<PAGE>
As filed with the Securities and Exchange Commission on November 1, 2000
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. 14*
AND
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 21
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, 2000
pursuant to paragraph (a)(1) of Rule 485.
Cash Reserves Portfolio and U.S. Treasury Reserves Portfolio have executed
this Registration Statement.
------------------------------------------------------------------------------
* Pursuant to Rule 429 under the Securities Act of 1933, this Post-Effective
Amendment also serves as Post-Effective Amendment No. 13 to the Registrant's
Registration Statement under the Securities Act of 1933 at File No.
33-28844.
<PAGE>
CITIFUNDS(R)
PREMIUM MONEY
MARKET FUNDS
Citibank, N.A.
Investment Adviser
CitiFunds(R) Premium Liquid Reserves
CitiFunds(R) Premium U.S. Treasury Reserves
[Graphic Omitted]
Prospectus
January 1, 2001
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.
[Logo]
----------------------
Money Market Series
INVESTMENT PRODUCTS: NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
<PAGE>
[Graphic Omitted]
TABLE OF CONTENTS
FUNDS AT A GLANCE ........................................................ 3
CitiFunds Premium Liquid Reserves .................................. 4
CitiFunds Premium U.S. Treasury Reserves ........................... 8
YOUR CITIFUNDS ACCOUNT ................................................... 11
How to Buy Shares .................................................. 11
How The Price Of Your Shares Is Calculated ......................... 11
How To Sell Shares ................................................. 11
Exchanges .......................................................... 12
Dividends .......................................................... 12
Retirement Accounts ................................................ 12
Tax Matters ........................................................ 12
MANAGEMENT OF THE FUNDS .................................................. 13
Investment Adviser ................................................. 13
Advisory Fees ...................................................... 13
Distribution Arrangements .......................................... 14
MORE ABOUT THE FUNDS ..................................................... 14
Principal Investment Strategies .................................... 14
FINANCIAL HIGHLIGHTS ..................................................... 16
<PAGE>
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
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 18.
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 bank deposit 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 the highest
short term rating category by nationally recognized rating agencies or, in
the opinion of the Fund's Adviser, 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.
$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.
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
iMoneyNet 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 1-800-995-0134 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%
1999 5.00%
As of September 30, 2000, the Fund had a year-to-date return of 4.52%.
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, 1999
Life of Fund
Since
1 Year 5 Years May 3, 1990
CitiFunds Premium Liquid
Reserves 5.00% 5.39% 5.08%
iMoneyNet 1st Tier Taxable
Money Market Funds Average 4.58% 4.98% * %
* 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
---------------------------------------------------------------------------
FEE TABLE
---------------------------------------------------------------------------
SHAREHOLDER FEES - Fees Paid Directly From Your Investment
---------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
ANNUAL 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 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.
---------------------------------------------------------------------------
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 LIQUID RESERVES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------------------------------------
$81 $252 $439 $978
---------------------------------------------------------------------------
<PAGE>
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 14.
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 bank deposit 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.
$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.
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 iMoneyNet 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 1-800-995-0134 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%
1999 4.31%
As of September 30, 2000, the Fund had a year-to-date return of 4.10%.
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
AVERAGE ANNUAL TOTAL RETURNS
AS OF DECEMBER 31, 1999
Life of Fund
Since
1 Year 5 Years March 1, 1991
CitiFunds Premium U.S.
Treasury Reserves 4.31% 4.83% 4.38%
iMoneyNet 100% U.S. Treasury
Rated Money Market Funds
Average 4.14% 4.64% * %
* Information regarding performance for this period is not available.
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
---------------------------------------------------------------------------
FEE TABLE
---------------------------------------------------------------------------
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%
0.58%
Other Expenses (administrative, shareholder
servicing and other expenses)
---------------------------------------------------------------------------
Total Annual Fund Operating Expenses* 0.83%
---------------------------------------------------------------------------
* 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.
--------------------------------------------------------------------------
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
---------------------------------------------------------------------------
$85 $265 $460 $1,025
---------------------------------------------------------------------------
<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
Fund's distributor, or from financial institutions, such as federal or
state-chartered banks, trust companies, savings and loan associations or savings
banks, or broker-dealers (called Service Agents). For more information, or to
purchase shares directly from a Fund, please call the Fund's sub-transfer agent
at 1-800-995-0134.
Shares are purchased at net asset value (normally $1.00 per share) the next
time it is calculated after your order is received in proper form by the Fund.
Each Fund and its distributor have the right to reject any purchase order or
cease offering Fund shares at any time.
Your Service 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 Service Agent transmits the order when the
check clears.
If you hold your shares through a Service Agent, your 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 Service Agent, or you may set up an account
directly with the Fund's sub-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 (redeem) your shares Monday through Friday, except on certain
holidays. You may make redemption requests in writing through the Funds'
sub-transfer agent or, if you hold your shares through a Service Agent, through
your Service Agent. If your account application permits, you may also make
redemption requests by telephone. All redemption requests must be in proper
form, as determined by the sub-transfer agent. Each Service Agent is responsible
for promptly submitting redemption requests to the Funds' sub-transfer agent.
For your protection, a Fund may request documentation for large redemptions or
other unusual activity in your account.
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
Shares may be exchanged for shares of any other Fund offered in the no-load
family of CitiFunds(R). CitiFunds is a registered service mark of Citicorp. You
may place exchange orders through the sub-transfer agent or, if you hold your
shares through a Service Agent, through your Service Agent. You may place
exchange orders by telephone if your account application permits. The
sub-transfer agent or your Service Agent can provide you with more information.
There is no sales charge on shares you get through an exchange.
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 Service 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.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER
Each Fund draws on the strength and experience of Citibank. Citibank is
currently 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.
During the upcoming fiscal year, SSB Citi Fund Management LLC (SSB Citi), an
affiliate of Citibank, is expected to assume the role of investment adviser to
the Funds. SSB Citi's address is 388 Greenwich Street, New York, New York
10013. Upon becoming investment adviser to the Funds, SSB Citi will select
each Fund's investments and oversee its operations. SSB Citi is also a
subsidiary of Citigroup Inc.
Citigroup businesses provide a broad array of financial services, including
asset management, banking, and consumer finance, credit and charge cards,
insurance, investments, investment banking, and trading, and use diverse
channels to make them available to consumer and corporate customers around the
world.
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, the Funds' Adviser 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, 2000 Citibank received the
following fees:
FEE, AS PERCENTAGE OF
AVERAGE DAILY NET
FUND ASSETS, 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. The Funds' Adviser may make similar payments under
similar arrangements.
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 the Adviser, 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 the Adviser 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 the Adviser'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, the Adviser 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 the Adviser'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. The Funds' 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
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
YEAR ENDED AUGUST 31,
2000 1999 1998 1997 1996
<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
YEAR ENDED AUGUST 31,
2000 1999 1998 1997 1996
<PAGE>
The Statement of Additional Information (SAI) provides more details about the
Fund and their policies. The SAI is incorporated by reference into this
Prospectus and is legally part of it.
Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance.
To obtain free copies of the SAI and the Annual and Semi-Reports or to make
other inquiries, please call 1-800-995-0134 toll-free, or your account
representative.
The SAI is also available from the Securities and Exchange Commission. You can
find it on the EDGAR Database 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: (202) 942-8090. 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
January 1, 2001
CITIFUNDS(R) PREMIUM LIQUID RESERVES
CITIFUNDS(R) 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 January 1, 2001, for CitiFunds(R) Premium Liquid Reserves
and CitiFunds(R) 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 calling 1-800-995-0134 toll-free.
The Funds are each separate series of CitiFunds(R) 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 ANY BANK, 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 ............................................... 19
8. Description of Shares, Voting Rights and Liabilities ................. 19
9. Certain Additional Tax Matters ....................................... 21
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 January 1, 2001, 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") is currently the investment adviser to each of
the Portfolios. During the upcoming fiscal year, SSB Citi Fund Management LLC
("SSB Citi"), an affiliate of Citibank, is expected to assume the role of
investment adviser to the Portfolios. The investment adviser (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 may be purchased from the Funds' distributor, CFBDS (the
"Distributor"), or from financial institutions, such as federal or
state-chartered banks, trust companies, savings and loan associations or savings
banks, or broker-dealers (called "Service 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,
iMoneyNet'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, 2000 5.14% $1,678.85
Ten years ended August 31, 2000 5.05% $1,635.93
Five years ended August 31, 2000 5.41% $1,301.35
One year ended August 31, 2000 5.80% $1,058.02
U.S. TREASURY RESERVES
March 1, 1991 (commencement of operations)
to August 31, 2000 4.45% $1,513.15
Five years ended August 31, 2000 4.84% $1,266.73
One year ended August 31, 2000 5.17% $1,051.67
The annualized yield of Liquid Reserves for the seven-day period ended
August 31, 2000 was 6.30%. The effective compound annualized yield of Liquid
Reserves for such period was 6.50%. The annualized yield of U.S. Treasury
Reserves for the seven-day period ended August 31, 2000 was 5.63%. The effective
compound annualized yield of U.S. Treasury Reserves for such period was 5.79%,
and the annualized tax equivalent yield of U.S. Treasury Reserves for such
period was 6.35% (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 to the Funds' sub-transfer agent or, if they hold their shares
through a Service Agent, to the Service Agent. 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 Service 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 Service 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 Service 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; 49* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
MARK T. FINN; 57 -- 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).
RILEY C. GILLEY; 74 -- Vice President and General Counsel, Corporate Property
Investors (November, 1988 to December, 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (retired, December 1987).
TRUSTEES OF THE PORTFOLIOS
ELLIOTT J. BERV; 57 -- President and Chief Executive Officer, Catalyst, Inc.
(Management Consultants) (since June, 1992); President and Director, Elliott
J. Berv & Associates (Management Consultants) (since May, 1984); Chief
Executive Officer, Rocket City Enterprises (Consulting, Publishing, Internet
Services) (since January 2000).
PHILIP W. COOLIDGE; 49* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
RILEY C. GILLEY; 74 -- Vice President and General Counsel, Corporate Property
Investors (November, 1988 to December, 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (retired, December 1987).
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).
OFFICERS OF THE TRUST AND THE PORTFOLIOS
PHILIP W. COOLIDGE; 49* -- President of the Trust and the Portfolios; Chief
Executive Officer and President, Signature Financial Group, Inc. and CFBDS.
CHRISTINE D. DORSEY; 30* -- 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; 39* -- Assistant Treasurer of the Trusts and the Portfolios;
Chief Financial Officer and Senior Vice President; Signature Financial Group,
Inc., Treasurer, CFBDS.
TAMIE EBANKS-CUNNINGHAM; 28* -- 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.
SUSAN JAKUBOSKI; 36* -- 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; 49* -- Assistant Secretary and Assistant Treasurer of the
Trust and the Portfolios; Vice President, Signature Financial Group, Inc.;
Assistant Secretary, CFBDS.
JULIE J. WYETZNER; 41* -- 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 ........... $10,503 $3,766 $73,000
Riley C. Gilley ........ $ 2,183 $1,259 $70,500
William S. Woods, Jr.(3) $ 3,924 $1,719 $44,250
------------
(1) For the fiscal year ended August 31, 2000.
(2) Messrs. Coolidge, Finn, and Gilley are trustees of 47, 23, and 34 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 --, 2000, 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 Service 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 currently manages the assets of each Portfolio pursuant to separate
investment advisory agreements (the "Advisory Agreements"). Prior to assuming
the role of investment adviser to the Portfolios, SSB Citi will enter into
investment advisory agreements with each Portfolio upon the terms described for
the Advisory Agreements below. 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, Citibank 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. Citibank has voluntarily agreed to waive a portion of
its investment advisory fee. The fees payable by a Portfolio under any future
advisory agreements with SSB Citi will not increase from the fees payable under
the current Advisory Agreements.
CASH RESERVES PORTFOLIO: For the fiscal years ended August 31, 1998, 1999
and 2000 the fees paid to Citibank under the Advisory Agreement, after waivers,
were $6,739,206, $9,422,276 and $ 11,359,641, respectively.
U.S. TREASURY RESERVES PORTFOLIO: For the fiscal years ended August 31,
1998, 1999 and 2000, the fees paid to Citibank under the Advisory Agreement,
after waivers, were $578,350, $614,718 and $ 858,454, 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. The Adviser 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, 1998, 1999 and 2000,
the fees paid to CFBDS from the Fund under the Administrative Services
Agreement, after waivers, were $894,835, $1,433,738 and $1,768,277,
respectively. For the fiscal years ended August 31, 1998, 1999 and 2000, 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, 1998, 1999 and
2000, the fees paid to CFBDS from U.S. Treasury Reserves under the
Administrative Services Agreement, after waivers, were $575,894, $587,727 and
$600,666, respectively. For the fiscal years ended August 31, 1998, 1999 and
2000, the fees payable to CFBDS under the Administrative Services Agreement with
U.S. Treasury Reserves Portfolio were voluntarily waived.
The Funds use the name "Citi" by agreement with a Citigroup Inc. affiliate.
If a Citigroup affiliate ceases to serve as Adviser of the Funds, the Funds will
change their respective names so as to delete the word "Citi."
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 years ended August 31, 1998, 1999 and 2000,
all fees payable to the Distributor from Liquid Reserves under the Distribution
Agreement were voluntarily waived.
U.S. TREASURY RESERVES: For the fiscal years ended August 31, 1998, 1999 and
2000, all fees payable from U.S. Treasury Reserves to the Distributor under the
Distribution Agreement were voluntarily waived.
The Trust, the Portfolios, the Adviser and the Distributor each have adopted
a code of ethics pursuant to Rule 17j-1 under the Investment Company Act of
1940, as amended. Each code of ethics permits personnel subject to such code to
invest in securities, including securities that may be purchased or held by a
Fund. However, the codes of ethics contain provisions and requirements designed
to identify and address certain conflicts of interest between personal
investment activities and the interests of the Funds. Of course, there can be no
assurance that the codes of ethics will be effective in identifying and
addressing all conflicts of interest relating to personal securities
transactions.
SERVICE 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 ("Service 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 Service 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 Service Agent pursuant to which that Service 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 Service 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 Service Agent maintains a servicing relationship.
Service 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 Service 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, 1998, 1999 and
2000, aggregate fees paid from Liquid Reserves to Service Agents, after waivers,
were $511,556, $784,448 and $967,782, respectively. For the fiscal years ended
August 31, 1998, 1999 and 2000, the aggregate fees paid from U.S. Treasury
Reserves to Service Agents under the Servicing Agreements, after waivers, were
$276,404, $265,910, and $294,992, respectively.
The Trust and each Portfolio have entered into a Transfer Agency and Service
Agreement with Citi Fiduciary Trust Company ("Citi Fiduciary") pursuant to which
Citi Fiduciary acts as transfer agent for each Fund and each Portfolio. Under
the Transfer Agency and Service Agreement, Citi Fiduciary maintains the
shareholder account records for the Funds and Portfolios, handles certain
communications between shareholders and the Funds and Portfolios and distributes
dividends and distributions payable by the Funds and Portfolios. For these
services, Citi Fiduciary receives a monthly fee computed on the basis of the
number of shareholder accounts it maintains for a Fund or Portfolio during the
month and is reimbursed for out-of-pocket expenses. The principal business
address of Citi Fiduciary is 388 Greenwich Street, New York, New York 10013.
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 sub-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 the Adviser, 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 the Adviser 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 the Adviser 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, 2000 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 desir able 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 Service 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, 2000, Statement of Operations for the year ended
August 31, 2000, Statement of Changes in Net Assets for the years ended August
31, 2000 and 1999, Financial Highlights for each of the years in the five-year
period ended August 31, 2000, Notes to Financial Statements and Independent
Auditor's Report) and of Cash Reserves Portfolio (Portfolio of Investments at
August 31, 2000, Statement of Assets and Liabilities at August 31, 2000,
Statement of Operations for the year ended August 31, 2000, Statement of Changes
in Net Assets for the years ended August 31, 2000 and 1999, Financial Highlights
for each of the years in the five-year period ended August 31, 2000, 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, 2000, Statement of Operations for the year
ended August 31, 2000, Statement of Changes in Net Assets for the years ended
August 31, 2000 and 1999, Financial Highlights for each of the years in the
five-year period ended August 31, 2000, Notes to Financial Statements and
Independent Auditors' Report) and of U.S. Treasury Reserves Portfolio (Portfolio
of Investments at August 31, 2000, Statement of Assets and Liabilities at August
31, 2000, Statement of Operations for the year ended August 31, 2000, Statement
of Changes in Net Assets for the years ended August 31, 2000 and 1999, Financial
Highlights for each of the years in the five-year period ended August 31, 2000,
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(R) PREMIUM LIQUID RESERVES
CITIFUNDS(R) PREMIUM U.S. TREASURY RESERVES
TRUSTEES AND OFFICERS
Philip W. Coolidge, President*
Mark T. Finn
Riley C. Gilley
ASSISTANT TREASURER
Linwood C. Downs*
* Affiliated Person of Administrator and Distributor
-----------------------------------------------------
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
SSB Citi Fund Management LLC
388 Greenwich Street
New York, NY 10013
ADMINISTRATOR AND DISTRIBUTOR
CFBDS, Inc.
21 Milk Street, Boston, MA 02109 (617) 423-1679
TRANSFER AGENT
Citi Fiduciary Trust Company
388 Greenwich Street
New York, NY 10013
SUB-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
----------------------------------------------
SERVICE 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
*,*** 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) Transfer Agency Agreement with Citi Fiduciary Trust
Company, as transfer agent
* h(7) Amended and Restated Exchange Privilege Agreement
between the Registrant, certain other investment
companies and CFBDS, as distributor
* i Opinion and consent of counsel
* m Amended and Restated Distribution Plan of the
Registrant
p(1) Code of Ethics of the Registrant, Citibank, N.A. and
SSB Citi Fund Management LLC
p(2) Code of Ethics of CFBDS
*** q(1) Powers of Attorney for the Registrant
*** q(2) Powers of Attorney for U.S. Treasury Reserves
Portfolio
*** q(3) Powers of Attorney for Cash Reserves Portfolio
,****
---------------------
* 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.
**** Incorporated herein by reference to Post-Effective Amendment No. 13 to
the Registrant's Registration Statement on Form N-1A (File No. 33-38848)
as filed with the Securities and Exchange Commission on December 28, 1999
and Post-Effective Amendment No. 12 to the Registrant's Registration
Statement on Form N-1A (File No. 33-28844) as filed with the Securities
and Exchange Commission on December 28, 1999.
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, CitiFunds(R) Multi-State Tax Free Trust (CitiSM New York Tax
Free Reserves, CitiSM Connecticut Tax Free Reserves and CitiSM California Tax
Free Reserves), CitiFunds(R) Tax Free Income Trust (CitiSM National Tax Free
Income Fund, CitiSM New York Tax Free Income Fund and CitiSM California Tax Free
Income Fund), CitiFunds(R) Institutional Trust (CitiFunds(R) 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
CitiFunds(R) 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.
Victor J. Menezes is the Chairman 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.
The following persons have the affiliations indicated:
Paul J. Collins Director, Kimberly-Clark Corporation
Director, Nokia Corporation
Robert I. Lipp Chairman, Chief Executive Officer and
President, Travelers Property Casualty Corp.
William R. Rhodes Director, Private Export Funding Corporation
Director, Conoco, Inc.
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
CitiSM U.S. Treasury Reserves, CitiSM Cash Reserves, CitiFunds(R) Institutional
U.S. Treasury Reserves, CitiFunds(R) Institutional Liquid Reserves, CitiFunds(R)
Institutional Cash Reserves, CitiSM Tax Free Reserves, CitiFunds(R)
Institutional Tax Free Reserves, CitiSM California Tax Free Reserves, CitiSM
Connecticut Tax Free Reserves, CitiSM New York Tax Free Reserves, CitiSelect(R)
Folio 100 Income, 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 CitiFunds(R) 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: 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 27 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
(sub-transfer agent and custodian) North Quincy, MA 02171
Citi Fiduciary Trust Company 125 Broad Street
(transfer agent) New York, NY 10004
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 of 1933 and the
Investment Company Act of 1940, the Registrant 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 31st day of October, 2000.
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 October 31, 2000.
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
*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 New York,
New York on the 31st day of October, 2000.
CASH RESERVES PORTFOLIO
By: Susan Jakuboski
----------------------
Susan Jakuboski
Vice 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 October 31, 2000.
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: Susan Jakuboski
----------------------
Susan Jakuboski
Executed by Susan Jakuboski
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 31st day of October,
2000.
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 October 31, 2000.
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. Coolidge
on behalf of those indicated
pursuant to Powers of Attorney.
<PAGE>
EXHIBIT INDEX
Exhibit
No.: Description:
------- -------------
h(6) Transfer Agency Agreement with Citi Fiduciary
Trust Company, as transfer agent
p(1) Code of Ethics of Registrant, Citibank, N.A.,
and SSB Citi Fund Management LLC
p(2) Code of Ethics of CFBDS
