------------------
FUND'S HIGHEST AND LOWEST RETURNS
FOR CALENDAR QUARTERS COVERED BY THE BAR CHART
................................................................................
Quarter Ending
................................................................................
Highest 1.37% June 30, 1995
................................................................................
Lowest 0.67% June 30, 1993
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- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
AS OF DECEMBER 31, 1998
................................................................................
Life of Fund
Since
1 Year 5 Years March 1, 1991
................................................................................
CITIFUNDS PREMIUM U.S. TREASURY
RESERVES 4.76% 4.71% 4.38%
................................................................................
IBC Financial Data 100% U.S. Treasury
Rated Money Market Funds Average 4.67% 4.57% *
- --------------------------------------------------------------------------------
*Information regarding performance for this period is not available.
<PAGE>
Fund Fees and Expenses
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.
- --------------------------------------------------------------------------------
CITIFUNDS PREMIUM U.S. TREASURY RESERVES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
FEES PAID DIRECTLY FROM YOUR INVESTMENT
..............................................................................
Maximum Sales Charge (Load) Imposed on Purchases None
..............................................................................
Maximum Deferred Sales Charge (Load) None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(1)
EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
................................................................................
Management Fees 0.15%
................................................................................
Distribution (12b-1) Fees 0.10%
................................................................................
Other Expenses (administrative, shareholder
servicing and other expenses) 0.56%
................................................................................
Total Annual Fund Operating Expenses* 0.81%
- --------------------------------------------------------------------------------
* Because some of the Fund's expenses were waived or reimbursed,
actual total operating expenses for the prior fiscal
year were: 0.45%
These fee waivers and reimbursements may be reduced or terminated
at any time.
(1) The Fund invests in securities through an underlying mutual fund, U.S.
Treasury Reserves Portfolio. This table reflects the expenses of both
the Fund and U.S. Treasury Reserves Portfolio.
- --------------------------------------------------------------------------------
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of
investing in the Fund to the cost of investing in other mutual
funds. The example assumes that:
o you invest $10,000 in the Fund for the time periods indicated;
o you reinvest all dividends;
o you then sell all of your shares at the end of those periods;
o your investment has a 5% return each year -- the assumption of a 5%
return is required by the SEC for the purpose of this example and
is not a prediction of the Fund's future performance; and
o the Fund's operating expenses as shown in the table without waivers
remain the same.
Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
- --------------------------------------------------------------------------------
CITIFUNDS PREMIUM U.S. TREASURY RESERVES
................................................................................
1 Year 3 Years 5 Years 10 Years
................................................................................
$83 $259 $450 $1,002
- --------------------------------------------------------------------------------
<PAGE>
Your CitiFunds Account
HOW TO BUY SHARES
Shares of the Funds are offered continuously and purchases may
be made Monday through Friday, except on certain holidays.
Shares may be purchased from the Funds' distributor or a
broker-dealer or financial institution that has an agreement
with the distributor. You must be a customer of a Shareholder
Servicing Agent to purchase shares. Shareholder Servicing
Agents are financial institutions that have entered into
shareholder servicing agreements concerning the Funds. You pay
no sales charge (load) to invest in the Funds. Each Fund and
its distributor have the right to reject any purchase order or
cease offering Fund shares at any time.
Shares are purchased at net asset value (normally $1.00 per
share) the next time it is calculated after your order is
received and accepted by the distributor.
Your Shareholder Servicing Agent will not transmit your
purchase order for Fund shares until it receives the purchase
price in federal or other immediately available funds. If you
pay by check, the Shareholder Servicing Agent transmits the
order when the check clears, usually within two business days.
If you are a customer of a Shareholder Service Agent, your
Shareholder Service Agent will establish and maintain your
account and be the shareholder of record. If you wish to
transfer your account, you may only transfer it to another
financial institution that acts as a Shareholder Service
Agent, or you may set up an account directly with the Fund's
transfer agent.
HOW THE PRICE OF YOUR SHARES IS CALCULATED
Each Fund calculates its net asset value (NAV) every day the
New York Stock Exchange is open for trading. Liquid Reserves
calculates its NAV at 3:00 p.m. Eastern time, and U.S.
Treasury Reserves calculates its NAV at 12:00 noon Eastern
time. On days when the financial markets in which the Funds
invest close early, NAV may be calculated as of the earlier
close of those markets. The Funds' securities are valued at
amortized cost, which is approximately equal to market value.
HOW TO SELL SHARES
You may sell your shares on any business day. The price will
be the NAV (normally $1.00 per share) the next time it is
calculated after your redemption request has been received by
your Shareholder Servicing Agent. You may contact your
Shareholder Servicing Agent in writing or, if your Shareholder
Servicing Agent permits, by telephone. All redemption requests
must be in proper form, as determined by your Shareholder
Servicing Agent.
You will receive your redemption proceeds in federal funds
normally on the business day on which you sell your shares
but, in any event, within seven days. Your redemption proceeds
may be delayed for up to ten days if your purchase was made by
check. Your redemption proceeds may also be delayed, or your
right to receive redemption proceeds suspended, if the New
York Stock Exchange is closed (other than on weekends or
holidays) or trading is restricted, or if an emergency exists.
The Funds have the right to pay your redemption proceeds by
giving you securities instead of cash. In that case, you may
incur costs (such as brokerage commissions) converting the
securities into cash. You should be aware that you may have to
pay taxes on your redemption proceeds.
Your account balance may be subject to a $500 minimum. If so,
the Fund reserves the right to close your account if it falls
below $500. You will have 60 days to make an additional
investment. If you do not increase your balance, the Fund may
close your account and send the proceeds to you. Your shares
will be sold at net asset value (normally $1.00 per share) on
the day your account was closed.
EXCHANGES
You may exchange your shares of the Funds for shares of
certain CitiFunds or other funds managed by Citibank. Your
Shareholder Servicing Agent can provide you with more
information, including a prospectus for any fund to be
acquired through an exchange. If your account application
allows, you may arrange the exchange by telephone.
Generally, there is no sales charge on shares you get through
an exchange. However, if you are exchanging shares of a Fund
for shares of another fund that are subject to an initial
sales charge, and if the initial sales charge for the shares
being exchanged into is greater than the sales charge, if any,
you paid to acquire the Fund shares being exchanged, you will
have to pay an initial sales charge at a rate equal to the
difference.
If you exchange your shares of a Fund for shares subject to an
initial sales charge, you may qualify for elimination or
reduction of the sales charge if you meet any of the following
conditions:
o You held the Fund shares being exchanged as of January 4, 1999.
o The Fund shares being exchanged were purchased with a sales charge
or acquired through a previous exchange from shares purchased with
a sales charge.
o The Fund shares being exchanged represent capital appreciation or
the reinvestment of dividends or capital gains distributions.
To qualify for this reduction or elimination of the sales
charge, you must notify your Shareholder Servicing Agent at
the time of exchange. You may need to provide documentation to
confirm your entitlement to the sales charge elimination or
reduction.
The exchange privilege may be changed or terminated at any
time. You should be aware that you may have to pay taxes on
your exchange.
DIVIDENDS
Each Fund calculates its net income each business day when it
calculates its NAV, and declares dividends for all of its
shareholders of record. Shares begin to accrue dividends on
the day they are purchased. You will not receive dividends for
the day on which you redeem your shares. Dividends are
distributed once a month, on or before the last business day
of the month. Unless you choose to receive your dividends in
cash, you will receive them as full and fractional additional
Fund shares.
RETIREMENT ACCOUNTS
Your Shareholder Servicing Agent can advise you about how
investments in the Funds may be incorporated into your
retirement plan.
TAX MATTERS
This discussion of taxes is for general information only. You
should consult your own tax adviser about your particular
situation.
TAXATION OF DISTRIBUTIONS: You normally have to pay federal
income tax on any distributions you receive from a Fund,
whether you take distributions in cash or reinvest them in
shares. Distributions designated as capital gain dividends are
taxable as long-term capital gains. Other distributions are
generally taxable as ordinary income. Some dividends paid in
January may be taxable as if they had been paid the previous
December. Distributions derived from interest on U.S.
government obligations may be exempt from certain state and
local taxes.
TAXATION OF TRANSACTIONS: If you sell your shares of a Fund,
or exchange them for shares of another Fund, it is considered
a taxable event. Depending on your purchase price and the
sales price of the shares you sell or exchange, you may have a
gain or loss on the transaction. You are responsible for any
tax liabilities generated by your transaction.
BACKUP WITHHOLDING: The account application asks each new
investor to certify that the investor's Social Security or
taxpayer identification number is correct and that the
shareholder is not subject to 31% backup withholding for
failing to report income to the IRS. A Fund may be required to
withhold (and pay over to the IRS for your credit) 31% of
certain distributions it pays you if you fail to provide this
information or otherwise violate IRS regulations.
FOREIGN SHAREHOLDERS: Each Fund will withhold U.S. federal
income tax payments at the rate of 30% (or any lower
applicable treaty rate) on taxable dividends and other
payments subject to withholding taxes that are made to persons
who are not citizens or residents of the United States.
Distributions received from a Fund by non-U.S. persons also
may be subject to tax under the laws of their own
jurisdictions.
<PAGE>
Management of the Funds
INVESTMENT ADVISER
Each Fund draws on the strength and experience of Citibank.
Citibank is the investment adviser of each Fund, and subject
to policies set by the Funds' Trustees, Citibank makes
investment decisions. Citibank has been managing money since
1822. With its affiliates, it currently manages more than $351
billion in assets worldwide.
Citibank, with its headquarters at 153 East 53rd Street, New
York, New York, is a wholly-owned subsidiary of Citigroup Inc.
"CitiFunds" is a service mark of Citicorp.
Citibank and its affiliates may have banking and investment
banking relationships with the issuers of securities that are
held in the Funds. However, in making investment decisions for
the Funds Citibank does not obtain or use material inside
information acquired by any division, department or affiliate
of Citibank in the course of those relationships. Citibank and
its affiliates may have loans outstanding that are repaid with
proceeds of securities purchased by the Funds.
ADVISORY FEES
For the Funds' fiscal year ended August 31, 1999 Citibank
received the following fees:
- --------------------------------------------------------------------------------
Fee, as percentage of
average
daily net assets,
Fund after waiver
................................................................................
CITIFUNDS PREMIUM LIQUID RESERVES 0.08%
................................................................................
CITIFUNDS PREMIUM U.S. TREASURY RESERVES 0.07%
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
The Funds do not charge any sales loads, deferred sales loads
or other fees in connection with the purchase of shares.
The Funds have adopted distribution plans under rule 12b-1
under the Investment Company Act of 1940. The plans allow each
Fund to use up to 0.10% per year of its average daily net
assets to compensate the Funds' distributor for its
distribution activities. The distributor currently waives a
portion of these fees on a voluntary basis. This fee waiver
may be terminated or reduced at any time. Because fees under
the plans are paid out of Fund assets, over time these fees
will increase the cost of your investment and may cost you
more than paying other types of sales charges.
The distributor may make payments for distribution and/or
shareholder servicing activities out of its past profits and
other available sources. The distributor may also make
payments for marketing, promotional or related expenses to
dealers. The amount of these payments is determined by the
distributor and may vary. Citibank may make similar payments
under similar arrangements.
--------------------
MORE ABOUT THE FUNDS
--------------------
More About the Funds
The Funds' goals, principal investments and risks are
summarized in FUNDS AT A GLANCE. More information on
investments and investment strategies appears below.
PRINCIPAL INVESTMENT STRATEGIES
The Funds' principal investment strategies are the strategies
that, in the opinion of Citibank, are most likely to be
important in trying to achieve each Fund's investment goals.
Of course, there can be no assurance that any Fund will
achieve its goals. Please note that each Fund may also use
strategies and invest in securities that are not described
below but that are described in the Statement of Additional
Information. A Fund may not use all of the strategies and
techniques or invest in all of the types of securities
described in the Prospectus or in the Statement of Additional
Information.
Each Fund has specific investment policies and procedures
designed to maintain a constant net asset value of $1.00 per
share. Each Fund also complies with industry regulations that
apply to money market funds. These regulations require that
each Fund's investments mature or be deemed to mature within
397 days from the date purchased and that the average maturity
of each Fund's investments (on a dollar-weighted basis) be 90
days or less. In addition, all of the Funds' investments must
be in U.S. dollar-denominated high quality securities which
have been determined by Citibank to present minimal credit
risks. To be high quality, a security (or its issuer) must be
rated in one of the two highest short-term rating categories
by nationally recognized rating agencies, such as Moody's or
Standard & Poor's, or, in Citibank's opinion, be of comparable
quality. Investors should note that within these two rating
categories there may be sub-categories or gradations
indicating relative quality. If the credit quality of a
security deteriorates after the Fund buys it, Citibank will
decide whether the security should be held or sold.
- --------------------------------------------------------------------------------
WHAT ARE MONEY MARKET INSTRUMENTS?
A MONEY MARKET INSTRUMENT is a short-term IOU issued by banks
or other corporations, or the U.S. or a foreign government and
state or local governments. Money market instruments have
maturity dates of 13 months or less. Money market instruments
may include CERTIFICATES OF DEPOSIT, BANKERS' ACCEPTANCES,
VARIABLE RATE DEMAND NOTES (where the interest rate is reset
periodically and the holder may demand payment from the issuer
at any time), FIXED-TERM OBLIGATIONS, COMMERCIAL PAPER (short
term unsecured debt of corporations), ASSET-BACKED SECURITIES
(which are backed by pools of accounts receivable such as car
installment loans or credit card receivables) and REPURCHASE
AGREEMENTS. In a repurchase agreement, the seller sells a
security and agrees to buy it back at a later date (usually
within seven days) and at a higher price, which reflects an
agreed upon interest rate.
- --------------------------------------------------------------------------------
CitiFunds Premium Liquid Reserves invests in high quality U.S.
dollar-denominated money market instruments of U.S. and non-
U.S. issuers. These obligations include U.S. government
obligations, obligations of U.S. and non-U.S. banks,
obligations issued or guaranteed by the governments of Western
Europe, Australia, Japan and Canada, commercial paper, asset
backed securities and repurchase agreements. The Fund's U.S.
government obligations may include U.S. Treasury bills, bonds
and notes and obligations of U.S. government agencies and
instrumentalities that may, but need not, be backed by the
full faith and credit of the United States. While the Fund can
invest in all these types of obligations, the Fund invests at
least 25% of its assets, and may invest all of its assets, in
bank obligations, including certificates of deposit, fixed
time deposits and bankers' acceptances. Except for this
concentration policy, the Fund's investment goals and policies
may be changed without a shareholder vote.
CitiFunds Premium Liquid Reserves invests only in "first tier"
securities, which are securities rated in the highest short-
term rating category by nationally recognized rating agencies
or, in Citibank's opinion, of comparable quality.
CitiFunds Premium U.S. Treasury Reserves invests in U.S.
Treasury bills, bonds, notes and receipts. Treasury receipts
are interest coupons on other U.S. Treasury obligations. This
Fund may also invest in short-term obligations of U.S.
government agencies and instrumentalities, but only if the
obligations are backed by the full faith and credit of the
United States. The Fund's investment goals and policies may be
changed without a shareholder vote. ALTHOUGH THE FUND INVESTS
IN U.S. GOVERNMENT OBLIGATIONS, AN INVESTMENT IN THE FUND IS
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
INVESTMENT STRUCTURE. Premium Liquid Reserves and Premium U.S.
Treasury Reserves do not invest directly in securities but
instead invest through an underlying mutual fund having the
same goals and strategies. Unless otherwise indicated,
references to these Funds in this Prospectus include the
underlying fund. Each Fund may stop investing in its
corresponding underlying fund at any time, and will do so if
the Fund's Trustees believe that to be in the shareholders'
best interests. The Fund could then invest in another mutual
fund or pooled investment vehicle, or could invest directly in
securities.
MANAGEMENT STYLE. Managers of mutual funds use different
styles when selecting securities to purchase. Citibank's
portfolio managers use a "top-down" approach when selecting
securities for the Funds. When using a "top-down" approach,
the portfolio manager looks first at broad economic factors
and market conditions, such as prevailing and anticipated
interest rates. On the basis of those factors and conditions,
the manager selects optimal interest rates and maturities and
chooses certain sectors or industries within the overall
market. The manager then looks at individual issuers within
those sectors or industries to select securities for the
investment portfolio.
Since the Funds maintain a weighted average maturity of no
more than 90 days, many of their investments are held until
maturity. The manager may sell a security before maturity when
it is necessary to do so to meet redemption requests. The
manager may also sell a security if the manager believes the
issuer is no longer as creditworthy, or in order to adjust the
average weighted maturity of a Fund's portfolio (for example,
to reflect changes in the manager's expectations concerning
interest rates), or when the manager believes there is
superior value in other market sectors or industries.
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Financial Highlights
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned on an investment in the
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report,
along with the Fund's financial statements, is included in the annual report
which is available upon request.
CITIFUNDS PREMIUM LIQUID RESERVES
<TABLE>
<CAPTION>
Year Ended August 31,
-------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
..............................................................................................................................
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
Net investment income 0.04836 0.05348 0.05240 0.05322 0.05465
Less dividends from net investment
income (0.04836) (0.05348) (0.05240) (0.05322) (0.05465)
..............................................................................................................................
Net asset value, end of period $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
..............................................................................................................................
Total return 4.94% 5.48% 5.37% 5.45% 5.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $795,324 $611,270 $387,910 $380,303 $423,992
Ratio of expenses to average net
assets+ 0.40% 0.40% 0.40% 0.40% 0.40%
Ratio of net investment income to
average net assets+ 4.84% 5.39% 5.25% 5.35% 5.47%
Note: If agents of the Fund and agents of Cash Reserves Portfolio had not waived all or a portion of their fees during the
periods indicated, the net investment income per share and the ratios would have been as follows:
Net investment income per share $0.04457 $0.04950 $0.04833 $0.04911 $0.05047
RATIOS:
Expenses to average net assets+ 0.79% 0.80% 0.81% 0.82% 0.83%
Net investment income to average net
assets+ 4.45% 4.99% 4.84% 4.93% 5.04%
+ Includes the Fund's share of the allocated expenses of Cash Reserves Portfolio, the investment company in which the Fund
invests its assets.
</TABLE>
<PAGE>
Financial Highlights -- Continued
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned on an investment in the
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by Deloitte & Touche LLP, whose report, along
with the Fund's financial statements, is included in the annual report which
is available upon request.
CITIFUNDS PREMIUM U.S. TREASURY RESERVES
<TABLE>
<CAPTION>
Year Ended August 31,
---------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
..............................................................................................................................
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
Net investment income 0.04195 0.04802 0.04794 0.04851 0.04999
Less dividends from net investment
income (0.04195) (0.04802) (0.04794) (0.04851) (0.04999)
..............................................................................................................................
Net asset value, end of period $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
..............................................................................................................................
Total return 4.28% 4.91% 4.90% 4.96% 5.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $237,520 $325,738 $239,441 $235,271 $317,312
Ratio of expenses to average net
assets+ 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to
average net assets+ 4.21% 4.81% 4.80% 4.88% 5.02%
Note: If agents of the Fund and agents of U.S. Treasury Reserves Portfolio had not waived all or a portion of their fees during
the periods indicated, the net investment income per share and the ratios would have been as follows:
Net investment income per share $0.03836 $0.04433 $0.04414 $0.04463 $0.04601
RATIOS:
Expenses to average net assets+ 0.81% 0.82% 0.83% 0.85% 0.84%
Net investment income to average net
assets+ 3.85% 4.44% 4.42% 4.49% 4.62%
+ Includes the Fund's share of the allocated expenses of U.S. Treasury Reserves Portfolio, the investment company in which the
Fund invests its assets.
</TABLE>
<PAGE>
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<PAGE>
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<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
The Statement of Additional Information (SAI) provides more
details about the Funds and their policies. The SAI is
incorporated by reference into this Prospectus and is legally
part of it.
Additional information about each Fund's investments is
available in that Fund's Annual and Semi-Annual Reports to
Shareholders. In each Fund's Annual Report, you will find a
discussion of the market conditions and investment strategies
that significantly affected that Fund's performance.
To obtain free copies of the SAI and the Annual and Semi-
Annual Reports or to make other inquiries, please call
1-800-625-4554 toll-free, or your account representative.
The SAI is also available from the Securities and Exchange
Commission. You can find it on the SEC Internet site at
http://www.sec.gov. Information about the Funds (including the
SAI) can also be reviewed and copied at the SEC's Public Reference
Room in Washington, DC. You can get information on the
operation of the Public Reference Room by calling the SEC at:
1-800-SEC-0330. Copies may also be obtained upon payment of a
duplicating fee by electronic request to [email protected],
or by writing to the SEC's Public Reference Section,
Washington, DC 20549-6009.
- ----------
SEC File Number: 811-5812 PRE1299
<PAGE>
Statement of
Additional Information
December 31, 1999
CITIFUNDS(SM) PREMIUM LIQUID RESERVES
CITIFUNDS(SM) PREMIUM U.S. TREASURY RESERVES
This Statement of Additional Information sets forth information which may
be of interest to investors but which is not necessarily included in the
Prospectus, dated December 31, 1999, for CitiFunds(SM) Premium Liquid Reserves
and CitiFunds(SM) Premium U.S. Treasury Reserves (the foregoing, collectively,
the "Funds"). This Statement of Additional Information should be read in
conjunction with the Prospectus. This Statement of Additional Information
incorporates by reference the financial statements described on page 21 hereof.
These financial statements can be found in the Funds' Annual Reports to
Shareholders. An investor may obtain copies of the Funds' Prospectuses and
Annual Reports without charge by contacting the Funds' Distributor (see back
cover for address and phone number).
The Funds are each separate series of CitiFunds(SM) Premium Trust (the
"Trust"). The address and telephone number of the Trust are 21 Milk Street,
Boston, Massachusetts 02109, (617) 423-1679. The Trust invests all of the
investable assets of Liquid Reserves and U.S. Treasury Reserves in Cash
Reserves Portfolio and U.S. Treasury Reserves Portfolio (collectively, the
"Portfolios"), respectively. The address and telephone number of Cash Reserves
Portfolio are Elizabethan Square, George Town, Grand Cayman, British West
Indies, (345) 945-1824. The address and telephone number of U.S. Treasury
Reserves Portfolio are 21 Milk Street, Boston, Massachusetts 02109, (617)
423-1679.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, CITIBANK, N.A. OR ANY OF ITS AFFILIATES, ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER AGENCY, AND INVOLVE INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
TABLE OF CONTENTS PAGE
- ----------------- ----
1. The Funds ............................................................ 2
2. Investment Objectives, Policies and Restrictions ..................... 3
3. Performance Information .............................................. 9
4. Determination of Net Asset Value ..................................... 11
5. Management ........................................................... 13
6. Dealer Commissions and Concessions .................................. 18
7. Portfolio Transactions ............................................... 18
8. Description of Shares, Voting Rights and Liabilities ................. 19
9. Certain Additional Tax Matters ....................................... 20
10. Independent Accountants and Financial Statements ..................... 21
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. THE FUNDS
The Trust is a no-load, open-end management investment company which was
organized as a business trust under the laws of the Commonwealth of
Massachusetts on May 23, 1989. Prior to January 2, 1998, the Trust was called
Landmark Premium Funds. Shares of the Trust are divided into two separate
series, CitiFunds Premium Liquid Reserves and CitiFunds Premium U.S. Treasury
Reserves, which are described in this Statement of Additional Information.
Prior to January 2, 1998, CitiFunds Premium Liquid Reserves and CitiFunds
Premium U.S. Treasury Reserves were called Premium Liquid Reserves and Premium
U.S. Treasury Reserves, respectively. References in this Statement of
Additional Information to the Prospectus are to the Prospectus, dated December
31, 1999, of the Funds by which shares of the Funds are offered.
Each of the Funds is a type of mutual fund commonly referred to as a
"money market fund." The net asset value of each of the Funds' shares is
expected to remain constant at $1.00, although there can be no assurance that
this will be so on a continuing basis. (See "Determination of Net Asset
Value.")
The Trust seeks the investment objectives of the Funds by investing all
the investable assets of Liquid Reserves and U.S. Treasury Reserves in Cash
Reserves Portfolio and U.S. Treasury Reserves Portfolio, respectively. Each of
the Portfolios is a diversified open-end management investment company. Each
Portfolio has the same investment objectives and policies as its corresponding
Fund.
The Trustees of the Trust believe that the aggregate per share expenses of
Liquid Reserves and U.S. Treasury Reserves and their corresponding Portfolios
will be less than or approximately equal to the expenses that each Fund would
incur if the assets of the Fund were invested directly in the types of
securities held by its Portfolio. Either Fund may withdraw its investment in
its Portfolio at any time, and will do so if the Fund's Trustees believe it to
be in the best interest of the Fund's shareholders. If a Fund were to withdraw
its investment in its Portfolio, the Fund could either invest directly in
securities in accordance with the investment policies described below or
invest in another mutual fund or pooled investment vehicle having the same
investment objectives and policies. If a Fund were to withdraw, the Fund could
receive securities from the Portfolio instead of cash, causing the Fund to
incur brokerage, tax and other charges or leaving it with securities which may
or may not be readily marketable or widely diversified.
Each Portfolio may change its investment objective and certain of its
investment policies and restrictions without approval by its investors, but a
Portfolio will notify its corresponding Fund (which in turn will notify its
shareholders) and its other investors at least 30 days before implementing any
change in its investment objective. A change in investment objective, policies
or restrictions may cause a Fund to withdraw its investment in its Portfolio.
The Portfolios, as New York trusts, are not required to hold and have no
intention of holding annual meetings of investors. However, when a Portfolio
is required to do so by law, or in the judgment of Trustees it is necessary or
desirable to do so, the Portfolio will submit matters to its investors for a
vote. When a Fund is asked to vote on matters concerning its corresponding
Portfolio (other than a vote to continue the Portfolio following the
withdrawal of an investor), the Fund will hold a shareholder meeting and vote
in accordance with shareholder instructions, or otherwise act in accordance
with applicable law. Of course, the Fund could be outvoted, or otherwise
adversely affected, by other investors in the Portfolio.
The Portfolios may sell interests to investors in addition to the Funds.
These investors may be mutual funds which offer shares to their shareholders
with different costs and expenses than the Funds. Therefore, the investment
returns for all investors in funds investing in a Portfolio may not be the
same. These differences in returns are also present in other mutual fund
structures.
Information about other holders of interests in the Portfolios is
available from the Funds' distributor, CFBDS, Inc. ("CFBDS"), 21 Milk Street,
Boston, Massachusetts 02109, (617) 423-1679.
Citibank, N.A. ("Citibank" or the "Adviser") is the investment adviser to
each of the Portfolios. The Adviser manages the investments of each Portfolio
from day to day in accordance with the investment objectives and policies of
that Portfolio. The selection of investments for each Portfolio, and the way
they are managed, depend on the conditions and trends in the economy and the
financial marketplaces.
CFBDS, the Funds' administrator (the "Administrator"), supervises the
overall administration of the Trust and U.S. Treasury Reserves Portfolio.
Signature Financial Group (Cayman) Ltd. ("SFG") supervises the overall
administration of Cash Reserves Portfolio. The Boards of Trustees of the Trust
and the Portfolios provide broad supervision over the affairs of the Trust and
of the Portfolios, respectively.
Shares of each Fund are continuously sold by CFBDS, each Fund's
distributor (the "Distributor"), only to investors who are customers of a
financial institution, such as a federal or state-chartered bank, trust
company, savings and loan association or savings bank, or a securities broker,
that has entered into a shareholder servicing agreement with the Trust with
respect to that Fund (collectively, "Shareholder Servicing Agents"). Although
shares of the Funds are sold without a sales load, CFBDS may receive fees from
the Funds pursuant to a Distribution Plan adopted in accordance with Rule
12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act").
2. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES
The investment objective of PREMIUM LIQUID RESERVES is to provide
shareholders with liquidity and as high a level of current income as is
consistent with the preservation of capital.
The investment objective of PREMIUM U.S. TREASURY RESERVES is to provide
its shareholders with liquidity and as high a level of current income from
U.S. government obligations as is consistent with the preservation of capital.
The investment objective of each Fund may be changed without approval by
that Fund's shareholders. Of course, there can be no assurance that either
Fund will achieve its investment objectives.
INVESTMENT POLICIES
The Trust seeks the investment objectives of the Funds by investing all of
the investable assets of Liquid Reserves and U.S. Treasury Reserves in Cash
Reserves Portfolio and U.S. Treasury Reserves Portfolio, respectively, each of
which has the same investment objective and policies as its corresponding
Fund. The Prospectus contains a discussion of the principal investment
strategies of each Fund and certain risks of investing in each Fund. The
following supplements the information contained in the Prospectus concerning
the investment objectives, policies and techniques of each Fund and Portfolio,
and contains more information about the various types of securities in which
each Fund and each Portfolio may invest and the risks involved in such
investments. Since the investment characteristics of Liquid Reserves and U.S.
Treasury Reserves will correspond directly to those of the Portfolio in which
it invests, the following is a supplementary discussion with respect to each
Portfolio.
The Trust may withdraw the investment of either Fund from its
corresponding Portfolio at any time, if the Board of Trustees of the Trust
determines that it is in the best interests of the Fund to do so. Upon any
such withdrawal, a Fund's assets would be invested in accordance with the
investment policies described below with respect to its corresponding
Portfolio. Except for the concentration policy of Liquid Reserves with respect
to bank obligations described in paragraph (1) below which may not be changed
without the approval of Liquid Reserves' shareholders, the approval of a
Fund's shareholders would not be required to change that Fund's investment
objectives or any of its investment policies. Likewise, except for the
concentration policy of Cash Reserves Portfolio with respect to bank
obligations described in paragraph (1) below which may not be changed without
the approval of Cash Reserves Portfolio's investors, the approval of the
investors in a Portfolio would not be required to change that Portfolio's
investment objectives or any of its investment policies discussed below,
including those concerning securities transactions. Each Portfolio would,
however, give written notice to its investors at least 30 days prior to
implementing any change in its investment objectives.
CASH RESERVES PORTFOLIO
Cash Reserves Portfolio seeks its investment objective through investments
limited to the following types of high quality U.S. dollar-denominated money
market instruments. All investments by Cash Reserves Portfolio mature or are
deemed to mature within 397 days from the date of acquisition, and the average
maturity of the investments held by the Portfolio (on a dollar-weighted basis)
is 90 days or less. All investments by the Portfolio are in "first tier"
securities (i.e., securities rated in the highest rating category for short-
term obligations by at least two nationally recognized statistical rating
organizations (each, an "NRSRO") assigning a rating to the security or issuer
or, if only one NRSRO assigns a rating, that NRSRO or, in the case of an
investment which is not rated, of comparable quality as determined by the
Adviser) and are determined by the Adviser to present minimal credit risks.
Investments in high quality, short term instruments may, in many
circumstances, result in a lower yield than would be available from
investments in instruments with a lower quality or a longer term. Cash
Reserves Portfolio may hold uninvested cash reserves pending investment. Under
the 1940 Act, Cash Reserves and Cash Reserves Portfolio are each classified as
"diversified," although in the case of Cash Reserves, all of its investable
assets are invested in the Portfolio. A "diversified investment company" must
invest at least 75% of its assets in cash and cash items, U.S. government
securities, investment company securities (e.g., interests in the Portfolio)
and other securities limited as to any one issuer to not more than 5% of the
total assets of the investment company and not more than 10% of the voting
securities of the issuer.
(1) Bank obligations -- Cash Reserves Portfolio invests at least 25%
of its investable assets, and may invest up to 100% of its assets, in bank
obligations. This concentration policy is fundamental and may not be
changed without the approval of the investors in Cash Reserves Portfolio.
Bank obligations include, but are not limited to, negotiable certificates
of deposit, bankers' acceptances and fixed time deposits. Cash Reserves
Portfolio limits its investments in U.S. bank obligations (including their
non-U.S. branches) to banks having total assets in excess of $1 billion
and which are subject to regulation by an agency of the U.S. government.
The Portfolio may also invest in certificates of deposit issued by banks
the deposits in which are insured by the Federal Deposit Insurance
Corporation ("FDIC"), having total assets of less than $1 billion,
provided that the Portfolio at no time owns more than $100,000 principal
amount of certificates of deposit (or any higher principal amount which in
the future may be fully insured by FDIC insurance) of any one of those
issuers. Fixed time deposits are obligations which are payable at a stated
maturity date and bear a fixed rate of interest. Generally, fixed time
deposits may be withdrawn on demand by the Portfolio, but they may be
subject to early withdrawal penalties which vary depending upon market
conditions and the remaining maturity of the obligation. Although fixed
time deposits do not have a market, there are no contractual restrictions
on the Portfolio's right to transfer a beneficial interest in the deposit
to a third party.
U.S. banks organized under federal law are supervised and examined by
the Comptroller of the Currency and are required to be members of the
Federal Reserve System and to be insured by the FDIC. U.S. banks organized
under state law are supervised and examined by state banking authorities
and are members of the Federal Reserve System only if they elect to join.
However, state banks which are insured by the FDIC are subject to federal
examination and to a substantial body of federal law and regulation. As a
result of federal and state laws and regulations, U.S. branches of U.S.
banks, among other things, are generally required to maintain specified
levels of reserves, and are subject to other supervision and regulation
designed to promote financial soundness.
Cash Reserves Portfolio limits its investments in non-U.S. bank
obligations (i.e., obligations of non-U.S. branches and subsidiaries of
U.S. banks, and U.S. and non-U.S. branches of non-U.S. banks) to U.S.
dollar-denominated obligations of banks which at the time of investment
are branches or subsidiaries of U.S. banks which meet the criteria in the
preceding paragraphs or are branches of non-U.S. banks which (i) have more
than $10 billion, or the equivalent in other currencies, in total assets;
(ii) in terms of assets are among the 75 largest non-U.S. banks in the
world; (iii) have branches or agencies in the United States; and (iv) in
the opinion of the Adviser, are of an investment quality comparable with
obligations of U.S. banks which may be purchased by the Portfolio. These
obligations may be general obligations of the parent bank, in addition to
the issuing branch or subsidiary, but the parent bank's obligations may be
limited by the terms of the specific obligation or by governmental
regulation. The Portfolio also limits its investments in non-U.S. bank
obligations to banks, branches and subsidiaries located in Western Europe
(United Kingdom, France, Germany, Belgium, the Netherlands, Italy,
Switzerland, Denmark, Norway, Sweden), Australia, Japan, the Cayman
Islands, the Bahamas and Canada. Cash Reserves Portfolio does not purchase
any bank obligation of the Adviser or an affiliate of the Adviser.
Since Cash Reserves Portfolio may hold obligations of non-U.S.
branches and subsidiaries of U.S. banks, and U.S. and non-U.S. branches of
non-U.S. banks, an investment in Cash Reserves involves certain additional
risks. Such investment risks include future political and economic
developments, the possible imposition of non-U.S. withholding taxes on
interest income payable on such obligations held by the Portfolio, the
possible seizure or nationalization of non-U.S. deposits and the possible
establishment of exchange controls or other non-U.S. governmental laws or
restrictions applicable to the payment of the principal of and interest on
certificates of deposit or time deposits that might affect adversely such
payment on such obligations held by the Portfolio. In addition, there may
be less publicly-available information about a non-U.S. branch or
subsidiary of a U.S. bank or a U.S. or non-U.S. branch of a non-U.S. bank
than about a U.S. bank and such branches and subsidiaries may not be
subject to the same or similar regulatory requirements that apply to U.S.
banks, such as mandatory reserve requirements, loan limitations and
accounting, auditing and financial record-keeping standards and
requirements.
The provisions of federal law governing the establishment and
operation of U.S. branches do not apply to non-U.S. branches of U.S.
banks. However, Cash Reserves Portfolio may purchase obligations only of
those non-U.S. branches of U.S. banks which were established with the
approval of the Board of Governors of the Federal Reserve System (the
"Board of Governors"). As a result of such approval, these branches are
subject to examination by the Board of Governors and the Comptroller of
the Currency. In addition, such non-U.S. branches of U.S. banks are
subject to the supervision of the U.S. bank and creditors of the non-U.S.
branch are considered general creditors of the U.S. bank subject to
whatever defenses may be available under the governing non-U.S. law and to
the terms of the specific obligation. Nonetheless, Cash Reserves Portfolio
generally will be subject to whatever risk may exist that the non-U.S.
country may impose restrictions on payment of certificates of deposit or
time deposits.
U.S. branches of non-U.S. banks are subject to the laws of the state
in which the branch is located or to the laws of the United States. Such
branches are therefore subject to many of the regulations, including
reserve requirements, to which U.S. banks are subject. In addition, Cash
Reserves Portfolio may purchase obligations only of those U.S. branches of
non-U.S. banks which are located in states which impose the additional
requirement that the branch pledge to a designated bank within the state
an amount of its assets equal to 5% of its total liabilities.
Non-U.S. banks in whose obligations Cash Reserves Portfolio may invest
may not be subject to the laws and regulations referred to in the
preceding two paragraphs.
(2) Obligations of, or guaranteed by, non-U.S. governments. Cash
Reserves Portfolio limits its investments in non-U.S. government
obligations to obligations issued or guaranteed by the governments of
Western Europe (United Kingdom, France, Germany, Belgium, the Netherlands,
Italy, Switzerland, Denmark, Norway, Sweden), Australia, Japan and Canada.
Generally, such obligations may be subject to the additional risks
described in paragraph (1) above in connection with the purchase of non-
U.S. bank obligations.
(3) Commercial paper rated Prime-1 by Moody's Investors Service, Inc.
("Moody's") or A-1 by Standard & Poor's Ratings Group ("Standard &
Poor's") or, if not rated, determined to be of comparable quality by the
Adviser, such as unrated commercial paper issued by corporations having an
outstanding unsecured debt issue currently rated Aaa by Moody's or AAA by
Standard & Poor's. Commercial paper is unsecured debt of corporations
usually maturing in 270 days or less from its date of issuance.
(4) Obligations of, or guaranteed by, the U.S. government, its
agencies or instrumentalities. These include issues of the U.S. Treasury,
such as bills, certificates of indebtedness, notes, bonds and Treasury
Receipts, which are unmatured interest coupons of U.S. Treasury bonds and
notes which have been separated and resold in a custodial receipt program
administered by the U.S. Treasury, and issues of agencies and
instrumentalities established under the authority of an Act of Congress.
Some of the latter category of obligations are supported by the full faith
and credit of the United States, others are supported by the right of the
issuer to borrow from the U.S. Treasury, and still others are supported
only by the credit of the agency or instrumentality. Examples of each of
the three types of obligations described in the preceding sentence are (i)
obligations guaranteed by the Export-Import Bank of the United States,
(ii) obligations of the Federal Home Loan Mortgage Corporation, and (iii)
obligations of the Student Loan Marketing Association, respectively.
(5) Repurchase agreements, providing for resale within 397 days or
less, covering obligations of, or guaranteed by, the U.S. government, its
agencies or instrumentalities which may have maturities in excess of 397
days. A repurchase agreement arises when a buyer purchases an obligation
and simultaneously agrees with the vendor to resell the obligation to the
vendor at an agreed-upon price and time, which is usually not more than
seven days from the date of purchase. The resale price of a repurchase
agreement is greater than the purchase price, reflecting an agreed-upon
market rate which is effective for the period of time the buyer's funds
are invested in the obligation and which is not related to the coupon rate
on the purchased obligation. Obligations serving as collateral for each
repurchase agreement are delivered to the Portfolio's custodian or a
subcustodian either physically or in book entry form and the collateral is
marked to the market daily to ensure that each repurchase agreement is
fully collateralized at all times. A buyer of a repurchase agreement runs
a risk of loss if, at the time of default by the issuer, the value of the
collateral securing the agreement is less than the price paid for the
repurchase agreement. If the vendor of a repurchase agreement becomes
bankrupt, Cash Reserves Portfolio might be delayed, or may incur costs or
possible losses of principal and income, in selling the collateral. The
Portfolio may enter into repurchase agreements only with a vendor which is
a member bank of the Federal Reserve System or which is a "primary dealer"
(as designated by the Federal Reserve Bank of New York) in U.S. government
obligations. The Portfolio will not enter into any repurchase agreements
with the Adviser or an affiliate of the Adviser. The restrictions and
procedures described above which govern the Portfolio's investment in
repurchase agreements are designed to minimize the Portfolio's risk of
losses in making those investments. (See "Repurchase Agreements.")
(6) Asset-backed securities, which may include securities such as
Certificates for Automobile Receivables ("CARS") and Credit Card
Receivable Securities ("CARDS"), as well as other asset-backed securities.
CARS represent fractional interests in pools of car installment loans, and
CARDS represent fractional interests in pools of revolving credit card
receivables. The rate of return on asset-backed securities may be affected
by early prepayment of principal on the underlying loans or receivables.
Prepayment rates vary widely and may be affected by changes in market
interest rates. It is not possible to accurately predict the average life
of a particular pool of loans or receivables. Reinvestment of principal
may occur at higher or lower rates than the original yield. Therefore, the
actual maturity and realized yield on asset-backed securities will vary
based upon the prepayment experience of the underlying pool of loans or
receivables. (See "Asset-Backed Securities.")
Cash Reserves Portfolio does not purchase securities which the Portfolio
believes, at the time of purchase, will be subject to exchange controls or
non-U.S. withholding taxes; however, there can be no assurance that such laws
may not become applicable to certain of the Portfolio's investments. In the
event exchange controls or non-U.S. withholding taxes are imposed with respect
to any of the Portfolio's investments, the effect may be to reduce the income
received by the Portfolio on such investments or to prevent the Portfolio from
receiving any value in U.S. dollars from its investment in non-U.S.
securities.
ASSET-BACKED SECURITIES
As set forth above, Cash Reserves Portfolio may purchase asset-backed
securities that represent fractional interests in pools of retail installment
loans, both secured (such as CARS) and unsecured, or leases or revolving
credit receivables, both secured and unsecured (such as CARDS). These assets
are generally held by a trust and payments of principal and interest or
interest only are passed through monthly or quarterly to certificate holders
and may be guaranteed up to certain amounts by letters of credit issued by a
financial institution affiliated or unaffiliated with the trustee or
originator of the trust.
Underlying automobile sales contracts, leases or credit card receivables
are subject to prepayment, which may reduce the overall return to certificate
holders. Reinvestment of principal may occur at higher or lower rates than the
original yield. Certificate holders may also experience delays in payment on
the certificates if the full amounts due on underlying loans, leases or
receivables are not realized by the Portfolio because of unanticipated legal
or administrative costs of enforcing the contracts or because of depreciation
or damage to the collateral (usually automobiles) securing certain contracts,
or other factors. If consistent with its investment objectives and policies,
Cash Reserves Portfolio may invest in other asset-backed securities.
REPURCHASE AGREEMENTS
Each of Cash Reserves and Cash Reserves Portfolio may invest its assets
repurchase agreements only with member banks of the Federal Reserve System or
"primary dealers" (as designated by the Federal Reserve Bank of New York) in
U.S. government securities. Under the terms of a typical repurchase agreement,
the Fund would acquire an underlying debt instrument for a relatively short
period (usually not more than one week) subject to an obligation of the seller
to repurchase and the Fund to resell the instrument at a fixed price and time,
thereby determining the yield during the Fund's holding period. This results
in a fixed rate of return insulated from market fluctuations during such
period. A repurchase agreement is subject to the risk that the seller may fail
to repurchase the security. All repurchase agreements entered into by Cash
Reserves shall be fully collateralized at all times during the period of the
agreement in that the value of the underlying security shall be at least equal
to the amount of the loan, including the accrued interest thereon, and the
Fund or its custodian or sub-custodian shall have control of the collateral,
which the Adviser believes will give the applicable Fund a valid, perfected
security interest in the collateral. This might become an issue in the event of
the bankruptcy of the other party to the transaction. In the event of default by
the seller under a repurchase agreement construed to be a collateralized loan,
the underlying securities are not owned by the Fund but only constitute
collateral for the seller's obligation to pay the repurchase price. Therefore,
the Fund may suffer time delays and incur costs in connection with the
disposition of the collateral. The Adviser believes that the collateral
underlying repurchase agreements may be more susceptible to claims of the
seller's creditors than would be the case with securities owned by Cash
Reserves. The Fund will not invest in a repurchase agreement maturing in more
than seven days if any such investment together with illiquid securities held by
the Fund exceed 10% of the Fund's total net assets. Repurchase agreements are
also subject to the same risks described herein with respect to stand-by
commitments.
U.S. TREASURY RESERVES PORTFOLIO
U.S. Treasury Reserves Portfolio seeks its investment objective by
investing in obligations of, or guaranteed by, the U.S. government, its
agencies or instrumentalities including issues of the U.S. Treasury, such as
bills, certificates of indebtedness, notes, bonds and Treasury Receipts, which
are unmatured interest coupons of U.S. Treasury bonds and notes which have
been separated and resold in a custodial receipt program administered by the
U.S. Treasury, and in issues of agencies and instrumentalities established
under the authority of an Act of Congress which are supported by the full
faith and credit of the United States. U.S. Treasury Reserves Portfolio will
not enter into repurchase agreements. All investments by the Portfolio are in
"first tier" securities (i.e., securities rated in the highest rating category
for short-term obligations by at least two NRSRO's assigning a rating to the
security or issuer or, if only one NRSRO assigns a rating, that NRSRO or, in
the case of an investment which is not rated, of comparable quality as
determined by the Adviser) and are determined by the Adviser to present
minimal credit risks. Investments in high quality, short term instruments may,
in many circumstances, result in a lower yield than would be available from
investments in instruments with a lower quality or a longer term. U.S.
Treasury Reserves Portfolio may hold uninvested cash reserves pending
investment.
LENDING OF SECURITIES
Consistent with applicable regulatory requirements and in order to
generate income, each of the Funds and Portfolios may lend its securities to
broker-dealers and other institutional borrowers. Such loans will usually be
made only to member banks of the U.S. Federal Reserve System and to member
firms of the New York Stock Exchange (and subsidiaries thereof). Loans of
securities would be secured continuously by collateral in cash, cash
equivalents, or U.S. Treasury obligations maintained on a current basis at an
amount at least equal to the market value of the securities loaned. The cash
collateral would be invested in high quality short-term instruments. Either
party has the right to terminate a loan at any time on customary industry
settlement notice (which will not usually exceed three business days). During
the existence of a loan, a Fund or Portfolio would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned and/or with respect to cash collateral would receive compensation based
on investment of the collateral (subject to a rebate payable to the borrower).
The borrower alternatively may pay the Fund or Portfolio a fee for use of the
borrowed securities. The Fund or Portfolio would not, however, have the right
to vote any securities having voting rights during the existence of the loan,
but would call the loan in anticipation of an important vote to be taken among
holders of the securities or of the giving or withholding of their consent on
a material matter affecting the investment. As with other extensions of
credit, there are risks of delay in recovery or even loss of rights in the
collateral should the borrower fail financially. However, the loans would be
made only to entities deemed by the Adviser to be of good standing, and when,
in the judgment of the Adviser, the consideration which can be earned
currently from loans of this type justifies the attendant risk. In addition, a
Fund or Portfolio could suffer loss if the borrower terminates the loan and
the Fund or Portfolio is forced to liquidate investments in order to return
the cash collateral to the buyer. If the Adviser determines to make loans, it
is not intended that the value of the securities loaned by a Fund or Portfolio
would exceed 33 1/3% of the value of its net assets.
PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS
Each Fund and Portfolio may invest up to 10% of its net assets in
securities for which there is no readily available market. These illiquid
securities may include privately placed restricted securities for which no
institutional market exists. The absence of a trading market can make it
difficult to ascertain a market value for illiquid investments. Disposing of
illiquid investments may involve time-consuming negotiation and legal
expenses, and it may be difficult or impossible for a Fund or Portfolio to
sell them promptly at an acceptable price.
INVESTMENT RESTRICTIONS
The Trust, on behalf of the Funds, and the Portfolios have each adopted
the following policies which may not be changed without approval by holders of
a "majority of the outstanding shares" of the applicable Fund or Portfolio,
which as used in this Statement of Additional Information means the vote of
the lesser of (i) 67% or more of the outstanding voting securities of the Fund
or Portfolio present at a meeting, if the holders of more than 50% of the
outstanding "voting securities" of the Fund or Portfolio are present or
represented by proxy, or (ii) more than 50% of the outstanding "voting
securities" of the Fund or the Portfolio. The term "voting securities" as used
in this paragraph has the same meaning as in the 1940 Act.
Whenever the Trust is requested to vote on a change in the investment
restrictions or fundamental policies of a Portfolio in which a Fund invests, the
Trust will hold a meeting of the corresponding Fund's shareholders and will cast
its vote as instructed by the shareholders. Each Fund will vote the shares held
by its shareholders who do not give voting instructions in the same proportion
as the shares of that Fund's shareholders who do give voting instructions.
Shareholders of the Funds who do not vote will have no effect on the outcome of
these matters.
Neither the Trust, on behalf of a Fund, nor a Portfolio may:
(1) borrow money, except that as a temporary measure for extraordinary
or emergency purposes either the Trust or the Portfolio may borrow from
banks in an amount not to exceed 1/3 of the value of the net assets
of the Fund or the Portfolio, respectively, including the amount borrowed
(moreover, neither the Trust (on behalf of the Fund) nor the Portfolio may
purchase any securities at any time at which borrowings exceed 5% of the
total assets of the Fund or the Portfolio, respectively (taken in each
case at market value)) (it is intended that the Fund and the Portfolio
would borrow money only from banks and only to accommodate requests for
the repurchase of shares of the Fund or the withdrawal of all or a portion
of a beneficial interest in the Portfolio while effecting an orderly
liquidation of securities);
(2) purchase any security or evidence of interest therein on margin,
except that either the Trust, on behalf of the Fund, or the Portfolio may
obtain such short term credit as may be necessary for the clearance of
purchases and sales of securities;
(3) underwrite securities issued by other persons, except that all the
assets of the Fund may be invested in the Portfolio and except insofar as
either the Trust or the Portfolio may technically be deemed an underwriter
under the Securities Act of 1933 in selling a security;
(4) make loans to other persons except (a) through the lending of
securities held by either the Fund or the Portfolio, but not in excess of
33 1/3% of the Fund's or the Portfolio's net assets, as the case may
be, (b) through the use of repurchase agreements (or, in the case of
Liquid Reserves and Cash Reserves Portfolio, fixed time deposits) or the
purchase of short term obligations, or (c) by purchasing all or a portion
of an issue of debt securities of types commonly distributed privately to
financial institutions; for purposes of this paragraph 4 the purchase of a
portion of an issue of debt securities which is part of an issue to the
public (and in the case of Liquid Reserves and Cash Reserves Portfolio,
short term commercial paper) shall not be considered the making of a loan;
(5) purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or
commodity contracts in the ordinary course of business (the Trust on
behalf of each Fund and the Portfolio reserve the freedom of action to
hold and to sell real estate acquired as a result of the ownership of
securities by the Fund or the Portfolio);
(6) in the case of U.S. Treasury Reserves and U.S. Treasury Reserves
Portfolio, concentrate its investment in any particular industry; provided
that nothing in this Investment Restriction is intended to affect the
ability to invest 100% of U.S. Treasury Reserves' assets in U.S. Treasury
Reserves Portfolio;
(7) in the case of Liquid Reserves and Cash Reserves Portfolio,
concentrate its investments in any particular industry, but, if it is
deemed appropriate for the achievement of its investment objective, up to
25% of the assets of Liquid Reserves or Cash Reserves Portfolio,
respectively (taken at market value at the time of each investment) may be
invested in any one industry, except that the Portfolio will invest at
least 25% of its assets and may invest up to 100% of its assets in bank
obligations; provided that, if the Trust withdraws the investment of
Liquid Reserves from Cash Reserves Portfolio, the Trust will invest the
assets of the Fund in bank obligations to the same extent and with the
same reservation as the Portfolio; and provided, further that nothing in
this Investment Restriction is intended to affect Liquid Reserves' ability
to invest 100% of its assets in Cash Reserves Portfolio; or
(8) issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder, except as appropriate to
evidence a debt incurred without violating Investment Restriction (1)
above.
If a percentage restriction or a rating restriction (other than a
restriction as to borrowing) on investment or utilization of assets set forth
above or referred to in the Prospectus is adhered to at the time an investment
is made or assets are so utilized, a later change in percentage resulting from
changes in the value of the securities held by a Fund or a Portfolio or a
later change in the rating of a security held by the Fund or the Portfolio is
not considered a violation of policy.
3. PERFORMANCE INFORMATION
Fund performance may be quoted in advertising, shareholder reports and
other communications in terms of yield, effective yield, tax equivalent yield,
total rate of return or tax equivalent total rate of return. All performance
information is historical and is not intended to indicate future performance.
Yields and total rates of return fluctuate in response to market conditions
and other factors.
From time to time, in reports or other communications to shareholders or
in advertising or sales materials, performance of Fund shares may be compared
with current or historical performance of other mutual funds or classes of
shares of other mutual funds, as listed in the rankings prepared by Lipper
Analytical Services, Inc. or similar independent services that monitor the
performance of mutual funds, financial indices such as the S&P 500 Index or
other industry or financial publications, including, but not limited to, Bank
Rate Monitor, IBC Donaghue's Money Fund Report, Morningstar, Inc. and Thomson
Financial Bank Watch. A Fund may also present statistics on current and
historical rates of Money Market Deposit Accounts and Statement Savings,
Certificates of Deposit (CDs) and other bank or depository products prepared
by outside services such as Bank Rate Monitor, Inc., and compare this
performance to the current or historical performance of the Fund. Any given
"performance" or performance comparison should not be considered as
representative of any performance in the future. In addition, there may be
differences between a Fund and the various indexes and products which may be
compared to the Fund. In particular, mutual funds differ from bank deposits or
other bank products in several respects. For example, a fund may offer greater
liquidity or higher potential returns than CDs, but a fund does not guarantee
your principal or your returns, and fund shares are not FDIC insured.
Each Fund may provide annualized yield and effective yield quotations. The
yield of a Fund refers to the income generated by an investment in the Fund
over a seven-day period (which period is stated in any such advertisement or
communication). This income is then annualized; that is, the amount of income
generated by the investment over that period is assumed to be generated each
week over a 365-day period and is shown as a percentage of the investment. Any
current yield quotation of a Fund which is used in such a manner as to be
subject to the provisions of Rule 482(d) under the Securities Act of 1933, as
amended, consists of an annualized historical yield, carried at least to the
nearest hundredth of one percent, based on a specific seven calendar day
period and is calculated by dividing the net change in the value of an account
having a balance of one share at the beginning of the period by the value of
the account at the beginning of the period and multiplying the quotient by
365/7. For this purpose the net change in account value would reflect the
value of additional shares purchased with dividends declared on the original
share and dividends declared on both the original share and any such
additional shares, but would not reflect any realized gains or losses as a
result of a Fund's investment in a Portfolio or from the sale of securities or
any unrealized appreciation or depreciation on portfolio securities. The
effective yield is calculated similarly, but when annualized the income earned
by the investment during that seven-day period is assumed to be reinvested.
The effective yield is slightly higher than the yield because of the
compounding effect of this assumed reinvestment. Any effective yield quotation
of a Fund so used shall be calculated by compounding the current yield
quotation for such period by multiplying such quotation by 7/365, adding 1 to
the product, raising the sum to a power equal to 365/7, and subtracting 1
from the result.
U.S. Treasury Reserves may provide tax equivalent yield quotations. The
tax equivalent yield refers to the yield that a fully taxable money market
fund would have to generate in order to produce an after-tax yield equivalent
to that of a Fund. The use of a tax equivalent yield allows investors to
compare the yield of the Fund, the dividends from which may be exempt from
federal or state personal income tax, with yields of funds the dividends from
which are not tax exempt. Any tax equivalent yield quotation of a Fund is
calculated as follows: If the entire current yield quotation for such period
is tax-exempt, the tax equivalent yield will be the current yield quotation
divided by 1 minus a stated income tax rate or rates. If a portion of the
current yield quotation is not tax-exempt, the tax equivalent yield will be
the sum of (a) that portion of the yield which is tax-exempt divided by 1
minus a stated income tax rate or rates and (b) the portion of the yield which
is not tax-exempt. A Fund also may provide yield, effective yield and tax
equivalent yield quotations for longer periods.
Each Fund may provide its period and average annualized total rates of
return. The total rate of return refers to the change in the value of an
investment in a Fund over a stated period and is compounded to include the
value of any shares purchased with any dividends or capital gains declared
during such period. A total rate of return quotation for a Fund is calculated
for any period by (a) dividing (i) the sum of the net asset value per share on
the last day of the period and the net asset value per share on the last day
of the period of shares purchasable with dividends and capital gains
distributions declared during such period with respect to a share held at the
beginning of such period and with respect to shares purchased with such
dividends and capital gains distributions, by (ii) the public offering price
on the first day of such period, and (b) subtracting 1 from the result. Period
total rate of return may be annualized. An annualized total rate of return
assumes that the period total rate of return is generated over a one-year
period. Any annualized total rate of return quotation is calculated by (x)
adding 1 to the period total rate of return quotation calculated above, (y)
raising such sum to a power which is equal to 365 divided by the number of
days in such period, and (z) subtracting 1 from the result.
U.S. Treasury Reserves may provide tax equivalent total rates of return.
The tax equivalent total rate of return refers to the total rate of return
that a fully taxable money market fund would have to generate in order to
produce an after-tax total rate of return equivalent to that of a Fund. The
use of a tax equivalent total rate of return allows investors to compare the
total rates of return of a Fund, the dividends from which may be exempt from
federal or state personal income taxes, with the total rates of return of
funds the dividends from which are not tax exempt. Any tax equivalent total
rate of return quotation of a Fund is calculated as follows: If the entire
current total rate of return quotation for such period is tax-exempt, the tax
equivalent total rate of return will be the current total rate of return
quotation divided by 1 minus a stated income tax rate or rates. If a portion
of the current total rate of return quotation is not tax-exempt, the tax
equivalent total rate of return will be the sum of (a) that portion of the
total rate of return which is tax-exempt divided by 1 minus a stated income
tax rate or rates and (b) the portion of the total rate of return which is not
tax-exempt.
Set forth below is total rate of return information, assuming that dividends
and capital gains distributions, if any, were reinvested, for each Fund for the
periods indicated. Performance results include any applicable fee waivers or
expense subsidies in place during the time period, which may cause the results
to be more favor- able than they would otherwise have been.
REDEEMABLE VALUE
OF A HYPOTHETICAL
$1,000 INVESTMENT
ANNUALIZED TOTAL AT THE END
PERIOD RATE OF RETURN OF THE PERIOD
- ------ -------------- -------------
LIQUID RESERVES
May 3, 1990 (commencement of operations) to
August 31, 1999 5.07% $1,586.79
Five years ended August 31, 1999 5.37% 1,298.92
One year ended August 31, 1999 4.94% 1,049.44
U.S. TREASURY RESERVES
March 1, 1991 (commencement of operations) to
August 31, 1999 4.37% 1,438.81
Five years ended August 31, 1999 4.83% 1,266.10
One year ended August 31, 1999 4.28% 1,042.77
The annualized yield of Liquid Reserves for the seven-day period ended
August 31, 1999 was 4.99%. The effective compound annualized yield of Liquid
Reserves for such period was 5.11%. The annualized yield of U.S. Treasury
Reserves for the seven-day period ended August 31, 1999 was 4.24%. The
effective compound annualized yield of U.S. Treasury Reserves for such period
was 4.33%, and the annualized tax equivalent yield of U.S. Treasury Reserves
for such period was 4.78% (assuming a combined state and local tax rate of
11.307% for New York City residents).
4. DETERMINATION OF NET ASSET VALUE
The net asset value of each share of the Funds is determined on each day
on which the New York Stock Exchange is open for trading. This determination
is normally made once during each such day as of 3:00 p.m., Eastern time, for
Liquid Reserves and 12:00 noon, Eastern time, for U.S. Treasury Reserves, by
dividing the value of each Fund's net assets (i.e., the value of its assets,
including its investment in a Portfolio, less its liabilities, including
expenses payable or accrued) by the number of the Fund's shares outstanding at
the time the determination is made. On days when the financial markets in
which the Funds invest close early, each Fund's net asset value is determined
as of the close of these markets if such time is earlier than the time at
which the net asset value is normally calculated. As of the date of this
Statement of Additional Information, the Exchange is open for trading every
weekday except for the following holidays (or the days on which they are
observed): New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. It is anticipated that the net asset value of each share of
each Fund will remain constant at $1.00 and, although no assurance can be
given that they will be able to do so on a continuing basis, as described
below, the Funds and Portfolios employ specific investment policies and
procedures to accomplish this result.
The value of a Portfolio's net assets (i.e., the value of its securities
and other assets less its liabilities, including expenses payable or accrued)
is determined at the same time and on the same days as the net asset value per
share of the corresponding Fund is determined. The net asset value of a Fund's
investment in the corresponding Portfolio is equal to the Fund's pro rata
share of the total investment of the Fund and of other investors in the
Portfolio less the Fund's pro rata share of the Portfolio's liabilities.
The securities held by a Fund or Portfolio are valued at their amortized
cost. Amortized cost valuation involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. If fluctuating interest rates cause the market value of the
securities held by the Fund or Portfolio to deviate more than 1/2 of 1% from
their value determined on the basis of amortized cost, the Trust's or
applicable Portfolio's Board of Trustees will consider whether any action
should be initiated, as described in the following paragraph. Although the
amortized cost method provides certainty in valuation, it may result in
periods during which the stated value of an instrument is higher or lower than
the price the Fund or Portfolio would receive if the instrument were sold.
Pursuant to the rules of the SEC, the Trust's and the Portfolios' Boards
of Trustees have established procedures to stabilize the value of the Funds'
and Portfolios' net assets within 1/2 of 1% of the value determined on the
basis of amortized cost. These procedures include a review of the extent of
any such deviation of net asset value, based on available market rates. Should
that deviation exceed 1/2 of 1% for a Fund or Portfolio, the Trust's or
applicable Portfolio's Board of Trustees will consider whether any action
should be initiated to eliminate or reduce material dilution or other unfair
results to investors in the Fund or Portfolio. Such action may include
withdrawal in kind, selling securities prior to maturity and utilizing a net
asset value as determined by using available market quotations. The Funds and
Portfolios maintain a dollar-weighted average maturity of 90 days or less, do
not purchase any instrument with a remaining maturity greater than 397 days or
(in the case of Liquid Reserves and Cash Reserves Portfolio) subject to a
repurchase agreement having a duration of greater than 397 days, limit their
investments, including repurchase agreements, to those U.S. dollar-denominated
instruments that are determined by the Adviser to present minimal credit risks
and comply with certain reporting and recordkeeping procedures. The Trust and
Portfolios also have established procedures to ensure that securities
purchased by the Funds and Portfolios meet high quality criteria. (See
"Investment Objectives, Policies and Restrictions -- Investment Policies.")
Because of the short-term maturities of the portfolio investments of each
Fund, the Funds do not expect to realize any material long-term capital gains
or losses. Any net realized short-term capital gains will be declared and
distributed to the Funds' shareholders annually after the close of each Fund's
fiscal year. Distributions of short-term capital gains are taxable to
shareholders as described in "Certain Additional Tax Matters." Any realized
short-term capital losses will be offset against short-term capital gains or,
to the extent possible, utilized as capital loss carryover. Each Fund may
distribute short-term capital gains more frequently than annually, reduce
shares to reflect capital losses or make distributions of capital if necessary
in order to maintain the Fund's net asset value of $1.00 per share.
It is expected that each Fund will have a positive net income at the time
of each determination thereof. If for any reason a Fund's net income is a
negative amount, which could occur, for instance, upon default by an issuer of
a portfolio security, the Fund would first offset the negative amount with
respect to each shareholder account from the dividends declared during the
month with respect to those accounts. If and to the extent that negative net
income exceeds declared dividends at the end of the month, the Fund would
reduce the number of outstanding Fund shares by treating each shareholder as
having contributed to the capital of the Fund that number of full and
fractional shares in the shareholder's account which represents the
shareholder's share of the amount of such excess. Each shareholder would be
deemed to have agreed to such contribution in these circumstances by
investment in the Fund.
Subject to compliance with applicable regulations, the Trust and the
Portfolios have each reserved the right to pay the redemption price of shares
of the Funds or beneficial interests in the Portfolios, either totally or
partially, by a distribution in kind of securities (instead of cash). The
securities so distributed would be valued at the same amount as that assigned
to them in calculating the net asset value for the shares or beneficial
interests being sold. If a holder of shares or beneficial interests received a
distribution in kind, such holder could incur brokerage or other charges in
converting the securities to cash.
Shareholders may redeem Fund shares by sending written instructions in
proper form (as determined by a shareholder's Shareholder Servicing Agent) to
their Shareholder Servicing Agents. Shareholders are responsible for ensuring
that a request for redemption is in proper form.
Shareholders may redeem or exchange Fund shares by telephone, if their
account applications so permit, by calling their Shareholder Servicing Agents.
During periods of drastic economic or market changes or severe weather or
other emergencies, shareholders may experience difficulties implementing a
telephone exchange or redemption. In such an event, another method of
instruction, such as a written request sent via an overnight delivery service,
should be considered. The Funds and each Shareholder Servicing Agent will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. These procedures may include recording of the telephone
instructions and verification of a caller's identity by asking for the
shareholder's name, address, telephone number, Social Security number, and
account number. If these or other reasonable procedures are not followed, the
Fund or the Shareholder Servicing Agent may be liable for any losses to a
shareholder due to unauthorized or fraudulent instructions. Otherwise, the
shareholders will bear all risk of loss relating to a redemption or exchange
by telephone.
The Trust and the Portfolios may suspend the right of redemption or
postpone the date of payment for shares of a Fund or beneficial interests in a
Portfolio more than seven days during any period when (a) trading in the
markets the Fund or Portfolio normally utilizes is restricted, or an
emergency, as defined by the rules and regulations of the SEC, exists making
disposal of the Fund's or Portfolio's investments or determination of its net
asset value not reasonably practicable; (b) the New York Stock Exchange is
closed (other than customary weekend and holiday closings); or (c) the SEC has
by order permitted such suspension.
5. MANAGEMENT
Each Fund and Portfolio is supervised by a Board of Trustees. In each
case, a majority of the Trustees are not affiliated with the Adviser. In
addition, a majority of the disinterested Trustees of the Funds are different
from a majority of the disinterested Trustees of their corresponding
Portfolios.
The Trustees and officers of the Trust and the Portfolios, their ages and
their principal occupations during the past five years are set forth below.
Their titles may have varied during that period. Asterisks indicate that those
Trustees and officers are "interested persons" (as defined in the 1940 Act) of
the Trust or a Portfolio. Unless otherwise indicated below, the address of
each Trustee and officer is 21 Milk Street, Boston, Massachusetts. The address
of Cash Reserves Portfolio is Elizabethan Square, George Town, Grand Cayman,
British West Indies. The address of U.S. Treasury Reserves Portfolio is 21
Milk Street, Boston, Massachusetts.
TRUSTEES OF THE TRUST
PHILIP W. COOLIDGE; 48* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
MARK T. FINN; 56 -- President and Director, Delta Financial, Inc. (since June,
1983); Chairman of the Board and part Owner, FX 500 Ltd. (Commodity Trading
Advisory Firm) (April 1990 to February 1996); General Partner and shareholder,
Greenwich Ventures LLC (Investment Partnership) (since January, 1996);
President, Secretary and Owner, Phoenix Trading Co. (Commodities Trading
Advisory Firm) (since March, 1997); Chairman and Owner, Vantage Consulting
Group, Inc. (since October, 1988). His address is 3500 Pacific Avenue, P.O.
Box 539, Virginia Beach, Virginia.
RILEY C. GILLEY; 73 -- Vice President and General Counsel, Corporate Property
Investors (November, 1988 to December, 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (retired, December 1987). His address is 4041 Gulf Shore Boulevard
North, Naples, Florida.
TRUSTEES OF THE PORTFOLIOS
ELLIOTT J. BERV; 56 -- President and Chief Executive Officer, Catalyst, Inc.
(Management Consultants) (since June, 1992); President and Director, Elliott
J. Berv & Associates (Management Consultants) (since May, 1984). His address
is 24 Atlantic Drive, Scarborough, Maine.
PHILIP W. COOLIDGE; 48* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
RILEY C. GILLEY; 73 -- Vice President and General Counsel, Corporate Property
Investors (November, 1988 to December, 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (retired, December 1987). His address is 4041 Gulf Shore Boulevard
North, Naples, Florida.
WALTER E. ROBB, III; 73 -- President, Benchmark Consulting Group, Inc. (since
1991); Principal, Robb Associates (Corporate Financial Advisors) (since 1978);
President and Treasurer, Benchmark Advisors, Inc. (Corporate Financial
Advisors) (since 1989); Trustee of certain registered investment companies in
the MFS Family of Funds (since 1985). His address is 35 Farm Road, Sherborn,
Massachusetts.
OFFICERS OF THE TRUST AND THE PORTFOLIOS
PHILIP W. COOLIDGE; 48* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
CHRISTINE D. DORSEY; 29* -- Assistant Secretary and Assistant Treasurer of the
Trust and the Portfolios; Vice President, Signature Financial Group, Inc.
(since January, 1996); Paralegal and Compliance Officer, various financial
companies (July, 1992 to January, 1996).
LINWOOD C. DOWNS; 38* -- Assistant Treasurer of the Trusts and the Portfolios;
Chief Financial Officer and Senior Vice President; Signature Financial Group,
Inc., Treasurer, CFBDS.
TAMIE EBANKS-CUNNINGHAM; 27* -- Assistant Secretary of the Trust and the
Portfolios; Office Manager, Signature Financial Group (Cayman) Ltd. (Since
April 1995); Administrator, Cayman Islands Primary School (prior to April
1995). Her address is P.O. Box 2494, Elizabethan Square, George Town, Grand
Cayman, Cayman Islands, B.W.I.
LINDA T. GIBSON; 34* -- Secretary of the Trust and the Portfolios; Senior Vice
President, Signature Financial Group, Inc.; Secretary, CFBDS.
SUSAN JAKUBOSKI; 35* -- Vice President, Assistant Treasurer and Assistant
Secretary of the Trust and the Portfolios; Vice President, Signature Financial
Group (Cayman) Ltd. (since July 1994)
MOLLY S. MUGLER; 48* -- Assistant Secretary and Assistant Treasurer of the
Trust and the Portfolios; Vice President, Signature Financial Group, Inc.;
Assistant Secretary, CFBDS.
JULIE J. WYETZNER; 40* -- Vice President, Assistant Secretary and Assistant
Treasurer of the Trust and the Portfolios; Vice President, Signature Financial
Group, Inc.
The Trustees and officers of the Trust and the Portfolios also hold
comparable positions with certain other funds for which CFBDS or an affiliate
serves as the distributor or administrator.
TRUSTEES COMPENSATION TABLE
AGGREGATE
AGGREGATE COMPENSATION FROM
COMPENSATION FROM PREMIUM TOTAL COMPENSATION
PREMIUM LIQUID U.S. TREASURY FROM THE TRUST
TRUSTEE RESERVES(1) RESERVES(1) AND COMPLEX(1)(2)
------- ----------- ----------- -----------------
Philip W. Coolidge ..... 0 0 0
Mark T. Finn ........... $6,172 $2,815 $63,250
Riley C. Gilley ........ 2,419 1,760 65,250
William S. Woods, Jr.(3) 5,828 2,853 66,000
- ------------
(1) For the fiscal year ended August 31, 1999.
(2) Messrs. Coolidge, Finn, Gilley and Woods are trustees of 49, 26, 33, and 26
Funds, respectively, of the family of open-end registered investment
companies advised or managed by Citibank.
(3) Effective December 31, 1999, Mr. Woods became a Trustee Emeritus of the
Trust. Per the terms of the Trust's Trustee Emeritus Plan, Mr. Woods serves
the Board of Trustees in an advisory capacity. As a Trustee Emeritus, Mr.
Woods is paid 50% of the annual retainer fee and meeting fees otherwise
applicable to Trustees, together with reasonable out-of-pocket expenses for
each meeting attended.
As of December 13, 1999, all Trustees and officers as a group owned less
than 1% of each Fund's outstanding shares. As of the same date, more than 95%
of the outstanding shares of Liquid Reserves and more than 95% of the
outstanding shares of U.S. Treasury Reserves were held of record by Citibank
or an affiliate, as a Shareholder Servicing Agent of the Funds, for the
accounts of their respective clients.
The Declaration of Trust of each of the Trust and the Portfolios provides
that the Trust or such Portfolio, as the case may be, will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with
the Trust or such Portfolio, as the case may be, unless, as to liability to
the Trust or such Portfolio or its respective investors, it is finally
adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices, or
unless with respect to any other matter it is finally adjudicated that they
did not act in good faith in the reasonable belief that their actions were in
the best interests of the Trust or such Portfolio, as the case may be. In the
case of settlement, such indemnification will not be provided unless it has
been determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees of the Trust
or such Portfolio, or in a written opinion of independent counsel, that such
officers or Trustees have not engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties.
ADVISER
Citibank manages the assets of each Portfolio pursuant to separate
investment advisory agreements (the "Advisory Agreements"). Subject to such
policies as the Board of Trustees of a Portfolio may determine, the Adviser
manages the securities of the Portfolio and makes investment decisions for the
Portfolio. The Adviser furnishes at its own expense all services, facilities
and personnel necessary in connection with managing the Portfolios'
investments and effecting securities transactions for each Portfolio. Each of
the Advisory Agreements will continue in effect as long as such continuance is
specifically approved at least annually by the Board of Trustees of the
applicable Portfolio or by a vote of a majority of the outstanding voting
securities of the applicable Portfolio, and, in either case, by a majority of
the Trustees of the applicable Portfolio who are not parties to such Advisory
Agreement or interested persons of any such party, at a meeting called for the
purpose of voting on the Advisory Agreement.
Each of the Advisory Agreements provides that the Adviser may render
services to others. Each Advisory Agreement is terminable without penalty on
not more than 60 days' nor less than 30 days' written notice by the applicable
Portfolio when authorized either by a vote of a majority of the outstanding
voting securities of the applicable Portfolio or by a vote of a majority of
the Board of Trustees of the applicable Portfolio, or by the Adviser on not
more than 60 days' nor less than 30 days' written notice, and will
automatically terminate in the event of its assignment. Each Advisory
Agreement provides that neither the Adviser nor its personnel shall be liable
for any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of security
transactions for the applicable Portfolio, except for willful misfeasance, bad
faith or gross negligence or reckless disregard of its or their obligations
and duties under the Advisory Agreement.
For its services under the Advisory Agreements, the Adviser receives
investment advisory fees, which are accrued daily and paid monthly, of 0.15%
of each Portfolio's average daily net assets on an annualized basis for the
Portfolio's then-current fiscal year. The Adviser has voluntarily agreed to
waive a portion of its investment advisory fee.
CASH RESERVES PORTFOLIO: For the fiscal years ended August 31, 1997, 1998
and 1999 the fees paid to Citibank under the Advisory Agreement, after
waivers, were $4,395,286, $6,739,206 and $9,422,276, respectively.
U.S. TREASURY RESERVES PORTFOLIO: For the fiscal years ended August 31,
1997, 1998 and 1999, the fees paid to Citibank under the Advisory Agreement,
after waivers, were $494,339, $578,350 and $614,718, respectively.
Citibank and its affiliates may have deposit, loan and other relationships
with the issuers of securities purchased on behalf of the Funds, including
outstanding loans to such issuers which may be repaid in whole or in part with
the proceeds of securities so purchased. Citibank has informed the Funds that,
in making its investment decisions, it does not obtain or use material inside
information in the possession of any division or department of Citibank or in
the possession of any affiliate of Citibank.
ADMINISTRATORS
Pursuant to Administrative Services Agreements (the "Administrative
Services Agreements"), CFBDS provides the Trust and U.S. Treasury Reserves
Portfolio, and SFG provides Cash Reserves Portfolio, with general office
facilities, and CFBDS supervises the overall administration of the Trust and
U.S. Treasury Reserves Portfolio and SFG supervises the overall administration
of Cash Reserves Portfolio, including, among other responsibilities, the
negotiation of contracts and fees with, and the monitoring of performance and
billings of, the independent contractors and agents of the Trust and the
Portfolios; the preparation and filing of all documents required for
compliance by the Trust and the Portfolios with applicable laws and
regulations; and arranging for the maintenance of books and records of the
Trust and the Portfolios. CFBDS and SFG provide persons satisfactory to the
Board of Trustees of the Trust and the Portfolios to serve as Trustees and
officers of the Trust and the Portfolios. Such Trustees and officers may be
directors, officers or employees of CFBDS, SFG or their affiliates.
For these services, the Administrators receive fees accrued daily and paid
monthly of 0.35% of the average daily net assets of each Fund and 0.05% of the
assets of each Portfolio, in each case on an annualized basis for the Fund's
or the Portfolio's then-current fiscal year. However, each of the
Administrators may voluntarily agree to waive a portion of the fees payable to
it.
LIQUID RESERVES: For the fiscal years ended August 31, 1997, 1998 and
1999, the fees paid to CFBDS from the Fund under the Administrative Services
Agreement, after waivers, were $571,767, $894,835 and $1,433,738,
respectively. For the fiscal years ended August 31, 1997, 1998 and 1999, all
fees payable to SFG under the Administrative Services Agreement with Cash
Reserves Portfolio were voluntarily waived.
U.S. TREASURY RESERVES: For the fiscal years ended August 31, 1997, 1998
and 1999, the fees paid to CFBDS from U.S. Treasury Reserves under the
Administrative Services Agreement, after waivers, were $468,960, $575,894 and
$587,727, respectively. For the fiscal years ended August 31, 1997, 1998 and
1999, the fees payable to CFBDS under the Administrative Services Agreement
with U.S. Treasury Reserves Portfolio were voluntarily waived.
By Agreement, the Trust acknowledges that the name "CitiFunds" is the
property of Citigroup Inc. and provides that if Citibank ceases to serve as
the Adviser of the Trust, the Trust will change its name so as to delete the
word CitiFunds. The Agreement with the Trust also provides that Citibank may
permit other investment companies in addition to the Trust to use the word
"CitiFunds" in their names.
The Administrative Services Agreements with the Trust and the Portfolios
provide that CFBDS or SFG, as the case may be, may render administrative
services to others. The Administrative Services Agreements with the Trust and
the Portfolios continue in effect as to a Fund or Portfolio, as applicable, if
such continuance is specifically approved at least annually by the Trust's or
the respective Portfolio's Board of Trustees or by a vote of a majority of the
outstanding voting securities of the applicable Fund or Portfolio and, in
either case, by a majority of the Trustees of the Trust or Portfolio who are
not interested parties of the Trust, Portfolio or CFBDS. The Administrative
Services Agreements with the Trust and the Portfolios terminate automatically
if they are assigned and may be terminated as to a Fund or Portfolio by the
Trust or the applicable Portfolio without penalty by vote of a majority of the
outstanding voting securities of the Fund or Portfolio, as applicable, or by
either party on not more than 60 days' nor less than 30 days' written notice.
The Administrative Services Agreements with the Trust and the Portfolios also
provide that neither CFBDS nor its personnel shall be liable for any error of
judgment or mistake of law or for any act or omission in the administration or
management of the Trust or the Portfolios, except for willful misfeasance, bad
faith or gross negligence in the performance of its or their duties or by
reason of reckless disregard of its or their obligations and duties under the
Administrative Services Agreements.
CFBDS and SFG are wholly-owned subsidiaries of Signature Financial Group,
Inc.
Pursuant to Sub-Administrative Services Agreements (the "Sub-
Administrative Agreements"), Citibank performs such sub-administrative duties
for the Trust and the Portfolios as are from time to time agreed upon by
Citibank and, as the case may be, CFBDS or SFG. Citibank's sub-administrative
duties may include providing equipment and clerical personnel necessary for
maintaining the organization of the Trust and the Portfolios, participation in
preparation of documents required for compliance by the Trust and the
Portfolios with applicable laws and regulations, preparation of certain
documents in connection with meetings of Trustees and shareholders of the
Trust and Portfolios, and other functions which would otherwise be performed
by CFBDS as set forth above. For performing such sub-administrative services,
Citibank receives such compensation as is from time to time agreed upon by
Citibank and, as the case may be, CFBDS or SFG not in excess of the amount
paid to CFBDS or SFG for its services under the applicable Administrative
Services Agreement. All such compensation is paid by CFBDS or SFG, as the case
may be.
DISTRIBUTOR
The Trust has adopted a Distribution Plan (the "Distribution Plan") in
accordance with Rule 12b-1 under the 1940 Act after having concluded that
there is a reasonable likelihood that the Distribution Plan will benefit the
Funds and their shareholders. The Distribution Plan provides that the
Distributor receives a fee from each Fund at an annual rate not to exceed
0.10% of the Fund's average daily net assets.
The Distribution Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Trust's Trustees and a majority of the Trust's Trustees who are not
"interested persons" of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of the Distribution
Plan or in any agreement related to such Plan ("Qualified Trustees"). The
Distribution Plan requires that at least quarterly the Trust and the
Distributor provide to the Board of Trustees and the Board of Trustees review
a written report of the amounts expended (and the purposes therefor) under the
Distribution Plan. The Distribution Plan further provides that the selection
and nomination of the Trust's Qualified Trustees is committed to the
discretion of the Qualified Trustees then in office who are not interested
Trustees of the Trust. The Distribution Plan may be terminated with respect to
the applicable Fund at any time by a vote of a majority of the Trust's
Qualified Trustees or by a vote of a majority of the outstanding voting
securities of that Fund. The Distribution Plan may not be amended to increase
materially the amount of the Funds' permitted expenses thereunder without the
approval of a majority of the outstanding voting securities of the applicable
Fund and may not be materially amended in any case without a vote of the
majority of both the Trust's Trustees and the Trust's Qualified Trustees. The
Distributor will preserve copies of any plan, agreement or report made
pursuant to the Distribution Plan for a period of not less than six years from
the date of the Distribution Plan, and for the first two years the Distributor
will preserve such copies in an easily accessible place.
As contemplated by the Distribution Plan, CFBDS acts as the agent of the
Funds in connection with the offering of shares of the Funds pursuant to a
Distribution Agreement (the "Distribution Agreement"). After the prospectus
and periodic reports have been prepared, set in type and mailed to existing
shareholders, the Distributor pays for the printing and distribution of copies
of the prospectuses and periodic reports which are used in connection with the
offering of shares of the Funds to prospective investors. The Prospectus
contains a description of fees payable to the Distributor under the
Distribution Agreement. During the period they are in effect, the Distribution
Plan and Distribution Agreement obligate the applicable Funds to pay
distribution fees to CFBDS as compensation for its distribution activities,
not as reimbursement for specific expenses incurred. Thus, even if CFBDS's
expenses exceed its distribution fees for any Fund, the Fund will not be
obligated to pay more than those fees and, if CFBDS's expenses are less than
such fees, it will retain its full fees and realize a profit. Each Fund will
pay the distribution fees to CFBDS until either its Distribution Plan or
Distribution Agreement is terminated or not renewed. In that event, CFBDS's
expenses in excess of distribution fees received or accrued through the
termination date will be CFBDS's sole responsibility and not obligations of
the Fund.
LIQUID RESERVES: For the fiscal year ended August 31, 1997, the fee paid
to the Distributor from Liquid Reserves under the Distribution Agreement,
after waivers, was $50,263. For the fiscal years ended August 31, 1998 and
1999, all fees payable to the Distributor from Liquid Reserves under the
Distribution Agreement were voluntarily waived.
U.S. TREASURY RESERVES: For the fiscal year ended August 31, 1997, the fee
paid from U.S. Treasury Reserves to the Distributor under the Distribution
Agreement, after waivers, was $33,523. For the fiscal years ended August 31,
1998 and 1999, all fees payable from U.S. Treasury Reserves to the Distributor
under the Distribution Agreement were voluntarily waived.
SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN
The Trust has adopted an Administrative Services Plan (the "Administrative
Plan") which provides that the Trust may obtain the services of an
administrator, a transfer agent, a custodian and one or more Shareholder
Servicing Agents, and may enter into agreements providing for the payment of
fees for such services. Under the Administrative Plan, the aggregate of the
fee paid to the Administrator from each Fund and the fees paid to the
Shareholder Servicing Agents from each Fund may not exceed 0.45% of the
applicable Fund's average daily net assets on an annualized basis for the
Fund's then-current fiscal year. The Administrative Plan continues in effect
if such continuance is specifically approved at least annually by a vote of
both a majority of the Trust's Trustees and a majority of the Trust's Trustees
who are not "interested persons" of the Trust and who have no direct or
indirect financial interest in the operation of the Administrative Plan or in
any agreement related to such Plan ("Qualified Trustees"). The Administrative
Plan requires that the Trust provide to the Trust's Board of Trustees and the
Trust's Board of Trustees review, at least quarterly, a written report of the
amounts expended (and the purposes therefor) under the Administrative Plan.
The Administrative Plan may be terminated at any time with respect to a Fund
by a vote of a majority of the Trust's Qualified Trustees or by a vote of a
majority of the outstanding voting securities of the Fund. The Administrative
Plan may not be amended to increase materially the amount of permitted
expenses thereunder without the approval of a majority of the outstanding
voting securities of a Fund and may not be materially amended in any case
without a vote of the majority of both the Trust's Trustees and the Trust's
Qualified Trustees.
The Trust has entered into a shareholder servicing agreement (a "Servicing
Agreement") with each Shareholder Servicing Agent pursuant to which that
Shareholder Servicing Agent provides shareholder services, including answering
customer inquiries, assisting in processing purchase, exchange and redemption
transactions and furnishing Fund communications to shareholders. For services
provided under each Servicing Agreement, each Shareholder Servicing Agent
receives fees from each Fund at an annual rate of 0.10% of the average daily
net assets of the Fund represented by shares owned by investors for whom such
Shareholder Servicing Agent maintains a servicing relationship. Some
Shareholder Servicing Agents may impose certain conditions on their customers
in addition to or different from those imposed by the Funds, such as requiring
a minimum initial investment or charging their customers a direct fee for
their services. Each Shareholder Servicing Agent has agreed to transmit to its
customers who are shareholders of a Fund appropriate prior written disclosure
of any fees that it may charge them directly and to provide written notice at
least 30 days prior to imposition of any transaction fees. For the fiscal
years ended August 31, 1997, 1998 and 1999, aggregate fees paid from Liquid
Reserves to Shareholder Servicing Agents, after waivers, were $365,697,
$511,556 and $784,448, respectively. For the fiscal years ended August 31,
1996, 1997 and 1998, the aggregate fees paid from U.S. Treasury Reserves to
Shareholder Servicing Agents under the Servicing Agreements, after waivers,
were $232,345, $276,404 and $265,910, respectively.
The Trust and each Portfolio has entered into a Transfer Agency and
Service Agreement and a Custodian Agreement with State Street Bank and Trust
Company ("State Street") pursuant to which State Street (or its affiliate
State Street Canada, Inc.) acts as transfer agent and custodian and performs
fund accounting services. State Street (or its affiliate State Street Canada,
Inc.) calculates the daily net asset value for the Funds and the Portfolios.
Securities held for a Fund or Portfolio may be held by a sub-custodian bank
approved by the Trust's or Portfolio's Trustees.
The Portfolios have also adopted Administrative Services Plans (the
"Portfolio Administrative Plans") which provide that the Portfolios may obtain
the services of an administrator, a transfer agent and a custodian, and may
enter into agreements providing for the payment of fees for such services.
Under the Portfolio Administrative Plans, the administrative services fee
payable to either CFBDS or SFG, as the case may be, may not exceed 0.05% of a
Portfolio's average daily net assets on an annualized basis for its then-
current fiscal year. Each Portfolio Administrative Plan continues in effect if
such continuance is specifically approved at least annually by a vote of both
a majority of the applicable Portfolio's Trustees and a majority of the
Portfolio's Trustees who are not "interested persons" of the Portfolio and who
have no direct or indirect financial interest in the operation of the
Portfolio Administrative Plan or in any agreement related to such Plan
("Qualified Trustees"). Each Portfolio Administrative Plan requires that the
applicable Portfolio provide to its Board of Trustees and the Board of
Trustees review, at least quarterly, a written report of the amounts expended
(and the purposes therefor) under the Portfolio Administrative Plan. Each
Portfolio Administrative Plan may be terminated at any time by a vote of a
majority of the Portfolio's Qualified Trustees or by a vote of a majority of
the outstanding voting securities of the applicable Portfolio. Neither
Portfolio Administrative Plan may be amended to increase materially the amount
of permitted expenses thereunder without the approval of a majority of the
outstanding voting securities of the applicable Portfolio and may not be
materially amended in any case without a vote of the majority of both the
Portfolio's Trustees and the Portfolio's Qualified Trustees.
6. DEALER COMMISSIONS AND CONCESSIONS
From time to time, the Funds' Distributor or Citibank, at its expense, may
provide additional commissions, compensation or promotional incentives
("concessions") to dealers that sell or arrange for the sale of shares of the
Funds. Such concessions provided by the Funds' Distributor or Citibank may
include financial assistance to dealers in connection with preapproved
conferences or seminars, sales or training programs for invited registered
representatives and other employees, payment for travel expenses, including
lodging, incurred by registered representatives and other employees for such
seminars or training programs, seminars for the public, advertising and sales
campaigns regarding one or more Funds, and/or other dealer-sponsored events.
From time to time, the Funds' Distributor or Citibank may make expense
reimbursements for special training of a dealer's registered representatives
and other employees in group meetings or to help pay the expenses of sales
contests. Other concessions may be offered to the extent not prohibited by
state laws or any self-regulatory agency, such as the NASD.
7. PORTFOLIO TRANSACTIONS
The Portfolios' purchases and sales of portfolio securities usually are
principal transactions. Portfolio securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities.
There usually are no brokerage commissions paid for such purchases. The
Portfolios do not anticipate paying brokerage commissions. Any transaction for
which a Portfolio pays a brokerage commission will be effected at the best
price and execution available. Purchases from underwriters of portfolio
securities include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as market makers include the
spread between the bid and asked price.
Allocation of transactions, including their frequency, to various dealers
is determined by the Adviser in its best judgment and in a manner deemed to be
in the best interest of investors in the applicable Portfolio rather than by
any formula. The primary consideration is prompt execution of orders in an
effective manner at the most favorable price.
Investment decisions for each Portfolio will be made independently from
those for any other account, series or investment company that is or may in
the future become managed by the Adviser or its affiliates. If, however, a
Portfolio and other investment companies, series or accounts managed by the
Adviser are contemporaneously engaged in the purchase or sale of the same
security, the transactions may be averaged as to price and allocated equitably
to each account. In some cases, this policy might adversely affect the price
paid or received by the Portfolio or the size of the position obtainable for
the Portfolio. In addition, when purchases or sales of the same security for a
Portfolio and for other investment companies or series managed by the Adviser
occur contemporaneously, the purchase or sale orders may be aggregated in
order to obtain any price advantages available to large denomination purchases
or sales.
Portfolio transactions may be executed with the Adviser, or with any
affiliate of the Adviser, acting either as principal or as broker, subject to
applicable law. No commissions on portfolio transactions were paid by any
Portfolio during the fiscal year ended August 31, 1999 to the Adviser or any
affiliate of the Adviser.
8. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trust's Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial interest
($0.00001 par value) of each series and to divide or combine the shares of any
series into a greater or lesser number of shares of that series without
thereby changing the proportionate beneficial interests in that series.
Currently, the Funds are the only two series of shares of the Trust. Each
share represents an equal proportionate interest in a Fund with each other
share. Upon liquidation or dissolution of a Fund, the Fund's shareholders are
entitled to share pro rata in the Fund's net assets avail-
able for distribution to its shareholders. The Trust reserves the right to
create and issue additional series of shares. Shares of each series
participate equally in the earnings, dividends and distribution of net assets
of the particular series upon the liquidation or dissolution of the series.
Shares of each series are entitled to vote separately to approve advisory
agreements or changes in investment policy, but shares of all series may vote
together in the election or selection of Trustees and accountants for the
Trust. In matters affecting only a particular series, only shares of that
series are entitled to vote.
Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the Trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Trust may elect all of the Trustees of the Trust if
they choose to do so and in such event the other shareholders in the Trust would
not be able to elect any Trustee. The Trust is not required and has no present
intention of holding annual meetings of shareholders but the Trust will hold
special meetings of a Fund's shareholders when in the judgment of the Trust's
Trustees it is necessary or desirable to submit matters for a shareholder vote.
Shareholders have under certain circumstances (e.g., upon application and
submission of certain specified documents to the Trustees by a specified number
of shareholders) the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Trustees. Shareholders also have the right to remove one or more Trustees
without a meeting by a declaration in writing by a specified number of
shareholders. No material amendment may be made to the Trust's Declaration of
Trust without the affirmative vote of the holders of a majority of its
outstanding shares.
The Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Trust or of any series of the Trust, a Shareholder
Servicing Agent may vote any shares of which it is the holder of record and
for which it does not receive voting instructions proportionately in
accordance with the instructions it receives for all other shares of which it
is the holder of record. Shares have no preference, pre-emptive, conversion or
similar rights. Shares, when issued, are fully paid and non-assessable, except
as set forth below.
The Trust may enter into a merger or consolidation, or sell all or
substantially all of its assets (or all or substantially all of the assets
belonging to any series of the Trust), if approved by the vote of the holders
of two-thirds of the Trust's outstanding shares voting as a single class, or
of the affected series of the Trust, as the case may be, except that if the
Trustees of the Trust recommend such sale of assets, merger or consolidation,
the approval by vote of the holders of a majority of the Trust's or the
affected series' outstanding shares would be sufficient. The Trust or any
series of the Trust, as the case may be, may be terminated (i) by a vote of a
majority of the outstanding voting securities of the Trust or the affected
series or (ii) by the Trustees by written notice to the shareholders of the
Trust or the affected series. If not so terminated, the Trust will continue
indefinitely.
Share certificates will not be issued.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business
trust may, under certain circumstances, be held personally liable as partners
for its obligations and liabilities. However, the Declaration of Trust
contains an express disclaimer of shareholder liability for acts or
obligations of the Trust and provides for indemnification and reimbursement of
expenses out of Trust property for any shareholder held personally liable for
the obligations of the Trust. The Declaration of Trust also provides that the
Trust may maintain appropriate insurance (e.g., fidelity bonding and errors
and omissions insurance) for the protection of the Trust, its shareholders,
Trustees, officers, employees and agents covering possible tort and other
liabilities. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.
The Trust's Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the
property of the Trust and that the Trustees will not be liable for any action
or failure to act, but nothing in the Declaration of Trust protects a Trustee
against any liability to which he or she would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his or her office.
Each Portfolio is organized as a trust under the laws of the State of New
York. Each Portfolio's Declaration of Trust provides that investors in the
Portfolio (e.g., other investment companies (including the corresponding
Fund), insurance company separate accounts and common and commingled trust
funds) are each liable for all obligations of the Portfolio. However, the risk
of a Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the applicable
Portfolio itself was unable to meet its obligations. It is not expected that
the liabilities of either Portfolio would ever exceed its assets.
Each investor in a Portfolio, including the corresponding Fund, may add to
or reduce its investment in the Portfolio on each business day. At 3:00 p.m.,
Eastern time, in the case of Cash Reserves Portfolio, and 12:00 noon, Eastern
time, in the case of U.S. Treasury Reserves Portfolio, on each such business
day, the value of each investor's interest in the Portfolio is determined by
multiplying the net asset value of the Portfolio by the percentage
representing that investor's share of the aggregate beneficial interests in
the Portfolio effective for that day. Any additions or withdrawals, which are
to be effected on that day, are then effected. The investor's percentage of
the aggregate beneficial interests in the Portfolio is then re-computed as the
percentage equal to the fraction (i) the numerator of which is the value of
such investor's investment in the Portfolio as of 3:00 p.m., Eastern time, for
Cash Reserves Portfolio or 12:00 noon, Eastern time, for U.S. Treasury
Reserves Portfolio, on such day plus or minus, as the case may be, the amount
of any additions to or withdrawals from the investor's investment in the
Portfolio effected on such day, and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of 3:00 p.m., Eastern time, for
Cash Reserves Portfolio or 12:00 noon, Eastern time, for U.S. Treasury
Reserves Portfolio, on such day plus or minus, as the case may be, the amount
of the net additions to or withdrawals from the aggregate investments in the
Portfolio by all investors in the Portfolio. The percentage so determined is
then applied to determine the value of the investor's interest in the
Portfolio as of 3:00 p.m., Eastern time, for Cash Reserves Portfolio or 12:00
noon, Eastern time, for U.S. Treasury Reserves Portfolio, on the following
business day of the Portfolio.
9. CERTAIN ADDITIONAL TAX MATTERS
Each of the Funds has elected to be treated and intends to qualify each
year as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), by meeting all applicable
requirements of Subchapter M, including requirements as to the nature of the
Fund's gross income, the amount of Fund distributions and the composition of
the Fund's portfolio assets. Provided all such requirements are met and all of
a Fund's net investment income and realized capital gains are distributed to
shareholders in accordance with the timing requirements imposed by the Code,
no federal income or excise taxes generally will be required to be paid by the
Fund. If a Fund should fail to qualify as a regulated investment company for
any year, the Fund would incur a regular corporate federal income tax upon its
taxable income and Fund distributions would generally be taxable as ordinary
dividend income to shareholders. Each of the Portfolios believes that it will
not be required to pay any federal income or excise taxes.
Investment income received by Liquid Reserves from non-U.S. investments
may be subject to foreign income taxes withheld at the source; Liquid Reserves
does not expect to be able to pass through to shareholders any foreign tax
credits or deductions with respect to those foreign taxes. The United States
has entered into tax treaties with many foreign countries that may entitle
Liquid Reserves to a reduced rate of tax or an exemption from tax on these
investments. It is not possible to determine Liquid Reserves' effective rate
of foreign tax in advance since that rate depends upon the proportion of the
Cash Reserves Portfolio's assets ultimately invested within various countries.
Because each Fund expects to earn primarily interest income, it is
expected that no Fund distributions will qualify for the dividends received
deduction for corporations.
10. INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
PricewaterhouseCoopers LLP are the independent and chartered accountants
for Liquid Reserves and Cash Reserves Portfolio, respectively, providing audit
services and assistance and consultation with respect to the preparation of
filings with the SEC. Deloitte & Touche LLP are the independent accountants
for U.S. Treasury Reserves and U.S. Treasury Reserves Portfolio, providing
audit services and assistance and consultation with respect to the preparation
of filings with the SEC.
The audited financial statements of Liquid Reserves (Statement of Assets
and Liabilities at August 31, 1999, Statement of Operations for the year ended
August 31, 1999, Statement of Changes in Net Assets for the years ended August
31, 1999 and 1998, Financial Highlights for each of the years in the five-year
period ended August 31, 1999, Notes to Financial Statements and Independent
Auditor's Report) and of Cash Reserves Portfolio (Portfolio of Investments at
August 31, 1999, Statement of Assets and Liabilities at August 31, 1999,
Statement of Operations for the year ended August 31, 1999, Statement of
Changes in Net Assets for the years ended August 31, 1999 and 1998, Financial
Highlights for each of the years in the five-year period ended August 31,
1999, Notes to Financial Statements and Independent Auditor's Report), each of
which is included in the Annual Report to Shareholders of Liquid Reserves, are
incorporated by reference into this Statement of Additional Information and
have been so incorporated in reliance upon the reports of
PricewaterhouseCoopers LLP, as experts in accounting and auditing.
The audited financial statements of U.S. Treasury Reserves (Statement of
Assets and Liabilities at August 31, 1999, Statement of Operations for the year
ended August 31, 1999, Statement of Changes in Net Assets for the years ended
August 31, 1999 and 1998, Financial Highlights for each of the years in the
five-year period ended August 31, 1999, Notes to Financial Statements and
Independent Auditors' Report) and of U.S. Treasury Reserves Portfolio (Portfolio
of Investments at August 31, 1999, Statement of Assets and Liabilities at August
31, 1999, Statement of Operations for the year ended August 31, 1999, Statement
of Changes in Net Assets for the years ended August 31, 1999 and 1998, Financial
Highlights for each of the years in the five-year period ended August 31, 1999,
Notes to Financial Statements and Independent Auditors' Report), each of which
is included in the Annual Report to Shareholders of U.S. Treasury Reserves, are
incorporated by reference into this Statement of Additional Information and have
been so incorporated in reliance upon the report of Deloitte & Touche LLP,
independent accountants, as experts in accounting and auditing.
A copy of each of the Annual Reports accompanies this Statement of
Additional Information.
<PAGE>
CITIFUNDS(SM) PREMIUM LIQUID RESERVES
CITIFUNDS(SM) PREMIUM U.S. TREASURY RESERVES
TRUSTEES AND OFFICERS
Philip W. Coolidge, President*
Mark T. Finn
Riley C. Gilley
William S. Woods, Jr.
SECRETARY
Linda T. Gibson*
ASSISTANT TREASURER
Linwood C. Downs
*Affiliated Person of Administrator and Distributor
- ----------------------------------------------
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
ADMINISTRATOR AND DISTRIBUTOR
CFBDS, Inc.
21 Milk Street, Boston, MA 02109 (617) 423-1679
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
AUDITORS
(CITIFUNDS PREMIUM LIQUID RESERVES)
PricewaterhouseCoopers LLP
160 Federal Street, Boston, MA 02110
(CITIFUNDS PREMIUM U.S. TREASURY RESERVES)
Deloitte & Touche LLP
200 Berkeley Street, Boston, MA 02116
LEGAL COUNSEL
Bingham Dana LLP
150 Federal Street, Boston, MA 02110
- ----------------------------------------------
SHAREHOLDER SERVICING AGENTS
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 CITIBANK CASH MANAGEMENT CLIENTS:
Citibank Cash Management
One Penns Way
New Castle, DE 19720
<PAGE>
PART C
Item 23. Exhibits.
* a(1) Declaration of Trust of the Registrant
* and *** a(2) Amendments to Declaration of Trust of the Registrant
* b(1) Amended and Restated By-Laws of the Registrant
*, ** b(2) Amendments to Amended and Restated By-Laws of the
Registrant
* e Distribution Agreement between the Registrant and
CFBDS, Inc. ("CFBDS"), as distributor
* g Custodian Contract between the Registrant and State
Street Bank and Trust Company ("State Street"), as
custodian
* h(1) Amended and Restated Administrative Services Plan of
the Registrant
* h(2) Administrative Services Agreement between the
Registrant and CFBDS, as administrator
* h(3) Sub-Administrative Services Agreement between
Citibank, N.A. and CFBDS
* h(4)(i) Form of Shareholder Servicing Agreement between the
Registrant and Citibank, N.A., as shareholder
servicing agent
* h(4)(ii) Form of Shareholder Servicing Agreement between the
Registrant and a federal savings bank, as shareholder
servicing agent
* h(4)(iii) Form of Shareholder Servicing Agreement between the
Registrant and CFBDS, as shareholder servicing agent
* h(5) Transfer Agency and Service Agreement between the
Registrant and State Street, as transfer agent
* h(6) Amended and Restated Exchange Privilege Agreement
between the Registrant, certain other investment
companies and CFBDS, as distributor
* i Opinion and consent of counsel
j Independent Accountants' Consent
* m Amended and Restated Distribution Plan of the
Registrant
*** p(1) Powers of Attorney for the Registrant
*** p(2) Powers of Attorney for U.S. Treasury Reserves
Portfolio
*** p(3) Powers of Attorney for Cash Reserves Portfolio
and
filed
herewith
- ---------------------
* Incorporated herein by reference to Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form N-1A (File No. 33-38848) as
filed with the Securities and Exchange Commission on August 29, 1996 and
Post-Effective Amendment No. 7 to the Registrant's Registration Statement
on Form N-1A (File No. 33-28844) as filed with the Securities and
Exchange Commission on August 29, 1996.
** Incorporated herein by reference to Post-Effective Amendment No. 10 to
the Registrant's Registration Statement on Form N-1A (File No. 33-38848)
as filed with the Securities and Exchange Commission on December 23, 1997
and Post-Effective Amendment No. 9 to the Registrant's Registration
Statement on Form N-1A (File No. 33-28844) as filed with the Securities
and Exchange Commission on December 23, 1997.
*** Incorporated herein by reference to Post-Effective Amendment No. 11 to
the Registrant's Registration Statement on Form N-1A (File No. 33-38848)
as filed with the Securities and Exchange Commission on October 16, 1998
and Post-Effective Amendment No. 10 to the Registrant's Registration
Statement on Form N-1A (File No. 33-28844) as filed with the Securities
and Exchange Commission on October 16, 1998.
Item 24. Persons Controlled by or under Common Control with Registrant.
Not applicable.
Item 25. Indemnification.
Reference is hereby made to (a) Article V of the Registrant's
Declaration of Trust, incorporated by reference herein as an Exhibit to the
Registrant's Registration Statement on Form N-1A; (b) Section 4 of the
Distribution Agreement between the Registrant and CFBDS, incorporated by
reference herein as an Exhibit to the Registrant's Registration Statement on
Form N-1A; and (c) the undertaking of the Registrant regarding indemnification
set forth in its Registration Statement on Form N-1A.
The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940.
Item 26. Business and Other Connections of Investment Adviser.
Citibank, N.A. ("Citibank") is a commercial bank offering a wide range of
banking and investment services to customers across the United States and around
the world. Citibank is a wholly-owned subsidiary of Citicorp, which is, in turn,
a wholly owned subsidiary of Citigroup Inc. Citibank also serves as investment
adviser to the following registered investment companies (or series thereof):
Asset Allocation Portfolios (Large Cap Value Portfolio, Small Cap Value
Portfolio, International Portfolio, Foreign Bond Portfolio, Intermediate Income
Portfolio and Short-Term Portfolio), The Premium Portfolios (High Yield
Portfolio, U.S. Fixed Income Portfolio, Large Cap Growth Portfolio,
International Equity Portfolio, Government Income Portfolio and Small Cap Growth
Portfolio), Tax Free Reserves Portfolio, U.S. Treasury Reserves Portfolio, Cash
Reserves Portfolio, CitiFundsSM Multi-State Tax Free Trust (CitiFundsSM New York
Tax Free Reserves, CitiFundsSM Connecticut Tax Free Reserves and CitiFundsSM
California Tax Free Reserves), CitiFundsSM Tax Free Income Trust (CitiFundsSM
National Tax Free Income Portfolio, CitiFundsSM New York Tax Free Income
Portfolio and CitiFundsSM California Tax Free Income Portfolio), CitiFundsSM
Institutional Trust (CitiFundsSM Institutional Cash Reserves) and Variable
Annuity Portfolios (CitiSelect(R) VIP Folio 100 Income, CitiSelect(R) VIP Folio
200 Conservative, CitiSelect(R) VIP Folio 300 Balanced, CitiSelect(R) VIP Folio
400 Growth, CitiSelect(R) VIP Folio 500 Growth Plus and CitiFundsSM Small Cap
Growth VIP Portfolio). Citibank and its affiliates manage assets in excess of
$351 billion worldwide. The principal place of business of Citibank is located
at 399 Park Avenue, New York, New York 10043.
John S. Reed is the Chairman of the Board and a Director of Citibank.
Victor J. Menezes is the President and a Director of Citibank. William R. Rhodes
and H. Onno Ruding are Vice Chairmen and Directors of Citibank. The other
Directors of Citibank are Paul S. Collins, Vice Chairman of Citigroup, Inc. and
Robert I. Lipp, Chairman and Chief Executive Officer of Travelers Insurance
Group and of Travelers Property Casualty Corp.
Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:
Paul J. Collins Director, Kimberly-Clark Corporation
Robert I. Lipp Chairman, Chief Executive Officer and
President, Travelers Property Casualty Corp.
John S. Reed Director, Monsanto Company
Director, Philip Morris Companies Incorporated
Stockholder, Tampa Tank & Welding, Inc.
William R. Rhodes Director, Private Export Funding Corporation
H. Onno Ruding Supervisory Director, Amsterdamsch
Trustees Cantoor B.V.
Director, Pechiney S.A.
Advisory Director, Unilever NV and Unilever PLC
Director, Corning Incorporated
Item 27. Principal Underwriters.
(a) CFBDS, the Registrant's Distributor, is also the distributor for
CitiFundsSM International Growth & Income Portfolio, CitiFundsSM International
Growth Portfolio, CitiFundsSM U.S. Treasury Reserves, CitiFundsSM Cash Reserves,
CitiFundsSM Institutional U.S. Treasury Reserves, CitiFundsSM Institutional
Liquid Reserves, CitiFundsSM Institutional Cash Reserves, CitiFundsSM Tax Free
Reserves, CitiFundsSM Institutional Tax Free Reserves, CitiFundsSM California
Tax Free Reserves, CitiFundsSM Connecticut Tax Free Reserves, CitiFundsSM New
York Tax Free Reserves, CitiFundsSM Intermediate Income Portfolio, CitiFundsSM
Short-Term U.S. Government Income Portfolio, CitiFundsSM New York Tax Free
Income Portfolio, CitiFundsSM National Tax Free Income Portfolio, CitiFundsSM
California Tax Free Income Portfolio, CitiFundsSM Small Cap Value Portfolio,
CitiFundsSM Growth & Income Portfolio, CitiFundsSM Large Cap Growth Portfolio,
CitiFundsSM Small Cap Growth Portfolio, CitiFundsSM Balanced Portfolio,
CitiSelect(R) Folio 100 Income, CitiSelect(R) Folio 200 Conservative,
CitiSelect(R) Folio 300 Balanced, CitiSelect(R) Folio 400 Growth, CitiSelect(R)
Folio 500 Growth Plus, CitiSelect(R) VIP Folio 100 Income, CitiSelect(R) VIP
Folio 200 Conservative, CitiSelect(R) VIP Folio 300 Balanced, CitiSelect(R) VIP
Folio 400 Growth, CitiSelect(R) VIP Folio 500 Growth Plus and CitiFundsSM Small
Cap Growth VIP Portfolio. CFBDS is also the placement agent for High Yield
Portfolio, Government Income Portfolio, International Equity Portfolio, Large
Cap Growth Portfolio, Small Cap Growth Portfolio, Large Cap Value Portfolio,
Small Cap Value Portfolio, International Portfolio, Foreign Bond Portfolio,
Intermediate Income Portfolio, Short-Term Portfolio, Tax Free Reserves
Portfolio, Cash Reserves Portfolio and U.S. Treasury Reserves Portfolio. CFBDS
also serves as the distributor for the following funds: The Travelers Fund UL
for Variable Annuities, The Travelers Fund VA for Variable Annuities, The
Travelers Fund BD for Variable Annuities, The Travelers Fund BD II for Variable
Annuities, The Travelers Fund BD III for Variable Annuities, The Travelers Fund
BD IV for Variable Annuities, The Travelers Fund ABD for Variable Annuities, The
Travelers Fund ABD II for Variable Annuities, The Travelers Separate Account PF
for Variable Annuities, The Travelers Separate Account PF II for Variable
Annuities, The Travelers Separate Account QP for Variable Annuities, The
Travelers Separate Account TM for Variable Annuities, The Travelers Separate
Account TM II for Variable Annuities, The Travelers Separate Account Five for
Variable Annuities, The Travelers Separate Account Six for Variable Annuities,
The Travelers Separate Account Seven for Variable Annuities, The Travelers
Separate Account Eight for Variable Annuities, The Travelers Fund UL for Life
Insurance, The Travelers Fund UL II for Life Insurance, The Travelers Fund UL
III for Life Insurance, The Travelers Variable Life Insurance Separate Account
One, The Travelers Variable Life Insurance Separate Account Two, The Travelers
Variable Life Insurance Separate Account Three, The Travelers Variable Life
Insurance Separate Account Four, The Travelers Separate Account MGA, The
Travelers Separate Account MGA II, The Travelers Growth and Income Stock Account
for Variable Annuities, The Travelers Quality Bond Account for Variable
Annuities, The Travelers Money Market Account for Variable Annuities, The
Travelers Timed Growth and Income Stock Account for Variable Annuities, The
Travelers Timed Short-Term Bond Account for Variable Annuities, The Travelers
Timed Aggressive Stock Account for Variable Annuities, The Travelers Timed Bond
Account for Variable Annuities, Small Cap Fund, Government Fund, Growth Fund,
Growth and Income Fund, International Equity Fund, Mid Cap Fund, Municipal Bond
Fund, Select Small Cap Portfolio, Select Government Portfolio, Select Growth
Portfolio, Select Growth and Income Portfolio, Select Mid Cap Portfolio,
Balanced Investments, Emerging Markets Equity Investments, Government Money
Investments, High Yield Investments, Intermediate Fixed Income Investments,
International Equity Investments, International Fixed Income Investments, Large
Capitalization Growth Investments, Large Capitalization Value Equity
Investments, Long- Term Bond Investments, Mortgage Backed Investments, Municipal
Bond Investments, S&P 500 Index Investments, Small Capitalization Growth
Investments, Small Capitalization Value Equity Investments, Multi-Sector Fixed
Income Investments, Multi-Strategy Market Neutral Investments, Appreciation
Portfolio, Diversified Strategic Income Portfolio, Emerging Growth Portfolio,
Equity Income Portfolio, Equity Index Portfolio, Growth & Income Portfolio,
Intermediate High Grade Portfolio, International Equity Portfolio, Money Market
Portfolio, Total Return Portfolio, Smith Barney Adjustable Rate Government
Income Fund, Smith Barney Aggressive Growth Fund Inc., Smith Barney Appreciation
Fund Inc., Smith Barney Arizona Municipals Fund Inc., Smith Barney California
Municipals Fund Inc., Balanced Portfolio, Conservative Portfolio, Growth
Portfolio, High Growth Portfolio, Income Portfolio, Global Portfolio, Select
Balanced Portfolio, Select Conservative Portfolio, Select Growth Portfolio,
Select High Growth Portfolio, Select Income Portfolio, Concert Social Awareness
Fund, Smith Barney Large Cap Blend Fund, Smith Barney Fundamental Value Fund
Inc., Large Cap Value Fund, Short-Term High Grade Bond Fund, U.S. Government
Securities Fund, Smith Barney Balanced Fund, Smith Barney Convertible Fund,
Smith Barney Diversified Strategic Income Fund, Smith Barney Exchange Reserve
Fund, Smith Barney High Income Fund, Smith Barney Municipal High Income Fund,
Smith Barney Premium Total Return Fund, Smith Barney Total Return Bond Fund,
Cash Portfolio, Government Portfolio, Municipal Portfolio, Concert Peachtree
Growth Fund, Smith Barney Contrarian Fund, Smith Barney Government Securities
Fund, Smith Barney Hansberger Global Small Cap Value Fund, Smith Barney
Hansberger Global Value Fund, Smith Barney Investment Grade Bond Fund, Smith
Barney Premier Selections Fund, Smith Barney Small Cap Value Fund, Smith Barney
Small Cap Growth Fund, Smith Barney Intermediate Maturity California Municipals
Fund, Smith Barney Intermediate Maturity New York Municipals Fund, Smith Barney
Large Capitalization Growth Fund, Smith Barney S&P 500 Index Fund, Smith Barney
Mid Cap Blend Fund, Smith Barney EAFE Index Fund, Smith Barney US 5000 Index
Fund, Smith Barney Managed Governments Fund Inc., Smith Barney Managed
Municipals Fund Inc., Smith Barney Massachusetts Municipals Fund, Cash
Portfolio, Government Portfolio, Retirement Portfolio, California Money Market
Portfolio, Florida Portfolio, Georgia Portfolio, Limited Term Portfolio,
National Portfolio, Massachusetts Money Market Portfolio, New York Money Market
Portfolio, New York Portfolio, Pennsylvania Portfolio, Smith Barney Municipal
Money Market Fund, Inc., Smith Barney Natural Resources Fund, Smith Barney
Financial Services Fund, Smith Barney Health Sciences Fund, Smith Barney
Technology Fund, Smith Barney New Jersey Municipals Fund Inc., Smith Barney
Oregon Municipals Fund, Zeros Plus Emerging Growth Series 2000, Smith Barney
Security and Growth Fund, Smith Barney Small Cap Blend Fund, Inc., Smith Barney
Telecommunications Income Fund, Income and Growth Portfolio, Reserve Account
Portfolio, U.S. Government/High Quality Securities Portfolio, Emerging Markets
Portfolio, European Portfolio, Global Government Bond Portfolio, International
Balanced Portfolio, International Equity Portfolio, Pacific Portfolio, AIM
Capital Appreciation Portfolio, Smith Aggressive Growth Portfolio, Smith Mid Cap
Portfolio, Alliance Growth Portfolio, INVESCO Global Strategic Income Portfolio,
MFS Total Return Portfolio, Putnam Diversified Income Portfolio, Smith Barney
High Income Portfolio, Smith Barney Large Cap Value Portfolio, Smith Barney
International Equity Portfolio, Smith Barney Large Capitalization Growth
Portfolio, Smith Barney Money Market Portfolio, Smith Barney Pacific Basin
Portfolio, Travelers Managed Income Portfolio, Van Kampen Enterprise Portfolio,
Centurion U.S. Equity Fund, Centurion International Equity Fund, Centurion U.S.
Contra Fund, Centurion International Contra Fund, Global High-Yield Bond Fund,
International Equity Fund, Emerging Opportunities Fund, Core Equity Fund,
Long-Term Bond Fund, Global Dimensions Fund L.P., Citicorp Private Equity L.P.,
AIM V.I. Capital Appreciation Fund, AIM V.I. Government Series Fund, AIM V.I.
Growth Fund, AIM V.I. International Equity Fund, AIM V.I. Value Fund, Fidelity
VIP Growth Portfolio, Fidelity VIP High Income Portfolio, Fidelity VIP Equity
Income Portfolio, Fidelity VIP Overseas Portfolio, Fidelity VIP II Contrafund
Portfolio, Fidelity VIP II Index 500 Portfolio, MFS World Government Series, MFS
Money Market Series, MFS Bond Series, MFS Total Return Series, MFS Research
Series, MFS Emerging Growth Series, Salomon Brothers Institutional Money Market
Fund, Salomon Brothers Cash Management Fund, Salomon Brothers New York Municipal
Money Market Fund, Salomon Brothers National Intermediate Municipal Fund,
Salomon Brothers U.S. Government Income Fund, Salomon Brothers High Yield Bond
Fund, Salomon Brothers International Equity Fund, Salomon Brothers Strategic
Bond Fund, Salomon Brothers Large Cap Growth Fund, Salomon Brothers Balanced
Fund, Salomon Brothers Small Cap Growth Fund, Salomon Brothers Asia Growth Fund,
Salomon Brothers Capital Fund Inc, Salomon Brothers Investors Value Fund Inc,
Salomon Brothers Opportunity Fund Inc, Salomon Brothers Institutional High Yield
Bond Fund, Salomon Brothers Institutional Emerging Markets Debt Fund, Salomon
Brothers Variable Investors Fund, Salomon Brothers Variable Capital Fund,
Salomon Brothers Variable Total Return Fund, Salomon Brothers Variable High
Yield Bond Fund, Salomon Brothers Variable Strategic Bond Fund, Salomon Brothers
Variable U.S. Government Income Fund, Salomon Brothers Variable Asia Growth
Fund, and Salomon Brothers Variable Small Cap Growth Fund.
(b) The information required by this Item 29 with respect to each
director and officer of CFBDS is incorporated by reference to Schedule A of Form
BD filed by CFBDS pursuant to the Securities and Exchange Act of 1934 (File No.
8-32417).
(c) Not applicable.
Item 28. Location of Accounts and Records.
The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:
NAME ADDRESS
CFBDS, Inc. 21 Milk Street, 5th Floor
(administrator and distributor) Boston, MA 02109
State Street Bank and Trust Company 1776 Heritage Drive
(transfer agent and custodian) North Quincy, MA 02171
Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043
SHAREHOLDER SERVICING AGENTS
Citibank, N.A. - The Citibank Private Bank 153 East 53rd Street
New York, NY 10043
Citibank, N.A. - Citibank
Global Asset Management 153 East 53rd Street
New York, NY 10043
Citibank, N.A. - North American
Investor Services 111 Wall Street
New York, NY 10094
CFBDS, Inc. 21 Milk Street, 5th Floor
Boston, MA 02109
Item 29. Management Services.
Not applicable.
Item 30. Undertakings.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Registrant certifies that it meets all requirements for
effectiveness of this Post-Effective Amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act and has duly caused this
Post-Effective Amendment to the Registration Statement on Form N-1A to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston and Commonwealth of Massachusetts on the 28th day of December, 1999.
CITIFUNDS PREMIUM TRUST
By: Philip W. Coolidge
----------------------
Philip W. Coolidge
President
Pursuant to the requirements of the Securities Act, this Post-Effective
Amendment to the Registration Statement on Form N-1A has been signed below by
the following persons in the capacities indicated below on December 28, 1999.
Signature Title
Philip W. Coolidge President, Principal Executive Officer
---------------------- and Trustee
Philip W. Coolidge
Linwood C. Downs Principal Financial Officer and Principal
---------------------- Accounting Officer
Linwood C. Downs
Mark T. Finn* Trustee
----------------------
Mark T. Finn
Riley C. Gilley* Trustee
----------------------
Riley C. Gilley
William S. Woods, Jr.* Trustee
----------------------
William S. Woods, Jr.
*By: Philip W. Coolidge
----------------------
Philip W. Coolidge
Executed by Philip W. Coolidge
on behalf of those indicated
pursuant to Powers of Attorney.
<PAGE>
SIGNATURES
Cash Reserves Portfolio has duly caused this Post-Effective Amendment
to the Registration Statement on Form N-1A of CitiFunds Premium Trust to be
signed on its behalf by the undersigned, thereunto duly authorized, in Grand
Cayman, Cayman Islands on the 28th day of December, 1999.
CASH RESERVES PORTFOLIO
By: Tamie Ebanks-Cunningham
----------------------
Tamie Ebanks-Cunningham
Assistant Secretary
This Post-Effective Amendment to the Registration Statement on Form
N-1A of CitiFunds Premium Trust has been signed below by the following persons
in the capacities indicated below on December 28, 1999.
Signature Title
Philip W. Coolidge* President, Principal Executive Officer
---------------------- and Trustee
Philip W. Coolidge
Linwood C. Downs* Principal Financial Officer and Principal
---------------------- Accounting Officer
Linwood C. Downs
Elliott J. Berv* Trustee
----------------------
Elliott J. Berv
Riley C. Gilley* Trustee
----------------------
Riley C. Gilley
Walter E. Robb, III* Trustee
----------------------
Walter E. Robb, III
*By: Tamie Ebanks-Cunningham
----------------------
Tamie Ebanks-Cunningham
Executed by Tamie Ebanks-Cunningham
on behalf of those indicated pursuant
to Powers of Attorney.
<PAGE>
SIGNATURES
U.S. Treasury Reserves Portfolio has duly caused this Post-Effective
Amendment to the Registration Statement on Form N-1A of CitiFunds Premium Trust
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Boston and Commonwealth of Massachusetts on the 28th day of December,
1999.
U.S. TREASURY RESERVES PORTFOLIO
By: Philip W. Coolidge
----------------------
Philip W. Coolidge
President
This Post-Effective Amendment to the Registration Statement on Form
N-1A of CitiFunds Premium Trust has been signed below by the following persons
in the capacities indicated below on December 28, 1999.
Signature Title
Philip W. Coolidge President, Principal Executive Officer
---------------------- and Trustee
Philip W. Coolidge
Linwood C. Downs Principal Financial Officer and Principal
---------------------- Accounting Officer
Linwood C. Downs
Elliott J. Berv* Trustee
----------------------
Elliott J. Berv
Riley C. Gilley* Trustee
----------------------
Riley C. Gilley
Walter E. Robb, III* Trustee
----------------------
Walter E. Robb, III
*By: Philip W. Coolidge
----------------------
Philip W. Coolidge
Executed by Philip W. Coolidg
on behalf of those indicated
pursuant to Powers of Attorney.
<PAGE>
EXHIBIT INDEX
Exhibit
No.: Description:
------- -------------
j Independent Accountants' Consent
p(3) Powers of Attorney for Cash Reserves Portfolio
<PAGE>
EXHIBIT j
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post Effective Amendment
No. 13 to Registration Statement No. 33-38848 of CitiFunds Premium Trust of our
reports each dated October 4, 1999 appearing in the annual report to
shareholders for the year ended August 31, 1999 of CitiFunds Premium U.S.
Treasury Reserves (a series of CitiFunds Premium Trust) and U.S. Treasury
Reserves Portfolio, and to the references to us under the headings "Financial
Highlights" in the Prospectus and "Independent Accountants and Financial
Statements" in the Statement of Additional Information, both of which are part
of such Registration Statement.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
December 23, 1999
<PAGE>
Exhibit j
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 12 to the registration statement on Form N-1A (the "Registration
Statement") of CitiFunds Premium Trust of our report dated October 6, 1999
relating to the financial statements and financial highlights of CitiFunds
Premium Liquid Reserves appearing in the August 31, 1999 Annual Report of
CitiFunds Premium Liquid Reserves, which are also incorporated by reference into
the Registration Statement. We also consent to the references to us under the
heading "Financial Statements" in the Prospectus and under the heading
"Independent Accountants and Financial Statements" in the Statement of
Additional Information.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 23, 1999
<PAGE>
Exhibit j
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statement of
Additional Information constituting part of this Post-Effective Amendment No. 12
to the registration statement on Form N-1A (the "Registration Statement") of
CitiFunds Premium Trust of our report dated October 6, 1999, relating to the
financial statements and financial highlights of the Cash Reserves Portfolio
appearing in the August 31, 1999 Annual Report of CitiFunds Premium Liquid
Reserves, which are also incorporated by reference into the Registration
Statement . We also consent to the reference to us under the heading
"Independent Accountants and Financial Statements" in the Statement of
Additional Information.
Chartered Accountants
Toronto, Ontario
December 23, 1999
<PAGE>
EXHIBIT p(3)
CASH RESERVES PORTFOLIO
The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Tamie Ebanks-Cunningham, Molly S. Mugler and Linda T.
Gibson, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any and
all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by Cash Reserves Portfolio (the "Registrant") with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, the Registration Statements on Form N-1A, and any and all amendments
thereto, to be executed by the Registrant and filed by another registrant with
the Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, or under the Securities Act of 1933, as amended, and any and all
other instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Registrant to comply with the Investment
Company Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 1st day
of September, 1998.
Riley C. Gilley
- --------------------------
Riley C. Gilley
<PAGE>
CASH RESERVES PORTFOLIOS
The undersigned hereby constitutes and appoints Philip W. Coolidge, Susan
Jakuboski, Tamie Ebanks-Cunningham, Molly S. Mugler and Linda T. Gibson, and
each of them, with full powers of substitution as his true and lawful attorneys
and agents to execute in his name and on his behalf in any and all capacities
the Registration Statements on Form N-1A, and any and all amendments thereto,
filed by Cash Reserves Portfolio (the "Registrant") with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, the
Registration Statements on Form N-1A, and any and all amendments thereto, to be
executed by the Registrant and filed by another registrant with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended, or
under the Securities Act of 1933, as amended, and any and all other instruments
which such attorneys and agents, or any of them, deem necessary or advisable to
enable the Registrant to comply with the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 28th day
of December, 1999.
Linwood C. Downs
- --------------------------
Linwood C. Downs
