CMC FUND TRUST, 485BPOS, 1995-12-19

CMC FUND TRUST
485BPOS, 1995-12-19

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<PAGE>1
Reg. Nos. 33-30394/811-5857

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. ___ [ ]

Post-Effective Amendment No. 10 [ X ]

and/or

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. 9 [ X ]

(Check appropriate box or boxes.)

CMC Fund Trust
(Exact Name of Registrant as Specified in Charter)

1300 SW Sixth Avenue, PO Box 1350, Portland, Oregon 97207
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (503) 222-3600

John A. Kemp
1300 SW Sixth Avenue, PO Box 1350, Portland, Oregon 97207
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable
after the effective date of this Registration Statement.

It is proposed that this filing will become effective:
X immediately upon filing pursuant to paragraph (b)
------
on ____________ pursuant to paragraph (b)
------
60 days after filing pursuant to paragraph (a)(i)
------
on ____________ pursuant to paragraph (a)(i)
------
75 days after filing pursuant to paragraph (a)(ii)
------
on ____________ pursuant to paragraph (a)(ii) of Rule 485
------

If appropriate:
this post-effective amendment designates a new effective
------ date for a previously filed post-effective amendment.

Please forward copies of communications to:

Robert J. Moorman
Stoel Rives
900 SW Fifth Avenue
Portland, Oregon 97204

An indefinite number of shares of the Trust are being registered by this
Registration Statement pursuant to Rule 24f-2 under the Investment
Company Act of 1940. A Rule 24f-2 Notice for the year ended October 31,
1995 will be filed on or before December 31, 1995.

<PAGE>2
CMC FUND TRUST

CROSS-REFERENCE SHEET

Location in
Part A - INFORMATION REQUIRED IN A PROSPECTUS Prospectus
-----------

Item 1. Cover Page............................... Cover

Item 2. Synopsis................................. "Fund Expenses"

Item 3. Condensed Financial Information.......... "Financial
Highlights"

Item 4. General Description of
Registrant.......................... "Features of the
Fund" and
"Description of
the Fund"

Item 5. Management of the Fund................... "Management of
the Fund" and
"Transfer Agent"

Item 6. Capital Stock and Other
Securities.......................... "Voting Rights";
"Taxes";
"Distributions";
and Cover

Item 7. Purchase of Securities Being
Offering............................ "How Investments
in the Fund Are
Made" and
"Determination
of Net Asset
Value"

Item 8. Redemption or Repurchase................. "Redemptions"

Item 9. Legal Proceedings........................ Not applicable

Location in
Statement of
Part B - INFORMATION REQUIRED IN A Additional
STATEMENT OF ADDITIONAL INFORMATION Information
------------

Item 10. Cover Page............................... Cover

Item 11. Table of Contents........................ "Table of
Contents"

Item 12. General Information and
History............................. Not applicable

Item 13. Investment Objectives and
Policies............................ "Investment
Restrictions" and
"Additional
Information
Regarding Certain
Investments by
the Fund."
Additional
information is in
Prospectus under
"Description of
the Fund."
<PAGE>3
Item 14. Management of the Registrant............. "Management"

Item 15. Controls Persons and Principal
Holders of Securities............... "Management"

Item 16. Investment Advisory and
Other Services...................... "Investment
Advisory and
Other Fees Paid
to Affiliates"
and "Custodians."
Additional
information is in
Prospectus under
"Transfer Agent."

Item 17. Brokerage Allocation..................... "Portfolio
Transactions"

Item 18. Capital Stock and Other
Securities.......................... All required
information is in
Prospectus under
"Voting Rights."

Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered....................... "Redemptions."
Additional
information is in
Prospectus under
"Determination of
Net Asset Value"
and "How
Investments in
the Fund are
Made."

Item 20. Tax Status............................... "Taxes."
Additional
information is in
Prospectus under
"Taxes."

Item 21. Underwriters............................. Not applicable

Item 22. Calculation of Performance Data.......... "Yield and
Performance."
Additional
information is in
Prospectus under
"Performance
Information."

Item 23. Financial Statements..................... "Financial
Statements"

Part C
- ------

Information required to be included in Part C is set forth under the
appropriate item in Part C of this registration statement.
<PAGE>
Part A-I

CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
1300 S.W. Sixth Avenue
Portland, Oregon 97201
503-222-3600

This Prospectus provides information on CMC Fund Trust (the "Trust"),
an open-end diversified management investment company, and two of its
portfolios (the "Funds"), the CMC Small Cap Fund (the "Small Cap Fund") and
the CMC International Stock Fund (the "International Stock Fund"). The
Funds have different investment objectives.

Small Cap Fund. The Small Cap Fund's investment objective is to
achieve capital appreciation by investing principally in common stocks or
securities convertible into common stocks of companies that each have an
aggregate market valuation of less than $800 million ("small cap"). See
"Small Cap Fund -- Investment Objective and Policies." The Small Cap Fund
may, however, invest up to 35 percent of its total assets in the securities
of companies with larger capitalizations when the Trustees or the Fund's
investment adviser believes the potential for capital appreciation of such
securities is comparable to that of small cap securities. While over the
long-term small cap securities have on average outperformed the Standard
and Poor's 500 Stock Index (the "S&P 500"), which the Fund believes is
generally representative of securities of companies with larger
capitalizations, they have also been more volatile and riskier than the
market as a whole.

International Stock Fund. The International Stock Fund's investment
objective is to provide long-term capital appreciation by investing
primarily in foreign equity securities. Under normal market conditions, at
least 75 percent of the Fund's foreign equity securities will be securities
of well capitalized, seasoned companies. See "International Stock Fund --
Investment Objective and Policies." Investments in foreign securities
involve special risks, including currency risk and political risk, which
may result in significant price fluctuations. See "International Stock Fund
- -- Risk Considerations."

The Funds enable clients of Columbia Management Co. ("CMC" or
"Adviser") to invest in a diversified portfolio of small cap securities or
foreign equity securities rather than having to purchase individual
securities for their accounts.

This Prospectus concisely sets forth information about the Funds that
clients should know before investing and should be retained for future
reference. A Statement of Additional Information about the Funds dated
December 19, 1995 has been filed with the Securities and Exchange
Commission ("SEC") and is available without charge upon request to the
Trust. The Statement of Additional Information is incorporated by reference
into this Prospectus.

THE FUNDS CHARGE NO SALES LOAD. SHARES OF THE FUNDS ARE SOLD AND
REDEEMED AT THEIR NET ASSET VALUE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR
ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

December 19, 1995

<PAGE>2
_______________________________________________________________________________

Table Of Contents
_______________________________________________________________________________

Fund Expenses................................................................2
Financial Highlights.........................................................3
Features of the Funds........................................................4
How Investments in the Funds Are Made........................................5
Redemptions..................................................................5
Determination of Net Asset Value.............................................6
Description of the Funds.....................................................6
Small Cap Fund......................................................6
International Stock Fund............................................7
Distributions...............................................................10
Performance Information.....................................................10
Voting Rights...............................................................11
Taxes.......................................................................11
Management of the Funds.....................................................12
Transfer Agent..............................................................13
Additional Information......................................................13

_______________________________________________________________________________

FUND EXPENSES
_______________________________________________________________________________

The following table illustrates all expenses and fees that a
shareholder of each Fund will incur. The purpose of this table is to assist
you in understanding the various costs and expenses an investor in a Fund
will bear directly or indirectly. The expenses and fees set forth in the
table are for the 1995 fiscal year. "Other operating expenses" includes
custodial and transfer agent fees and audit, legal, and other business
operating expenses. See "Management of the Funds." If assets under separate
management by CMC are invested in a Fund, the shareholder will pay no fee
pursuant to its advisory contract with CMC with respect to those assets
invested in that Fund (for the period during which the assets are invested
in the Fund).

<TABLE>
<CAPTION>
Small Cap International
Fund Stock Fund
-----------------------------
<S> <C> <C>
Shareholder Transaction Expenses None None

Annual Fund Operating Expenses
(As a percentage of average net assets)

Management Fees .74% .75%

12b-1 Fees None None

Other Operating Expenses .03% .23%

Total Fund Operating Expenses .77% .98%

</TABLE>

EXAMPLE OF EXPENSES

The following example illustrates the expenses that you would pay on a
$1,000 investment over the periods shown, assuming a 5% annual rate of
return and redemption at the end of each period.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Small Cap Fund $7.86 $24.60 $42.78 $95.41
International Stock Fund $10.00 $31.22 $54.17 $120.12

</TABLE>

The above example should not be considered a representation of past or
future expenses or performance. The 5% rate of return used in the example
is required by the SEC for comparative purposes; actual expenses and
performance may be greater or less than those shown.
<PAGE>3
_______________________________________________________________________________

FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
_______________________________________________________________________________

The tables below have been audited by Coopers & Lybrand, L.L.P.,
independent accountants, as stated in their report appearing on page 43 in
the Statement of Additional Information. This information should be
reviewed in conjunction with the financial statements and notes thereto
appearing in the Statement of Additional Information. Additional
information about the performance of the Funds for fiscal 1995 is in the
Statement of Additional Information under "Financial Statements."

<TABLE>
SMALL CAP FUND
--------------
<CAPTION>

Fiscal Year Ended October 31,
-----------------------------
1995 1994 1993 1992 1991 1990 1989(1)
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $49.35 $56.44 $50.68 $49.53 $30.66 $40.12 $40.00
------ ------ ------ ------ ------ ------ ------
Income (Loss) from Investment Operations:
Net Investment Income............................ 0.22 0.18 0.10 0.03 0.05(2) 0.08(2) 0.13(2)
Net Realized and Unrealized Gains (Losses)
on Investments................................. 10.88 1.99 15.50 2.72 20.00 (9.43) (0.01)
------ ------ ------ ------ ------ ------ ------
Total from Investment Operations............ 11.10 2.17 15.60 2.75 20.05 (9.35) 0.12
------ ------ ------ ------ ------ ------ ------
Less Distributions:
Dividends (from net investment income)........... (0.16) (0.17) (0.10) (0.03) (0.06) (0.11) --
Dividends (in excess of net investment
income)........................................ (0.01)
Distributions (from capital gains)............... (4.25) (8.99) (9.74) (1.57) (1.12) -- --
Distributions (in excess of capital gains)....... (0.04) (0.09)
------ ------ ------ ------ ------ ------ ------
Total Distributions......................... (4.45) (9.26) (9.84) (1.60) (1.18) (0.11) --
------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of Period................... $56.00 $49.35 $56.44 $50.68 $49.53 $30.66 $40.12
====== ====== ====== ====== ====== ====== ======

Total Return..................................... 22.55% 3.87% 30.87% 5.54% 65.44% -23.35% 0.30%(3)

Ratios/Supplemental Data
Net Assets, End of Period (in millions).......... $537 $468 $493 $411 $276 $128 $20
Ratio of Expenses to Average Net Assets.......... 0.77% 0.78% 0.79% 0.80% 0.81% 0.91% 1.46%
Ratio of Net Investment Income to Average
Net Assets.................................. 0.43% 0.29% 0.17% 0.06% 0.12% 0.21% 1.85%
Portfolio Turnover Rate.......................... 125.8% 97.24% 64.39% 56.02% 69.65% 59.42% 34.48%

<FN>
(1) From inception of operations on August 30, 1989. Ratios and portfolio turnover rates are annualized.
(2) Based on average number of shares outstanding during the period.
(3) Not annualized.
</TABLE>
<PAGE>4
<TABLE>
INTERNATIONAL STOCK FUND

Fiscal Year Ended October 31,
-----------------------------
1995 1994(1)
------ ------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $39.51 $40.00
------ ------
Loss from Investment Operations:
Net Investment Income............................ 0.39 0.10
Net Realized and Unrealized Loss on
Investments and Foreign Currency Related
Transactions................................... (2.64) (0.59)
------ ------
Total from Investment Operations............ (2.25) (0.49)
------ ------
Less Distributions:
Dividends (from net investment income)........... (0.19)
Dividends (in excess of net investment
income)........................................ (0.01)
------
Total Distributions......................... (0.20)
------
Net Asset Value, End of Period................... $37.06 $39.51
====== ======
Total Return..................................... -5.69% -1.23%(2)
Ratios/Supplemental Data
Net Assets, End of Period (in millions).......... $69 $84
Ratio of Expenses to Average Net Assets.......... 0.98% 1.16%
Ratio of Net Investment Income to Average
Net Assets.................................. 0.99% 0.53%
Portfolio Turnover Rate.......................... 158.32% 123.80%

<FN>
(1) From inception of operations on February 1, 1994. Ratios and portfolio
turnover rates are annualized.
(2) Not annualized.
</TABLE>
_______________________________________________________________________________

FEATURES OF THE FUNDS
_______________________________________________________________________________

The Trust enables clients of CMC to invest in diversified portfolios
of either small cap securities or foreign securities rather than purchasing
such securities on an individual basis. Although there are risks that
cannot be eliminated in owning securities, management believes the Funds
offer many advantages to CMC's clients that would not normally be available
if similar securities were purchased on an individual basis. Among those
advantages are economies of scale, diversification, convenience, and, with
respect to the International Stock Fund, foreign custody. Notwithstanding
those advantages, investments by the Funds in small cap companies and
foreign securities, respectively, may be regarded as speculative. See
"Investment Objective and Policies" for each Fund.

By combining a portion of the capital of CMC clients' accounts into a
large portfolio, it is possible to offer all clients who invest in a Fund
effective access to either small capitalization or foreign company issues,
as the case may be, as well as professional investment supervision.

Each Fund is a portfolio of the Trust, an open-end diversified
management company established as an Oregon business trust under a Restated
Declaration of Trust dated October 13, 1993 ("Declaration of Trust"). The
Trust has established one other portfolio, the CMC High Yield Fund. The
Trust is not required under its Declaration of Trust to hold annual
shareholder meetings, but special meetings may be called for purposes such
as electing or removing Trustees, changing fundamental investment policies,
or approving an
<PAGE>5
investment advisory contract.

Each Fund is a "no-load fund", which means investors pay no sales load
and do not incur any additional expenses beyond those paid directly by the
Fund. See "Fund Expenses."

_______________________________________________________________________________

HOW INVESTMENTS IN THE FUNDS ARE MADE
_______________________________________________________________________________

An independent fiduciary of a CMC client account, after careful review
of this prospectus, including Fund expenses, and its consistency with the
client's written investment guidelines, approves the investment in a Fund
and authorizes CMC to purchase and redeem shares of a Fund at the
discretion of CMC for the client's portfolio, subject to limitations on the
amount of the investment imposed by the independent fiduciary. If CMC is
deemed to be a fiduciary with respect to a shareholder of a Fund under the
Employee Retirement Income Security Act of 1974, certain conditions must be
satisfied before assets may be invested in a Fund by CMC on behalf of the
shareholder. See "Investment Advisory and Other Fees Paid to Affiliates" in
the Statement of Additional Information.

The shares of each Fund are purchased and redeemed at the net asset
value next determined after an order is received by the Fund. Net asset
value of each Fund is determined as of the close of regular trading
(normally 4:00 p.m. New York time) on each day the New York Stock Exchange
("NYSE") is open for business. See "Determination of Net Asset Value."

Orders received by a Fund are processed the day they are received.
Orders received before the close of regular trading on each day the NYSE is
open for business will be entered at the net asset value per share
calculated that day. Orders received after the close of regular trading on
each day the NYSE is open for business will be entered at the net asset
value next determined. All investments are credited to the shareholder's
account in full and fractional shares computed to the third decimal place.
Although the Funds have no policy with respect to initial or subsequent
minimum investments, purchase orders may be refused at the discretion of a
Fund.

Shares purchased are credited to the CMC client's account on the
record books of the applicable Fund, with confirmations supplied by the
Fund to the account custodian for the CMC client.

Shareholder inquiries, including requests for certificated shares, may
be made by writing to CMC or the applicable Fund at 1300 SW Sixth Avenue,
Portland, Oregon 97207 or by calling (503) 222-3600.

_______________________________________________________________________________

REDEMPTIONS
_______________________________________________________________________________

Redemptions of all or any portion of a shareholder's investment can be
made at any time. Redemptions of shares are at the net asset value next
computed after receipt of a redemption order on days when the NYSE is open
for business. See "Determination of Net Asset Value." Payment will be made
within seven days of the date of redemption except as provided by the rules
of the SEC.

If certificates for shares of a Fund have been issued to a
shareholder, they must be returned to the Fund, properly endorsed, before
any redemption request may be processed. Redemption proceeds are normally
transmitted in the manner specified in the redemption request on the
business day following the effective date of the redemption. Although a
shareholder may redeem shares that were recently purchased by check, a Fund
may hold the redemption proceeds until payment for the purchase of such
shares has cleared, which may take up to 15 days from the date of purchase.
No interest is paid on the redemption proceeds after the redemption date
and before the proceeds are transmitted. This holding period does not apply
to the redemption of shares recently purchased by bank wire or with a
cashier's or certified check.

Each Fund reserves the right to redeem Fund shares in cash or in kind.
The Trust has elected, however, to be governed by Rule 18f-1 under the
Investment Company Act of 1940 (the "1940 Act"), pursuant to which each Fund
is obligated to redeem, during any 90-day period, shares of a shareholder
solely for cash up to the lesser of $250,000 or 1 percent of the net asset
value of the Fund. A shareholder who is redeemed in
<PAGE>6
kind may incur brokerage fees upon the sale of any securities distributed
upon redemption.

_______________________________________________________________________________

DETERMINATION OF NET ASSET VALUE
_______________________________________________________________________________

The net asset value per share of each Fund is determined by CMC, under
procedures approved by the Trustees of the Trust, as of the close of
regular trading (normally 4 p.m. New York time) on each day the NYSE is
open for business and at other times determined by the Trustees. The net
asset value per share is computed by dividing the value of all assets of
the Fund, less its liabilities, by the number of shares outstanding.

Securities will be valued according to the market value obtained in a
consistent manner from the broadest and most representative markets. These
market quotations, depending on local convention or regulation, may be last
sale price, last bid or asked price, or the mean between last bid and asked
prices as of, in each case, the close of the applicable exchange.
Securities for which market quotations are not readily available and other
assets will be valued at fair value as determined in good faith under
procedures established by and under the general supervision of the
Trustees. These procedures may include valuing portfolio securities by
reference to other securities with comparable ratings, interest rates, and
maturities and using pricing services, in each case only when these
procedures result in prices that are believed to reflect fair market value.
Fair value for debt securities with remaining maturities of less than 60
days is based on cost adjusted for amortization of discount or premium and
accrued interest (unless the Trustees believe unusual circumstances
indicate another method of determining fair value should be considered).

Trading in securities on many foreign securities exchanges and
over-the-counter markets is normally completed at various times before the
close of business on each day on which the NYSE is open. In addition,
trading of these foreign securities may not take place on all NYSE business
days. Trading may take place in various foreign markets on Saturday or on
other days the NYSE is not open for business and on which a Fund's net
asset value is therefore not calculated. The calculation of a Fund's net
asset value may not take place contemporaneously with the determination of
the prices of the Fund's portfolio securities. Events affecting the values
of portfolio securities that occur between the time the prices are
determined and the close of the NYSE will not be reflected in a Fund's
calculation of net asset value unless the Trustees deem that the particular
event would materially affect net asset value. Assets of foreign securities
are translated from the local currency into U.S. dollars at the prevailing
exchange rates.

_______________________________________________________________________________

DESCRIPTION OF THE FUNDS
_______________________________________________________________________________

Small Cap Fund

Investment Objective and Policies. The investment objective of the
Small Cap Fund is to achieve capital appreciation by investing, in normal
circumstances, at least 65 percent of the value of the Fund's total assets
in common stocks or securities convertible into common stocks of companies
that each have an aggregate market valuation of less than $800 million
("small cap"). There is no minimum aggregate market valuation for a company
to be considered an appropriate investment for the Fund. The Fund may,
however, invest from time to time up to 35 percent of the value of the
Fund's total assets in the securities of larger, more established companies
when the Trustees or the Fund's investment adviser believes such securities
offer capital appreciation potential that is generally comparable to small
cap securities. During periods when the Funds investment adviser determines
market conditions call for a temporary defensive posture, the Fund may
without limit retain cash or invest in high-grade fixed income securities
or money market instruments. See "Additional Information -- Temporary
Investments and -- Repurchase Agreements." To the extent the Fund's assets
are invested in these types of securities or held in cash, the Fund will
not be invested in securities designed to achieve the Fund's investment
objective of capital appreciation. The Fund may also purchase certain
options and futures contracts. See "Additional Information -- Options and
Financial Futures Transactions." The Fund's investment objective may be
changed by the Trustees without shareholder approval upon 30 days written
notice.

<PAGE>7
The Small Cap Fund may invest in convertible debentures and
convertible preferred stock, each convertible into the common stock of
small cap companies. Convertible debentures are interest-bearing debt
securities, typically unsecured, that represent an obligation of the
corporation providing the owner with claims to the corporation's earnings
and assets before common and preferred stock owners, generally on par with
unsecured creditors. If unsecured, claims of convertible debenture owners
would be inferior to claims of secured debt holders. Convertible preferred
stocks are securities that represent an ownership interest in a corporation
providing the owner with claims to the corporation's earnings and assets
before common stock owners but after bond owners. Investments by the Small
Cap Fund in convertible debentures or convertible preferred stock would be
a substitute for an investment in the underlying common stock, primarily
either in circumstances where only the convertible security is available in
quantities necessary to satisfy the Fund's investment needs (for example,
in the case of a new issuance of convertible securities) or where, because
of financial market conditions, the conversion price of the convertible
security is comparable to the price of the underlying common stock, in
which case a preferred position with respect to the corporation's earnings
and assets may be preferable to holding common stock.

The Small Cap Fund may also invest in warrants, which are options to
buy a stated number of underlying securities at a specified price any time
during the life of the warrants. The securities underlying these warrants
will be the same types of securities that the Fund will invest in to
achieve its investment objective of capital appreciation. The purchaser of
a warrant expects the market price of the underlying security will exceed
the purchase price of the warrant plus the exercise price of the warrant,
thus resulting in a profit. If the market price never exceeds the purchase
price plus the exercise price of the warrant before the expiration date of
the warrant, the purchaser will suffer a loss equal to the purchase price
of the warrant. Securities held by the Small Cap Fund will generally be
traded in established over-the-counter markets or listed on a national or
regional securities exchange. The Small Cap Fund does not intend to
concentrate its investments in any particular industry or group of
industries, but to diversify its holdings among as many different companies
and industries as seems appropriate in light of the conditions prevailing
at any given time. The Small Cap Fund may also invest up to 5 percent of
its total assets in equity securities of closed-end investment companies
where the investment policies of the closed-end investment company are
generally similar to those of the Fund. To the extent the Fund makes any
such investments, shareholders of the Fund will incur, indirectly,
additional investment advisory and other expenses as indirect shareholders
of the closed-end investment company.

The Small Cap Fund may invest up to one-third of its total assets in
securities issued by companies in developed foreign countries, principally
companies in Canada, Western Europe, and Asia, or in American Depository
Receipts ("ADRs") for foreign securities. For a discussion of the special
risks involved with investing in foreign securities, see "International
Stock Fund -- Risk Considerations."

Investments in small cap companies may involve greater risks, with a
corresponding affect on the Small Cap Fund's net asset value, than
investments in larger companies. For this reason, the Fund is not intended
to be a complete investment vehicle. The Fund is designed for that portion
of a portfolio that can appropriately be invested in securities with
greater risk but also greater potential for appreciation.

International Stock Fund

Investment Objective and Policies. The International Stock Fund's
investment objective is to provide long-term capital appreciation by
investing primarily in equity securities of companies based outside the
United States. This objective may be changed by the Trustees without
shareholder approval upon 30 days written notice. There is no assurance
that the Fund will achieve its investment objective.

Under normal market conditions, the International Stock Fund will
invest in equity securities (i.e., common stock and preferred stock),
including securities convertible into equity securities, of issuers located
outside the United States. Under normal market conditions, at least
75 percent of the Fund's assets invested in equity securities will be
securities of well capitalized, seasoned companies. The Fund considers a
company well capitalized if it has an aggregate market valuation over $500
million. The Fund may invest in smaller, less seasoned companies when the
Fund's investment adviser believes such companies offer attractive
opportunities consistent with the Fund's overall investment objective. An
investment in a less seasoned company may involve greater risks than an
investment in a larger, more established company. See "Additional
Information -- Investments in Small and Unseasoned Companies." In addition
to investing in equity securities, the Fund may also enter into foreign
currency exchange contracts and purchase other securities to protect
against fluctuations in exchange rates. These securities are described
below and under
<PAGE>8
"Additional Information."

The International Stock Fund's investment adviser intends to select
portfolio securities using what is sometimes referred to as a "top down"
approach, under which the international investment environment is first
analyzed in the following areas: economic activity and prospects for growth
in the United States and foreign countries, trends in monetary and fiscal
policy, the outlook for currency exchange rates, prospects for political
changes, investor sentiment, and market momentum. This "top down" analysis
aids in identifying the appropriate allocation of investments among various
geographic regions or countries and the various business sectors within
those regions or countries. The Fund does not intend to concentrate its
investment in any particular industries. Once the analysis is completed,
specific portfolio selections are made. Factors affecting individual
security selection include:

-- financial strength of the issuer
-- ability of management
-- dynamics of the business sector
-- earnings growth and profit margins
-- trend in sales
-- potential for new product development
-- dividend payment history and potential
-- financial ratios, including price/earnings and price/book ratios
-- investment for the future in research and facilities

The International Stock Fund will invest in at least three different
foreign countries and may invest in companies located anywhere in the
world. The Fund intends to invest principally in the following countries:
Austria, Belgium, Denmark, Finland, France, Germany, Italy, The
Netherlands, Norway, Spain, Sweden, Switzerland, the United Kingdom,
Australia, Hong Kong, Japan, New Zealand, Singapore, Canada, and Mexico.

Currency Management. The value of the International Stock Fund will
fluctuate as a result of changes in the exchange rates between the U.S.
dollar and the currencies in which the foreign securities or bank deposits
held by the Fund are denominated. To reduce or limit exposure to adverse
changes in currency exchange rates (referred to as "hedging"), the Fund may
enter into forward currency exchange contracts that in effect lock in a
rate of exchange during the period of the forward contract. Forward
contracts are usually entered into with currency traders, are not traded on
securities exchanges, and usually have a term of less than one year but can
be renewed. A default on a contract would deprive the Fund of unrealized
profits or force the Fund to cover its commitments for purchase or sale of
currency, if any, at the market price. The Fund will only enter into
forward contracts for hedging and not for speculation. If required by the
Investment Company Act or the SEC, the Fund may "cover" its commitment
under the forward contracts by segregating cash or liquid high-grade
securities with the Fund's custodian in an amount not less than the value
of the Fund's total assets committed to the consummation of the contracts.
Under normal market conditions, no more than 25 percent of the Fund's
assets may be committed to the consummation of currency exchange contracts.

The International Stock Fund may also purchase or sell foreign
currencies on a "spot" (cash) basis or on a forward basis to lock in the
U.S. dollar value of a transaction at the exchange rate or rates then
prevailing. The Fund may use this hedging technique in an attempt to
insulate itself against possible losses and gains resulting from a change
in the relationship between the U.S. dollar and the relevant foreign
currency during the period between the date the security is purchased or
sold and the date on which payment is made or received.

Hedging against adverse changes in exchange rates will not eliminate
fluctuation in the prices of the International Stock Fund's portfolio
securities or prevent loss if the prices of those securities decline. In
addition, the use of forward contracts may limit potential gains from an
appreciation in the U.S. dollar value of a foreign currency. The
forecasting of short-term currency market movements is very difficult, and
there can be no assurance that short-term hedging strategies used by the
Fund will be successful.

Risk Considerations. Investing in foreign securities that are traded
principally in markets outside the United States may involve greater risk
than investing in domestic securities. Investing in foreign securities,
which are generally denominated in foreign currencies, and the use of
forward currency exchange contracts involve risks not typically associated
with investing in domestic securities. The value of the International
<PAGE>9
Stock Fund's portfolio will be affected by changes in currency exchange
rates and in currency exchange regulations. Foreign securities may be
subject to foreign taxes that would reduce their effective yield. Certain
foreign governments levy withholding taxes against dividend and interest
income. Although in some countries a portion of these taxes is recoverable,
the unrecovered portion of any foreign withholding taxes would reduce the
income the Fund receives from its foreign investments.

Foreign investments involve certain other risks, including possible
political or economic instability in the country of the issuer, the
difficulty of predicting international trade patterns, and the possibility
of currency exchange controls. Foreign securities may also be subject to
greater fluctuations in price than domestic securities. There may be less
publicly available information about a foreign company than about a
domestic company. Foreign companies generally are not subject to uniform
accounting, auditing, and financial reporting standards comparable to those
applicable to domestic companies. There is generally less government
regulation of stock exchanges, brokers, and listed companies abroad than in
the United States. In addition, with respect to certain foreign countries,
there is a possibility of expropriation, nationalization, confiscatory
taxation, or diplomatic developments that could affect investments in those
countries. Finally, in the event of default on a foreign debt obligation,
it may be more difficult for the International Stock Fund to obtain or
enforce a judgment against the issuers of the obligation. The Fund will
normally execute its portfolio securities transactions on the principal
stock exchange on which the security is traded.

The International Stock Fund may invest a portion of its assets in
developing countries or in countries with new or developing capital
markets, such as countries in Eastern Europe. The considerations noted
above regarding the risk of investing in foreign securities are generally
more significant for these investments. These countries may have relatively
unstable governments and securities markets in which only a small number of
securities trade. Markets of developing countries may generally be more
volatile than markets of developed countries. Investments in these markets
may involve significantly greater risks, as well as the potential for
greater gains.

In addition to investing directly in foreign equity securities, the
International Stock Fund may also purchase such securities in the form of
American Depository Receipts ("ADRs") and European Depository Receipts
("EDRs"). ADRs in registered form are dollar-denominated securities
designed for use in the U.S. securities markets. ADRs are sponsored and
issued by domestic banks and represent and may be converted into underlying
foreign securities deposited with the domestic bank or a correspondent
bank. ADRs do not eliminate the risks inherent in investing in the
securities of foreign issuers. By investing in ADRs rather than directly in
the foreign security, however, the Fund may avoid currency risks during the
settlement period for either purchases or sales. There is a large, liquid
market in the United States for most ADRs. The information available for
ADRs is subject to the accounting, auditing, and financial reporting
standards of the domestic market or exchange on which they are traded,
which standards are more uniform and more exacting than those to which many
foreign issuers may be subject. EDRs are receipts evidencing an arrangement
with a European bank similar to that for ADRs. EDRs are not necessarily
denominated in the currency of the underlying security.

Additional costs may be incurred in connection with the International
Stock Fund's foreign investments. Foreign brokerage commissions are
generally higher than those in the United States. Expenses may also be
incurred on currency conversions when the Fund moves investments from one
country to another. Increased custodian costs as well as administrative
difficulties may be experienced in connection with maintaining assets in
foreign jurisdictions.

A description of other investment restrictions and certain investment
practices of the International Stock Fund is included under "Additional
Information" and in the Statement of Additional Information. The Fund's
investment restrictions include a prohibition on investing more than
10 percent of its total assets in the securities of companies that have a
record of less than 3 years of continuous operations or more than 10 percent
of its total assets in illiquid securities.
<PAGE>10
_______________________________________________________________________________

DISTRIBUTIONS
_______________________________________________________________________________

Generally, each Fund distributes net investment income twice a year
and net realized capital gains from investment transactions annually. The
amount distributed, if any, will vary according to the income
received from securities held by the Funds and capital gains realized from
the sale of securities.

All distributions are paid as cash dividends and reinvested in
additional shares at the net asset value at the close of business on the
record date unless the account has elected to receive them in cash.

_______________________________________________________________________________

PERFORMANCE INFORMATION
_______________________________________________________________________________

Historical average annual total return and total return information
for the Funds will be provided periodically. Such performance information
represents historical data, and the investment return and principal value
of an investment will fluctuate so that shares of a Fund when redeemed may
be worth more or less than their original cost. Average annual total return
and total return quotations for a Fund assume the reinvestment of all
distributions during the period presented. Average annual total return
represents the average annual compounded rates of return for the period
presented that would equate the initial amount invested to the ending
redeemable value. Total return represents a percentage return for the
period presented that would equate the initial amount invested to the
ending redeemable value. The table below shows total return and performance
information for the Small Cap Fund and the International Stock Fund for the
periods ended October 31, 1995. A discussion by the Adviser regarding each
Fund's performance for fiscal 1995 is set forth under "Financial Statements"
in the Statement of Additional Information.

Average Annual Total Return Total Return
--------------------------- ------------
Since Since
1 Year 5 Years Inception* 1 Year 5 Years Inception*
------ ------- --------- ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C>
CMC Small Cap Fund....................... 22.55% 23.81% 13.86% 22.55% 190.90% 123.66%

Since Since
1 Year Inception* 1 Year Inception*
------ --------- ------ ---------
CMC International Stock Fund............. -5.69% -4.09% -5.69% -6.85%
<FN>
* Since August 30, 1989 for the Small Cap Fund and since February 1, 1994 for the International Stock Fund.

</TABLE>

The Funds may compare their performance to other mutual funds with
similar investment objectives and to the mutual fund industry as a whole,
as quoted by ranking services and publications of general interest.
Examples of these services or publications include Lipper Analytical
Services, Inc., Schabacker's Total Investment Service, CDA Technologies,
Barron's, Business Week, Changing Times, The Financial Times, Financial
World, Forbes, Investor's Daily, Money, Morningstar Mutual Funds, Personal
Investor, The Economist, The Wall Street Journal, and USA Today. (Lipper
Analytical Services, Inc. is an independent rating service that ranks over
1,000 mutual funds based upon total return performance). These ranking
services and publications may rank the performance of the Funds against all
other funds over specified periods and against funds in specified
categories.

The Funds may compare their performance to that of a recognized stock
market indicator, such as the Nasdaq Composite Index, the S&P 500, the Dow
Jones Industrial Average, Morgan Stanley Capital International Europe,
Australia, Far East Index, or the FT-Actuaries Europe-Pacific Index. Client
communications may contain past or present performance rankings. This is
not to be considered representative or indicative of future results.
<PAGE>11

_______________________________________________________________________________

VOTING RIGHTS
_______________________________________________________________________________

The Trust may establish separate series of investment portfolios under
its Declaration of Trust. The Funds and CMC High Yield Fund are the only
series established under the Trust. Shares of each series vote together,
except as provided in the Trust's Declaration of Trust and under applicable
law. It is expected that shares of a series would vote separately by series
on any changes in fundamental investment policies relating to that series.
All shares of each series of the Trust, including the Funds, have equal
rights as to voting, redemption, and distribution. All issued and
outstanding shares of the Funds are fully paid and nonassessable. Shares
have no preemptive or conversion rights. Fractional shares have the same
rights proportionately as full shares. The shares of the Funds do not have
cumulative voting rights, which means that the holders of more than 50
percent of the shares of the Funds and any other portfolio of the Trust, if
established, voting for the election of Trustees can elect all the Trustees
if they choose to do so. In certain circumstances, Trustees may be removed
by action of the Trustees or the shareholders.

Under the provisions of the 1940 Act, and as used elsewhere in this
Prospectus, the phrase "vote of a majority of the outstanding voting
securities of the Fund" means the vote, at any meeting of shareholders of
the Fund, of (i) 67 percent or more of the shares present or represented by
proxy at the meeting, if the holders of more than 50 percent of the
outstanding shares are present or represented by proxy, or (ii) more than
50 percent of the outstanding shares, whichever is less. As of November 30,
1995, 35.04% or 3,489,151 shares of the Small Cap Fund and 76.93% or
1,427,112 shares of the International Stock Fund were beneficially owned by
the State of Oregon Stock Growth Fund.

Annual meetings of shareholders will not be held except as required by
the 1940 Act and other applicable law. A special meeting will be held to
vote on the removal of a Trustee or Trustees of the Trust if requested in
writing by the holders of not less than 10% of the outstanding shares of
the Trust.

_______________________________________________________________________________

TAXES
_______________________________________________________________________________

Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
By qualifying and by meeting certain other requirements, a Fund will not be
subject to federal income taxes to the extent it distributes to its
shareholders its net investment income and realized capital gains. Each
Fund intends to make sufficient distributions to relieve itself from
liability for federal income taxes.

Shareholders that are subject to federal income taxes will recognize
ordinary income on distributions of net investment income or of any excess
of net short-term capital gain over net long-term capital loss.
Distributions properly designated as representing the excess of net
long-term capital gain over net short-term capital loss are taxable to
shareholders as long-term capital gain, regardless of the length of time
the shareholder held shares of the Fund. A portion of any distributions
received from a Fund may be eligible for the dividends received deduction
in the case of corporate shareholders, depending on the amount of
qualifying dividends received by the Fund from domestic corporations.

The tax character of dividends and other distributions from a Fund is
the same whether they are paid in cash or reinvested in additional shares
of the Fund. Dividends declared in October, November, or December to
shareholders of record as of a date in one of those months and paid in the
following January will be reportable as if received by the shareholders on
December 31. Thus, the shareholders may be taxed on these dividends in the
taxable year prior to the year of actual receipt.

A distribution may be taxable to a shareholder even if the
distribution reduces the net asset value of the shares held below their
cost (and is in an economic sense a return of the shareholder's capital).
This tax result is most likely when shares are purchased shortly before an
annual distribution of capital gains or other earnings.

Investment income received by the International Stock Fund and derived
from foreign securities may be subject to foreign income taxes withheld by
the foreign company. The United States has entered into tax
<PAGE>12
treaties with many foreign countries that entitle a fund to a reduced rate
of tax or exemption from tax on this income. It is impossible to determine
the effective rate of foreign tax in advance since the amount of the
International Stock Fund's assets to be invested within various countries
will fluctuate and the extent to which foreign tax refunds will be
recovered is uncertain. The International Stock Fund intends to operate so
as to qualify for treaty-reduced tax rates where applicable.

If the International Stock Fund has paid withholding or other taxes to
foreign governments during the year, the taxes will reduce the Fund's
income. In that event, the International Stock Fund may qualify for and
make an election permitted under the Code so that shareholders will be
required to treat as taxable income their pro rata portion of the income
taxes paid by the Fund to foreign countries and may, subject to
limitations, be able to claim a credit or deduction for the same amount.
Although the International Stock Fund intends to meet the requirements of
the Code to "pass through" these foreign taxes, there can be no assurance
the Fund will be able to do so.

Each Fund will mail to its shareholders annually a summary of the
federal income tax status of the Fund's distributions for the preceding
year. Additional information regarding certain income tax consequences of
investments in the Funds is set forth in the Statement of Additional
Information.

This "Taxes" section is only a brief summary of the major tax
considerations affecting each Fund and its shareholders and is not a
complete or detailed explanation of tax matters. In addition to Federal
taxes, shareholders of the Funds may be subject to state and local taxes.
Accordingly, investors are urged to consult their tax advisers concerning
the tax consequences to them of investing in the Funds.

_______________________________________________________________________________

MANAGEMENT OF THE FUNDS
_______________________________________________________________________________

Each Fund is managed under the general supervision of the Trustees of
the Trust. The Trust has contracted with CMC to provide investment advisory
services to the Funds. CMC has acted as an investment adviser since 1969
and acts as investment manager for approximately $12 billion of assets of
other institutions. CMC is owned by its employees, including J. Jerry
Inskeep, Jr. and James F. Rippey, who are Trustees and officers of the
Trust. The address of CMC is 1300 S.W. Sixth, P.O. Box 1350, Portland,
Oregon 97207-1350.

Under the investment advisory contract with the Trust, CMC provides
research, advice, and supervision with respect to investment matters and
determines which securities are purchased or sold. In addition, CMC
provides office space and pays all executive salaries and expenses and
ordinary office expenses of the Funds. Certain employees of CMC are also
officers of the Trust and, subject to the authority of the Trustees of the
Trust, are responsible for the overall management of the Trust.

The Adviser uses an investment team approach to analyze investment
themes and strategies for the Funds. Alan J. Folkman, a Senior Vice
President and director of CMC, is the Chief Investment Officer of the
Investment Team. With over 28 years of experience in the investment
management industry, Mr. Folkman supervises the Investment Team in
establishing broad investment strategies and determining portfolio
guidelines for the Funds.

Members of the Investment Team are responsible for the analysis of
particular industries or types of fixed income securities and for
recommendations on individual securities within those industries or asset
categories. Investment decisions for the Funds are then made by the
Investment Team and the individual portfolio managers who are responsible
for investment decisions on behalf of the Funds.

Richard J. Johnson, a Vice President of CMC and a Chartered Financial
Analyst, joined the Investment Team in 1994 and assumed principal
responsibility for investment decisions on behalf of the Small Cap Fund in
April 1995. Prior to joining the Columbia Investment Team, Mr. Johnson was
a Portfolio Manager and Analyst with Provident Investment Counsel
(1990-1994). Mr. Johnson received a Masters of Business Administration from
the Anderson Graduate School of Management at UCLA in 1990.

James McAlear, a Vice President of CMC, has had principal
responsibility for investment decisions on behalf of the International
Stock Fund since its inception in 1994. Prior to joining the Columbia
Investment Team in 1992, Mr. McAlear was a Senior Vice President of IDS
International, Inc. (1985-1992) and an
<PAGE>13
Executive Director for Merrill Lynch Europe (1972-1985).

Members of the Investment Team and other personnel of the Trust or CMC
are permitted to trade securities for their own or family accounts, subject
to the rules of the Code of Ethics adopted by the Trust. The rules that
govern personal trading by investment personnel are based on the principal
that employees owe a fiduciary duty to conduct their trades in a manner
that is not detrimental to the Funds or their shareholders. The Trust has
adopted the recommendations of the Investment Company Institute, an
organization comprised of members of the mutual fund industry, relating to
restrictions on personal trading. For more information on the Code of
Ethics and specific trading restrictions, see the Statement of Additional
Information.

The investment advisory fee of each Fund is accrued daily and paid
monthly. The advisory fee for each Fund equals the annual rate of .75 of 1
percent of its daily net assets, which is higher than the advisory fee paid
by most other mutual funds. For the fiscal year ended October 31, 1995, the
investment advisory fees incurred by the Small Cap Fund and International
Stock Fund were $3,528,353 and $543,358, respectively. The Funds assume
their respective costs relating to trust matters, cost of services to
shareholders, transfer and dividend paying agent fees, custodian fees,
legal and auditing expenses, disinterested trustees' fees, taxes and
governmental fees, interest, brokers' commissions, transaction expenses,
cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase, or redemption of its shares, expenses
of registering or qualifying its shares for sale, transfer taxes, and all
expenses of preparing its registration statements, prospectuses, and
reports.

_______________________________________________________________________________

TRANSFER AGENT
_______________________________________________________________________________

Columbia Trust Company (the "Trust Company") acts as transfer agent and
dividend paying agent for the Funds. The Trust Company is owned by its
employees, including J. Jerry Inskeep, Jr. and James F. Rippey, who are
also principal shareholders of CMC and Trustees and officers of the Trust.
The address of the Trust Company is 1301 S.W. Fifth Avenue, P.O. Box 1350,
Portland, Oregon 97207-1350.

_______________________________________________________________________________

ADDITIONAL INFORMATION
_______________________________________________________________________________

Repurchase Agreements. The Funds may invest in repurchase agreements,
which are agreements by which the Fund purchases a security and
simultaneously commits to resell that security to the seller (a commercial
bank or recognized securities dealer) at a stated price within a number of
days (usually not more than seven) from the date of purchase. The resale
price reflects the purchase price plus a rate of interest which is
unrelated to the coupon rate or maturity of the purchased security.
Repurchase agreements may be considered loans by a Fund collateralized by
the underlying security. The obligation of the seller to pay the stated
price is in effect secured by the underlying security. The seller will be
required to maintain the value of the collateral underlying any repurchase
agreement at a level at least equal to the price of the repurchase
agreement. In the case of default by the seller, a Fund could incur a loss.
In the event of a bankruptcy proceeding commenced against the seller, a
Fund may incur costs and delays in realizing upon the collateral. Each Fund
will enter into repurchase agreements only with those banks or securities
dealers who are deemed creditworthy pursuant to criteria adopted by the
Trustees of the Trust. There is no limit on the portion of a Fund's assets
that may be invested in repurchase agreements with maturities of seven days
or less.

Investments in Small and Unseasoned Companies. The Funds may invest in
companies that are unseasoned; that is, these companies may have limited or
unprofitable operating histories, limited financial resources, and
inexperienced management. In addition, they often face competition from
larger or more established firms that have greater resources. Securities of
small and unseasoned companies are frequently traded in the
over-the-counter market or on regional exchanges where low trading volumes
may result in erratic or abrupt price movements. To dispose of these
securities, the Funds may have to sell them over an extended period of time
or below the original purchase price. Investments by the Funds in these
small or unseasoned companies may also be regarded as speculative. Each
Fund has a fundamental policy not to invest more than 10 percent of its
total assets in companies that have a record of less than three years of
<PAGE>14
continuous operations.

Illiquid Securities. The Funds may buy securities whose public resale
would be subject to legal restrictions ("restricted securities"). No illiquid
securities, including restricted securities and repurchase agreements of
more than seven days maturity, will be acquired if upon the purchase more
than 10 percent of the value of a Fund's net assets would consist of these
securities. "Illiquid securities" are securities that may not be sold or
disposed of in the ordinary course of business within seven days at
approximately the price used to determine the Fund's net asset value. Under
current interpretations of the Staff of the SEC, the following instruments
in which the Fund may invest will be considered illiquid: (1) repurchase
agreements maturing in more than seven days; (2) restricted securities
(securities whose public resale is subject to legal restrictions);
(3) options, with respect to specific securities, not traded on a national
securities exchange that are not readily marketable; and (4) any other
securities in which the Fund may invest that are not readily marketable.

The International Stock Fund may purchase certain restricted
securities that can be resold to qualifying institutions pursuant to a
regulatory exemption under Rule 144A ("Rule 144A securities"). If a dealer or
institutional trading market exists for Rule 144A securities, such
securities are deemed to be liquid and thus not subject to the
International Stock Fund's 10 percent limitation on the investment in
restricted or other illiquid securities. Under the supervision of the
Trustees of the Trust, the Adviser determines the liquidity of Rule 144A
securities and, through reports from the Adviser, the Trustees monitor
trading activity in these securities. In reaching liquidity decisions, the
Adviser will consider, among other things, the following factors: (1) the
frequency of trades and quotes for the security; (2) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (3) dealer undertakings to make a market in the security; and
(4) the nature of the security and the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers, and the
procedures for the transfer). Because institutional trading in Rule 144A
securities is relatively new, it is difficult to predict accurately how
these markets will develop. If institutional trading in Rule 144A
securities declines, the International Stock Fund's liquidity could be
adversely affected to the extent it is invested in such securities.

Options and Financial Futures Transactions. Each Fund may invest up to
5 percent of its net assets in premiums on put and call exchange-traded
options. A call option gives the holder (buyer) the right to purchase a
security at a specified price (the exercise price) at any time until a
certain date (the expiration date). A put option gives the buyer the right
to sell a security at the exercise price at any time until the expiration
date. Each Fund may also purchase options on securities indices. Options on
securities indices are similar to options on a security except that, rather
than the right to take or make delivery of a security at a specified price,
an option on a securities index gives the holder the right to receive, on
exercise of the option, an amount of cash if the closing level of the
securities index on which the option is based is greater than, in the case
of a call, or less than, in the case of a put, the exercise price of the
option. Each Fund may enter into closing transactions, exercise its
options, or permit the options to expire. A Fund may only write call
options that are covered. A call option is covered if written on a security
the Fund owns. Each Fund may write such options on up to 25 percent of its
net assets.

The Funds may engage in financial futures transactions, including
interest rate futures transactions. Financial futures contracts are
commodity contracts that obligate the long or short holder to take or make
delivery of a specified quantity of a financial instrument, such as a
security or the cash value of a securities index, during a specified future
period at a specified price. Each Fund's investment restrictions do not
limit the percentage of a Fund's assets that may be invested in financial
futures transactions. Neither Fund, however, intends to enter into
financial futures transactions for which the aggregate initial margin
exceeds 5 percent of the net assets of the Fund after taking into account
unrealized profits and unrealized losses on any such transactions it has
entered into. The Funds may engage in futures transactions only on
commodities exchanges or boards of trade.

The Funds will not engage in transactions in index options, financial
futures contracts, or related options for speculation, but only as an
attempt to hedge against market conditions affecting the values of
securities that the Fund owns or intends to purchase. When a Fund purchases
a put on a stock index or on a stock index future not held by the Fund, the
put protects the Fund against a decline in the value of all securities held
by it to the extent that the stock index moves in a similar pattern to the
prices of the securities held. The correlation, however, between indices
and price movements of the securities in which a Fund will generally invest
will be imperfect. Each Fund expects, nonetheless, that the use of put
options that relate to such indices will, in certain circumstances, protect
against declines in values of specific portfolio securities or a Fund's
portfolio generally. Although the purchase of a put option may partially
protect a Fund from a
<PAGE>15
decline in the value of a particular security or its portfolio generally,
the cost of a put will reduce the potential return on the security or the
portfolio if either increases in value.

Upon entering into a futures contract, a Fund will be required to
deposit with its custodian in a segregated account cash or certain U.S.
government securities in an amount known as the "initial margin." This
amount, which is subject to change, is in the nature of a performance bond
or a good faith deposit on the contract and would be returned to the Fund
upon termination of the futures contract, assuming all contractual
obligations have been satisfied.

The principal risks of options and futures transactions are:
(1) possible imperfect correlation between movements in the prices of options,
currencies, or futures contracts and movements in the prices of the
securities or currencies hedged or used for cover; (2) lack of assurance
that a liquid secondary market will exist for any particular options or
futures contract when needed; (3) the need for additional skills and
techniques beyond those required for normal portfolio management;
(4) losses on futures contracts resulting from market movements not anticipated
by the investment adviser; and (5) possible need to defer closing out
certain options or futures contracts to continue to qualify for beneficial
tax treatment afforded "regulated investment companies" under the Code.

Portfolio Turnover. The Funds generally will not trade in securities
for short-term profits but, when circumstances warrant, they may purchase
and sell securities without regard to the length of time they have been
held. A high portfolio turnover may increase transaction costs and may
affect taxes paid by shareholders to the extent short-term gains are
distributed. The Funds portfolio turnover rates are shown in the table
under "Financial Highlights."

Temporary Investments. When, as a result of market conditions, a Fund's
investment adviser determines a temporary defensive position is warranted
to help preserve capital, the Fund may without limit temporarily retain
cash, denominated in domestic or foreign currencies, or invest in prime
commercial paper, high-grade debt securities, securities of the U.S.
Government and its agencies and instrumentalities, and high-quality money
market instruments, including repurchase agreements, issued by entities
organized in the United States or any foreign country, denominated in U.S.
dollars or foreign currency. When a Fund assumes a temporary defensive
position, it is not invested in securities designed to achieve its
investment objective.

CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
_______________________________________________________________________________

STATEMENT OF ADDITIONAL INFORMATION

Columbia Financial Center
1300 SW Sixth Avenue
PO Box 1350
Portland, Oregon 97207
(503) 222-3600

This Statement of Additional Information contains information relating
to CMC Fund Trust (the "Trust"), an open-end diversified management
investment company established as an Oregon business trust on August 7,
1989, and two portfolios of the Trust, CMC Small Cap Fund (the "Small Cap
Fund") and CMC International Stock Fund (the "International Stock Fund").
The "Fund" or "Funds" when used in this Statement of Additional Information
refers to these two funds. The Trust has established one other portfolio,
the CMC High Yield Fund.

This Statement of Additional Information is not a Prospectus. It
relates to a Prospectus dated December 19, 1995 (the "Prospectus") and
should be read in conjunction with the Prospectus. Copies of the Prospectus
are available without charge upon request to the Trust.

Table of Contents

Management...................................................................2
Investment Advisory and Other Fees Paid to Affiliates........................4
Portfolio Transactions.......................................................5
Redemptions and Net Asset Value..............................................7
Custodians...................................................................7

Independent Accountants......................................................8

Taxes........................................................................8
Performance.................................................................12
Investment Restrictions.....................................................13
Additional Information Regarding Certain Investments by the Funds...........16

Financial Statements........................................................21

December 19, 1995

<PAGE>2
_______________________________________________________________________________

MANAGEMENT
_______________________________________________________________________________

The trustees and officers of the Trust are listed below, together with
their principal business occupations. Except as otherwise indicated, each
person listed has held his position with the Trust since inception in
August 1989. All other principal business positions have been held for more
than five years, except that positions with Columbia Real Estate Equity
Fund, Inc. have been held since April 1994, positions with Columbia High
Yield Fund, Inc. have been held since July 1993, positions with Columbia
International Stock Fund, Inc. have been held since July 1992, and
positions with each of Columbia Common Stock Fund, Inc. and Columbia
Balanced Fund, Inc. have been held since July 1991, and except as otherwise
indicated. The term "Columbia Funds" refers to Columbia High Yield Fund,
Inc., Columbia Balanced Fund, Inc., Columbia Common Stock Fund, Inc.,
Columbia International Stock Fund, Inc., Columbia Municipal Bond Fund,
Inc., Columbia Real Estate Equity Fund, Inc., Columbia U.S. Government
Securities Fund, Inc., Columbia Special Fund, Inc., Columbia Growth Fund,
Inc., Columbia Daily Income Company, and Columbia Fixed Income Securities
Fund, Inc.

J. JERRY INSKEEP, JR.,* Chairman and Trustee of the Trust; Chairman and
Director of each of the Columbia Funds; Chairman, Director, and a principal
shareholder of Columbia Management Co. (the "Adviser"), the investment
adviser of the Fund, and Columbia Funds Management Company ("CFMC");
Chairman and Director of Columbia Trust Company (the "Trust Company");
Director of Columbia Financial Center Incorporated ("Columbia Financial").

JAMES F. RIPPEY,* President and Trustee of the Trust; Director of each of
the Columbia Funds; President, Director, and a principal shareholder of the
Adviser and CFMC; President and Director of the Trust Company.

RICHARD L. WOOLWORTH, Trustee of the Trust (since July 1993); Director of
each of the Columbia Funds (since January 1992). Mr. Woolworth is Chairman,
President, and Chief Executive Officer of Blue Cross and Blue Shield of
Oregon and President and Chief Executive Officer of The Benchmark Group,
health insurers, 100 S. W. Market Street, Portland, Oregon 97201.

GEORGE L. HANSETH,* Trustee, Vice President, Assistant Secretary, and
Treasurer of the Trust; Senior Vice President, Assistant Secretary, and
Treasurer of each of the Columbia Funds; Vice President, Assistant
Secretary, Treasurer, and Director of the Adviser and CFMC; Vice President,
Treasurer, Assistant Secretary, and Director of the Trust Company;
President and Director of Columbia Financial.

JOHN A. KEMP,* Trustee and Vice President of the Trust; President and
Director of each of the Columbia Funds; Senior Vice President and Director
of the Adviser, CFMC, Columbia Financial, and the Trust Company.

ALEXANDER S. MACMILLAN III,* Trustee of the Trust (since March 1994); Vice
President of the Adviser and CFMC.

PETER C. OLSON,* Trustee of the Trust (since April 1991); Vice President of
the Adviser.

PETER T. SHAND,* Trustee of the Trust (since April 1991); Vice President of
the Adviser.

LAWRENCE S. VIEHL,* Vice President of the Trust, each of the Columbia
Funds, the Adviser, CFMC, and the Trust Company.
<PAGE>3

JEFF B. CURTIS,* Secretary of the Trust (since April 1994); Secretary of
each of the Columbia Funds (since April 1994); General Counsel and
Secretary to the Adviser, CFMC, the Trust Company and Columbia Financial
(since 1993); Stoel Rives (1986-1993), a law firm in Portland, Oregon.

*These officers and trustees are "interested persons" as defined by
the Investment Company Act of 1940 (the "1940 Act") and receive no trustee
fees or salaries from the Fund. The business address of each such person is
1300 SW Sixth Avenue, PO Box 1350, Portland, Oregon 97207.

At November 30, 1995, to the knowledge of the Trust, the following
persons owned of record or beneficially more than 5 percent of the
outstanding shares of the Small Cap Fund or the International Stock Fund:

Shares Beneficially Owned
Name and Address at November 30, 1995
- ---------------- -------------------------

Small Cap Fund
- --------------
<S> <C>

State of Oregon Stock Growth Fund
Department of the Treasury
State of Oregon
Salem, OR 97310 3,489,151 (35.04%)

Hanford Operations and Engineering
Pension Plan
3060 George Washington Way
P.O. Box 1970 H30-08
Richland, WA 99352 798,788 (8.02%)

Eastman Kodak Employees Savings &
Investment Plan
85 Old Kings Highway
North Darien, CT 06820 614,129 (6.17%)

International Stock Fund
- ------------------------

State of Oregon Stock Growth Fund
Department of the Treasury
State of Oregon
Salem, OR 97310 1,427,112 (76.93%)

Lumber Industry Pension Fund
2929 NW 31st Ave.
Portland, OR 97210 123,783 (6.67%)

</TABLE>

Because the State of Oregon owns approximately 35% and 77% of the
Small Cap Fund and the International Stock Fund, respectively, it may be
able to effectively control the outcome of any matters submitted to the
shareholders of either Fund or the Trust, including the election of
trustees or revisions to any fundamental investment policy of the Funds.

<PAGE>4
_______________________________________________________________________________

INVESTMENT ADVISORY AND OTHER FEES PAID TO AFFILIATES
_______________________________________________________________________________

Information regarding services performed by the Adviser to the Funds
and the formula for calculating the fees paid for those services are set
forth in the Prospectus under "Management of the Funds." Advisory fees
incurred by the Small Cap Fund were $3,528,353, $3,690,807, and $3,469,614
for fiscal 1995, fiscal 1994, and fiscal 1993, respectively. Advisory fees
incurred by the International Stock Fund were $543,358 and $301,661,
respectively, for fiscal 1995 and that portion of fiscal 1994 the Fund was
in operation.

Shareholders of the Funds will be investment advisory clients of the
Adviser, in addition to their indirect relationship to the Adviser by
virtue of their status as shareholders of a Fund. If, however, the assets
of an investment advisory client of the Adviser are invested in a Fund,
that client will pay no fee pursuant to its separate management contract
with the Adviser with respect to those assets invested in that Fund (for
the period during which the assets are invested in a Fund).

If the Adviser is deemed to be a fiduciary with respect to a
prospective shareholder of a Fund pursuant to the Employee Retirement
Income Security Act of 1974 ("ERISA"), certain conditions must be satisfied
before assets may be invested in that Fund by the Adviser on behalf of the
shareholder. These conditions have been set forth by the U. S. Department
of Labor in Prohibited Transaction Class Exemption No. 77-4 (the
"Exemption"). The Exemption permits the Adviser to direct investments of
ERISA-qualified plans to a mutual fund, such as a Fund, for which the
Adviser serves as an investment adviser if, after review of the Prospectus
and disclosure relating to fees of the Fund and fees under the advisory
contract, another fiduciary, as determined under ERISA, with respect to
that shareholder approves investments in the Fund. The second fiduciary
must be independent of and unrelated to the Adviser under standards set
forth by the U. S. Department of Labor in the Exemption.

The second, independent fiduciary that must approve investments in a
Fund by the Adviser is not engaged as a second fiduciary only in
contemplation of a possible investment in the Fund. Rather, the second,
independent fiduciary is almost always a committee appointed by the
employee benefit plan sponsor and has oversight responsibility for
appointment of CMC as an investment adviser with respect to certain plan
assets. This committee is almost always made up of one or more employees of
the plan sponsor, and, as such, these employees receive compensation from
the plan sponsor but are not compensated out of plan assets.

The Adviser is registered under the Investment Advisers Act of 1940,
is engaged principally in the business of rendering investment supervisory
services, and is responsible for payment of all executive salaries and
executive expenses and office rent of the Funds and the Trust.

Messrs. Inskeep and Rippey, Trustees and officers of the Trust, each
own approximately 41 percent of the voting securities of the Adviser and,
therefore, are considered "controlling persons" under the 1940 Act. Certain
affiliated persons of the Trust are also affiliated persons of the Adviser.
See "Management." The Adviser acts as an investment manager for
approximately $12 billion of assets of other institutions. The Funds are
intended to provide investment vehicles for certain client accounts managed
by the Adviser. An independent fiduciary of those client accounts, after
careful review of a Fund's Prospectus, Statement of Additional Information
and fees arrangement, approves the investment
<PAGE>5
in the Fund. The independent fiduciary then authorizes the Adviser to
purchase and sell shares of a Fund at its discretion for the client's
portfolio, subject to certain limitations imposed by the authorization.

The Trust Company acts as transfer agent and dividend crediting agent
for the Funds. Its address is 1301 SW Fifth Avenue, PO Box 1350, Portland,
Oregon 97207. It issues certificates for shares of the Funds, if requested,
and records and disburses dividends for the Funds. The Trust pays the Trust
Company a per account fee of $1 per month for each shareholder account with
a Fund existing at any time during the month, with a minimum aggregate fee
of $1,500 per month per Fund. In addition, the Trust pays the Trust Company
for extra administrative services performed at cost in accordance with a
schedule set forth in the agreements between the Trust Company and the
Trust and reimburses the Trust Company for certain out-of-pocket expenses
incurred in carrying out its duties under those agreements. Certain
trustees and officers of the Trust are minority shareholders of the Trust
Company. The Trust paid $18,000 and $18,000 to the Trust Company for
services performed for fiscal 1995 under the transfer agent agreements
relating to the Small Cap Fund and the International Stock Fund,
respectively.

_______________________________________________________________________________

PORTFOLIO TRANSACTIONS
_______________________________________________________________________________

Each Fund will not generally invest in securities for short-term
capital appreciation but, when business and economic conditions, market
prices, or a Fund's investment policy warrant, individual security
positions may be sold without regard to the length of time they have been
held. The rate of portfolio turnover for the Small Cap Fund and the
International Stock Fund is disclosed in the prospectus under "Financial
Highlights."

Each Fund may purchase its portfolio securities through a securities
broker and pay the broker a commission, or the Fund may purchase the
securities directly from a broker which acts as principal and sells
securities directly for its own account without charging a commission. Each
Fund may also purchase securities from underwriters, the price of which
will include a commission or concession paid by the issuer to the
underwriter. The purchase price of securities purchased from dealers
serving as market makers will include the spread between the bid and asked
prices.

Prompt execution of orders at the most favorable price will be the
primary consideration of a Fund in transactions where brokerage fees are
involved. Research, statistical, and other services also may be taken into
consideration in selecting broker-dealers. These services may include:
advice concerning the value of securities, the advisability of investing
in, purchasing, or selling securities, and the availability of securities
or the purchasers or sellers of securities; and furnishing analyses and
reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategies, and performance of accounts. While the Funds
have no arrangements or formulas as to either the allocation of brokerage
business or commission rates paid thereon, a commission in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction may be paid by a Fund if management of the Trust
determines in good faith that the commission is reasonable in relation to
the value of the brokerage and research services provided, viewed in terms
of either that particular transaction or management's overall
responsibilities with respect to a Fund.

<PAGE>6

Allocation of transactions to obtain research services for the Adviser
enables the Adviser to supplement its own research and analysis with the
statistics, information, and views of others. While it is not possible to
place a dollar value on these services, it is the opinion of the Adviser
that the receipt of such services will not reduce the overall expenses for
its research or those of its affiliated companies. The fees paid to the
Adviser by a Fund would not be reduced as a result of the receipt of such
information and services by the Fund. The receipt of research services from
brokers or dealers might be useful to the Adviser and its affiliates in
rendering investment management services to the Funds or other clients;
and, conversely, information provided by brokers or dealers who have
executed orders on behalf of other clients might be useful to the Adviser
in carrying out its obligations to the Funds. Total brokerage commissions
paid by the Trust on transactions by the Small Cap Fund were $1,459,444,
$1,147,341, and $830,446 in fiscal 1995, fiscal 1994, and fiscal 1993,
respectively. Total brokerage commissions paid by the Trust on transactions
by the International Stock Fund were $657,669 and $393,319, respectively,
for fiscal 1995 and that portion of fiscal 1994 the Fund was in operation.

The Trustees of the Trust will from time to time review whether the
recapture for the benefit of a Fund of some portion of the brokerage
commissions or similar fees paid by a Fund on portfolio transactions is
legally permissible and, if so, to determine, in the exercise of its
business judgment, whether it would be advisable for a Fund to seek such
recapture.

Investment decisions for one Fund are made independently from those of
the other Fund or accounts managed by the Adviser or mutual funds managed
by Columbia Funds Management Company, an affiliate of the Adviser. The same
security is sometimes held in the portfolio of more than one fund or
account. Simultaneous transactions are inevitable when several funds or
accounts are managed by the same investment adviser, particularly when the
same security is suitable for the investment objective of more than one
fund or account. In the event of simultaneous transactions, allocations
among the Funds or accounts will be made on an equitable basis.

Both the Trust and the Adviser have adopted a Code of Ethics (the
"Code") that sets forth general and specific standards relating to the
securities trading activities of all their employees. The purpose of the
Code is to ensure that all employees conduct their personal transactions in
a manner that does not interfere with the portfolio transactions of the
Funds or the Adviser's other clients or take unfair advantage of their
relationship with the Adviser. The specific standards in the Code include,
among others, a requirement that all employee trades be pre-cleared; a
prohibition on investing in initial public offerings; required pre-approval
of investments in private placements; a prohibition on portfolio managers
trading in a security seven days before or after a trade in the same
security by an account over which the manager exercises investment
discretion; and a prohibition on realizing any profit on the trading of a
security held less than 60 days. Certain securities and transactions, such
as mutual fund shares or U. S. Treasuries and purchases of options on
securities indexes or securities under an automatic dividend reinvestment
plan, are exempt from the restrictions in the Code because they present
little or no potential for abuse. Certain transactions involving the stocks
of large capitalization companies are exempt from the seven day black-out
period and short-term trading prohibitions because such transactions are
highly unlikely to affect the price of these stocks. In addition to the
trading restrictions, the Code contains reporting obligations that are
designed to ensure compliance and allow the Adviser's Ethics Committee to
monitor that compliance.

The Trust and the Adviser have also adopted a Policy and Procedures
Designed to Detect and Prevent Insider Trading (the "Insider Trading
Policy"). The Insider Trading Policy prohibits any employee from trading,
either personally or on behalf of others (including a client account), on
the basis of material nonpublic information. All employees are required to
certify each year that they have read and complied with the provisions of
the Code and the Insider Trading Policy.

<PAGE>7
_______________________________________________________________________________

REDEMPTIONS AND NET ASSET VALUE
_______________________________________________________________________________

Information regarding redemptions is set forth in the Prospectus under
"Redemptions." Information regarding the determination of the net asset
value per share of a Fund is set forth in the Prospectus under
"Determination of Net Asset Value."

The Trust may suspend the determination of net asset value of a Fund
and the right of redemption for any period (1) when the New York Stock
Exchange is closed, other than customary weekend and holiday closings, (2)
when trading on the New York Stock Exchange is restricted, (3) when an
emergency exists as a result of which sale of securities owned by a Fund is
not reasonably practicable or it is not reasonably practicable for the
Trust to determine the value of the Fund's net assets, or (4) as the
Securities and Exchange Commission ("SEC") may by order permit for the
protection of security holders, provided the Trust complies with rules and
regulations of the SEC which govern as to whether the conditions prescribed
in (2) or (3) exist. The New York Stock Exchange observes the following
holidays: New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving, and Christmas. In the case of
suspension of the right to redeem, shareholders may withdraw their
redemption request or receive payment based upon the net asset value
computed upon the termination of the suspension.

_______________________________________________________________________________

CUSTODIANS
_______________________________________________________________________________

United States National Bank of Oregon, 321 SW Sixth Avenue, Portland,
Oregon 97208, acts as general custodian of the Trust. Morgan Stanley Trust
Company ("Morgan Stanley" or a "Custodian"), One Evertrust Plaza, Jersey
City, New Jersey 07302, has entered into a custodian agreement with the
Trust in respect of the purchase of foreign securities by the Funds. The
Custodians hold all securities and cash of the Funds, receive and pay for
securities purchased, deliver against payment securities sold, receive and
collect income from investments, make all payments covering expenses of the
Funds, and perform other administrative duties, all as directed by
authorized officers of the Trust. The Custodians do not exercise any
supervisory function in the purchase and sale of portfolio securities or
payment of dividends.

Portfolio securities purchased outside the United States by the Funds
are maintained in the custody of foreign banks, trust companies, or
depositories that have sub-custodian arrangements with Morgan Stanley (the
"foreign sub-custodians"). Each of the domestic and foreign custodial
institutions that may hold portfolio securities of the Funds has been
approved by the Trustees of the Trust in accordance with regulations under
the 1940 Act.

The Trustees of the Trust review, at least annually, whether it is in
the best interest of the Funds and their shareholders to maintain Fund
assets in each of the countries in which the Funds invest, with particular
foreign sub-custodians in those countries, pursuant to contracts between
the foreign sub-custodians and Morgan Stanley. The review includes an
assessment of the risk of holding Fund assets in that country (including
risks of expropriation or imposition of exchange controls), the operational
capability and reliability of the foreign sub-custodian, and the impact of
local laws on the custody
<PAGE>8
arrangement. The Trustees of the Trust are aided in their review by Morgan
Stanley, which has assembled the network of foreign sub-custodians used by
the Funds, as well as by the Adviser and counsel. With respect to foreign
sub-custodians, however, there can be no assurance that the Funds, and the
value of their shares, will not be adversely affected by acts of foreign
governments, financial or operational difficulties of the foreign
sub-custodians, difficulties and costs of obtaining jurisdiction over, or
enforcing judgments against, the foreign sub-custodians, or the application
of foreign law to a Fund's foreign sub-custodial arrangement. Accordingly,
an investor should recognize that the administrative risks involved in
holding assets abroad are greater than those associated with investing in
the United States.

_______________________________________________________________________________

INDEPENDENT ACCOUNTANTS
_______________________________________________________________________________

_______________________________________________________________________________

TAXES
_______________________________________________________________________________

Federal Income Taxes

Each Fund intends and expects to meet continuously the tests for
qualification as a regulated investment company under Part I of Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"). Each Fund
believes it satisfies the tests to qualify as a regulated investment
company.

To qualify as a regulated investment company for any taxable year,
each Fund must, among other things:

(a) derive at least 90 percent of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities, or foreign currencies, or other
income (including but not limited to gains from options, futures, or
forward contracts) derived with respect to its business of investing in
such stock, securities, or currencies (the "90 Percent Test");

(b) derive less than 30 percent of its gross income from the sale or
other disposition of any of the following, if held for less than three
months: stock, securities, foreign currencies (or options, futures, or
forward contracts on foreign currencies) that are not directly related to
the Fund's principal business of investing in stocks or securities (or
options and futures with respect to stocks or securities), or certain other
assets (the "30 Percent Test"); and

(c) diversify its holdings so that at the end of each quarter (i) 50
percent or more of the value of the assets of the Fund is represented by
cash, government securities, and other securities limited, in respect of
any one issuer of such other securities, to an amount not greater than 5
percent of the value of the assets of the Fund and 10 percent of the
outstanding voting securities of such issuer, and (ii) not
<PAGE>9
more than 25 percent of the value of the assets of the Fund is invested in
the securities (other than government securities) of any one issuer or of
two or more issuers that the Fund "controls" within the meaning of Section
851 of the Code and that meet certain requirements. In addition, a Fund
must file, or have filed, a proper election with the Internal Revenue
Service.

Special Aspects of 90 Percent Test with Respect to Foreign Currency.
For purposes of the 90 Percent Test, foreign currency gains that are not
directly related to a Fund's principal business of investing in stocks or
securities (or options and futures with respect to stock or securities) may
be excluded from qualifying income by regulation. No such regulations,
however, have been issued.

Unless an exception applies, a Fund may be required to recognize some
income with respect to foreign currency contracts under the mark-to-market
rules of Section 1256 of the Code even though that income is not realized.
Special rules under Sections 1256 and 988 of the Code determine the
character of any income, gain, or loss on foreign currency contracts.

Two possible exceptions to marking-to-market relate to hedging
transactions and mixed straddles. A hedging transaction is defined for
purposes of Section 1256 as a transaction that (1) a Fund properly
identifies as a hedging transaction, (2) is entered into in the normal
course of business primarily to reduce the risk of price changes or
currency fluctuations with respect to the Fund's investments, and (3)
results in ordinary income or loss. A mixed straddle is a straddle where
(1) at least one (but not all) of the straddle positions are Section 1256
contracts and (2) the Fund properly identifies each position forming part
of the straddle. A straddle for these purposes generally is offsetting
positions with respect to personal property. A Fund holds offsetting
positions generally if there is a substantial diminution of the Fund's risk
of loss from holding a position by reason of its holding one or more other
positions.

Special Aspects of 30 Percent Test with Respect to Foreign Currency. A
Fund may choose to defer the closing out of a forward currency contract
beyond the time when it would otherwise be advantageous to do so to avoid
realizing excessive gains on securities or currencies held less than three
months and not directly related to the Fund's principal business of
investing in stock or securities (or options and futures with respect to
stocks or securities). In the case of a designated hedge, increases and
decreases during the period of the hedge in the value of positions that are
part of the designated hedge are netted for purposes of the 30 Percent
Test. A designated hedge for these purposes is generally an option to sell
or a contract that reduces a taxpayer's risk of loss and that the taxpayer
clearly identifies.

Part I of Subchapter M of the Code will apply to a Fund during a
taxable year only if it meets certain additional requirements. Among other
things, the Fund must: (a) have a deduction for dividends paid (without
regard to capital gain dividends) at least equal to the sum of 90 percent
of its investment company taxable income (computed without any deduction
for dividends paid) and 90 percent of its tax-exempt interest in excess of
certain disallowed deductions (unless the Internal Revenue Service waives
this requirement) and (b) either (i) have been subject to Part I of
Subchapter M for all taxable years ending after November 8, 1983 or (ii) as
of the close of the taxable year have no earnings and profits accumulated
in any taxable year to which Part I of Subchapter M did not apply.

The Trust currently has three Funds. The Trust may establish
additional funds in the future. Federal income tax laws generally will
treat each fund as a separate corporation (provided that each fund consists
of a segregated portfolio of assets the beneficial interests in which are
owned by the holders of a class or series of stock that is preferred over
all other classes or series in respect of that portfolio of assets).
<PAGE>10
A regulated investment company that meets the requirements described
above is taxed only on its "investment company taxable income," which
generally equals the undistributed portion of its ordinary net income and
any excess of net short-term capital gain over net long-term capital loss.
In addition, any excess of net long-term capital gain over net short-term
capital loss that is not distributed is taxed to a Fund at corporate
capital gain tax rates. The policy of a Fund is to apply capital loss
carry-forwards as a deduction against future capital gains before making a
capital gain distribution to shareholders.

If any net long-term capital gains in excess of net short-term capital
losses are retained by a Fund, requiring federal income taxes to be paid
thereon by the Fund, the Fund may elect to treat such capital gains as
having been distributed to shareholders. In the case of such an election,
shareholders will be taxed on such amounts as long-term capital gains, will
be able to claim their proportional share of the federal income taxes paid
by the Fund on such gains as a credit against their own federal income tax
liabilities, and generally will be entitled to increase the adjusted tax
basis of their shares in the Fund by the differences between their pro rata
shares of such gains and their tax credits.

Shareholders of each Fund are taxed on distributions of net investment
income, or of any excess of net short-term capital gain over net long-term
capital loss, as ordinary income. Income distributions to corporate
shareholders from a Fund may qualify, in whole or in part, for the federal
income tax dividends-received deduction, depending on the amount of
qualifying dividends received by the Fund by domestic corporations. The
dividends received deduction equals 70 percent of eligible dividends
received from a Fund by a shareholder. Distributions of any excess of net
long-term capital gain over net short-term capital loss from a Fund are
ineligible for the dividends-received deduction.

Distributions properly designated by a Fund as representing the excess
of net long-term capital gain over net short-term capital loss are taxable
to shareholders as long-term capital gain, regardless of the length of time
the shares of the Fund have been held by shareholders. For noncorporate
taxpayers, the highest rate that applies to long-term capital gains is
lower than the highest rate that applies to ordinary income. Any loss that
is realized and allowed on redemption of shares of a Fund less than six
months from the date of purchase of the shares and following the receipt of
a capital gain dividend will be treated as a long-term capital loss to the
extent of the capital gain dividend. For this purpose, Section 852(b)(4) of
the Code contains special rules on the computation of a shareholder's
holding period.

If a Fund declares a dividend in October, November, or December
payable to shareholders of record on a certain date in such a month and
pays the dividend during January of the following year,
<PAGE>11
the shareholders will be taxed as if they had received the dividend on
December 31 of the year in which the dividend was declared. Thus, a
shareholder may be taxed on the dividend in a taxable year prior to the
year of actual receipt.

A special tax may apply to a Fund if it fails to make sufficient
distributions during the calendar year. The required distributions for each
calendar year generally equal the sum of (a) 98 percent of the ordinary
income for the calendar year plus (b) 98 percent of the capital gain net
income for the one-year period that ends on October 31 during the calendar
year, plus (c) an adjustment relating to any shortfall for the prior
taxable year. If the actual distributions are less than the required
distributions, a tax of 4 percent applies to the shortfall.

The Code allows the deduction by certain individuals, trusts, and
estates of "miscellaneous itemized deductions" only to the extent that such
deductions exceed 2 percent of adjusted gross income. The limit on
miscellaneous itemized deductions will not apply, however, with respect to
the expenses incurred by any "publicly offered regulated investment
company." Each Fund believes that it is a publicly offered regulated
investment company because its shares are continuously offered pursuant to
a public offering (within the meaning of section 4 of the Securities Act of
1933 (the "1933 Act"), as amended). Therefore, the limit on miscellaneous
itemized deductions should not apply to expenses incurred by a Fund.

Foreign Income Taxes. The International Stock Fund invests in the
securities of foreign corporations and issuers. Foreign countries may
impose income taxes, generally collected by withholding, on foreign-source
dividends and interest paid to a Fund. These foreign taxes will reduce the
International Stock Fund's distributed income. That Fund generally expects
to incur, however, no foreign income taxes on gains from the sale of
foreign stocks and securities.

The United States has entered into income tax treaties with many
foreign countries to reduce or eliminate the foreign taxes on certain
dividends and interest received from corporations in those countries. The
International Stock Fund intends to take advantage of such treaties where
possible. It is impossible to predict with certainty the effective rate of
foreign taxes that will be paid by that Fund since the amount invested in
particular countries will fluctuate and the amounts of dividends and
interest relative to total income will fluctuate.

U.S. Foreign Tax Credits or Deductions for Shareholders of the
International Stock Fund. Section 853 of the Code allows a regulated
investment company to make a special election relating to foreign income
taxes if more than 50 percent of the value of the company's total assets at
the close of its taxable year consists of stock or securities in foreign
corporations. The International Stock Fund generally expects, if necessary,
to qualify for and to make the election permitted under Section 853 of the
Code. Although the International Stock Fund intends to meet the
requirements of the Code to "pass through" such foreign taxes, there can be
no assurance that the Fund will be able to do so. The International Stock
Fund will elect under Section 853 of the Code only if it believes that it
is in the best interests of its shareholders to do so.

As a result of the Section 853 election, shareholders of the
International Stock Fund will be able to claim a credit or deduction on
their income tax returns for, and will be required to include in income in
addition to taxable distributions actually received, their pro rata
portions of the income taxes paid by the Fund to foreign countries. A
shareholder's use of the credits resulting from the election will be
subject to the limits of Section 904 of the Code. In general, those limits
will prevent a shareholder from using foreign tax credits to reduce U.S.
taxes on U.S. source income. Each shareholder should discuss the use of
foreign tax credits and the Section 904 limits with an individual tax
adviser.
<PAGE>12
No deduction for foreign taxes may be claimed under the Code by
individual shareholders who do not elect to itemize deductions on their
federal income tax returns, although such a shareholder may claim a credit
for foreign taxes and in any event will be treated as having taxable income
in the amount of the shareholder's pro rata share of foreign taxes paid by
the Fund.

Each year, the International Stock Fund will provide a statement to
each shareholder showing the amount of foreign taxes for which a credit or
a deduction may be available.

Investment in Passive Foreign Investment Companies. If a Fund invests
in certain non-U.S. corporations that receive at least 75 percent of their
annual gross income from passive sources (such as sources that produce
certain interest, dividends, royalties, capital gains, or rental income) or
hold at least 50 percent of their assets in such passive sources ("passive
foreign investment companies"), the Fund could be subject to federal income
tax and additional interest charges on "excess distributions" received from
such companies or gain from the sale of stock in such companies, even if
all income or gain actually received by a Fund is distributed to its
shareholders in a timely manner. A Fund would not be able to pass through
to its shareholders any credit or deduction for such tax. Accordingly, each
Fund expects to limit its investments in such passive foreign investment
companies and expects to attempt to undertake appropriate actions to limit
its tax liability, if any, with respect to such investments. The Internal
Revenue Service has proposed regulations that, if adopted, will allow a
regulated investment company to avoid the tax and interest charge with
respect to a passive foreign investment company by electing to mark the
stock to market each year.

State Income Taxes

The state tax consequences of investments in the Funds are beyond the
scope of the tax discussions in the Prospectus and this Statement of
Additional Information.

Additional Information

The foregoing summary and the summary included in the Prospectus under
"Taxes" of tax consequences of investment in the Funds are necessarily
general and abbreviated. No attempt has been made to present a complete or
detailed explanation of tax matters. Furthermore, the provisions of the
statutes and regulations on which they are based are subject to change by
legislative or administrative action. State and local taxes are beyond the
scope of this discussion. Prospective investors in the Fund are urged to
consult their own tax advisers regarding specific questions as to federal,
state, or local taxes.

_______________________________________________________________________________

PERFORMANCE
_______________________________________________________________________________

The Trust may from time to time advertise or quote the total return
performance for the Funds. These figures represent historical data and are
calculated according to the SEC rules standardizing such computations. The
investment return on and the value of shares of a Fund will fluctuate so
that the shares when redeemed may be worth more or less than their original
cost.

The Trust may publish average annual total return quotations for
recent 1, 5, and 10-year periods (or a fractional portion thereof) computed
by finding the average annual compounded rates of return
<PAGE>13
over the 1, 5, and 10-year periods that would equate the initial amount
invested to the ending redeemable value, according to the following
formula:

P(1+T)n = ERV

Where: P = a hypothetical initial payment of $1000

T = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical
$1000 payment made at the beginning of the 1,
5, and 10-year periods (or a fractional
portion thereof)

Total return figures may also be published for recent 1, 5, and
10-year periods (or a fractional portion thereof) where the total return
figures represent the percentage return for the 1, 5, and 10-year periods
that would equate the initial amount invested to the ending redeemable
value.

If the Trust's registration statement under the 1940 Act with respect
to a Fund has been in effect less than 1, 5 or 10 years, the time period
during which the registration statement with respect to that Fund has been
in effect will be substituted for the periods stated.

_______________________________________________________________________________

INVESTMENT RESTRICTIONS
_______________________________________________________________________________

The Prospectus sets forth the investment objectives and certain
restrictions applicable to the Funds. The following is a list of investment
restrictions applicable to each Fund. If a percentage limitation is adhered
to at the time of the investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not result
in a violation of such restriction. The Trust may not change these
restrictions without a majority vote of the outstanding shares of the
applicable Fund.

The Small Cap Fund may not:

1. Buy or sell commodities. The Small Cap Fund may, however, invest in
futures contracts relating to broadly based stock indices, subject to the
restrictions in paragraph 15.

2. Concentrate investments in any industry. The Small Cap Fund,
however, may (a) invest up to 25 percent of the value of the total assets
in any one industry and (b) invest for temporary defensive purposes up to
100 percent of the value of the total assets in securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities.

3. Buy or sell real estate.
<PAGE>14
4. Make loans to other persons (except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue). For purposes of this restriction 4, the making of a loan
by the Fund will not include the purchase of a portion of an issue of
publicly distributed bonds, debentures, or other securities, whether or not
the purchase is made upon the original issuance of the securities.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting
securities of that issuer to be held in the Small Cap Fund.

7. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets
of the Small Cap Fund at market value to be invested in the securities of
that issuer (other than obligations of the U.S. Government and its agencies
and instrumentalities), with reference to 75 percent of the assets of the
Fund.

8. Purchase securities of other open-end investment companies. The
Fund may, however, purchase securities of closed-end investment companies
so long as the Fund and the International Stock Fund do not own in the
aggregate more than 10 percent of the outstanding voting securities of such
investment company.

9. Issue senior securities, bonds, or debentures.

10. Underwrite securities of other issuers, except that the Small Cap
Fund may acquire portfolio securities in circumstances where, if the
securities are later publicly offered or sold by the Fund, it might be
deemed to be an underwriter for purposes of the 1933 Act.

11. Borrow money in excess of 5 percent of its net assets value. Any
borrowing must only be temporary, from banks, and for extraordinary or
emergency purposes.

12. Invest its assets in the securities of any company if the
purchase, at the time thereof, would cause more than 10 percent of the
value of the Small Cap Fund's total assets to be invested in companies
which have a record of less than three years' continuous operation,
including the operation of predecessors and parents.

13. Invest in companies for the purpose of exercising control or
management.

14. Engage in short sales of securities except to the extent that such
sales are "against the box"; that is, only to the extent the Small Cap Fund
owns the securities sold short or owns other securities convertible into an
equivalent amount of the securities sold short. Such transactions may only
be made to protect a profit in or to attempt to minimize a loss with
respect to convertible securities. In any event, no more than 10 percent of
the value of the Small Cap Fund's net assets taken at market may, at any
time, be held as collateral for such sales.
<PAGE>15
15. Buy and sell puts and calls on stock index futures or options on
stock index futures, or financial futures or options on financial futures,
unless such options are written by other persons and the options or futures
are offered through the facilities of a national securities association or
are listed on a national securities or commodities exchange.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 4, 5, 11, 12, and 14) permit specified practices
but limit the portion of the Small Cap Fund's assets that may be so
invested. (See the Prospectus for additional information.) Except for the
practices described in paragraph 5, the Small Cap Fund has no intention of
engaging in these permitted practices in the foreseeable future.

The International Stock Fund may not:

1. Buy or sell commodities. However, the International Stock Fund may
invest in futures contracts or options on such contracts relating to
broadly based stock indices, subject to the restrictions in paragraph 15,
and may enter into foreign currency transactions.

2. Concentrate investments in any industry. However, the International
Stock Fund may (a) invest up to 25 percent of the value of its assets in
any one industry and (b) invest for temporary defensive purposes up to
100 percent of the value of its assets in securities issued or guaranteed
by the United States or its agencies or instrumentalities.

3. Buy or sell real estate. However, the International Stock Fund may
purchase or hold readily marketable securities issued by companies, such as
real estate investment trusts, which deal in real estate or interests
therein.

4. Make loans to other persons, except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue and except to the extent the entry into repurchase
agreements in accordance with the Fund's investment restrictions may be
deemed a loan.

5. Purchase illiquid securities, including restricted securities and
repurchase agreements of more than seven days maturity if, as a result of
such purchase, more than 10 percent of the assets of the Fund (taken at
current value) is invested in such securities. "Illiquid securities" are
securities that may not be sold or disposed of in the ordinary course of
business within seven days at approximately the price used to determine the
Fund's net asset value and include restricted securities that are subject
to legal or contractual restrictions on resale. Certain restricted
securities that can be resold to qualifying institutions pursuant to a
regulatory exemption under Rule 144A under the 1933 Act and for which a
dealer or institutional trading market exists may be deemed to be liquid
securities by the Trustees of the Trust and, therefore, are not subject to
the above investment restriction.

6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting
securities of that issuer to be held by the International Stock Fund.

7. Purchase the securities of any issuer (including any foreign
government issuer) if the purchase, at the time thereof, would cause more
than 5 percent of the value of the total assets of the Fund at market value
to be invested in the securities of that issuer (other than obligations of
the U.S. government and its agencies and instrumentalities), with reference
to 75 percent of the assets of the International Stock Fund.

8. Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition, or reorganization, or
by purchase in the open market of securities of closed-
<PAGE>16
end investment companies where no underwriter or dealer's commission or
profit, other than customary broker's commission, is involved and only if
immediately thereafter not more than (i) 3 percent of the total outstanding
voting stock of such company is owned by the Fund, (ii) 5 percent of the
International Stock Fund's total assets would be invested in any one such
company, and (iii) 10 percent of the International Stock Fund's total
assets would be invested in such securities.

9. Issue senior securities, bonds, or debentures.

10. Underwrite securities of other issuers, except that the
International Stock Fund may acquire portfolio securities in circumstances
where, if the securities are later publicly offered or sold by the
International Stock Fund, it might be deemed to be an underwriter for
purposes of the 1933 Act.

11. Borrow money, except temporarily for extraordinary or emergency
purposes. For all amounts borrowed, the Fund will maintain an asset
coverage of 300 percent. The International Stock Fund will not make any
additional investments while borrowings exceed 5 percent of the Fund's
total assets.

12. Invest its funds in the securities of any company if the purchase
would cause more than 5 percent of the value of the International Stock
Fund's total assets to be invested in companies which have a record of less
than three years of continuous operation, including operation of
predecessors and parents.

13. Invest in companies for the purpose of exercising control or
management.

14. Engage in short sales of securities except to the extent that the
International Stock Fund owns other securities convertible into an
equivalent amount of such securities. Such transactions may only be made to
protect a profit in or to attempt to minimize a loss with respect to
convertible securities. In any event, no more than 5 percent of the value
of the International Stock Fund's net assets taken at market may, at any
time, be held as collateral for such sales.

15. Buy and sell puts and calls on securities, stock index futures, or
options on stock index futures, or financial futures or options on
financial futures, unless such options are written by other persons and the
options or futures are offered through the facilities of a recognized
securities association or are listed on a recognized securities or
commodities exchange or similar entity.

Some of the policies described above prohibit particular practices.
Other policies (paragraphs 5, 8, 11, 12, and 14) permit specified practices
but limit the portion of the International Stock Fund's assets that may be
so invested. Subject to the investment restriction, the International Stock
Fund expects to engage in the practices described in paragraphs 5 (illiquid
securities) and 8 (investment companies). The International Stock Fund has
no intention of engaging in the other permitted practices in the
foreseeable future.

_______________________________________________________________________________

ADDITIONAL INFORMATION REGARDING CERTAIN INVESTMENTS BY THE FUNDS
_______________________________________________________________________________

Additional information with respect to certain of the securities in
which a Fund may invest on a temporary basis, as described under "Temporary
Investments" in the Prospectus, is set forth below.
<PAGE>17
Certificates of Deposit

Certificates of Deposit are receipts issued by a U.S. bank in exchange
for the deposit of funds. The U.S. bank agrees to pay the amount deposited,
plus interest, to the bearer of the receipt on the date specified on the
certificate. Because the certificate is negotiable, it can be traded in the
secondary market before maturity. Under current FDIC regulations, $100,000
is the maximum insurance payable on Certificates of Deposit issued to a
Fund by any one bank. Therefore, Certificates of Deposit purchased by a
Fund may not be fully insured.

Bankers' Acceptances

Time drafts are drawn on a U.S. bank by an exporter or importer to
obtain a stated amount of funds to pay for specific merchandise or, less
frequently, foreign exchange. The draft is then "accepted" by the U.S. bank
(the drawee), which in effect unconditionally guarantees to pay the face
value of the instrument on its maturity date. The face of the instrument
specifies the dollar amount involved, the maturity date, and the nature of
the underlying transaction.

Letters of Credit

Letters of Credit are issued by banks and authorize the beneficiary to
draw drafts upon such banks for acceptance and payment under specified
conditions.

Commercial Paper

Commercial paper is an unsecured short-term note of indebtedness
issued in bearer form by business or banking firms to finance their
short-term credit needs.

Securities Rating Agencies

Subsequent to its purchase by a Fund, an issue may cease to be rated,
or its rating may be reduced below the criteria set forth for the Fund.
Neither event would require the elimination of bonds from a Fund's
portfolio, but the Adviser will consider that event in its determination of
whether the Fund should continue to hold such security in its portfolio. To
the extent the ratings accorded by Standard & Poor's Corporation ("S&P") or
Moody's Investors Services, Inc. ("Moody's") for securities may change as a
result of changes in the rating systems, a Fund will attempt to use
comparison ratings as standards for its investments in municipal bonds in
accordance with the policies described herein.

Commercial Paper Ratings. A1 and Prime 1 are the highest commercial
paper ratings issued by S&P and Moody's, respectively.

Commercial paper rated A1 by S&P has the following characteristics:
(1) liquidity ratios are adequate to meet cash requirements; (2) long-term
senior debt is rated A or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically,
the issuer's industry is well established and the issuer has a strong
position within the industry; and (6) the reliability and quality of
management are unquestioned.

Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas;
(3) evaluation of the issuer's
<PAGE>18
products in relation to competition and customer acceptance; (4) liquidity;
(5) amount and quality of long-term debt; (6) trend of earnings over a
period of 10 years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by the
management of obligations which may be present or may arise as a result of
public interest questions and preparation to meet such obligations.

Bond Ratings. Moody's -- The following is a description of Moody's
three highest bond ratings:

Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large or
by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to impairment
sometime in the future.

S&P -- The following is a description of S&P's three highest bond
ratings:

AAA - This is the highest rating assigned by S&P's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.

AA - Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority
of instances they differ from AAA issues only in small degree.

A - Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.

Government Securities

Government securities may be either direct obligations of the U.S.
Treasury or may be the obligations of an agency or instrumentality of the
United States.

Treasury Obligations. The U.S. Treasury issues a variety of marketable
securities that are direct obligations of the U.S. Government. These
securities fall into three categories - bills, notes, and bonds -
distinguished primarily by their maturity at time of issuance. Treasury
bills have maturities of one year
<PAGE>19
or less at the time of issuance, while Treasury notes currently have
maturities of 1 to 10 years. Treasury bonds can be issued with any maturity
of more than 10 years.

Obligations of Agencies and Instrumentalities. Agencies and
instrumentalities of the U.S. Government are created to fill specific
governmental roles. Their activities are primarily financed through
securities whose issuance has been authorized by Congress. Agencies and
instrumentalities include Export Import Bank, Federal Housing
Administration, Government National Mortgage Association, Tennessee Valley
Authority, Banks for Cooperatives, Farmers Home Administration, Federal
Home Loan Banks, Federal Intermediate Credit Banks, Federal Land Banks,
Federal National Mortgage Association, Federal Home Loan Mortgage Corp.,
U.S. Postal System, and Federal Finance Bank. Although obligations of
"agencies" and "instrumentalities" are not direct obligations of the U.S.
Treasury, payment of the interest or principal on these obligations is
generally backed directly or indirectly by the U.S. Government. This
support can range from backing by the full faith and credit of the United
States or U.S. Treasury guarantees to the backing solely of the issuing
instrumentality itself.

Mortgage-Backed Certificates

GNMA (Government National Mortgage Association) Certificates
("Certificates") are mortgage-backed securities. The Certificates evidence
part ownership of a pool of mortgage loans. The Certificates which the
Funds may purchase are of the "modified pass-through" type. "Modified
pass-through" Certificates entitle the holder to receive all interest and
principal payments owed on the mortgage pool, net of fees paid to the
servicing agent and GNMA, regardless of whether or not the mortgagor
actually makes the payment.

Market for GNMA Certificates. Since the inception of the GNMA
Mortgage-Backed Securities program in 1970, the amount of GNMA Certificates
outstanding has grown rapidly. The size of the market and the active
participation in the secondary market by securities dealers and many types
of investors make the GNMA Certificates a highly liquid instrument. Prices
of GNMA Certificates are readily available from securities dealers and
depend on, among other things, the level of market rates, the Certificate's
coupon rate and the prepayment experience of the pool of mortgages backing
each Certificate.

Other Pass-Through Certificates. A Fund may invest in other
pass-through securities. These are mortgage-backed securities for which the
payments on the underlying mortgages are passed from the mortgage holder
through the servicing agent, net of fees paid to the servicing agent, to a
Fund. These securities may be "modified pass-through certificates" (like
GNMA certificates) whereby a Fund would receive interest and principal
payments regardless of whether the mortgagors make the payments, or they
may be "straight pass-through certificates" whereby a Fund would receive
principal and/or interest only to the extent actually collected by the
servicing agent. The servicing agent may be an instrumentality or agency of
the U.S. Government or may be an institution such as a bank or savings and
loan association. The underlying mortgages may be conventional mortgages as
well as mortgages guaranteed by federal agencies or instrumentalities.
Straight pass-through securities involve additional
<PAGE>20
risks because payments are not guaranteed. However, this risk may be
mitigated to the extent that the underlying mortgages are guaranteed by a
federal agency or instrumentality or by a private insurance company. The
Fund will limit its investments in other pass-through securities to those
issued by Federal National Mortgage Association; Federal Home Loan Mortgage
Corporation (Participation Certificates); and Resolution Funding Corp.
Participation Certificates.
<PAGE>21
_______________________________________________________________________________

CMC SMALL CAP FUND
A Portfolio of CMC Fund Trust
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
_______________________________________________________________________________

We are pleased to report the performance of CMC Small Cap Fund for the
last fiscal year. The Fund's total return for the 12 months ended October 31,
1995 was 22.55%. This compares favorably with the Fund's benchmark, the
Russell 2000 Stock Index, which posted a 18.34% total return for the same
period.

During the first fiscal quarter, market conditions were not favorable
for small cap stocks contrary to the historical pattern of seasonal
strength ("the January effect") at this time of year. Concerns about rising
inflation led the Federal Reserve to continue tightening interest rates,
generating fears that the economy would eventually be tipped into
recession. During this period, investors put a premium on large cap stocks
and the additional liquidity they provide.

As the economy appeared to slow early in the year, inflation
expectations eased, the Fed stopped tightening, interest rates declined,
and the broad market strengthened considerably. The S&P 500 began a
sustained bull run that continues today. Small cap stocks also benefited,
but it was not until mid-summer that we saw the same level of performance
as large cap stocks. A factor contributing to the attractiveness of larger
cap stocks was the rapidly declining value of the U.S. dollar, which boosts
the earnings growth of large domestic companies with significant amounts of
foreign currency-based revenues. Investors focused on these larger
companies since they were able to produce earnings growth on par with small
companies.

By mid-summer, the dollar bottomed, the Fed made its first move to
lower short-term interest rates, and the performance of small cap stocks
improved relative to the broader market. This strength lasted through
mid-September, propelling the Russell 2000 alongside the S&P 500 on a
year-to-date basis. Growth stocks outperformed cyclicals during this
period, with technology and financial stocks leading the market. As history
has often shown, late September and October ushered in a correction for the
broad market and small cap stocks. However, the Fund was able to
significantly outperform the Russell 2000 during this difficult period.

The Fund benefited from an increase in its exposure to the technology
and financial sectors during the second and third fiscal quarters, a period
during which these sectors led the market. We eliminated semiconductor
stocks from the Fund's portfolio late in the year, thus avoiding most of
the sharp decline in these stocks. The Fund also benefited from a reduction
in REIT (real estate investment trusts) holdings.

At October 31st, the major industry categories comprising the Funds
net assets were technology at 19.6%, health care at 16.8%, consumer
non-durables at 9.1%, machinery/capital spending at 6.3%, and
banking/financing at 6.2%. Currently, the ten largest holdings of the Fund
are:

Elan Corp. (2.5%)
Teva Pharmaceutical (2.0%)
Target Therapeutics (1.9%)
Boston Chicken (1.8%)
Micron Systems (1.8%)
<PAGE>22
Media Computer (1.7%)
Symantec (1.7%)
Healthsouth (1.6%)
Thermedics (1.6%)
United States Filter (1.5%)

As we begin fiscal year 1996, we expect continued low inflation, a
likely easing by the Federal Reserve, and a sluggish but gradually
improving economy. Significant uncertainties remain: the resolution of the
budget impasse and its ultimate impact on interest rates and the harm to
certain industries, such as health care, that could be caused by proposed
cuts. There is currently significant stress in the consumer sector and
certain cyclical industries as a result of the slow economy and the Fund
will attempt to avoid sectors and stocks that have earnings risk.

We continue to believe growth stocks will outperform the broader
market until there is a pickup in the economy. Earnings growth for the S&P
500 is slowing considerably as we move into the new year, and small cap
stocks should re-establish their long term earnings growth superiority.
This is particularly positive given the attractive valuation of small
versus large cap stocks. The average projected earnings growth rate for the
stocks held by the Fund is 22% over the next 3 years, with a P/E to growth
ratio of 1.0. Based on IBES estimates, this compares to growth rates and
P/E to growth ratios of 17.6% and 0.9, respectively, for the Russell 2000
and 11.9% and 1.2, respectively, for the S&P 500.

We appreciate your confidence in our ability to provide quality
investment services.

The Columbia Investment Team

November 30, 1995

[Graphic line chart depicting the dollar amounts ($6,000-$24,000) of
CMC Small Cap, Russell 2000 and S&P 500 for the period 8/30/89 to 10/95:

1 Year 5 Years Since Inception*
------ ------- ---------------
CMC Small Cap 22.55% 23.81% 13.86%
Russell 2000 18.34% 22.09% 10.54%
S&P 500 26.43% 17.22% 11.79%

* Inception of operations of the Fund was August 30, 1989. Performance
information on the indices is based on the period beginning August 31,
1989. The table above shows total return performance information for
the periods ended October 31, 1995. Past performance is not indicative
of future performance. S&P 500 and Russell 2000 are unmanaged stock
indices.]

<PAGE>23
- --------------------------------------------------------------------------------
CMC INTERNATIONAL STOCK FUND
A Portfolio of CMC Fund Trust
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
- --------------------------------------------------------------------------------

Foreign markets generally experienced modest to poor returns during the
twelve months ended October 31, 1995. The CMC International Stock Fund fell
5.69% for the period, compared to the FT/S&P Actuaries Euro-Pacific Index,
which declined 1.10%. While returns for the one-year period are negative,
Fund performance improved after the first fiscal quarter, and continues to
date.

During the first half of the fiscal year, the Fund experienced
disappointing performance primarily due to a weak Japanese stock market. We
started out the year with a significant weighting in Japan based on our
belief that its prospects for growth were attractive after several years of
economic adjustment. We also felt that the yen would weaken after its surge
in 1994, thus lending support to exporting industries.

The Kobe earthquake in January, however, upset economic forecasts
during the second fiscal quarter, and contrary to nearly all expectations at
that time, the yen experienced a sharp increase against the dollar. The Fund
did not benefit from the yen's sudden strengthening because we had a
defensive currency strategy in place, hedging half the portfolio's exposure
to the yen.

Elsewhere, emerging markets also offered little opportunity for
appreciation following the devaluation of the peso and the subsequent selloff
of stocks in the Mexican stock market in late 1994. We were able to avoid
much of the effect of the peso's devaluation, but we believe that certain
emerging markets now offer attractive opportunities for 1996. Our emerging
market holdings currently consist of Korea, India, Brazil and, most recently,
Hong Kong.

Contributing to fund performance during the year was our particular
focus in the core European markets of Germany and the United Kingdom, which
were prospering from declining interest rates. To date, economic growth in
Europe has been modest, inflation remains subdued, and the outlook for steady
gains in many European markets is positive. We believe that the greatest
beneficiaries of this climate are financials and major consumer growth
companies, which we are emphasizing in the portfolio.

During the second half of the year, the Fund benefited from a major
change in Japanese monetary policy initiated in early July. The Bank of
Japan aggressively lowered interest rates and then, supported by the central
banks of the United States and Germany, intervened prominently in the foreign
exchange market by buying dollars and selling yen. This led to a rapid
decline in the yen and a strong surge in the Japanese stock market.
Thereafter, the Fund experienced strong, positive performance. Although the
Fund's exposure to Japan has varied throughout the year, it now represents
our largest country weighting at 36% of the portfolio, due to its potential
for stock market recovery.
<PAGE>24
As of November 30, the ten largest country weightings and the ten
largest security holdings of the Fund (as a percentage of net assets) are:

Country Weightings Security
Japan (36.1%) Bombardier Inc. Class B (2.4%)
United Kingdom (14.6%) HSBC Holdings, Ltd.(2.1%)
Germany (8.7%) Cheung Kong Holdings, Ltd. (2.0%)
Hong Kong (7.0%) NTT Corp (1.8%)
France (6.1%) UNI-Storebrand AS (1.4%)
Switzerland (5.5%) Ciba-Geigy A.G. (Bearer) (1.3%)
Canada (3.7%) Telebras (Pfd) (1.2%)
Netherlands (3.6%) Keyence Corp (1.2%)
Brazil (3.2%) Kyocera Co. Wts. #2 1/23/98 (1.2%)
Finland (2.5%) Aegon NV (1.2%)

Looking ahead to fiscal 1996, we anticipate a more stable environment
for international securities. Currency markets have returned to their levels
of a year ago, and we believe that the Japanese market has bottomed out and
is now on an upswing. While global stock markets generally pose greater
risk, we believe that over the long term they will continue to offer
investors an excellent way to diversify their assets and to participate in
growth opportunities worldwide. After the dramatic gains in the U.S. stock
market in 1995, investors in 1996 may look for value in foreign markets,
which have lagged behind.

We appreciate your continuing support.

The Columbia Investment Team

November 30, 1995
[Graphic line chart depicting the dollar amounts ($8,500-$13,000) of
CMC International Stock, Euro Pacific Index and S&P 500 for the period
2/1/94 to 10/31/95:

1 Year Since Inception*
------ ---------------
CMC International Stock Fund -5.69% -4.09%
Euro Pacific Index -1.10% 1.32%
S&P 500 26.43% 15.21%

* Inception of operations of Fund was February 1, 1994. The table above
shows total return performance information for the periods ended
October 31, 1995. Past performance is not indicative of future
performance. S&P 500 and FT/S&P Actuaries Euro Pacific are unmanaged
stock indices.]

<PAGE>25
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CMC SMALL CAP FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
October 31, 1995
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
<S> <C> <C>
COMMON STOCKS (90.5%)
Aerospace (1.7%)
* BE Aerospace, Inc. ............................. 333,000 $ 2,622,375
* Orbital Sciences Corp. ......................... 461,000 6,569,250
--------------
9,191,625
--------------
Banking & Finance (6.2%)
* California Federal Bank (Class A)............... 150,000 2,212,500
Community First Bankshares, Inc. ............... 78,200 1,583,550
First Security Corp. (Del.)..................... 144,000 4,716,000
* Insignia Financial Group, Inc. (Class A)........ 100,000 2,700,000
North Fork Bancorp, Inc. ....................... 166,000 3,631,250
SFFed Corp. .................................... 120,000 3,660,000
Washington Mutual, Inc. ........................ 163,000 4,197,250
Zions Bancorp................................... 156,000 10,803,000
--------------
33,503,550
--------------
Building & Forestry Products (0.8%)
* U.S. Home Corp. ................................ 150,000 4,031,250
--------------
Business & Consumer Services (5.2%)
* AccuStaff, Inc. ................................ 116,000 5,162,000
* Checkfree Corp. ................................ 39,000 823,875
Danka Business Systems plc ADR.................. 140,000 4,690,000
* On Assignment, Inc. ............................ 111,000 2,997,000
* Opta Food Ingredients, Inc. .................... 252,000 3,843,000
* Protection One, Inc. ........................... 366,000 2,882,250
* Robert Half International, Inc. ................ 120,000 4,380,000
* Westcott Communications, Inc. .................. 215,000 2,956,250
--------------
27,734,375
--------------
Chemical (2.6%)
* Applied Extrusion Technologies, Inc............. 91,100 1,400,662
Minerals Technologies, Inc. .................... 181,900 7,253,263
Potash Corp. of Saskatchewan, Inc. ............. 79,000 5,500,375
--------------
14,154,300
--------------
Consumer Durable (3.0%)
* Custom Chrome, Inc. ............................ 256,600 6,447,075
* Pepsi-Cola Puerto Rico Bottling Co. (Class B)... 200,000 2,725,000
* Ride, Inc. ..................................... 100,000 2,412,500
* Ultralife Batteries, Inc. ...................... 219,400 4,442,850
--------------
16,027,425
--------------
Consumer Non-Durable (9.1%)
* Bed, Bath & Beyond, Inc. ....................... 197,100 6,159,375
Big B, Inc. .................................... 237,500 3,503,125
* Borders Group, Inc. ............................ 287,700 4,926,862
* Boston Chicken, Inc. ........................... 288,000 9,738,000
</TABLE>
<PAGE>26
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CMC SMALL CAP FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
COMMON STOCKS (Continued)

<S> <C> <C>
* Day Runner, Inc. ............................... 170,000 $ 4,292,500
* Gymboree Corp. ................................. 124,500 2,816,812
Harman International Industries, Inc. .......... 152,775 7,046,747
* Nine West Group, Inc. .......................... 130,000 5,785,000
* Rexall Sundown, Inc. ........................... 200,000 3,000,000
Tiffany & Co. .................................. 32,700 1,426,538
--------------
48,694,959
--------------
Consumer Staples (0.1%)
* Mondavi (Robert) Corp. ......................... 28,000 791,000
--------------
Energy (3.9%)
* Barrett Resources Corp. ........................ 205,500 4,777,875
* Cairn Energy USA, Inc. ......................... 402,500 4,830,000
* Flores & Rucks, Inc. ........................... 290,000 3,770,000
* Global Natural Resources, Inc. ................. 330,000 3,300,000
* Gulf Canada Resources Ltd. ..................... 680,000 2,635,000
* Texas Meridian Resources Corp. ................. 170,000 1,848,750
--------------
21,161,625
--------------
Energy Services (2.8%)
* BJ Services Co. ................................ 295,000 6,932,500
* Dreco Energy Services Ltd. (Class A)............ 200,600 2,758,250
* Input/Output, Inc. ............................. 90,000 3,363,750
* Pride Petroleum Services, Inc. ................. 230,000 2,012,500
--------------
15,067,000
--------------
Entertainment & Media (2.5%)
* Hollywood Entertainment Corp. .................. 190,000 5,082,500
* Scholastic Corp. ............................... 72,000 4,446,000
* United International Holdings, Inc. (Class A)... 229,300 3,611,475
--------------
13,139,975
--------------
Health (16.8%)
* ARV Assisted Living, Inc. ...................... 100,000 1,500,000
* Assisted Living Concepts, Inc. ................. 175,000 2,515,625
Ballard Medical Products........................ 245,333 4,231,994
* Elan Corp. plc ADR.............................. 280,000 11,235,000
* Haemonetics Corp. (Mass.)....................... 245,000 4,624,375
* HEALTHSOUTH Corp. .............................. 314,000 8,203,250
* IDEXX Laboratories, Inc. ....................... 41,000 1,670,750
* InStent, Inc. .................................. 16,000 268,000
* Medic Computer Systems, Inc. ................... 144,000 7,668,000
* Mycogen Corp. .................................. 120,000 1,605,000
* Nellcor Puritan Bennett, Inc. .................. 70,000 4,025,000
* OccuSystems, Inc. .............................. 172,000 3,558,250
* Sterling House Corp. ........................... 129,600 1,603,800
Surgical Care Affiliates, Inc. ................. 260,000 7,702,500
* Target Therapeutics, Inc. ...................... 100,600 7,796,500
</TABLE>
<PAGE>27
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CMC SMALL CAP FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
COMMON STOCKS (Continued)

<S> <C> <C>
Teva Pharmaceutical Industries Ltd. ADR......... 260,000 $ 10,205,000
* Thermedics, Inc. ............................... 335,000 6,155,625
* UroMed Corp. ................................... 286,000 3,038,750
* Value Health, Inc. ............................. 120,000 2,745,000
--------------
90,352,419
--------------
Insurance (1.8%)
Executive Risk, Inc. ........................... 140,300 3,086,600
Protective Life Corp. .......................... 93,000 2,650,500
* RenaissanceRe Holdings Ltd. .................... 82,000 2,224,250
* Transnational Re Corp. (Class A)................ 75,000 1,678,125
--------------
9,639,475
--------------
Machinery & Capital Spending (6.3%)
Albany International Corp. (Class A)............ 174,000 3,610,500
Applied Power, Inc. (Class A)................... 228,100 6,928,538
* Elsag Bailey Process Automation N.V. ........... 137,000 3,733,250
Harnischfeger Industries, Inc. ................. 90,000 2,835,000
* Jacobs Engineering Group, Inc. ................. 150,000 3,281,250
* Larsen & Toubro Ltd. GDR ....................... 112,000 1,988,000
Roper Industries, Inc. ......................... 94,000 3,407,500
Titan Wheel International, Inc. ................ 307,500 4,458,750
* Wolverine Tube, Inc. ........................... 108,000 3,847,500
--------------
34,090,288
--------------
Metal Mining & Steel (1.7%)
Cambior, Inc. .................................. 197,900 1,954,263
Schnitzer Steel Industries, Inc. (Class A)...... 167,000 4,425,500
* TVX Gold, Inc. ................................. 421,000 2,736,500
--------------
9,116,263
--------------
Pollution Control (3.8%)
* Air & Water Technologies Corp. (Class A)........ 406,625 2,033,125
* Earth Technology Corp.-USA...................... 173,800 869,000
* Osmonics, Inc. ................................. 276,550 4,701,350
* Tetra Tech, Inc. ............................... 224,212 4,876,611
* U.S. Filter Corp. .............................. 330,300 7,679,475
--------------
20,159,561
--------------
Real Estate Securities (0.6%)
Shurgard Storage Centers, Inc. (Class A)........ 130,000 3,315,000
--------------
Technology (19.6%)
* Actel Corp. .................................... 332,800 3,910,400
* ADE Corp. ...................................... 40,000 600,000
* Advanced Semiconductor Materials
International N.V. ........................... 66,000 3,093,750
* American Management Systems, Inc. .............. 116,900 3,375,487
* Applied Innovation, Inc. ....................... 90,000 866,250
* Avid Technology, Inc. .......................... 50,000 2,187,500
* Cambridge Technology Partners, Inc. (Mass.)..... 72,000 4,086,000
</TABLE>
<PAGE>28
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CMC SMALL CAP FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
COMMON STOCKS (Continued)

<S> <C> <C>
* Checkpoint Systems, Inc. ....................... 96,000 $ 2,772,000
* Computron Software, Inc. ....................... 11,800 200,600
* Comverse Technology, Inc. ...................... 165,000 3,753,750
* FORE Systems, Inc. ............................. 100,000 5,300,000
* Gandalf Technologies, Inc. ..................... 300,000 1,706,250
* Geotek Communications, Inc. .................... 100,000 825,000
* Geoworks........................................ 157,300 3,362,288
* IMNET Systems, Inc. ............................ 57,200 1,451,450
* Integrated Silicon Systems, Inc. ............... 196,200 5,763,375
* Intersolv, Inc. ................................ 275,000 4,331,250
* Itron, Inc. .................................... 125,300 3,633,700
* Macromedia, Inc. ............................... 120,000 4,440,000
* Micros Systems, Inc. ........................... 200,000 7,450,000
* Microtest, Inc. ................................ 110,000 1,705,000
* PHAMIS, Inc. ................................... 80,000 2,020,000
Pioneer Standard Electronics, Inc. ............. 210,000 2,913,750
* Platinum Technology, Inc. ...................... 202,000 3,686,500
* Premenos Technology Corp. ...................... 110,000 4,317,500
* Pure Software, Inc. ............................ 10,400 382,200
* RadiSys, Corp. ................................. 80,000 930,000
* S3, Inc. ....................................... 270,000 4,623,750
* SpeedFam International, Inc. ................... 52,000 851,500
* SPSS, Inc. ..................................... 220,000 3,712,500
* Structural Dynamics Research Corp. ............. 176,900 3,228,425
* Symantec Corp. ................................. 240,000 5,835,000
* Tower Semiconductor Ltd. ....................... 134,000 4,053,500
* Transaction Systems Architects, Inc. ........... 140,000 3,640,000
--------------
105,008,675
--------------
Utilities/Communications (2.0%)
* Intermedia Communications of Florida, Inc. ..... 395,000 4,986,875
* MobilMedia Corp. ............................... 80,000 2,100,000
* Mobile Telecommunication Technologies Corp. .... 127,000 3,603,625
--------------
10,690,500
--------------
Total Common Stocks
(Cost $401,559,338)........................... 485,869,265
--------------

WARRANTS (0.0%)
Energy Services (0.0%)
* BJ Services Co.
(Cost $241,440)............................... 60,000 270,000
--------------

Total investments, excluding temporary cash
investments (Cost $401,800,778)............... 486,139,265
--------------
</TABLE>
<PAGE>29
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CMC SMALL CAP FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
REPURCHASE AGREEMENTS (10.6%)

<S> <C> <C>
Goldman Sachs Corp.
5.860% dated 10/31/1995,
due 11/01/1995 in the
amount of $26,258,781.
Collateralized by U.S. Treasury Bonds
10.625% to 12.000%
due 06/15/2013 to 06/15/2015,
U. S. Treasury Note
6.500% due 11/15/2000,
U. S. Treasury Strip
due 06/15/1998.................................... $ 26,254,566 $ 26,254,566
J.P. Morgan Securities, Inc.
5.840% dated 10/31/1995,
due 11/01/1995 in the
amount of $25,904,144.
Collateralized by U.S. Treasury Notes
6.250% to 6.500%,
due 08/15/1997 to 08/15/2005...................... 25,900,000 25,900,000
Merrill Lynch GSI
5.880% dated 10/31/1995,
due 11/01/1995 in the
amount of $4,800,773.
Collateralized by U.S. Treasury Notes
4.000% to 8.500%,
due 01/31/1996 to 08/15/2005...................... 4,800,000 4,800,000
Total Repurchase Agreements ---------------
(Cost $56,954,566)............................... 56,954,566
---------------
Total Investments (101.1%)
(Cost $458,755,344)............................. 543,093,831

Receivables less liabilities (-1.1%).............. (5,926,472)
---------------
Net Assets (100.0%)..................... $ 537,167,359
===============
<FN>
(1) See Note 1 of Notes to Financial Statements.

*Non-Income Producing

The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>30
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CMC INTERNATIONAL STOCK FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
October 31, 1995
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
COMMON STOCKS (89.9%)

<S> <C> <C>
Brazil (0.9%)
Companhia Energetica de Minas Gerais SA, ADR
(Utilities-Electric)......................... 15,368 $ 328,491
Usinas Siderurgicas de Minas Gerais SA, ADR
(Metals, Mining & Steel)..................... 30,000 270,000
-------------
598,491
-------------
Canada (4.1%)
Bombardier, Inc. (Class B)
(Manufacturing - Diversified Industries)..... 130,000 1,583,891
* Future Shop Ltd., The (Retail)................. 50,000 571,987
Magna International, Inc. (Class A)
(Motor Vehicles & Parts)..................... 15,000 652,902
-------------
2,808,780
-------------
Finland (3.3%)
Finnair Oy (Transportation)..................... 48,000 348,449
Kesko Oy (Retail)............................... 25,000 313,472
Kymmene Oy (Paper & Forest Products)............ 20,000 546,809
Nokia Oy (Class A) (Electronics)................ 6,000 343,641
Valmet Oy (Class A) (Machinery &
Capital Spending)............................. 27,000 750,919
-------------
2,303,290
-------------
France (6.3%)
Alcatel Alsthom SA (Electrical Equipment)....... 2,000 170,867
AXA SA (Insurance).............................. 10,000 555,647
BIC SA (Consumer Products)...................... 6,000 569,558
Brioche Pasquier SA (Food Processing)........... 2,600 342,021
Carrefour SA (Retail)........................... 1,300 763,830
Coflexip Stena Offshore Group, ADR
(Oil Equipment & Services).................... 35,000 490,000
ECCO SA (Business Services)..................... 1,600 248,118
LVMH Moet Hennessy Louis Vuitton SA
(Consumer Products)........................... 2,000 398,118
Societe Nationale d'Exploitation Industrielle
des Tabacs et Allumettes (Consumer Products).. 15,000 521,686
Societe Generale SA (Banking)................... 2,500 285,904
-------------
4,345,749
-------------
Germany (5.2%)
Bayer AG (Chemicals)............................ 1,800 478,977
Daimler-Benz AG (Motor Vehicles & Parts)........ 1,200 578,678
Gehe AG (Wholesale Distributor)................. 1,100 540,227
* Gerresheimer Glas AG (Containers)............... 1,300 238,380
Karstadt AG (Retail)............................ 1,000 436,389
Mannesmann AG (Machinery & Capital Spending).... 2,000 658,564
* SGL Carbon AG (Metals, Mining & Steel).......... 5,500 360,803
Siemens AG (Electrical Equipment)............... 550 288,486
-------------
3,580,504
-------------
</TABLE>
<PAGE>31
- --------------------------------------------------------------------------------
CMC INTERNATIONAL STOCK FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
COMMON STOCKS (Continued)

<S> <C> <C>
Hong Kong (7.1%)
Cheung Kong Holdings Ltd. (Real Estate)......... 250,000 $ 1,409,872
China Light & Power Co., Ltd.
(Utilities-Electric).......................... 170,000 905,939
HSBC Holdings plc (Banking)..................... 100,321 1,459,814
Swire Pacific Ltd. (Class A) (Transportation)... 150,000 1,125,310
-------------
4,900,935
-------------
India (2.2%)
Bajaj Auto Ltd., GDR (Motor Vehicles & Parts)... 7,800 206,700
* Indian Hotels Co., Ltd., The, GDR
(Entertainment & Leisure)..................... 20,000 360,000
Larsen & Toubro Ltd., GDR
(Engineering & Construction).................. 20,000 355,000
Tata Engineering & Locomotive Co., Ltd., GDS
(Motor Vehicles & Parts)...................... 27,500 574,063
-------------
1,495,763
-------------
Italy (0.8%)
* De Rigo S.p.A., ADS (Consumer Products)........ 8,000 165,000
* Gucci Group N.V. (Consumer Products)........... 12,000 360,000
-------------
525,000
-------------
Japan (32.1%)
Ajinomoto Co., Inc. (Food & Beverages).......... 17,000 168,168
CANON, INC. (Electronics)....................... 44,000 754,163
Daiwabo Information System Co., Ltd.
(Technology).................................. 6,000 172,184
East Japan Railway Co. (Transportation)......... 63 298,031
Fuji Bank Ltd., The (Banking)................... 30,000 558,276
Fuji Photo Film Co., Ltd. (Entertainment
& Leisure).................................... 9,000 223,017
FUJICOPIAN CO., LTD. (Machinery
& Capital Spending)........................... 24,000 197,453
Hitachi Ltd.(Electrical Equipment).............. 65,000 668,462
Industrial Bank of Japan Ltd., The (Banking).... 23,000 628,501
ITO-YOKADO CO., LTD. (Retail)................... 6,000 328,501
JUSCO CO., LTD. (Retail)........................ 32,000 752,204
KAJIMA CORP. (Construction)..................... 27,000 249,638
Kao Corp. (Consumer Products)................... 17,000 206,464
Kawasaki Steel Corp. (Metals, Mining & Steel)... 73,000 243,095
Kel Corp. (Electronics)......................... 25,000 457,884
KEYENCE CORP. (Electronics)..................... 7,000 863,859
Kinki Nippon Railway Co., Ltd. (Transportation). 33,000 255,338
KOMATSU LTD. (Machinery & Capital Spending)..... 26,000 203,722
KUBOTA CORP. (Machinery & Capital Spending)..... 30,000 186,288
Laox Co., Ltd. (Retail)......................... 19,000 413,124
Marubeni Corp. (Wholesale Distributor).......... 90,000 438,982
Mitsubishi Bank Ltd., The (Banking)............. 28,000 548,482
Mitsubishi Chemical Corp. (Chemicals)........... 65,000 295,397
Mitsubishi Estate Co., Ltd. (Real Estate)....... 60,000 640,549
Mitsubishi Heavy Inds., Ltd.
(Machinery & Capital Spending)................ 51,000 394,114
</TABLE>
<PAGE>32
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CMC INTERNATIONAL STOCK FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
COMMON STOCKS (Continued)

<S> <C> <C>
Japan (Continued)
Mitsubishi Trust & Banking Corp., The (Banking). 20,000 $ 280,118
Mitsui Fudosan Co., Ltd. (Real Estate).......... 66,000 756,317
Mitsui Home Co., Ltd. (Construction)............ 23,000 326,641
MITSUMI ELECTRIC CO., LTD. (Electronics)........ 9,000 217,728
MR. MAX CORP. (Retail).......................... 15,000 258,570
NEC Corp. (Electronics)......................... 100,000 1,322,233
Nintendo Co., Ltd. (Entertainment & Leisure).... 3,000 220,960
NIPPON STEEL CORP. (Metals, Mining & Steel)..... 95,000 315,426
NIPPON TELEGRAPH & TELEPHONE CORP.
(Utilities-Communication)..................... 91 754,360
Nippon Yusen Kabushiki Kaisha (Transportation).. 47,000 251,802
NIPPONDENSO CO., LTD. (Motor Vehicles & Parts).. 20,000 366,308
NISSAN MOTOR CO., LTD. (Motor Vehicles & Parts). 40,000 270,323
Nomura Securities Co., Ltd., The
(Financial Services).......................... 22,000 402,938
NTT Data Communications Systems Corp.
(Business Services)........................... 18 451,322
OMRON CORP. (Electronics)....................... 9,000 210,676
ROHM CO., LTD. (Electronics).................... 16,000 968,462
SANKYO CO., LTD. (Pharmaceuticals).............. 10,000 220,372
Sanwa Bank Ltd., The (Banking).................. 30,000 511,263
Sekisui Chemical Co., Ltd. (Chemicals).......... 60,000 781,587
SHIMIZU CORP. (Construction).................... 26,000 242,684
Shin-Etsu Chemical Co., Ltd. (Chemicals)........ 17,000 347,992
SONY CORP. (Electronics)........................ 5,000 225,269
Sumitomo Trust & Banking Co., Ltd.,
The (Banking)................................. 20,000 231,146
Takeda Chemical Inds., Ltd. (Pharmaceuticals)... 23,000 324,388
Tokio Marine & Fire Insurance Co., Ltd.,
The (Insurance)............................... 30,000 308,521
TONEN CORP. (Oil & Gas Products)................ 17,000 241,430
Toyo Communication Equipment Co., Ltd.
(Electronics)................................. 17,000 316,357
TOYOTA MOTOR CORP. (Motor Vehicles & Parts)..... 31,000 576,885
TRANS COSMOS, INC. (Business Services).......... 4,000 222,527
--------------
22,070,501
--------------
Korea (1.1%)
* CITC Seoul Excel Trust, IDR (Investment Trust).. 70,000 771,400
--------------
Netherlands (3.6%)
Aegon NV (Insurance)............................ 20,210 767,744
Elsevier NV (Publishing)........................ 50,000 646,880
Heineken NV (Food & Beverages).................. 3,600 639,269
Philips Electronics NV (Electronics)............ 10,000 386,860
--------------
2,440,753
--------------
Norway (1.3%)
UNI Storebrand AS (Class A) (Insurance)......... 180,000 907,806
--------------
</TABLE>
<PAGE>33
- --------------------------------------------------------------------------------
CMC INTERNATIONAL STOCK FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
COMMON STOCKS (Continued)

<S> <C> <C>
Sweden (0.9%)
Telefonaktiebolaget LM Ericsson (Class B)
(Electronics)................................. 28,000 $ 595,251
--------------
Switzerland (5.4%)
Alusuisse-Lonza Holding AG (Bearer)
(Metals, Mining & Steel)...................... 950 726,520
BBC Brown Boveri Ltd. (Series A) (Bearer)
(Electrical Equipment)........................ 550 638,194
Ciba-Geigy AG (Bearer) (Pharmaceutical)......... 1,000 863,436
Roche Holding Ltd. (Genusssheine)
(Pharmaceutical).............................. 100 726,872
Swiss Reinsurance Co. (Registered) (Insurance).. 420 459,595
Zurich Insurance Co. (Registered) (Insurance)... 1,000 286,344
--------------
3,700,961
--------------
United Kingdom (15.6%)
Abbey National plc (Banking).................... 40,000 338,436
Argyll Group plc (Retail)....................... 57,000 289,543
B.A.T Inds. plc (Consumer/Business Services).... 40,000 328,008
Barclays plc (Banking).......................... 60,000 703,890
BOC Group plc, The (Chemicals).................. 21,000 288,334
British Petroleum Co. plc (Energy).............. 70,754 520,389
British Sky Broadcasting Group plc (Media Group) 115,000 686,826
Compass Group plc (Food & Beverages)............ 32,000 217,408
General Electric Co. plc (Electrical Equipment). 70,000 347,284
Glaxo Wellcome plc (Pharmaceutical)............. 25,000 337,133
Hays plc (Business Services).................... 58,000 335,402
Lloyds Bank plc (Banking)....................... 38,000 467,411
Next plc (Retail)............................... 100,000 651,750
PowerGen plc (Utilities-Electric)............... 40,000 358,976
Provident Financial plc (Financial Services).... 37,318 453,421
Prudential Corp. (Insurance).................... 50,000 312,445
Reed Intl. plc (Publishing)..................... 28,000 425,589
Reuters Holdings plc (Business Services)........ 66,000 613,166
Sage Group plc (Media Group).................... 70,000 279,818
Severn Trent plc (Utilities-Water).............. 40,000 406,060
Siebe plc (Machinery & Capital Spending)........ 61,976 736,864
SmithKline Beecham plc (Class A)
(Pharmaceuticals)............................. 30,000 313,077
THORN EMI plc (Entertainment & Leisure)......... 30,568 711,421
Tomkins plc (Manufacturing-Diversified
Industries)................................... 1,282 5,054
Vodafone Group plc (Utilities-Communication).... 145,000 597,951
--------------
10,725,656
--------------
Total Common Stocks
(Cost $58,997,440)............................ 61,770,840
--------------
</TABLE>
<PAGE>34
- --------------------------------------------------------------------------------
CMC INTERNATIONAL STOCK FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
PREFERRED STOCKS (4.4%)

<S> <C> <C>
Brazil (2.2%)
Companhia Cervejaria Brahma SA (Food & Beverages).. 550,000 $ 209,932
* Companhia Tecidos do Norte de Minas SA (Textiles).. 1,200,000 374,415
Refrigeracao Parana SA (Consumer Products)......... 80,000,000 188,872
Telecomunicacoes Brasileiras SA
(Utilities-Communication)........................ 17,500,000 709,646
--------------
1,482,865
--------------
Germany (2.2%)
Fresenius AG (Pharmaceutical)...................... 600 479,744
Jil Sander AG (Consumer Products).................. 545 457,072
Systeme, Anwendungen, Produkte in der
Dattenverarbeitung AG (Business Services).......... 4,000 614,073
--------------
1,550,889
--------------
Total Preferred Stocks
(Cost $2,690,473)................................ 3,033,754
--------------
WARRANTS (2.3%)

Germany (0.8%)
* Veba AG (04/06/1998) (Utilities-Electric).......... 4,000 570,007
--------------
Japan (1.5%)
* Kyocera Corp. #2 (01/23/1998) (Electronics)....... 560 945,000
* Mr. Max Corp. (02/17/1998) (Retail)............... 6,000 84,581
--------------
1,029,581
--------------
Total Warrants
(Cost $1,487,986)............................... 1,599,588
--------------
Total investments, excluding temporary cash
investment (Cost $63,175,899)................... 66,404,182
--------------
REPURCHASE AGREEMENT (2.8%)

Goldman Sachs Corp.
5.860% dated 10/31/1995,
due 11/1/1995 in the
amount of $1,946,270
Collateralized by U.S. Treasury Bonds
10.625% to 12.000%
due 06/15/2013 to 06/15/2015,
U. S. Treasury Note
6.500% due 11/15/2000,
U. S. Treasury Strip
due 06/15/1998
(Cost $1,945,958).................................. 1,945,958 1,945,958
--------------
</TABLE>
<PAGE>35
- --------------------------------------------------------------------------------
CMC INTERNATIONAL STOCK FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Face Value Value (1)
-------------- --------------
<S> <C> <C>
Total Investments (99.4%)
(Cost $65,121,857)............................ $ 68,350,140

Cash and receivables less liabilities (0.6%).... 407,412
--------------
Net Assets (100.0%)............................. $ 68,757,552
<FN>
(1) See Note 1 of Notes to Financial Statements.

*Non-Income Producing

The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>36
- --------------------------------------------------------------------------------
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
October 31, 1995
<TABLE>
<CAPTION>
CMC Small CMC International
Cap Fund Stock Fund
---------------- -----------------

<S> <C> <C>
ASSETS:
Investments at identified cost $ 401,800,778 $ 63,175,899
- ---------------------------------------------------- ---------------- -----------------

Investments at value (Notes 1 and 2).............. $ 486,139,265 $ 66,404,182
Temporary cash investments, at cost (Note 1)...... 56,954,566 1,945,958
Cash.............................................. 100,711
Cash denominated in foreign currencies
(cost $4,247)(Note 1)........................... 4,239
Receivable for:
Interest........................................ 177,399 11,269
Dividends....................................... 122,496 107,656
Investments sold................................ 7,808,370
Forward foreign currency exchange contracts
held at market................................ 35,839,838
---------------- -----------------
Total assets...................................... 551,202,096 104,413,853
---------------- -----------------
LIABILITIES:
Payable for:
Dividends and distributions..................... 1,918,944 6,800
Investments purchased........................... 11,729,012
Investment management fee (Note 4).............. 346,391 44,676
Accrued expenses................................ 40,390 36,155
Forward foreign currency exchange contracts
held at market................................ 35,568,670
---------------- -----------------
Total liabilities................................. 14,034,737 35,656,301
---------------- -----------------

Net assets applicable to outstanding shares....... $ 537,167,359 $ 68,757,552
================ =================

Net assets consist of:
Undistributed net investment loss............... $ (18,884) $ (9,470)
Unrealized appreciation on:
Investments................................... 84,338,487 3,228,283
Translation of assets and liabilities
in foreign currencies....................... 271,661
Undistributed net realized loss from:
Investments................................... (259,916) (6,419,526)
Foreign currency transactions................. (294,428)
Capital paid in (Note 3)........................ 453,107,672 71,981,032
---------------- -----------------
$ 537,167,359 $ 68,757,552
================ =================

Shares of capital stock outstanding (Note 3)........ 9,593,018 1,855,088
================ =================

Net asset value, offering and
redemption price per share (1).................... $ 56.00 $ 37.06
================ =================
<FN>
(1) The net asset value per share is computed by dividing net assets applicable
to outstanding shares by shares of capital stock outstanding.

The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>37
- --------------------------------------------------------------------------------
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Fiscal Year Ended October 31, 1995
<TABLE>
<CAPTION>
CMC Small CMC International
Cap Fund Stock Fund
--------------- -----------------
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest............................................ $ 1,475,122 $ 443,037
Dividends........................................... 4,191,211 1,158,592
Foreign taxes withheld.............................. (166,148)
--------------- ---------------
Total income..................................... 5,666,333 1,435,481
--------------- ---------------
Expenses:
Investment management fees (Note 4)................. 3,528,353 543,358
Shareholder servicing costs (Note 4)................ 21,103 18,000
Reports to shareholders ............................ 200 65
Financial information and subscriptions............. 380
Accounting service fees............................. . 26,896
Custodian fees...................................... 15,805 65,720
Bank transaction and checking fees.................. 24,598 27,096
Registration fees................................... 5,411 2,342
Legal, insurance and auditing fees.................. 36,407 27,357
Other (Note 4)...................................... 6,619 3,865
--------------- ---------------
Total expenses................................... 3,638,876 714,699
--------------- ---------------
Net investment income (Note 1)......................... 2,027,457 720,782
--------------- ---------------
Realized gain (loss) and unrealized appreciation (depreciation)
from investment and foreign currency transactions:
Net realized gain (loss) from:
Investments (Note 2)................................ 37,975,837 (5,546,911)
Foreign currency transactions (Note 1).............. (672,552)
--------------- ---------------
Net realized gain (loss).......................... 37,975,837 (6,219,463)
--------------- ---------------
Net unrealized appreciation (depreciation) on:
Investments (Note 1)................................ 54,175,558 (205,745)
Translation of assets and liabilities in
foreign currencies (Note 1)....................... 257,407
--------------- ---------------
Net unrealized appreciation during the period..... 54,175,558 51,662
--------------- ---------------
Net gain (loss) on investment and foreign currency
transactions (Note 1)................................ 92,151,395 (6,167,801)
--------------- ---------------
Net increase (decrease) in net assets resulting from
operations........................................... $ 94,178,852 $ (5,447,019)

The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>38
- --------------------------------------------------------------------------------
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Fiscal Year Ended October 31
<TABLE>
<CAPTION>
CMC Small CMC International
Cap Fund Stock Fund
----------------------------------- -----------------------------------
1995 1994 1995 1994 (1)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income......................... $ 2,027,457 $ 1,422,157 $ 720,782 $ 203,060
Net realized gain (loss) from:
Investments (Note 2)........................ 37,975,837 72,071,990 (5,546,911) (757,696)
Foreign currency transactions............... (672,552) (1,676,385)
Change in net unrealized appreciation
(depreciation) on:
Investment............................... 54,175,558 (59,064,003) (205,745) 3,434,028
Translation of assets and liabilities
in foreign currencies (Note 1 )........ 257,407 14,254
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets
resulting from operations................... 94,178,852 14,430,144 (5,447,019) 1,217,261
Distributions to shareholders:
From net investment income.................... (1,453,395) (1,422,157)** (359,577)
In excess of net investment income............ (37,501)* (9,470)*
From net realized gain from
investments................................. (37,975,837) (72,071,990)
In excess of net realized gain from
investments................................. (315,760)* (578,709)*
Capital share transactions, net (Note 3)......... 14,781,544 34,727,293 (9,724,562) 83,080,919
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets............ 69,215,404 (24,952,920) (15,540,628) 84,298,180

NET ASSETS:
Beginning of period.............................. 467,951,955 492,904,875 84,298,180 0
--------------- --------------- --------------- ---------------
End of period.................................... $ 537,167,359(2) $ 467,951,955(3) $ 68,757,552(4) $ 84,298,180
=============== =============== =============== ===============
<FN>
(1) From inception of operations on February 1, 1994.
(2) Includes undistributed net investment loss of $18,884.
(3) Includes undistributed net investment loss of $30,090.
(4) Includes undistributed net investment loss of $9,470.
* On a tax basis, there was no return of capital.
** On a tax basis, $145,012 of the distributions to shareholders consisted of a return of capital.

The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>39
- --------------------------------------------------------------------------------
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1. Significant accounting policies:

CMC Small Cap Fund and CMC International Stock Fund (the Funds) are
portfolios of CMC Fund Trust (the Trust), an open-end diversified
investment company registered under the Investment Company Act of 1940, as
amended. The Trust has established one other portfolio, CMC High Yield
Fund, which began operations on July 6, 1994. Each portfolio issues a
separate series of the Trust's shares and maintains a separate investment
portfolio. The policies described below are consistently followed by the
Funds for the preparation of their financial statements in conformity with
generally accepted accounting principles.

Investment valuation - The values of the Funds' equity
investments are based on the last sale prices reported by the principal
securities exchanges on which the investments are traded, or, in the
absence of recorded sales, at the closing bid prices on such exchanges
or over-the-counter markets. Temporary investments in short-term
securities, principally repurchase agreements, are valued at cost,
which approximates market.

Forward foreign currency exchange contracts - In connection with
portfolio purchases and sales of securities denominated in a foreign
currency, the CMC International Stock Fund enters into forward foreign
currency exchange contracts (contracts). Additionally, the CMC
International Stock Fund enters into contracts to hedge certain other
foreign currency denominated assets. Contracts are recorded at market
value. The CMC International Stock Fund could be exposed to risks if
counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
Realized losses arising from such transactions amounted to $ 845,486
and are included in net realized loss from foreign currency related
transactions. As of October 31, 1995, the CMC International Stock Fund
had entered into the following forward currency exchange contracts
resulting in net unrealized appreciation of $ 271,168.

<TABLE>
<CAPTION>
Net Unrealized
Currency to Currency to Settlement Appreciation
be Delivered be Received Date (U.S. $)
- -------------------------- ------------------------------------------------------------
<S> <C> <C> <C>
10,000,000 Japanese Yen 101,554 U.S. Dollars 11/01/95 $ 3,611
600,000,000 Japanese Yen 5,986,232 U.S. Dollars 11/01/95 109,640
600,000,000 Japanese Yen 6,040,289 U.S. Dollars 11/01/95 163,697
11,874,387 Japanese Yen 1,210,000,000 U.S. Dollars 11/01/95 (23,260)
1,200,000,000 Japanese Yen 11,860,637 U.S. Dollars 12/19/95 17,480
----------
$ 271,168
==========
</TABLE>

Foreign currency translations - The books and records of the CMC
International Stock Fund are maintained in U.S. dollars. Foreign
currency transactions are translated into U.S. dollars on the following
basis:

(i) market value of investment securities, other assets, and
liabilities at the daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and
interest income and certain expenses at the rates of exchange
prevailing on the respective dates of such transactions.

The CMC International Stock Fund does not isolate that portion of
the results of operations resulting from changes in foreign exchange
rates on investments from the fluctuations arising from changes in
market prices of securities held. Such fluctuations are included with
the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from
sales and maturities of short-term securities, sales of foreign
currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between
the amounts of dividends, interest, and foreign withholding taxes
recorded on the CMC International Stock Fund's books and the U.S.
dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities (other than investments in securities)
at October 31, 1995 resulting from changes in the exchange rates.

Shareholder distributions - The Funds distribute net investment
income twice a year and any net realized gains from investment
transactions annually. Distributions to shareholders are recorded on
the record date.

Income and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for foreign currency transactions, net operating
losses, deferral of losses from wash sales and return of capital
received from Real Estate Investment Trusts.
<PAGE>40
- --------------------------------------------------------------------------------
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------

1. Significant accounting policies (Continued):

Federal income taxes - The Funds have made no provision for
federal income taxes on net investment income or net realized gains
from sales of securities, since it is the intention of the Funds to
comply with the provisions of the Internal Revenue Code available to
certain regulated investment companies, and to make distributions of
income and security profits sufficient to relieve them from
substantially all federal income taxes.

As of October 31, 1995, CMC International Stock Fund has capital
loss carryovers of $5,454,196 and $757,696 available to offset future
capital gains. These capital loss carryovers expire in the year 2003
and 2002 respectively. To the extent that the capital loss carryovers
are used to offset any capital gains, it is unlikely that the gains so
offset will be distributed to shareholders.

2. Investment Transactions:

Aggregate purchases, sales and maturities, net realized gain (loss) and
unrealized appreciation (depreciation) of securities, excluding temporary
cash investments, as of and for the fiscal year ended October 31, 1995
were as follows:

<TABLE>
<CAPTION>
CMC Small CMC International
Cap Fund Stock Fund
---------------- -----------------
<S> <C> <C>
Purchases:
Investment securities other than
U.S. Government obligations.................. $ 565,746,340 $ 105,172,236
================ =================
Sales and Maturities:
Investment securities other than
U.S. Government obligations.................. $ 625,481,664 $ 102,469,327
================ =================
Net Realized Gain (Loss):
Investment securities other than
U.S. Government obligations.................. $ 37,975,837 $ (5,546,911)
================ =================
Unrealized Appreciation (Depreciation)
as of October 31, 1995:
Appreciation................................. $ 100,838,290 $ 6,207,481
Depreciation................................. (16,499,803) (2,979,198)
---------------- -----------------
Net unrealized appreciation................ $ 84,338,487 $ 3,228,283
================ =================
Unrealized Appreciation (Depreciation) for
federal income tax purposes as of
October 31, 1995:
Appreciation................................. $ 100,823,210 $ 6,180,204
Depreciation................................. (16,757,578) (3,159,555)
---------------- -----------------
Net unrealized appreciation................ $ 84,065,632 $ 3,020,649
================ =================
For federal income tax purposes, the cost
of investments owned at October 31, 1995......... $ 402,073,633 $ 63,383,533
================ =================

The net realized gain for CMC Small Cap Fund includes proceeds of $521,900 from
Shareholder class action suits related to securities held by the Fund.
</TABLE>
<PAGE>41
- --------------------------------------------------------------------------------
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------

3. Capital Stock:
<TABLE>
<CAPTION>
CMC Small CMC International
Cap Fund Stock Fund
----------------------------------- -------------------------------------
Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended Ended
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994(1)
---------------- ---------------- ---------------- -------------------
<S> <C> <C> <C> <C>
Shares:
Shares sold.................................... 1,462,141 1,163,894 310,371 2,135,887
Shares issued for reinvestment
of dividends................................. 678,136 1,423,895 9,854
---------------- ---------------- ---------------- -------------------
2,140,277 2,587,789 320,225 2,135,887
Less shares redeemed........................... (2,030,154) (1,837,782) (598,816) (2,208)
---------------- ---------------- ---------------- -------------------
Net increase (decrease) in shares.............. 110,123 750,007 (278,591) 2,133,679
================ ================ ================ ===================
Amounts:
Sales.......................................... $ 80,911,048 $ 66,830,285 $ 11,344,299 $ 83,168,219
Reinvestment of dividends...................... 37,788,898 70,176,278 362,247
---------------- ---------------- ---------------- -------------------
118,699,946 137,006,563 11,706,546 83,168,219
Less redemptions............................... (103,918,402) (102,279,270) (21,431,108) (87,300)
---------------- ---------------- ---------------- -------------------
Net increase (decrease)........................ $ 14,781,544 $ 34,727,293 $ (9,724,562) $ 83,080,919
================ ================ ================ ===================
Capital stock authorized (shares) 100,000,000 100,000,000
<FN>
(1) From inception of operations on February 1, 1994
</TABLE>

4. Transactions with affiliates and related parties:

<TABLE>
<CAPTION>
CMC Small CMC International
Cap Fund Stock Fund
---------------- -----------------
<S> <C> <C>
Investment management fees incurred................. $3,528,353 $543,358

Investment management fee computation basis
(percentage of daily net assets per annum)........ .75 of 1% .75 of 1%

Transfer agent fee (included in shareholder
servicing costs).................................. $18,000 $18,000

Fees earned by trustees not affiliated with the
Fund's investment advisor or transfer agent
(included in other expenses)...................... $6,619 $1,013

The investment advisor of the Funds is Columbia Management Co.

The transfer agent for the Funds is Columbia Trust Company, a subsidiary of Columbia
Funds Management Company. The transfer agent is compensated based on a per account
fee or a minimum of $1,500 per month.
</TABLE>
<PAGE>42
- --------------------------------------------------------------------------------
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
Portfolios of CMC Fund Trust
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------

4. Transactions with affiliates and related parties (Continued):

The contracts for investment advisory and transfer agent services
for the CMC Small Cap Fund and the CMC International Stock Fund must be
renewed annually by a majority vote of the Fund's shareholders or by the
Trustees of CMC Fund Trust.

Certain officers and Trustees of CMC Fund Trust are also officers
and directors of Columbia Management Co., Columbia Trust Company and
Columbia Funds Management Company. They did not receive any direct payments
from the Funds.
<PAGE>43
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------

To the Shareholders and Trustees of CMC Fund Trust:

We have audited the accompanying statements of assets and
liabilities of CMC Small Cap Fund and CMC International Stock Fund,
portfolios of CMC Fund Trust, including the schedules of investments, as of
October 31, 1995, the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in
the period then ended of the CMC Small Cap Fund, and for the period from
inception, February 1, 1994, to October 31, 1994 and for the year ended
October 31, 1995 of CMC International Stock Fund and the financial
highlights for the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Funds' management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1995, by correspondence
with the custodian, and confirmation by correspondence with brokers as to
securities purchased but not received at that date or other auditing
procedures where confirmations from brokers were not received. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

We have also audited the financial statements of the CMC High Yield
Fund, a portfolio of the Trust, as of and for the year ended October 31,
1995, and we have issued an unqualified opinion thereon. The Annual Report
containing our report on the financial statements of the CMC High Yield
Fund is available from the Trust.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of CMC Small Cap Fund and CMC International Stock Fund, portfolios
of CMC Fund Trust, as of October 31, 1995, the results of their operations
for the year then ended, the changes in their net assets for each of the
two years in the period then ended of CMC Small Cap Fund, and for the
period from inception, February 1, 1994 to October 31, 1994 and for the
year ended October 31, 1995 of CMC International Stock Fund and the
financial highlights for the periods indicated therein, in conformity with
generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Portland, Oregon
December 1, 1995
<PAGE>1
Part A-II

CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
1300 S.W. Sixth Avenue
Portland, Oregon 97201
503-222-3600

This Prospectus provides information on CMC Fund Trust (the
"Trust"), an open-end diversified management investment company, and one of
its portfolios, CMC High Yield Fund (the "Fund"). The Fund seeks to provide
a high level of current income by investing primarily in lower-rated fixed
income securities. Capital appreciation is a secondary investment objective
when consistent with seeking high current income. Under normal market
conditions, at least 80% of the Fund's total assets will be invested in
lower-rated fixed income securities, commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of principal
and non-payment of interest. An investment in the Fund should represent
only a portion of a balanced investment program. Investors should carefully
assess the risks associated with an investment in the Fund. See
"Description of the Fund -- Investment Objective and Policies and --Risk
Considerations."

The Fund enables clients of Columbia Management Co. ("CMC" or
"Adviser") to invest in a diversified portfolio of lower-rated fixed income
securities rather than having to purchase individual securities for their
accounts.

This Prospectus concisely sets forth information about the Fund that
clients should know before investing and should be retained for future
reference. A Statement of Additional Information about the Fund dated
December 19 1995 has been filed with the Securities and Exchange Commission
("SEC") and is available without charge upon request to the Trust. The
Statement of Additional Information is incorporated by reference into this
Prospectus.

THE FUND CHARGES NO SALES LOAD. SHARES OF THE FUND ARE SOLD AND
REDEEMED AT THEIR NET ASSET VALUE.

December 19, 1995

<PAGE>2
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------

Fund Expenses................................................................2
Financial Highlights.........................................................3
Features of the Fund.........................................................3
How Investments in the Fund Are Made.........................................4
Redemptions..................................................................4
Determination of Net Asset Value.............................................5
Description of the Fund......................................................5
Distributions................................................................8
Performance Information......................................................8
Voting Rights................................................................9
Taxes........................................................................10
Management of the Fund.......................................................10
Transfer Agent...............................................................11
Additional Information.......................................................11

- --------------------------------------------------------------------------------
FUND EXPENSES
- --------------------------------------------------------------------------------

The following table sets forth all shareholder expenses and
estimated annual operating expenses of the Fund. "Annual Fund Operating
Expenses" are the expenses incurred by the Fund for fiscal 1995. "Other
Operating Expenses" include estimates of such expenses as audit, legal, and
other business operating expenses. The purpose of this table is to assist
you in understanding the costs and expenses that an investor in the Fund
will bear directly or indirectly. See "No Sales Load," "How to Redeem," and
"Management of the Fund." If assets under separate management by CMC are
invested in the Fund, the shareholder will pay no fee pursuant to its
advisory contract with CMC with respect to those assets invested in the
Fund (for the period during which the assets are invested in the Fund).

Shareholder Transaction Expenses None

Annual Fund Operating Expenses
(As a percentage of average net assets)

Management Fees .40%
12b-1 Fees None

Other Operating Expenses (after reimbursement)* .14%

Total Fund Operating Expenses .54%

* The adviser of the Fund has voluntarily agreed to assume ordinary
recurring expenses of the Fund to the extent these expenses, together with
the management fee, exceed 0.54% of the Fund's average net assets. Without
the expense reimbursement, the "Total Fund Operating Expenses" for fiscal
1995 would have been .61%.

EXAMPLE OF EXPENSES

The following example illustrates the expenses you would pay on a
$1,000 investment over the periods shown assuming (1) a 5% annual rate of
return and (2) redemption at the end of each period.

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------

$5.52 $17.31 $30.17 $67.71

<PAGE>3
This example should not be considered a representation of past or
future expenses or performance. The 5% rate of return used in the example
is required by the SEC for comparison purposes; actual expenses and
performance may be greater or less than those shown.

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
- --------------------------------------------------------------------------------

The table below has been audited by Coopers & Lybrand, L.L.P., independent
accountants, as stated in their report appearing on page 32 in the
Statement of Additional Information. This information should be reviewed in
conjunction with the financial statements and notes thereto appearing in
the Statement of Additional Information. Additional information about the
performance of the Fund for fiscal 1995 is included in the Statement of
Additional Information under "Financial Statements."

Fiscal Year Ended October 31,
-----------------------------
1995 1994(1)
------------ -------------
<S> <C> <C>
Net Asset Value, Beginning of Period......... $34.48 $35.00
------ ------
Income From Investment Operations:
Net Investment Income........................ 3.31 0.94
Net Realized and Unrealized Gain (Loss)
on Investments............................. 2.11 (0.52)
------ ------
Total From Investment Operations........ 5.42 0.42
------ ------
Less Distributions:
Dividends (from net investment income)....... (3.31) (0.94)
Distributions (from capital gains)........... (0.35)
------
Total Distributions..................... (3.66) (0.94)
------ ------
Net Asset Value, End of Period............... $36.24 $34.48
====== ======

Total Return................................. 16.49% 1.21%(2)

Ratios/Supplemental Data
Net Assets, End of Period (in thousands)..... $42,192 $9,602
Ratio of Expenses to Average Net Assets...... 0.54% 0.54%
Ratio of Net Investment Income to Average
Net Assets.............................. 9.36% 9.86%
Portfolio Turnover Rate...................... 45.64% 72.67%

<FN>

(1) From inception of operations on July 6, 1994. Ratios and portfolio
turnover rates are annualized.
(2) Not annualized.
</TABLE>

- --------------------------------------------------------------------------------
FEATURES OF THE FUND
- --------------------------------------------------------------------------------

The Trust enables clients of CMC to invest in a diversified
portfolio of lower-rated fixed income securities rather than purchasing
such securities on an individual basis. Although there are risks which
cannot be eliminated in owning securities, management believes the Fund
offers many advantages to CMC's clients that would not normally be
available if similar securities were purchased on an individual basis.
Among those advantages are economies of scale, diversification, and
convenience. Notwithstanding those advantages, investments by the Fund in
lower-rated securities involves special risks. See "Description of the Fund
- -- Risk Considerations."

<PAGE>4
By combining a portion of the capital of CMC clients' accounts into
a large portfolio, it is possible to offer all clients who invest in the
Fund effective access to higher yielding, lower-rated securities, as well
as professional investment supervision.

The Fund is a portfolio of the Trust, an open-end diversified
management company established as an Oregon business trust under a Restated
Declaration of Trust dated October 13, 1993, as amended ("Declaration of
Trust"). The Trust has established two other portfolios, CMC Small Cap Fund
and CMC International Stock Fund. The Trust is not required under its
Declaration of Trust to hold annual shareholder meetings, but special
meetings may be called for purposes such as electing or removing Trustees,
changing fundamental investment policies, or approving an investment
advisory contract.

The Fund is a "no-load fund," which means investors pay no sales
load and do not incur any additional expenses beyond those paid directly by
the Fund. See "Fund Expenses".

- --------------------------------------------------------------------------------
HOW INVESTMENTS IN THE FUND ARE MADE
- --------------------------------------------------------------------------------

An independent fiduciary of a CMC client account, after careful
review of this prospectus, including Fund expenses, and its consistency
with the client's written investment guidelines, approves the investment in
the Fund and authorizes CMC to purchase and redeem shares of the Fund at
the discretion of CMC for the client's portfolio, subject to limitations on
the amount of the investment imposed by the independent fiduciary. If CMC
is deemed to be a fiduciary with respect to a shareholder of the Fund under
the Employee Retirement Income Security Act of 1974, certain conditions
must be satisfied before assets may be invested in the Fund by CMC on
behalf of the shareholder. See "Investment Advisory and Other Fees Paid to
Affiliates" in the Statement of Additional Information.

The shares of the Fund are purchased and redeemed at the net asset
value next determined after an order is received by the Fund. Net asset
value of the Fund is determined as of the close of regular trading
(normally 4:00 p.m. New York time) on each day the New York Stock Exchange
("NYSE") is open for business. See "Determination of Net Asset Value."

Orders received by the Fund are processed the day they are received.
Orders received before the close of regular trading on each day the NYSE is
open for business will be entered at the net asset value per share
calculated that day. Orders received after the close of regular trading on
each day the NYSE is open for business will be entered at the net asset
value next determined. All investments are credited to the shareholder's
account in full and fractional shares computed to the third decimal place.
Although the Fund has no policy with respect to initial or subsequent
minimum investments, purchase orders may be refused at the discretion of
the Fund.

Shares purchased are credited to the CMC client's account on the
record books of the Fund, with confirmations supplied by the Fund to the
account custodian for the CMC client.

Shareholder inquiries, including requests for certificated shares,
may be made by writing to CMC or the Fund at 1300 SW Sixth Avenue,
Portland, Oregon 97207 or by calling (503) 222-3600.

- --------------------------------------------------------------------------------
REDEMPTIONS
- --------------------------------------------------------------------------------

Redemptions of all or any portion of a shareholder's investment can
be made at any time. Redemptions of shares are at the net asset value next
computed after receipt of a redemption order on days when the NYSE is open
for business. See "Determination of Net Asset Value." Payment will be made
within seven days of the date of redemption except as provided by the rules
of the SEC

If certificates for shares of the Fund have been issued to a
shareholder, they must be returned to the
<PAGE>5
Fund, properly endorsed, before any redemption request may be processed.
Redemption proceeds are normally transmitted in the manner specified in the
redemption request on the business day following the effective date of the
redemption. Although a shareholder may redeem shares that were recently
purchased by check, the Fund may hold the redemption proceeds until payment
for the purchase of such shares has cleared, which may take up to 15 days
from the date of purchase. No interest is paid on the redemption proceeds
after the redemption date and before the proceeds are transmitted. This
holding period does not apply to the redemption of shares recently
purchased by bank wire or with a cashier's or certified check.

The Fund reserves the right to redeem Fund shares in cash or in
kind. The Trust has elected, however, to be governed by Rule 18f-1 under
the Investment Company Act of 1940 (the "1940 Act"), pursuant to which the
Fund is obligated to redeem, during any 90-day period, shares of a
shareholder solely for cash up to the lesser of $250,000 or 1 percent of
the net asset value of the Fund. A shareholder who is redeemed in kind may
incur brokerage fees upon the sale of any securities distributed upon
redemption.

- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------

The net asset value per share of the Fund is determined by CMC,
under procedures approved by the Trustees of the Trust, as of the close of
regular trading (normally 4 p.m. New York time) on each day the NYSE is
open for business and at other times determined by the Trustees. The net
asset value per share is computed by dividing the value of all assets of
the Fund, less its liabilities, by the number of shares outstanding.

Securities will be valued according to the market value obtained in
a consistent manner from the broadest and most representative markets.
These market quotations, depending on local convention or regulation, may
be last sale price, last bid or asked price, or the mean between last bid
and asked prices as of, in each case, the close of the applicable exchange.
Securities for which market quotations are not readily available and other
assets will be valued at fair value as determined in good faith under
procedures established by and under the general supervision of the
Trustees. These procedures may include valuing portfolio securities by
reference to other securities with comparable ratings, interest rates, and
maturities and using pricing services, in each case only when these
procedures result in prices that are believed to reflect fair market value.
Fair value for debt securities with remaining maturities of less than 60
days is based on cost adjusted for amortization of discount or premium and
accrued interest (unless the Trustees believe unusual circumstances
indicate another method of determining fair value should be considered).

- --------------------------------------------------------------------------------
DESCRIPTION OF THE FUND
- --------------------------------------------------------------------------------

Investment Objective and Policies. The Fund's primary investment
objective is to provide shareholders with a high level of current income by
investing primarily in lower-rated fixed income securities. A security
purchased by the Fund for high current income may also be purchased for the
purpose of achieving the Fund's secondary investment objective of capital
appreciation. Capital appreciation may result, for example, from an
improvement in the issuer's financial condition or credit rating or from a
decline in interest rates. A fixed income security held by the Fund may
depreciate from, among other things, a decline in the issuer's financial
condition or a general rise in interest rates. See "Risk Considerations."
The Fund's objective may not be changed without a vote of a majority of the
outstanding voting securities of the Fund. There is no assurance that the
Fund will achieve its investment objective.

The Fund may invest in fixed income securities consisting of
corporate debt securities (bonds, debentures, and notes), asset-backed
securities, bank obligations, collateralized bonds, loan and mortgage
obligations, commercial paper, preferred stocks, repurchase agreements,
savings and loan obligations, and U. S. Government and agency obligations.
Debt securities and preferred stocks may be convertible into, or
exchangeable for, common stock, and may have warrants attached.

Under normal market conditions, the Fund will invest at least 80% of
its total assets in high yielding
<PAGE>6
fixed income securities rated Ba or B by Moody's Investors Service, Inc.
("Moody's") or BB or B by Standard & Poor's Corporation ("S&P"). The Fund
will not invest in fixed income securities rated below Caa by Moody's or
CCC by S&P, and no more than 10% of the Fund's total assets may be invested
in securities with Caa or CCC ratings. Up to 20% of the Fund's total assets
may be invested in fixed income securities rated Baa or better by Moody's
or BBB or better by S&P. The Fund may also invest in unrated fixed income
securities when the Fund's investment adviser believes the security is of
comparable quality to that of securities eligible for purchase by the Fund.
If the credit rating of a security drops below the rating it held when
purchased by the Fund, the Fund will evaluate the appropriateness of
retaining that security.

When, as a result of market conditions, the Fund's investment
adviser determines a temporary defensive position is warranted to help
preserve capital, the Fund may without limit temporarily retain cash or
invest in prime commercial paper, high-grade debt securities, securities of
the U.S. Government and its agencies and instrumentalities, and
high-quality money market instruments, including repurchase agreements.
When the Fund assumes a temporary defensive position, it is not invested in
securities designed to achieve its investment objective of providing a high
level of current income.

Securities rated Ba or less by Moody's or BB or less by S&P,
commonly referred to as "junk bonds," are considered noninvestment grade
securities, subject to a high degree of risk, and considered speculative by
the major credit rating agencies with respect to the issuer's ability to
meet principal and interest payments. The Fund is designed for investors
who are willing to assume substantial risks of significant fluctuations in
principal value in order to achieve a high level of current income. The
Fund should represent only a portion of a balanced investment program. See
"Risk Considerations" for a description of the risks of investing in
lower-rated securities and "Additional Information" for a description of
corporate bond ratings.

The table below shows the ratings assigned to the fixed income
securities held by the Fund during 1995. The figures, expressed as a
percentage of total net assets, are dollar-weighted averages of month end
holdings for 1995. The Fund did not hold any securities unrated by either
Moody's or S&P, or securities rated above Baa/BBB or below B/B by
Moody's/S&Ps during that period.

Moody's Standard & Poor's

Rating Average Rating Average
------ ------- ------ -------
Baa 0.8% BBB 4.4%
Ba 56.8% BB 53.8%
B 38.0% B 37.1%

The securities ratings by Moody's and S&P are based largely on the
issuer's historical financial condition and the rating agency's investment
analysis at the time of the rating. As a result, the rating assigned to a
security does not necessarily reflect the issuer's current financial
condition, which may be better or worse than the rating indicates. Credit
ratings are only one factor the Fund's investment adviser relies on in
evaluating lower-rated fixed income securities. The analysis by the Fund's
investment adviser of a lower-rated security may also include consideration
of the issuer's experience and managerial strength, changing financial
condition, borrowing requirements or debt maturity schedules, regulatory
concerns, and responsiveness to changes in business conditions and interest
rates. The Fund's adviser also may consider relative values based on
anticipated cash flow, interest or dividend coverage, balance sheet
analysis, and earnings prospects. Because of the number of investment
considerations involved in investing in lower-rated securities, achievement
of the Fund's investment objective may be more dependent upon the
investment adviser's credit analysis than is the case with investing in
higher quality debt securities.

There are no limitations on the dollar weighted average maturity of
the Fund's portfolio. Although a substantial portion of the lower-rated
debt securities that may be purchased by the Fund have maturities ranging
from less than one year to 10 years, the Fund may also purchase securities
with maturities of up to 30 years. Securities will be selected on the basis
of the Fund adviser's assessment of interest rate trends and the liquidity
of various instruments under prevailing market conditions. Shifting the
average maturity of the portfolio in response to anticipated changes in
interest rates generally will be carried out through the sale of securities
and the purchase of different securities within the desired maturity range.
This may result in greater realized capital gains and losses than would be
the case if the Fund generally held all securities to
<PAGE>7
maturity. Portfolio decisions will be made solely on the basis of
investment, rather than tax, considerations.

The Fund may invest in corporate debt securities or preferred stocks
that are convertible into or exchangeable for common stock. The Fund may
also acquire common stock in the following circumstances: in connection
with the purchase of a unit of securities that includes both fixed income
securities and common stock; when fixed income securities held by the Fund
are converted by the issuer into common stock; upon the exercise of
warrants attached to fixed income securities held by the Fund; and if
purchased in the context of a corporate transaction in which the holders of
common stock will receive newly issued fixed income securities. Common
stock acquired by the Fund in these circumstances may be held by the Fund
to permit orderly disposition or to establish long-term holding periods for
income tax purposes.

The Fund may invest up to 10% of its total assets in fixed income
securities of foreign issuers, including foreign governments, denominated
in U.S. dollars. See "Additional Information" for a discussion of the risks
involved in the investment in foreign securities.

Risk Considerations. All fixed income securities are subject to two
types of risk: credit risk and interest rate risk. The credit risk relates
to the ability of the issuer to meet interest and principal payments when
due. Generally, higher yielding bonds, such as those acquired by the Fund,
are subject to credit risk to a greater extent than higher quality, lower
yielding bonds. High yield bonds may be issued in connection with corporate
restructurings, such as leveraged buyouts, mergers, acquisitions, debt
recapitalizations, or similar events. In addition, high yield bonds are
often issued by smaller, less creditworthy companies or by companies with
substantial debt. The ratings of fixed income securities by Moody's and S&P
are a generally accepted barometer of credit risk.

Interest rate risk refers to the fluctuations in the net asset value
of any portfolio of fixed income securities resulting solely from the
inverse relationship between the price and yield of fixed income
securities; that is, when interest rates rise, bond prices generally fall
and, conversely, when interest rates fall, bond prices generally rise. The
change in net asset value depends upon several factors, including the
bond's maturity date. In general, bonds with longer maturities are more
sensitive to interest rate changes than bonds with shorter maturities.

The market for lower-rated debt securities is relatively new and
until recently its growth has paralleled a long economic expansion. Past
experience, therefore, may not provide an accurate indication of future
performance of this market, particularly during an economic recession. An
economic downturn or increase in interest rates is likely to have a greater
negative effect on the ability of the issuers of the Fund's securities to
pay principal and interest, meet projected business goals, and obtain
additional financing. These circumstances also may result in a higher
incidence of defaults compared to higher rated securities. In addition to
general economic conditions, the price of a lower-rated debt security is
more sensitive to the financial condition of the issuer than is the case
with higher rated debt securities. Consequently, the market for lower-rated
bonds often behaves more like the market for equity securities. Adverse
changes in economic conditions or an issuer's financial condition and
increases in interest rates may adversely affect the market for lower-rated
debt securities, the value of such securities in the Fund's portfolio, and,
therefore, the Fund's net asset value. As a result, investment in the Fund
is more speculative than investment in shares of a fund that invests
primarily in higher rated debt securities.

Although the Fund intends generally to purchase lower-rated
securities that have secondary markets, these markets may be less liquid
and less active than markets for higher rated securities. These factors may
limit the ability of the Fund to sell lower-rated securities at their
expected value. Adverse publicity and investor perceptions, whether or not
based on fundamental analysis, may decrease the values and liquidity of
lower-rated debt securities, especially in a thinly traded market. If
market quotations are not readily available for the Fund's lower-rated or
nonrated securities, these securities will be valued by a method the Fund's
board of directors believes accurately reflects fair value. Judgment plays
a greater role in valuing lower-rated debt securities than it does in
valuing securities for which more extensive quotations and last sale
information are available.

Special tax considerations are associated with investing in
lower-rated debt securities structured as zero coupon or pay-in-kind
securities. A zero coupon security has no cash coupon payments. Instead,
the issuer sells the security at a substantial discount from its maturity
value. The interest equivalent received by the investor from holding this
security to maturity is the difference between the maturity value and the
<PAGE>8
purchase price. Pay-in-kind securities are securities that pay interest in
either cash or additional securities, at the issuer's option, for a
specified period. The price of pay-in-kind securities is expected to
reflect the market value of the underlying debt plus an amount representing
accrued interest since the last payment. Zero coupon bonds and pay-in-kind
securities are more volatile than cash pay securities. The Fund accrues
taxable income on these securities prior to the receipt of cash payments.
The Fund intends to distribute substantially all of its income to its
shareholders to qualify for pass-through treatment under the tax laws and
may, therefore, need to use its cash reserves to satisfy distribution
requirements.

The Fund generally will not trade in securities for short-term
profits but, when circumstances warrant, it may purchase and sell
securities without regard to the length of time held. A high portfolio
turnover may increase transaction costs and may affect taxes paid by
shareholders to the extent short-term gains are distributed. The Fund's
portfolio turnover rates for 1995 and 1994 are shown in the table under
"Financial Highlights."

Investment Restrictions. See "Additional Information" for
information on the purchase by the Fund of repurchase agreements, illiquid
securities, when-issued securities, loan transactions, and options. A
description of other investment restrictions and certain additional
investment practices of the Fund is included in the Statement of Additional
Information.

- --------------------------------------------------------------------------------
DISTRIBUTIONS
- --------------------------------------------------------------------------------

Income dividends, consisting of net investment income, are declared
daily and paid monthly by the Fund. All income dividends paid by the Fund
will be reinvested in additional shares of the Fund at the net asset value
on the dividend payment date unless the account has elected to receive the
dividends in cash.

If all of your shares in the Fund are redeemed, the undistributed
dividends on the redeemed shares will be paid at that time. The Fund
generally distributes substantially all of its net realized capital gains
to shareholders once a year, usually in December. The amount distributed,
if any, will depend on the amount of capital gains realized from the sale
of the Fund's portfolio securities. Capital gain distributions are declared
and paid as cash dividends and reinvested in additional shares at the net
asset value, at the close of business on the record date, less the amount
of the distribution.

- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

The Fund will from time to time advertise or quote its current
yield, which represents the annualization of the Fund's net investment
income over a recent 30-day period divided by the Fund's net asset value at
the end of that period. The current yield for the 30-day period ended
October 31, 1995 was 8.58%. The Fund will also periodically provide
average annual total return and total return information. This information
is historical data and is not intended to indicate future performance. The
return and principal value of your investment will fluctuate, so that your
shares when redeemed may be worth more or less than their original cost.
Average annual total return and total return quotations assume the
reinvestment of all distributions during the period presented. Average
annual total return represents the average annual compounded rates of
return for the periods presented that would equate the initial amount
invested to the ending redeemable value. Total return represents a
percentage return for the periods presented that would equate the initial
amount invested to the ending redeemable value. The average annual total
returns for the Fund for the following periods ended October 31, 1995 were:
16.49% for one year and 13.50% for the life of the Fund (since July 6,
1994). For additional information on yield and total return calculations
for the Fund, see the Statement of Additional Information.

The Fund may compare its performance to other mutual funds with
similar investment objectives and to the mutual fund industry as a whole,
as quoted by ranking services and publications of general interest.
Examples of these services or publications include Lipper Analytical
Services, Inc., Schabacker's Total Investment Service, CDA Technologies,
Barron's, Business Week, Changing Times, The Financial
<PAGE>9
Times, Financial World, Forbes, Investor's Daily, Money, Morningstar Mutual
Funds, Personal Investor, The Economist, The Wall Street Journal, and USA
Today. (Lipper Analytical Services, Inc. is an independent rating service
that ranks over 1,000 mutual funds based upon total return performance.)
These ranking services and publications may rank the performance of the
Fund against all other funds over specified periods and against funds in
specified categories.

The Fund may also compare its performance to that of a recognized
unmanaged index of investment results, including the Standard & Poor's 500,
Dow Jones Industrial Average, Russell 2000, and NASDAQ stock indices and
the Lehman Brothers and Salomon bond indices. The comparative material
found in advertisements, sales literature, or in reports to shareholders
may contain past or present performance ratings. This is not to be
considered representative or indicative of future results or future
performance.

The Fund may also compare its performance to other income-producing
securities such as (i) money market funds; (ii) various bank products
(based on average rates of bank and thrift institution certificates of
deposit, money market deposit accounts, and NOW accounts as reported by the
Bank Rate Monitor and other financial reporting services, including
newspapers); and (iii) U.S. treasury bills or notes. There are differences
between these income-producing alternatives and the Fund other than their
yields, some of which are summarized below.

The yield of the Fund is not fixed and will fluctuate. The principal
value of your investment in the Fund at redemption may be more or less than
its original cost. In addition, your investment is not insured and its
yield is not guaranteed. Although the yields of bank money market deposit
accounts and NOW accounts will fluctuate, principal will not fluctuate and
is insured by the Federal Deposit Insurance Corporation up to $100,000.
Bank passbook savings accounts normally offer a fixed rate of interest, and
their principal and interest are also guaranteed and insured. Bank
certificates of deposit offer fixed or variable rates for a set term.
Principal and fixed rates are guaranteed and insured. There is no
fluctuation in principal value. Withdrawal of these deposits prior to
maturity will normally be subject to a penalty.

- --------------------------------------------------------------------------------
VOTING RIGHTS
- --------------------------------------------------------------------------------

The Trust may establish separate series of investment portfolios
under its Declaration of Trust. The Fund, CMC Small Cap Fund, and CMC
International Stock Fund are the only series established under the Trust.
Shares of each series vote together, except as provided in the Trust's
Declaration of Trust and under applicable law. It is expected that shares
of a series would vote separately by series on any changes in fundamental
investment policies relating to that series. All shares of each series of
the Trust, including the Fund, have equal rights as to voting, redemption,
and distribution. All issued and outstanding shares of the Fund are fully
paid and nonassessable. Shares have no preemptive or conversion rights.
Fractional shares have the same rights proportionately as full shares. The
shares of the Fund do not have cumulative voting rights, which means that
the holders of more than 50 percent of the shares of the Fund and any other
portfolio of the Trust, voting for the election of Trustees, can elect all
the Trustees if they choose to do so. In certain circumstances, Trustees
may be removed by action of the Trustees or the shareholders.

Under the provisions of the 1940 Act, and as used elsewhere in this
Prospectus, the phrase "vote of a majority of the outstanding voting
securities of the Fund" means the vote at any meeting of shareholders of
the Fund of (i) 67 percent or more of the shares present or represented by
proxy at the meeting, if the holders of more than 50 percent of the
outstanding shares are present or represented by proxy, or (ii) more than
50 percent of the outstanding shares, whichever is less. As of November 30,
1995, 24.9% or 299,765 shares of the Fund were beneficially owned by Locals
302 & 612 Operating Engineers Employers Retirement Fund.

Annual meetings of shareholders will not be held except as required
by the Investment Company Act of 1940 and other applicable law. A special
meeting will be held to vote on the removal of a Trustee or Trustees of the
Trust if requested in writing by the holders of not less than 10% of the
outstanding shares of the Trust.

<PAGE>10
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------

The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
By qualifying and by meeting certain other requirements, the Fund will not
be subject to federal income taxes to the extent it distributes to its
shareholders its net investment income and realized capital gains. The Fund
intends to make sufficient distributions to relieve itself from liability
for federal income taxes.

The tax character of dividends and other distributions from the Fund
is the same whether they are paid in cash or reinvested in additional
shares of the Fund. Dividends declared in October, November, or December to
shareholders of record as of a date in one of those months and paid in the
following January will be reportable as if received by the shareholders on
December 31. Thus, the shareholders may be taxed on these dividends in the
taxable year prior to the year of actual receipt.

The Fund will mail to its shareholders annually a summary of the
federal income tax status of the Fund's distributions for the preceding
year. Additional information regarding certain income tax consequences of
investments in the Fund is set forth in the Statement of Additional
Information.

This "Taxes" section is only a brief summary of the major tax
considerations affecting the Fund and its shareholders and is not a
complete or detailed explanation of tax matters. In addition to federal
taxes, shareholders of the Fund may be subject to state and local taxes.
Accordingly, investors are urged to consult their tax advisers concerning
the tax consequences to them of investing in the Fund.

- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

The Fund is managed under the general supervision of the Trustees of
the Trust. The Trust has contracted with CMC to provide investment advisory
services to the Fund and the other series of the Trust, CMC Small Cap Fund
and CMC International Stock Fund. CMC has acted as an investment adviser
since 1969 and acts as investment manager for approximately $12 billion of
assets of other institutions. CMC is owned by its employees, including J.
Jerry Inskeep, Jr. and James F. Rippey, who are Trustees and officers of
the Trust. The address of CMC is 1300 S.W. Sixth Avenue, P.O. Box 1350,
Portland, Oregon 97207-1350.

Under the investment advisory contract with the Trust, CMC provides
research, advice, and supervision with respect to investment matters, and
determines which securities are purchased or sold. In addition, CMC
provides office space and pays all executive salaries and expenses and
ordinary office expenses of the Fund. Certain employees of CMC are also
officers of the Trust and, subject to the authority of the Trustees of the
Trust, are responsible for the overall management of the Trust. CMC will
pay all of the organizational expenses of the Fund.

The Adviser uses an investment team approach to analyze investment
themes and strategies for the Funds. Alan J. Folkman, a Senior Vice
President and director of CMC, is the Chief Investment Officer of the
Investment Team. With over 28 years of experience in the investment
management industry, Mr. Folkman
<PAGE>11
supervises the Investment Team in establishing broad investment strategies
and determining portfolio guidelines for the Funds.

Members of the Investment Team are responsible for the analysis of
particular industries or types of fixed income securities and for
recommendations on individual securities within those industries or asset
categories. Thomas L. Thomsen, a Vice President and director of CMC, has
principal oversight responsibility for investment strategies on behalf of
the Fund. Prior to joining the Investment Team in 1978, Mr. Thomsen was a
Senior Investment Officer for the Treasury Department of the State of
Oregon (1974-1978) and a Fixed Income Portfolio Manager for First National
Bank of Oregon (1969-1973). Mr. Jeffrey L. Rippey, a Vice President of CMC,
has the responsibility of implementing on a daily basis the investment
strategies developed for the Fund. Prior to joining the Investment Team in
1981, Mr. Jeffrey Rippey worked in the Trust Department of Rainier National
Bank (1978-1981).

Members of the Investment Team and other personnel of the Trust or
CMC are permitted to trade securities for their own or family accounts,
subject to the rules of the Code of Ethics adopted by the Trust. The rules
that govern personal trading by investment personnel are based on the
principal that employees owe a fiduciary duty to conduct their trades in a
manner that is not detrimental to the Funds or their shareholders. The
Trust has adopted the recommendations of the Investment Company Institute,
an organization comprised of members of the mutual fund industry, relating
to restrictions on personal trading. For more information on the Code of
Ethics and specific trading restrictions, see the Statement of Additional
Information.

The investment advisory fee of the Fund is accrued daily and paid
monthly. The advisory fee for the Fund equals the annual rate of .40 of 1
percent of its daily net assets. The investment advisory fees incurred by
the Fund were $106,597 and $8,766 for fiscal 1995 and that portion of
fiscal 1994 the Fund was in operation, respectively. The Fund assumes its
costs relating to trust matters, cost of services to shareholders, transfer
and dividend paying agent fees, custodian fees, legal and auditing
expenses, disinterested trustees' fees, taxes and governmental fees,
interest, brokers' commissions, transaction expenses, cost of stock
certificates and any other expenses (including clerical expenses) of issue,
sale, repurchase, or redemption of its shares, expenses of registering or
qualifying its shares for sale, transfer taxes, and all expenses of
preparing its registration statements, prospectuses, and reports. CMC has
voluntarily agreed to assume ordinary recurring expenses of the Fund to the
extent these expenses, together with the management fee, exceed 0.54% of
the Fund's average net assets.

- --------------------------------------------------------------------------------
TRANSFER AGENT
- --------------------------------------------------------------------------------

Columbia Trust Company (the "Trust Company") acts as transfer agent
and dividend paying agent for the Fund. The Trust Company is owned by its
employees, including J. Jerry Inskeep, Jr. and James F. Rippey, who are
also principal shareholders of CMC and Trustees and officers of the Trust.
The address of the Trust Company is 1301 S.W. Fifth Avenue, P.O. Box 1350,
Portland, Oregon 97207-1350.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

Repurchase Agreements. The Fund may invest in repurchase agreements,
which are agreements by which the Fund purchases a security and
simultaneously commits to resell that security to the seller (a commercial
bank or recognized securities dealer) at a stated price within a number of
days (usually not more than seven) from the date of purchase. The resale
price reflects the purchase price plus a rate of interest which is
unrelated to the coupon rate or maturity of the purchased security.
Repurchase agreements may be considered loans by the Fund collateralized by
the underlying security. The obligation of the seller to pay the stated
price is in effect secured by the underlying security. The seller will be
required to maintain the value of the collateral underlying any repurchase
agreement at a level at least equal to the price of the repurchase
agreement. In the case of default by the seller, the Fund could incur a
loss. In the event of a bankruptcy proceeding commenced against the seller,
the Fund may incur costs and delays in realizing
<PAGE>12
upon the collateral. The Fund will enter into repurchase agreements only
with those banks or securities dealers who are deemed creditworthy pursuant
to criteria adopted by the Trustees of the Trust. There is no limit on the
portion of the Fund's assets that may be invested in repurchase agreements
with maturities of seven days or less.

Illiquid Securities. No illiquid securities will be acquired by the
Fund if upon the purchase more than 10 percent of the value of the Fund's
net assets would consist of these securities. "Illiquid securities" are
securities that may not be sold or disposed of in the ordinary course of
business within seven days at approximately the price used to determine the
Fund's net asset value. Under current interpretations of the Staff of the
SEC, the following instruments in which the Fund may invest will be
considered illiquid: (1) repurchase agreements maturing in more than seven
days; (2) restricted securities (securities whose public resale is subject
to legal restrictions); (3) options, with respect to specific securities,
not traded on a national securities exchange that are not readily
marketable; and (4) any other securities in which the Fund may invest that
are not readily marketable.

The Fund may purchase without limit, however, certain restricted
securities that can be resold to qualifying institutions pursuant to a
regulatory exemption under Rule 144A ("Rule 144A securities"). If a dealer
or institutional trading market exists for Rule 144A securities, such
securities are deemed to be liquid and thus not subject to the Fund's 10
percent limitation on the investment in restricted or other illiquid
securities. Under the supervision of the Trustees of the Trust, the Adviser
determines the liquidity of Rule 144A securities and, through reports from
the Adviser, the Trustees monitor trading activity in these securities. In
reaching liquidity decisions, the Adviser will consider, among other
things, the following factors: (1) the frequency of trades and quotes for
the security; (2) the number of dealers willing to purchase or sell the
security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the security; and (4) the nature of the
security and the marketplace trades (e.g., the time needed to dispose of
the security, the method of soliciting offers, and the procedures for the
transfer). Because institutional trading in Rule 144A securities is
relatively new, it is difficult to predict accurately how these markets
will develop. If institutional trading in Rule 144A securities declines,
the Fund's liquidity could be adversely affected to the extent it is
invested in such securities.

Options and Financial Futures Transactions. The Fund may invest up
to 5 percent of its net assets in premiums on put and call exchange-traded
options. The Fund may also purchase options on securities indices. Options
on securities indices are similar to options on a security except that,
rather than the right to take or make delivery of a security at a specified
price, an option on a securities index gives the holder the right to
receive, on exercise of the option, an amount of cash if the closing level
of the securities index on which the option is based is greater than, in
the case of a call, or less than, in the case of a put, the exercise price
of the option.

The Fund may engage in financial futures transactions, including
interest rate futures transactions. Financial futures contracts are
commodity contracts that obligate the long or short holder to take or make
delivery of a specified quantity of a financial instrument, such as a
security or the cash value of a securities index, during a specified future
period at a specified price. The Fund's investment restrictions do not
limit the percentage of the Fund's assets that may be invested in financial
futures transactions. The Fund, however, does not intend to enter into
financial futures transactions for which the aggregate initial margin
exceeds 5 percent of the net assets of the Fund after taking into account
unrealized profits and unrealized losses on any such transactions it has
entered into. The Fund may engage in futures transactions only on
commodities exchanges or boards of trade.

Foreign Securities. The Fund may invest up to 10% of its total
assets in fixed income securities of foreign issuers, including securities
issued by foreign governments, denominated in U.S. dollars. Foreign
securities may be subject to foreign taxes that would reduce their
effective yield. Certain foreign governments levy withholding taxes against
dividend and interest income. Although in some countries a
<PAGE>13
portion of these taxes is recoverable, the unrecovered portion of any
foreign withholding taxes would reduce the income the Fund receives from
its foreign investments. Foreign investments involve certain other risks,
including possible political or economic instability, the possibility of
currency exchange controls, reduced availability of public information
about a foreign company, and the lack of uniform accounting, auditing, and
financial reporting standards comparable to those applicable to domestic
companies. In addition, with respect to certain foreign countries, there is
a possibility of expropriation, nationalization, confiscatory taxation, or
diplomatic developments that could affect investments in those countries.
Finally, in the event of default on a foreign debt obligation, it may be
more difficult for the Fund to obtain or enforce a judgment against the
issuers of the obligation.

Loan Transactions. The Fund may lend portfolio securities to
qualified institutional investors for the short-term purpose of realizing
additional income. The aggregate value of all securities loaned may not
exceed 33 1/3% of the Fund's total assets, and such loans will be
collateralized by cash, cash equivalents, or an irrevocable letter of
credit in accordance with regulations adopted by the SEC. For more
information on loan transactions, see the Statement of Additional
Information.

Bond Ratings. Moody's -- The following is a description of Moody's
bond ratings:

Aaa - Best quality; smallest degree of investment risk.

Aa - High quality by all standards; Aa and Aaa are known as
high-grade bonds.

A - Many favorable investment attributes; considered upper
medium-grade obligations.

Baa - Medium-grade obligations; neither highly protected nor poorly
secured. Interest and principal appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time.

Ba - Speculative elements; future cannot be considered well assured.
Protection of interest and principal payments may be very moderate and not
well safeguarded during both good and bad times over the future.

B - Generally lack characteristics of a desirable investment.
Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.

Caa - Poor standing, may be in default; elements of danger with
respect to principal or interest.

S&P -- The following is a description of S&P's bond ratings:

AAA - Highest rating; extremely strong capacity to pay principal and
interest.

AA - Also high-quality with a very strong capacity to pay principal
and interest; differ from AAA issues only by a small degree.

A - Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions.

BBB - Adequate capacity to pay principal and interest; normally
exhibit adequate protection parameters, but adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to
pay principal and interest than for higher rated bonds.

Bonds rated AAA, AA, A, and BBB are considered investment grade
bonds.

BB - Less near-term vulnerability to default than other speculative
grade debt; face major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions that could lead to inadequate
capacity to meet timely interest and principal payment.

B - Greater vulnerability to default but presently have the capacity
to meet interest payments and
<PAGE>14
principal repayments; adverse business, financial, or economic
conditions would likely impair capacity or willingness to pay interest and
repay principal.

CCC - Current identifiable vulnerability to default and dependent
upon favorable business, financial, and economic conditions to meet timely
payments of interest and repayments of principal. In the event of adverse
business, financial, or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.

Bonds rated BB, B, and CCC are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the least degree of speculation and CCC a
higher degree of speculation. While such debt will likely have some quality
and protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.

Investment Restrictions. A description of other investment
restrictions and certain investment practices of the Funds is included in
the Statement of Additional Information.
<PAGE>1
Part B-II
Reg. Nos. 33-30394/ 811-5857
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
- --------------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION

Columbia Financial Center
1300 SW Sixth Avenue
PO Box 1350
Portland, Oregon 97207
(503) 222-3600

Table of Contents

Management....................................................................2
Investment Advisory and Other Fees Paid to Affiliates.........................3

Portfolio Transactions........................................................4

Redemptions and Net Asset Value...............................................6
Custodians....................................................................6
Independent Accountants.......................................................6
Taxes.........................................................................7
Yield and Performance.........................................................9
Investment Restrictions......................................................10
Additional Information Regarding Certain Investments by the Fund.............12
Financial Statements.........................................................18

December 19, 1995

<PAGE>2
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------

The trustees and officers of the Trust are listed below, together
with their principal business occupations. Except as otherwise indicated,
each person listed has held his position with the Trust since inception in
August 1989. All other principal business positions have been held for more
than five years, except that positions with Columbia Real Estate Equity
Fund, Inc. have been held since April 1994, positions with Columbia High
Yield Fund, Inc. have been held since July 1993, positions with Columbia
International Stock Fund, Inc. have been held since July 1992, and
positions with each of Columbia Common Stock Fund, Inc. and Columbia
Balanced Fund, Inc. have been held since July 1991, and except as otherwise
indicated. The term "Columbia Funds" refers to Columbia High Yield Fund,
Inc., Columbia Balanced Fund, Inc., Columbia Common Stock Fund, Inc.,
Columbia International Stock Fund, Inc., Columbia Municipal Bond Fund,
Inc., Columbia Real Estate Equity Fund, Inc., Columbia U.S. Government
Securities Fund, Inc., Columbia Special Fund, Inc., Columbia Growth Fund,
Inc., Columbia Daily Income Company, and Columbia Fixed Income Securities
Fund, Inc.

ALEXANDER S. MACMILLAN III, * Trustee of the Trust (since March 1994); Vice
President of the Adviser and CFMC.

PETER C. OLSON,* Trustee of the Trust (since April 1991); Vice President of
the Adviser.

PETER T. SHAND,* Trustee of the Trust (since April 1991); Vice President of
the Adviser.

LAWRENCE S. VIEHL,* Vice President of the Trust, each of the Columbia
Funds, the Adviser, CFMC, and the Trust Company.

JEFF B. CURTIS,* Secretary of the Trust (since April 1994); Secretary of
each of the Columbia Funds (since April 1994); General Counsel and
Secretary to the Adviser, CFMC, the Trust Company, and Columbia Financial
(since April 1993); Stoel Rives (1986-1993), a law firm in Portland,
Oregon.

<PAGE>3
*These officers and trustees are "interested persons" as defined by
the Investment Company Act of 1940 (the "1940 Act") and receive no trustee
fees or salaries from the Fund. The business address of each such person is
1300 SW Sixth Avenue, PO Box 1350, Portland, Oregon 97207.

At November 30, 1995, to the knowledge of the Trust, the following
persons owned of record or beneficially more than 5 percent of the
outstanding shares of the Fund:

Shares Beneficially Owned
Name and Address at November 30, 1995
- ---------------- --------------------------

Locals 302 & 612 Operating Engineers
Employers Retirement Plan
P.O. Box 34203
Seattle, WA 98124 299,765 (24.96%)

Lumber Industry Pension Fund
2929 NW 31st Ave.
Portland, OR 97210 206,203 (17.17%)

Meyer Memorial Trust
1515 SW Fifth Ave.
Portland, OR 97201 99,269 (8.27%)

Oregon Sheet Metal Workers
3133 NE 45th
Portland, OR 97213 61,952 (5.16%)

- --------------------------------------------------------------------------------
INVESTMENT ADVISORY AND OTHER FEES PAID TO AFFILIATES
- --------------------------------------------------------------------------------

Information regarding services performed by the Adviser to the Fund
and the formula for calculating the fees paid for those services are set
forth in the Prospectus under "Management of the Fund." Advisory fees
incurred by the Fund were $106,597 and $8,766 for fiscal 1995 and that
portion of fiscal 1994 the Fund was in operation, respectively.

Shareholders of the Fund will be investment advisory clients of the
Adviser, in addition to their indirect relationship to the Adviser by
virtue of their status as shareholders of the Fund. If, however, the assets
of an investment advisory client of the Adviser are invested in the Fund,
that client will pay no fee pursuant to its separate management contract
with the Adviser with respect to those assets invested in the Fund (for the
period during which the assets are invested in the Fund).

If the Adviser is deemed to be a fiduciary with respect to a
prospective shareholder of the Fund pursuant to the Employee Retirement
Income Security Act of 1974 ("ERISA"), certain conditions must be satisfied
before assets may be invested in that Fund by the Adviser on behalf of the
shareholder. These conditions have been set forth by the U. S. Department
of Labor in Prohibited Transaction Class Exemption No. 77-4 (the
"Exemption"). The Exemption permits the Adviser to direct investments of
ERISA-qualified plans to a mutual fund, such as the Fund, for which the
Adviser serves as an investment adviser if, after review of the Prospectus
and disclosure relating to fees of the Fund and fees under the advisory
contract, another fiduciary, as determined under ERISA, with respect to
that shareholder approves investments in the Fund. The second fiduciary
must be independent of and unrelated to the Adviser under standards set
forth by the U. S. Department of Labor in the Exemption.
<PAGE>4
The second, independent fiduciary that must approve investments in
the Fund by the Adviser is not engaged as a second fiduciary only in
contemplation of a possible investment in the Fund. Rather, the second,
independent fiduciary is almost always a committee appointed by the
employee benefit plan sponsor and has oversight responsibility for
appointment of CMC as an investment adviser with respect to certain plan
assets. This committee is almost always made up of one or more employees of
the plan sponsor, and, as such, these employees receive compensation from
the plan sponsor but are not compensated out of plan assets.

Messrs. Inskeep and Rippey, Trustees and officers of the Trust, each
own approximately 41 percent of the voting securities of the Adviser and,
therefore, are considered "controlling persons" under the 1940 Act. Certain
affiliated persons of the Trust are also affiliated persons of the Adviser.
See "Management." The Adviser acts as an investment manager for
approximately $10.5 billion of assets of other institutions. The Funds are
intended to provide investment vehicles for certain client accounts managed
by the Adviser. An independent fiduciary of those client accounts, after
careful review of the Fund's Prospectus, Statement of Additional
Information, and fees arrangement, approves the investment in the Fund. The
independent fiduciary then authorizes the Adviser to purchase and sell
shares of the Fund at its discretion for the client's portfolio, subject to
certain limitations imposed by the authorization.

The Trust Company acts as transfer agent and dividend crediting
agent for the Fund. Its address is 1301 SW Fifth Avenue, PO Box 1350,
Portland, Oregon 97207. It issues certificates for shares of the Fund, if
requested, and records and disburses dividends for the Fund. The Trust pays
the Trust Company a per account fee of $1 per month for each shareholder
account with the Fund existing at any time during the month, with a minimum
aggregate fee of $1,500 per month. In addition, the Trust pays the Trust
Company for extra administrative services performed at cost in accordance
with a schedule set forth in the agreement between the Trust Company and
the Trust and reimburses the Trust Company for certain out-of-pocket
expenses incurred in carrying out its duties under that agreement. Certain
trustees and officers of the Trust are minority shareholders of the Trust
Company. The Trust paid $18,000 to the Trust Company for services performed
for fiscal 1995 under the transfer agent agreement relating to the Fund.

- --------------------------------------------------------------------------------
PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------

The Fund will not generally invest in securities for short-term
capital appreciation but, when business and economic conditions, market
prices or the Fund's investment policy warrant, individual security
positions may be sold without regard to the length of time they have been
held. The portfolio turnover rate for the Fund is disclosed in the
prospectus under "Financial Highlights."

The Fund may purchase its portfolio securities through a securities
broker and pay the broker a commission, or the Fund may purchase the
securities directly from a broker which acts as principal and sells
securities directly for its own account without charging a commission. The
Fund may also purchase securities from underwriters, the price of which
will include a commission or concession paid by the issuer to the
underwriter. The purchase price of securities purchased from dealers
serving as market makers will include the spread between the bid and asked
prices.

Prompt execution of orders at the most favorable price will be the
primary consideration of the Fund in transactions where brokerage fees are
involved. Research, statistical, and other services also may be taken into
consideration in selecting broker-dealers. These services may include:
advice concerning the value of securities, the advisability of investing
in, purchasing, or selling securities, and
<PAGE>5
the availability of securities or the purchasers or sellers of securities;
and furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategies, and
performance of accounts. While the Fund has no arrangements or formulas as
to either the allocation of brokerage business or commission rates paid
thereon, a commission in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction may be paid by
the Fund if management of the Trust determines in good faith that the
commission is reasonable in relation to the value of the brokerage and
research services provided, viewed in terms of either that particular
transaction or management's overall responsibilities with respect to the
Fund.

Investment decisions for the Fund are made independently from those
of the other portfolios of the Trust or accounts managed by the Adviser or
Columbia Funds Mangement Company. The same security is sometimes held in
the portfolio of more than one fund or account. Simultaneous transactions
are inevitable when several funds or accounts are managed by the same
investment adviser, particularly when the same security is suitable for the
investment objective of more than one fund or account. In the event of
simultaneous transactions, allocations among the Fund or accounts will be
made on an equitable basis.

Both the Trust and the Adviser have adopted a Code of Ethics (the
"Code") that sets forth general and specific standards relating to the
securities trading activities of all their employees. The purpose of the
Code is to ensure that all employees conduct their personal transactions in
a manner that does not interfere with the portfolio transactions of the
Fund or the Adviser's other clients or take unfair advantage of their
relationship with the Adviser. The specific standards in the Code include,
among others, a requirement that all employee trades be pre-cleared; a
prohibition on investing in initial public offerings; required pre-approval
of an investment in private placements; a prohibition on portfolio managers
trading in a security seven days before or after a trade in the same
security by an account over which the manager exercises investment
discretion; and a prohibition on realizing any profit on the trading of a
security held less than 60 days. Certain securities and transactions, such
as mutual fund shares or U. S. Treasuries and purchases of options on
securities indexes or securities under an automatic dividend reinvestment
plan, are exempt from the restrictions in the Code because they present
little or no potential for abuse. Certain transactions involving the stocks
of large capitalization companies are exempt from the seven day black-out
period and short-term trading prohibitions because such transactions are
highly unlikely to affect the price of these stocks. In addition to the
trading restrictions, the Code contains reporting obligations that are
designed to ensure compliance and allow the Adviser's Ethics Committee to
monitor that compliance.

<PAGE>6
- --------------------------------------------------------------------------------
REDEMPTIONS AND NET ASSET VALUE
- --------------------------------------------------------------------------------

Information regarding redemptions is set forth in the Prospectus
under "Redemptions". Information regarding the determination of the net
asset value per share of the Fund is set forth in the Prospectus under
"Determination of Net Asset Value."

The Trust may suspend the determination of net asset value of the
Fund and the right of redemption for any period (1) when the New York Stock
Exchange is closed, other than customary weekend and holiday closings, (2)
when trading on the New York Stock Exchange is restricted, (3) when an
emergency exists as a result of which sale of securities owned by the Fund
is not reasonably practicable or it is not reasonably practicable for the
Trust to determine the value of the Fund's net assets, or (4) as the
Securities and Exchange Commission ("SEC") may by order permit for the
protection of security holders, provided the Trust complies with rules and
regulations of the SEC which govern as to whether the conditions prescribed
in (2) or (3) exist. The New York Stock Exchange observes the following
holidays: New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving, and Christmas. In the case of
suspension of the right to redeem, shareholders may withdraw their
redemption request or receive payment based upon the net asset value
computed upon the termination of the suspension.

- --------------------------------------------------------------------------------
CUSTODIANS
- --------------------------------------------------------------------------------

United States National Bank of Oregon, 321 SW Sixth Avenue,
Portland, Oregon 97208, acts as general custodian of the Trust (a
"Custodian"). Morgan Stanley Trust Company ("Morgan Stanley" or a
"Custodian"), One Evertrust Plaza, Jersey City, New Jersey 07302, has
entered into a custodian agreement with the Trust in respect of the
purchase of foreign securities by the Fund. The Custodians hold all
securities and cash of the Fund, receive and pay for securities purchased,
deliver against payment securities sold, receive and collect income from
investments, make all payments covering expenses of the Fund, and perform
other administrative duties, all as directed by authorized officers of the
Trust. The Custodians do not exercise any supervisory function in the
purchase and sale of portfolio securities or payment of dividends.

The Fund is authorized to invest up to 10% of its total assets in
fixed income securities of foreign issuers, denominated in U.S. dollars.
Portfolio securities purchased outside the United States by the Fund are
maintained in the custody of foreign banks, trust companies, or
depositories that have sub-custodian arrangements with Morgan Stanley (the
"foreign sub-custodians"). Each of the domestic and foreign custodial
institutions that may hold portfolio securities of the Fund has been
approved by the Trustees of the Trust in accordance with regulations under
the 1940 Act.

- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

Coopers & Lybrand, L.L.P., 2700 First Interstate Tower, Portland,
Oregon 97201, serves as the Trust's independent accountants and, in
addition to examining the financial statements of the Trust at fiscal
year-end, is expected to assist in the preparation of the tax returns of
the Trust and in certain other matters.
<PAGE>7
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------

Federal Income Taxes

The Fund intends and expects to meet continuously the tests for
qualification as a regulated investment company under Part I of Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"). The Fund
believes it satisfies the tests to qualify as a regulated investment
company.

To qualify as a regulated investment company for any taxable year,
the Fund must, among other things:

(c) diversify its holdings so that at the end of each quarter (i) 50
percent or more of the value of the assets of the Fund is represented by
cash, government securities, and other securities limited, in respect of
any one issuer of such other securities, to an amount not greater than 5
percent of the value of the assets of the Fund and 10 percent of the
outstanding voting securities of such issuer, and (ii) not more than 25
percent of the value of the assets of the Fund is invested in the
securities (other than government securities) of any one issuer or of two
or more issuers that the Fund "controls" within the meaning of Section 851
of the Code and that meet certain requirements. In addition, the Fund must
file, or have filed, a proper election with the Internal Revenue Service.

Part I of Subchapter M of the Code will apply to the Fund during a
taxable year only if it meets certain additional requirements. Among other
things, the Fund must: (a) have a deduction for dividends paid (without
regard to capital gain dividends) at least equal to the sum of 90 percent
of its investment company taxable income (computed without any deduction
for dividends paid) and 90 percent of its tax-exempt interest in excess of
certain disallowed deductions (unless the Internal Revenue Service waives
this requirement) and (b) either (i) have been subject to Part I of
Subchapter M for all taxable years ending after November 8, 1983 or (ii) as
of the close of the taxable year have no earnings and profits accumulated
in any taxable year to which Part I of Subchapter M did not apply.

The Trust currently has three portfolios, including the Fund. The
Trust may establish additional funds in the future. Federal income tax laws
generally will treat each fund as a separate corporation (provided that
each fund consists of a segregated portfolio of assets the beneficial
interests in which are owned by the holders of a class or series of stock
that is preferred over all other classes or series in respect of that
portfolio of assets).

A regulated investment company that meets the requirements described
above is taxed only on its "investment company taxable income," which
generally equals the undistributed portion of its ordinary net income and
any excess of net short-term capital gain over net long-term capital loss.
In addition, any excess of net long-term capital gain over net short-term
capital loss that is not distributed is taxed to the Fund at corporate
capital gain tax rates. The policy of the Fund is to apply capital loss
<PAGE>8
carry-forwards as a deduction against future capital gains before making a
capital gain distribution to shareholders.

If any net long-term capital gains in excess of net short-term
capital losses are retained by the Fund, requiring federal income taxes to
be paid thereon by the Fund, the Fund may elect to treat such capital gains
as having been distributed to shareholders. In the case of such an
election, shareholders will be taxed on such amounts as long-term capital
gains, will be able to claim their proportional share of the federal income
taxes paid by the Fund on such gains as a credit against their own federal
income tax liabilities, and generally will be entitled to increase the
adjusted tax basis of their shares in the Fund by the differences between
their pro rata shares of such gains and their tax credits.

Shareholders of the Fund are taxed on distributions of net
investment income, or of any excess of net short-term capital gain over net
long-term capital loss, as ordinary income. Income distributions from the
Fund are unlikely to qualify for the dividends-received deduction for
corporate shareholders because the income of the Fund consists largely or
entirely of interest rather than dividends. Distributions of any excess of
net long-term capital gain over net short-term capital loss from the Fund
are ineligible for the dividends-received deduction.

The Fund may purchase zero coupon bonds and payment-in-kind ("PIK")
bonds. With respect to zero coupon bonds, the Fund recognizes
original-issue-discount income ratably over the life of the bond even
though the Fund receives no payments on the bond until the bond matures.
With respect to PIK bonds, the Fund recognizes interest income equal to the
fair market value of the bonds distributed as interest. Because the Fund
must distribute 90 percent of its income to remain qualified as a
registered investment company, the Fund may need to use its cash reserves
or be forced to liquidate a portion of its portfolio to generate cash to
distribute to its shareholders with respect to original-issue-discount
income from zero coupon bonds and interest income from PIK bonds.

The Fund may invest up to 10 percent of its total assets in the
securities of foreign corporations and issuers. Foreign countries may
impose income taxes, generally collected by withholding, on foreign-source
dividends and interest paid to the Fund. These foreign taxes will reduce
the Fund's distributed income. The Fund generally expects to incur,
however, no foreign income taxes on gains from the sale of foreign
securities. The United States has entered into income tax treaties with
many foreign countries to reduce or eliminate the foreign taxes on certain
dividends and interest received from corporations in those countries. The
Fund intends to take advantage of such treaties where possible. It is
impossible to predict with certainty in advance the effective rate of
foreign taxes that will be paid by the Fund since the amount invested in
particular countries will fluctuate and the amounts of dividends and
interest relative to total income will fluctuate.

Distributions properly designated by the Fund as representing the
excess of net long-term capital gain over net short-term capital loss are
taxable to shareholders as long-term capital gain, regardless of the length
of time the shares of the Fund have been held by shareholders. For
noncorporate taxpayers, the highest rate that applies to long-term capital
gains is lower than the highest rate that applies to ordinary income. Any
loss that is realized and allowed on redemption of shares of the Fund less
than six months from the date of purchase of the shares and following the
receipt of a capital gain dividend will be treated as a long-term capital
loss to the extent of the capital gain dividend. For this purpose, Section
852(b)(4) of the Code contains special rules on the computation of a
shareholder's holding period.

Distributions of taxable net investment income and net realized
capital gains will be taxable as described above, whether paid in shares or
in cash. Each distribution is accompanied by a brief explanation of the
form and character of the distribution. Within 60 days after the close of
each taxable year, the Fund issues to each shareholder a statement of the
federal income tax status of all distributions, including a statement of
the prior taxable year's distributions which the Fund has designated to be
treated as long-term capital gain.
<PAGE>9
A distribution may be taxable to a shareholder even if the
distribution reduces the net asset value of the shares held below their
cost (and is in an economic sense a return of the shareholder's capital).
This tax result is most likely when shares are purchased shortly before an
annual distribution of capital gains or other earnings.

If the Fund declares a dividend in October, November, or December
payable to shareholders of record on a certain date in such a month and
pays the dividend during January of the following year, the shareholders
will be taxed as if they had received the dividend on December 31 of the
year in which the dividend was declared. Thus, a shareholder may be taxed
on the dividend in a taxable year prior to the year of actual receipt.

A special tax may apply to the Fund if it fails to make sufficient
distributions during the calendar year. The required distributions for each
calendar year generally equal the sum of (a) 98 percent of the ordinary
income for the calendar year plus (b) 98 percent of the capital gain net
income for the one-year period that ends on October 31 during the calendar
year, plus (c) an adjustment relating to any shortfall for the prior
taxable year. If the actual distributions are less than the required
distributions, a tax of 4 percent applies to the shortfall.

The Code allows the deduction by certain individuals, trusts, and
estates of "miscellaneous itemized deductions" only to the extent that such
deductions exceed 2 percent of adjusted gross income. The limit on
miscellaneous itemized deductions will not apply, however, with respect to
the expenses incurred by any "publicly offered regulated investment
company." The Fund believes that it is a publicly offered regulated
investment company because its shares are continuously offered pursuant to
a public offering (within the meaning of section 4 of the Securities Act of
1933 (the "1933 Act"), as amended). Therefore, the limit on miscellaneous
itemized deductions should not apply to expenses incurred by the Fund.

State Income Taxes

The state tax consequences of investments in the Fund are beyond the
scope of the tax discussions in the Prospectus and this Statement of
Additional Information.

Additional Information

The foregoing summary and the summary included in the Prospectus
under "Taxes" of tax consequences of investment in the Fund are necessarily
general and abbreviated. No attempt has been made to present a complete or
detailed explanation of tax matters. Furthermore, the provisions of the
statutes and regulations on which they are based are subject to change by
legislative or administrative action. State and local taxes are beyond the
scope of this discussion. Prospective investors in the Fund are urged to
consult their own tax advisers regarding specific questions as to federal,
state, or local taxes.

- --------------------------------------------------------------------------------
YIELD AND PERFORMANCE
- --------------------------------------------------------------------------------

The Trust may from time to time advertise or quote current yield and
total return performance for the Fund. These figures represent historical
data and are calculated according to SEC rules standardizing such
computations. The investment return on and the value of shares of the Fund
will fluctuate so that the shares when redeemed may be worth more or less
than their original cost.

<PAGE>10
Current yield of the Fund is calculated by dividing the net
investment income per share earned during an identified 30-day period by
the maximum offering price per share on the last day of the same period,
according to the following formula:

6
Yield = 2 [(a-b + 1) -1]
---
cd

Where: a = dividends and interest earned during the period.

b = expenses accrued for the period.

c = the average daily number of shares outstanding during
the period that were entitled to receive dividends.

d = the maximum offering price per share on the last day of
the period.

The Fund uses generally accepted accounting principles in
determining actual income paid, and these principles differ in some
instances from SEC rules for computing income for the above yield
calculations. Therefore, the quoted yields as calculated above may differ
from the actual dividends paid.

The Trust may publish average annual total return quotations for
recent 1, 5, and 10-year periods (or a fractional portion thereof) computed
by finding the average annual compounded rates of return over the 1, 5, and
10-year periods that would equate the initial amount invested to the ending
redeemable value, according to the following formula:

P(1+T)n = ERV

Where: P = a hypothetical initial payment of $1000

T = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical $1000 payment
made at the beginning of the 1, 5, and 10-year periods
(or a fractional portion thereof)

If the Trust's registration statement under the 1940 Act with
respect to the Fund has been in effect less than 1, 5 or 10 years, the time
period during which the registration statement with respect to that Fund
has been in effect will be substituted for the periods stated.

- --------------------------------------------------------------------------------
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------

The Prospectus sets forth the investment objectives and certain
restrictions applicable to the Fund. The following is a list of investment
restrictions applicable to the Fund. If a percentage limitation is adhered
to at the time of the investment, a later increase or decrease in
percentage resulting from any
<PAGE>11
change in value or net assets will not result in a violation of such
restriction. The Trust may not change these restrictions without a majority
vote of the outstanding shares of the Fund.

The Fund may not:

1. Buy or sell commodities or commodity futures contracts.

2. Concentrate investments in any industry. However, it may invest
up to 25 percent of the value of its total assets in any one industry and
more than 25 percent of the value of its total assets in cash, cash
equivalents, or securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities. Commitments to purchase securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities on a "when-issued" basis may not exceed 20 percent of the
total assets of the Fund. Emphasis on investments in securities of a
particular industry will be shifted whenever the Adviser determines that
such action is desirable for investment reasons. The Trustees will
periodically review these decisions of the Adviser.

3. Buy or sell real estate. However, the Fund may purchase or hold
securities issued by companies, such as real estate investment trusts, that
deal in real estate or interests therein, and participation interests in
pools of real estate mortgage loans.

4. Make loans to other persons (except by purchase of short-term
commercial paper, bonds, debentures, or other debt securities constituting
part of an issue). The Fund may lend portfolio securities to broker-dealers
or other institutional investors if, as a result thereof, the aggregate
value of all securities loaned does not exceed 33 1/3 percent of its total
assets.

5. Purchase illiquid securities, including restricted securities and
repurchase agreements of more than seven days maturity, if upon the
purchase more than 10 percent of the value of the Fund's net assets would
consist of these securities. "Illiquid securities" are securities that may
not be sold or disposed of in the ordinary course of business within seven
days at approximately the price used to determine the Fund's net asset
value and include restricted securities that are subject to legal or
contractual restrictions on resale. Certain restricted securities that can
be resold to qualifying institutions pursuant to a regulatory exemption
under Rule 144A of the 1933 Act and for which a dealer or institutional
trading market exists may be deemed to be liquid securities by the Trustees
of the Fund and, therefore, are not subject to the above investment
restriction.

6. Purchase the securities of any issuer if the purchase, at the
time thereof, would cause more than 10 percent of the outstanding voting
securities of that issuer to be held in the Fund.

7. Purchase the securities of any issuer if the purchase, at the
time thereof, would cause more than 5 percent of the value of its total
assets at market value to be invested in the securities of that issuer
(other than obligations of the U.S. Government and its instrumentalities),
with reference to 75 percent of the assets of the Fund.

8. Purchase or retain securities of an issuer if those officers or
directors of the Fund or the Adviser who individually own more than 1/2 of
1% of the outstanding securities of that issuer together own more than 5%
of such securities.

9. Purchase securities of other open-end investment companies.

10. Issue senior securities, bonds, or debentures.

11. Underwrite securities of other issuers, except the Fund may
acquire portfolio securities in circumstances where, if the securities are
later publicly offered or sold by the Fund, it might be deemed to be an
underwriter for purposes of the 1933 Act.
<PAGE>12
12. Borrow money except as a temporary measure for extraordinary or
emergency purposes. Its borrowings may not exceed 5 percent of the gross
assets of the Fund valued at the lesser of cost or market value, nor may it
pledge, mortgage, or hypothecate assets valued at market to an extent
greater than 10 percent of the gross assets valued at cost of the Fund.

13. Invest in the securities of any company if the purchase, at the
time thereof, would cause more than 5 percent of the value of the Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years of continuous operation.

14. Invest in companies to exercise control or management.

15. Buy any securities or other property on margin, except for
short-term credits necessary for clearing transactions and except that
margin payments and other deposits in connection with transactions in
options, futures, and forward contracts shall not be deemed to constitute
purchasing securities on margin.

16. Engage in short sales of securities except to the extent that it
owns other securities convertible into an equivalent amount of such
securities. These short sales may only be made to protect a profit in or to
attempt to minimize a loss with respect to convertible securities. In any
event no more than 10 percent of the Fund's net assets valued at market
may, at any time, be held as collateral for such sales.

17. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

Some of the practices described above prohibit particular practices.
Certain policies described in paragraphs 4, 5, 12, 13, and 16 permit
specified practices but limit the portion of the Fund's assets that may be
so invested. Except for the practices described in paragraph 5, the Fund
has no current intention of engaging in any of these permitted practices in
the foreseeable future.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION REGARDING CERTAIN INVESTMENTS BY THE FUND
- --------------------------------------------------------------------------------

Securities held by the Fund may include a variety of fixed income
debt securities, such as bonds, debentures, notes, equipment trust
certificates, short-term obligations (those having maturities of 12 months
or less), such as prime commercial paper and bankers' acceptances, domestic
certificates of deposit, obligations of or guaranteed by the U.S.
Government and its agencies or instrumentalities, Government National
Mortgage Association ("GNMA") mortgage-backed certificates and other
similar securities representing ownership in a pool of loans ("pass-through
securities"), and repurchase agreements with banks or securities dealers
relating to these securities. Portfolio securities may have variable or
"floating" interest rates. Information regarding certain of these
securities is included below. Investments may also be made in fixed income
preferred stocks. Debt securities and preferred stocks may be convertible
into, or exchangeable for, common stocks, and may have warrants attached.

Depending on prevailing market conditions, debt securities may be
purchased at a discount from face value, producing a yield of more than the
coupon rate, or at a premium over face value, producing a yield of less
than the coupon rate. In making investment decisions, the Fund's Adviser
will consider factors other than current yield, such as preservation of
capital, maturity, and yield to maturity. Common stocks acquired through
exercise of conversion rights or warrants or acceptance of exchange or
similar offers will not be retained in the portfolio. Orderly disposition
of these equity securities will be made consistent with management's
judgment as to the best obtainable price.

To achieve its investment objective, the Fund generally will invest
at least 80% of its total assets in high yielding fixed income securities
rated Ba or lower by Moody's or BB or lower by S&P. The
<PAGE>13
Fund may not invest in any fixed income securities rated below Caa by
Moody's or CCC by S&P, and no more than 10% of the Fund's total assets may
be invested in fixed income securities rated Caa or CCC. The Fund may also
invest in unrated fixed income securities when the Fund's Adviser believes
the security is of comparable quality to that of securities eligible for
purchase by the Fund. Securities rated Ba or less by Moody's or BB or less
by S&P, commonly referred to as "junk bonds," are considered noninvestment
grade securities, subject to a high degree of risk, and considered
speculative by the major credit rating agencies with respect to the
issuer's ability to meet principal and interest payments. The Fund is
designed for investors who are willing to assume substantial risks of
significant fluctuations in principal value in order to achieve a high
level of current income. The Fund should represent only a portion of a
balanced investment program. See the Prospectus under "Description of the
Fund -- Risk Considerations" for a description of the risks of investing in
lower-rated securities and under "Additional Information" for a description
of corporate bond ratings.

Additional information with respect to certain of the securities in
which the Fund may invest is set forth below.

Certificates of Deposit

Certificates of Deposit are receipts issued by a U.S. bank in
exchange for the deposit of funds. The U.S. bank agrees to pay the amount
deposited, plus interest, to the bearer of the receipt on the date
specified on the certificate. Because the certificate is negotiable, it can
be traded in the secondary market before maturity. Under current FDIC
regulations, $100,000 is the maximum insurance payable on Certificates of
Deposit issued to the Fund by any one bank. Therefore, Certificates of
Deposit purchased by the Fund may not be fully insured.

Bankers' Acceptances

Letters of Credit

Letters of Credit are issued by banks and authorize the beneficiary
to draw drafts upon such banks for acceptance and payment under specified
conditions.

Commercial Paper

Commercial paper is an unsecured short-term note of indebtedness
issued in bearer form by business or banking firms to finance their
short-term credit needs.

Securities Rating Agencies

Subsequent to its purchase by the Fund, an issue may cease to be
rated, or its rating may be reduced below the criteria set forth for the
Fund. Neither event would require the elimination of bonds from the Fund's
portfolio, but the Adviser will consider that event in its determination of
whether the Fund should continue to hold such security in its portfolio. To
the extent the ratings accorded by Standard & Poor's Corporation ("S&P") or
Moody's Investors Services, Inc. ("Moody's") for securities may change as a
result of changes in the rating systems, the Fund will attempt to use
comparison ratings as standards for its investments in municipal bonds in
accordance with the policies described herein.

Commercial Paper Ratings. A1 and Prime 1 are the highest commercial
paper ratings issued by S&P and Moody's, respectively.
<PAGE>14
Commercial paper rated A1 by S&P has the following characteristics:
(1) liquidity ratios are adequate to meet cash requirements; (2) long-term
senior debt is rated A or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically,
the issuer's industry is well established and the issuer has a strong
position within the industry; and (6) the reliability and quality of
management are unquestioned.

Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas;
(3) evaluation of the issuer's products in relation to competition and
customer acceptance; (4) liquidity; (5) amount and quality of long-term debt;
(6) trend of earnings over a period of 10 years; (7) financial strength of a
parent company and the relationships which exist with the issuer; and
(8) recognition by the management of obligations which may be present or may
rise as a result of public interest questions and preparation to meet such
obligations.

Bond Ratings. See the Prospectus under "Additional Information --
Bond Ratings" for a description of the ratings used by Moody's and S&P.

Government Securities

Government securities may be either direct obligations of the U.S.
Treasury or may be the obligations of an agency or instrumentality of the
United States.

Treasury Obligations. The U.S. Treasury issues a variety of
marketable securities that are direct obligations of the U.S. Government.
These securities fall into three categories - bills, notes, and bonds -
distinguished primarily by their maturity at time of issuance. Treasury
bills have maturities of one year or less at the time of issuance, while
Treasury notes currently have maturities of 1 to 10 years. Treasury bonds
can be issued with any maturity of more than 10 years.

Mortgage-Backed Certificates

GNMA Certificates ("Certificates") are mortgage-backed securities.
The Certificates evidence part ownership of a pool of mortgage loans. The
Certificates which the Fund may purchase are of the "modified pass-through"
type. "Modified pass-through" Certificates entitle the holder to receive
all interest and principal payments owed on the mortgage pool, net of fees
paid to the servicing agent and GNMA, regardless of whether or not the
mortgagor actually makes the payment.

The GNMA Guarantee. The National Housing Act authorizes GNMA to
guarantee the timely payment of principal of and interest on securities
backed by a group (or pool) of mortgages insured by FHA or FMHA, or
guaranteed by VA. The GNMA guarantee is backed by the full faith and credit
of the United States. GNMA is also empowered to borrow without limitation
from the U.S. Treasury to make any payments required under its guarantee.
<PAGE>15
Market for GNMA Certificates. Since the inception of the GNMA
Mortgage-Backed Securities program in 1970, the amount of GNMA Certificates
outstanding has grown rapidly. The size of the market and the active
participation in the secondary market by securities dealers and many types
of investors make the GNMA Certificates a highly liquid instrument. Prices
of GNMA Certificates are readily available from securities dealers and
depend on, among other things, the level of market rates, the Certificate's
coupon rate and the prepayment experience of the pool of mortgages backing
each Certificate.

Other Pass-Through Certificates. A Fund may invest in other
pass-through securities. These are mortgage-backed securities for which the
payments on the underlying mortgages are passed from the mortgage holder
through the servicing agent, net of fees paid to the servicing agent, to
the Fund. These securities may be "modified pass-through certificates"
(like GNMA certificates) whereby the Fund would receive interest and
principal payments regardless of whether the mortgagors make the payments,
or they may be "straight pass-through certificates" whereby the Fund would
receive principal and/or interest only to the extent actually collected by
the servicing agent. The servicing agent may be an instrumentality or
agency of the U.S. Government or may be an institution such as a bank or
savings and loan association. The underlying mortgages may be conventional
mortgages as well as mortgages guaranteed by federal agencies or
instrumentalities. Straight pass-through securities involve additional
risks because payments are not guaranteed. However, this risk may be
mitigated to the extent that the underlying mortgages are guaranteed by a
federal agency or instrumentality or by a private insurance company. The
Fund will limit its investments in other pass-through securities to those
issued by Federal National Mortgage Association; Federal Home Loan Mortgage
Corporation (Participation Certificates); and Resolution Funding Corp.
Participation Certificates.

Floating or Variable Rate Securities

Floating or variable rate securities have interest rates that
periodically change according to the rise and fall of a specified interest
rate index or a specific fixed-income security that is used as a benchmark.
The interest rate typically changes every six months, but for some
securities the rate may fluctuate weekly, monthly, or quarterly. The index
used is often the rate for 90 or 180-day Treasury Bills. Variable-rate and
floating-rate securities may have interest rate ceilings or caps that fix
the interest rate on such a security if, for example, a specified index
exceeds a predetermined interest rate. If an interest rate on a security
held by the Fund becomes fixed as a result of a ceiling or cap provision,
the interest income received by the Fund will be limited by the rate of the
ceiling or cap. In addition, the principal values of these types of
securities will be adversely affected if market interest rates continue to
exceed the ceiling or cap rate.

Collateralized Mortgage Obligations ("CMOs")

CMOs are obligations fully collateralized by a portfolio of
mortgages or mortgage-related securities. Payments of principal and
interest on the mortgages are passed through to the holders of the CMOs on
the same schedule as they are received, although certain classes of CMOs
have priority over others with respect to the receipt of prepayments on the
mortgages. Therefore, depending on the type of CMOs in which the Fund
invests, the investment may be subject to a greater or lesser risk of
prepayment than other types of mortgage-related securities. CMOs may also
be less marketable than other securities. The Fund will invest only in
those CMO's whose characteristics and terms are consistent with the average
maturity and market risk profile of the other securities held by the Fund.

Loan Transactions

Loan transactions involve the lending of securities to a
broker-dealer or institutional investor for its use in connection with
short sales, arbitrage, or other securities transactions. Loans of
portfolio securities of the Fund will be made (if at all) in strictest
conformity with applicable federal and state rules and regulations. The
purpose of a qualified loan transaction is to afford the Fund the
opportunity to continue to earn income on the securities loaned and at the
same time to earn income on the collateral held by it.
<PAGE>16
Management of the Fund understands that it is the view of the Staff
of the SEC that the Fund is permitted to engage in loan transactions only
if the following conditions are met: (1) the Fund must receive at least 100
percent collateral in the form of cash, cash equivalents, e.g., U.S.
Treasury bills or notes, or an irrevocable letter of credit; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the level of
the collateral; (3) the Fund must be able to terminate the loan, after
notice, at any time; (4) the Fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and
any increase in market value; (5) the Fund may pay only reasonable
custodian fees in connection with the loan; (6) voting rights on the
securities loaned may pass to the borrower; however, if a material event
affecting the investment occurs, the Trustees must be able to terminate the
loan and vote proxies or enter into an alternative arrangement with the
borrower to enable the Trustees to vote proxies. Excluding items (1) and
(2), these practices may be amended from time to time as regulatory
provisions permit.

While there may be delays in recovery of loaned securities or even a
loss of rights in collateral supplied if the borrower fails financially,
loans will be made only to firms deemed by a Fund's management to be of
good standing and will not be made unless, in the judgment of the Fund's
management, the consideration to be earned from such loans would justify
the risk. Such loan transactions are referred to in this section as
"qualified loan transactions."

Options and Financial Futures Transactions

The Fund may invest up to 5 percent of its net assets in premiums on
put and call exchange-traded options. A call option gives the holder
(buyer) the right to purchase a security at a specified price (the exercise
price) at any time until a certain date (the expiration date). A put option
gives the buyer the right to sell a security at the exercise price at any
time until the expiration date. The Fund may also purchase options on
securities indices. Options on securities indices are similar to options on
a security except that, rather than the right to take or make delivery of a
security at a specified price, an option on a securities index gives the
holder the right to receive, on exercise of the option, an amount of cash
if the closing level of the securities index on which the option is based
is greater than, in the case of a call, or less than, in the case of a put,
the exercise price of the option. The Fund may enter into closing
transactions, exercise its options, or permit the options to expire. The
Fund may only write call options that are covered. A call option is covered
if written on a security the Fund owns. The Fund may write such options on
up to 25 percent of its net assets.

The Fund will not engage in transactions in index options, financial
futures contracts, or related options for speculation, but only as an
attempt to hedge against market conditions affecting the values of
securities that the Fund owns or intends to purchase. When the Fund
purchases a put on a stock index or on a stock index future not held by the
Fund, the put protects the Fund against a decline in the value of all
securities held by it to the extent that the stock index moves in a similar
pattern to the prices of the securities held. The correlation, however,
between indices and price movements of the securities in which the Fund
will generally invest may be imperfect. The Fund expects, nonetheless, that
the use of put options that relate to such indices will, in certain
circumstances, protect against declines in values of specific portfolio
securities or the Fund's portfolio generally. Although the purchase of a
put option may partially protect the Fund from a decline in the value of a
particular security or its portfolio
<PAGE>17
generally, the cost of a put will reduce the potential return on the
security or the portfolio if either increases in value.

Upon entering into a futures contract, the Fund will be required to
deposit with its custodian in a segregated account cash or certain U.S.
government securities in an amount known as the "initial margin." This
amount, which is subject to change, is in the nature of a performance bond
or a good faith deposit on the contract and would be returned to the Fund
upon termination of the futures contract, assuming all contractual
obligations have been satisfied.

The principal risks of options and futures transactions are:
(a) possible imperfect correlation between movements in the prices of
options, currencies, or futures contracts and movements in the prices of
the securities or currencies hedged or used for cover; (b) lack of assurance
that a liquid secondary market will exist for any particular options or
futures contract when needed; (c) the need for additional skills and
techniques beyond those required for normal portfolio management;
(d) losses on futures contracts resulting from market movements not
anticipated by the investment adviser; and (e) possible need to defer
closing out certain options or futures contracts to continue to qualify
for beneficial tax treatment afforded "regulated investment companies"
under the Code.
<PAGE>18
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
- --------------------------------------------------------------------------------

With the steady decline in interest rates since the beginning of the
year, the overall performance of fixed income funds, including the High Yield
Fund, has improved significantly compared to 1994 returns. In its first full
year of operations, the Fund posted a total return of 16.49% for the 12
months ended October 31, 1995. This compares to average annual total returns
of 13.20% for the Lipper High Current Yield Fund Index and 16.17% for the
Lehman Government/Corporate Bond Index for the same period.

The market conditions for noninvestment grade bonds ("junk bonds" or
"high yield bonds") during 1995 were generally favorable. A growing economy,
rising stock market, low inflation, and significant cash flows into bond
mutual funds all helped to contribute to positive returns by fixed income
securities. While spreads continued to widen between the yields of Treasury
securities and high yield bonds, as a result of both a rally in the long-term
bond market and a rise in the default rates of high yield bonds, the yield
advantage of high yield bonds more than offset the negative impact of
widening yield spreads.

The High Yield Fund continues to emphasize bonds with ratings in the
upper two noninvestment grade categories (BB or B), which helped contribute
to the Fund's strong relative performance. In addition, performance
benefited from superior credit analysis and security selection, with the vast
majority of rating changes during the year for the Fund's securities
representing upgrades. This compares favorably to the rating changes by
Moody's Investors Services, Inc. and Standard & Poor's Corporation, where
approximately one-half of the changes in the high yield bond market were
downgrades. Regarding average maturity, with a current duration of 4.5
years, we expect the Fund to continue to maintain its intermediate average
maturity.

As of November 30, the Fund's top five industry sectors were media,
energy, manufacturing, healthcare, and hotel/gaming. At that date, the top
ten issuers of securities held by the Fund were:

Safeway (3.1%)
American Standard (2.9%)
Jones Intercable (2.8%)
Station Casino (2.8%)
WestPoint Stevens (2.7%)
Gulf Canada Resources (2.6%)
United Int'l Holdings (2.5%)
AK Steel (2.5%)
Genesis Health (2.4%)
<PAGE>19
Looking ahead, we are optimistic that steady growth in the economy,
together with low inflation, should continue to provide a favorable
environment for high yield securities. The High Yield Fund's long-term
objective remains unchanged; to provide a high rate of return from a
well-diversified portfolio of high yield bonds that represent the upper tier
of the noninvestment grade issues. For these reasons, we believe the Fund
provides an attractive source of diversification for many of our fixed income
clients.

Thank you for your continued support and confidence.

The Columbia Investment Team

November 30, 1995

[Graphic line chart depicting the dollar amounts ($9,750-$12,000) of CMC
High Yield, Lehman Gov't/Corp Bond and Lipper Current High Yield from
7/6/94 to 10/31/95:

1 Year Since Inception*
------ ---------------
CMC High Yield 16.49% 13.50%
Lehman Gov't/Corp Bond 16.17% 12.18%
Lipper Current High Yield 13.20% 9.72%

* Inception of operations of the Fund was July 6, 1994. The table
above shows total return performance information for the periods
ended October 31, 1995. Performance information on the Lipper
High Yield Bond Index is based on the periods beginning June 30,
1994. Past performance is not indicative of future performance.
The Lehman Government/Corporate Bond Index is an unmanaged bond
index. The Lipper High Current Yield Fund Index is a composite
of the 30 largest high yield bond funds monitored by Lipper
Analytical Services, Inc.]

<PAGE>20
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
October 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value(1)
-------------- --------------
<S> <C> <C>
CORPORATE BONDS (96.9%)

Basic Industry
Chemicals (3.1%)
Freeport-McMoran Resource Partners L.P.
Senior Subordinated Notes
8.750% 02/15/2004................................ $ 700,000 $ 703,500
IMC Global, Inc. Series B
Senior Note
10.125% 06/15/2001................................ 550,000 588,500
------------
1,292,000
------------
Forest Products (5.8%)
Domtar, Inc.
Senior Notes
12.000% 04/15/2001............................... 750,000 870,937
Riverwood International Corp.
Senior Notes
10.750% 06/15/2000.............................. 750,000 793,125
Stone Container Corp.
First Mortgage Note
10.750% 10/01/2002.............................. 750,000 783,750
------------
2,447,812
------------
Metals/Mining (8.5%)
AK Steel Corp.
Senior Note
10.750% 04/01/2004.............................. 1,000,000 1,090,000
Armco, Inc.
Senior Notes
9.375% 11/01/2000.............................. 600,000 591,000
Inland Steel Industries, Inc.
Notes
12.750% 12/15/2002.............................. 750,000 836,250
Magma Copper Co.
Senior Subordinated Notes
8.700% 05/15/2005.............................. 750,000 748,125
Santa Fe Pacific Gold Corp.
Debentures
8.375% 07/01/2005.............................. 300,000 301,221
------------
3,566,596
------------
</TABLE>
<PAGE>21
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value(1)
-------------- --------------
<S> <C> <C>
CORPORATE BONDS (Continued)

Consumer Related
Hotel/Gaming (11.4%)
GNS Finance Corp.
Senior Subordinated Notes
9.250% 03/15/2003............................... $ 725,000 $ 777,563
HMH Properties, Inc. (144A)
Senior Secured Note
9.500% 05/15/2005............................... 1,000,000 1,005,000
Harrahs Operating, Inc.
Senior Subordinated Notes
10.875% 04/15/2002............................... 800,000 874,000
Host Marriott Travel Plazas, Inc. (144A)
Senior Secured Notes
9.500% 05/15/2005............................... 300,000 294,000
La Quinta Inns, Inc.
Senior Subordinated Notes
9.250% 05/15/2003............................... 650,000 682,500
Station Casinos, Inc.
Senior Subordinated Notes
9.625% 06/01/2003............................... 1,250,000 1,193,750
-------------
4,826,813
-------------
Healthcare (8.3%)
Abbey Healthcare Group, Inc.
Senior Subordinated Notes
9.500% 11/01/2002.............................. 1,000,000 1,042,500
Community Health Systems, Inc.
Senior Subordinated Debenture
10.250% 11/30/2003.............................. 850,000 913,750
HEALTHSOUTH Rehabilitation Corp.
Senior Subordinated Notes
9.500% 04/01/2001.............................. 700,000 742,000
Tenet Healthcare Corp.
Senior Note
9.625% 09/01/2002.............................. 750,000 806,250
-------------
3,504,500
-------------
Other (7.1%)
Royal Caribbean Cruises Ltd.
Senior Subordinated Notes
11.375% 05/15/2002.............................. 775,000 844,750
Rykoff Sexton, Inc.
Senior Subordinated Notes
8.875% 11/01/2003.............................. 1,000,000 1,000,000
</TABLE>
<PAGE>22
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value(1)
-------------- -------------
<S> <C> <C>
CORPORATE BONDS (Continued)

Consumer Related (Continued)
Other (Continued)
Westpoint Stevens, Inc.
Senior Note
8.750% 12/15/2001.............................. $ 650,000 $ 656,500
Westpoint Stevens, Inc.
Senior Subordinated Debenture
9.375% 12/15/2005.............................. 500,000 500,000
-------------
3,001,250
-------------
Energy (13.2%)
Global Marine, Inc.
Notes
12.750% 12/15/1999.............................. 715,000 790,075
Gulf Canada Resources Ltd.
Subordinated Debentures
9.625% 07/01/2005.............................. 1,100,000 1,124,750
Louis Dreyfus Natural Gas Corp.
Senior Subordinated Notes
9.250% 06/15/2004.............................. 750,000 790,770
Maxus Energy Corp.
Notes
9.875% 10/15/2002.............................. 750,000 738,750
Noble Drilling Corp.
Senior Notes
9.250% 10/01/2003.............................. 785,000 812,475
Santa Fe Energy Resource, Inc.
Senior Subordinated Debentures
11.000% 05/15/2004.............................. 750,000 817,500
Seagull Energy Corp.
Senior Subordinated Notes
8.625% 08/01/2005.............................. 500,000 470,000
-------------
5,544,320
-------------
Housing Related (2.2%)
USG Corp.
Senior Note
8.500% 08/01/2005.............................. 900,000 931,500
------------

Manufacturing (13.1%)
American Standard, Inc.
Senior Subordinated Discount Debenture
Step-Up Coupon
0.000% to 06/01/1998, then 10.500% to 06/01/2005.. 1,500,000 1,256,250
</TABLE>
<PAGE>23
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value(1)
-------------- -------------
<S> <C> <C>
CORPORATE BONDS (Continued)

Manufacturing (Continued)
Coltec Industries, Inc.
Senior Notes
9.750% 04/01/2000.............................. $ 700,000 $ 714,000
Easco Corp. Series B
Senior Notes
10.000% 03/15/2001.............................. 950,000 950,000
Exide Corp.
Senior Notes
10.000% 04/15/2005.............................. 400,000 430,000
Hayes Wheels International, Inc.
Notes
9.250% 11/15/2002.............................. 300,000 324,000
Mark IV Industries, Inc.
Subordinated Notes
8.750% 04/01/2003.............................. 250,000 258,750
Rohr, Inc.
Senior Note
11.625% 05/15/2003.............................. 600,000 643,500
SPX Corp.
Senior Subordinated Notes
11.750% 06/01/2002.............................. 650,000 692,250
Wolverine Tube, Inc.
Senior Subordinated Notes
10.125% 09/01/2002.............................. 250,000 262,500
------------
5,531,250
------------
Media (12.2%)
Continental Cablevision, Inc.
Debentures
9.000% 09/01/2008.............................. 1,000,000 1,035,000
Jones Intercable, Inc.
Senior Notes
9.625% 03/15/2002.............................. 1,150,000 1,210,375
Rogers Cantel Mobile, Inc.
Notes
10.750% 11/01/2001.............................. 650,000 679,250
Rogers Communications, Inc.
Debenture
10.875% 04/15/2004.............................. 350,000 364,000
United International Holdings, Inc.
Senior Note with Warrants
0.000% 11/15/1999.............................. 1,850,000 1,110,000
</TABLE>
<PAGE>24
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value(1)
-------------- -------------
<S> <C> <C>
CORPORATE BONDS (Continued)

Media (Continued)
Viacom, Inc.
Subordinated Debenture
8.000% 07/07/2006.............................. $ 750,000 $ 742,500
------------
5,141,125
------------
Retail
Supermarkets (3.8%)
Safeway, Inc.
Debenture
10.000% 12/01/2001.............................. 1,200,000 1,338,000
Stop & Shop Cos., Inc.
Senior Subordinated Notes
9.750% 02/01/2002.............................. 250,000 273,750
------------
1,611,750
------------
Other (2.7%)
Ethan Allen, Inc.
Senior Notes
8.750% 03/15/2001.............................. 800,000 816,000
Federated Department Stores, Inc.
Senior Notes
10.000% 02/15/2001.............................. 300,000 321,000
------------
1,137,000
------------
Transportation
Other (2.0%)
Southern Pacific Rail Corp.
Senior Notes
9.375% 08/15/2005.............................. 800,000 856,000
------------
Utility (3.5%)
California Energy, Inc.
Senior Secured Note
9.875% 06/30/2003.............................. 750,000 772,500
Long Island Lighting Co.
Debenture
7.500% 03/01/2007.............................. 750,000 717,255
------------
1,489,755
------------
Total Corporate Bonds
(Cost $39,473,301).................................. 40,881,671
------------
</TABLE>
<PAGE>25
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value(1)
-------------- -------------
<S> <C> <C>
REPURCHASE AGREEMENT (0.8%)
Goldman Sachs Corp.
5.860% dated 10/31/1995,
due 11/01/1995 in the
amount of $344,353
Collateralized by U.S. Treasury Bonds
10.625% to 12.000%
due 06/15/2013 to 06/15/2015,
U. S. Treasury Note
6.500% due 11/15/2000,
U. S. Treasury Strip
due 06/15/1998
(Cost $344,298)...................................... $ 344,298 $ 344,298
-------------
Total Investments (97.7%)
(Cost $39,817,599)................................... 41,225,969

Receivables less liabilities (2.3%)..................... 965,544
-------------
Net Assets (100.0%)..................................... $ 42,191,513
=============
<FN>
(1) See Note 1 of Notes to Financial Statements.

The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>26
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
October 31, 1995

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at identified cost ....................... $ 39,473,301
- -------------------------------------------------------- -----------------

Investments at value (Notes 1 and 2).................. $ 40,881,671
Temporary cash investment, at cost (Note 1)............ 344,298
Receivable for:
Interest............................................ 1,037,948
Expense reimbursement from investment
advisor (Note 4).................................. 17,511
-----------------
Total assets......................................... 42,281,428
-----------------

LIABILITIES:
Payable for:
Dividends and distributions......................... 49,493
Investment management fee (Note 4).................. 14,204
Accrued expenses ................................... 26,218
-----------------
Total liabilities.................................... 89,915
-----------------

Net assets applicable to outstanding shares........... $ 42,191,513
=================

Net assets consist of:
Unrealized appreciation on investments.............. $ 1,408,370
Undistributed net realized loss
from investments.................................. (7,467)
Capital paid in (Note 3)............................ 40,790,610
-----------------
$ 42,191,513
=================

Shares of capital stock outstanding (Note 3)............ 1,164,269
=================

Net asset value, offering and
redemption price per share (1)....................... $ 36.24
=================
<FN>
(1) The net asset value per share is computed by dividing net assets applicable
to outstanding shares by shares of capital stock outstanding.

The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>27
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
Fiscal Year Ended October 31, 1995
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Income:
Interest.................................... $ 2,613,710
-------------
Total income............................. 2,613,710
-------------
Expenses:
Investment management fees (Note 4)...... 106,597
Shareholder servicing costs (Note 4)..... 18,000
Reports to Shareholders.................. 65
Financial information and subscriptions.. 3,211
Custodian fees........................... 896
Bank transaction and checking fees....... 2,482
Registration fees........................ 8,839
Legal, insurance and auditing fees....... 19,698
Other (Note 4)........................... 368
-------------
160,156
Expenses reimbursed by investment
advisor (Note 4)....................... (17,511)
-------------
Total expenses...................... 142,645
-------------
Net investment income (Note 1).............. 2,471,065
-------------

Realized gain and unrealized appreciation on investments:
Net realized gain from investment
transactions (Note 2)..................... 402,706

Net unrealized appreciation of investments
during the period (Note 1)................. 1,507,468
-------------
Net gain on investments (Note 1)............. 1,910,174
-------------
Net increase in net assets resulting
from operations............................ $ 4,381,239
=============
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>28
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year
Ended Ended
October 31, 1995 October 31, 1994(1)
------------------- -----------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income ................................ $ 2,471,065 $ 190,326
Net realized gain (loss) from
investment transactions (Note 2).................... 402,706 (9,124)
Change in net unrealized appreciation (depreciation)
on investments...................................... 1,507,468 (99,098)
-------------- --------------

Net increase in net assets resulting from operations.. 4,381,239 82,104

Distributions to shareholders:
From net investment income............................ (2,471,065) (190,326)
From net realized gain from investments............... (401,049)
Capital share transactions, net (Note 3)................. 31,080,871 9,709,739
------------- -------------

Net increase in net assets............................... 32,589,996 9,601,517

NET ASSETS:
Beginning of period...................................... 9,601,517 0
------------- -------------

End of period ........................................... $ 42,191,513 $ 9,601,517
============= =============
<FN>
(1) From inception of operations on July 6, 1994.

The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>29
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1. Significant accounting policies:

CMC High Yield Fund (the Fund) is a portfolio of CMC Fund Trust (the
Trust), an open-end diversified investment company registered under the
Investment Company Act of 1940, as amended. The Trust has established two
other portfolios, CMC Small Cap Fund and CMC International Stock Fund. Each
portfolio issues a separate series of the Trust's shares and maintains a
separate investment portfolio. The policies described below are
consistently followed by the Fund for the preparation of its financial
statements in conformity with generally accepted accounting principles.

Investment valuation - The Fund's investments are carried at values
deemed best to reflect their fair values as determined in good faith by or
under the supervision of the Trustees. These values are based on market
value as quoted by dealers who are market makers in these securities or by
an independent pricing service unless unusual circumstances indicate that
another method of determining fair value should be considered. Market
values are based on the average of bid and ask prices, or by reference to
other securities with comparable ratings, interest rates and maturities.
Temporary investments in short-term securities, principally repurchase
agreements, are valued at cost, which approximates market.

Shareholder distributions - The Fund distributes net investment income
monthly and any net realized gains from investment transactions annually.
Distributions to shareholders are recorded on the record date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
net operating losses and deferral of losses from wash sales.

Federal income taxes - The Fund has made no provisions for federal
income taxes on net investment income or net realized gains from sales of
securities, since it is the intention of the Fund to comply with the
provisions of the Internal Revenue Code available to certain regulated
investment companies, and to make distributions of income and security
profits sufficient to relieve it from substantially all federal income taxes.

Other - Investment transactions are accounted for on the date the
investments are purchased or sold. The cost of investments sold is
determined by the use of the specific identification method for both
financial reporting and income tax purposes. Interest income is recorded on
the accrual basis. Realized gains and losses from investment transactions
and unrealized appreciation or depreciation of investments are reported on
the basis of identified costs. The Fund, through its custodian, receives
delivery of underlying securities collateralizing repurchase agreements
(included in temporary cash investments). Market values of these securities
are required to be at least 100% of the cost of the repurchase agreement.
The Fund's investment advisor determines that the value of the underlying
securities is at all times at least equal to the resale price. In the event
of default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral may be subject to legal proceedings.
The Fund invests in lower rated debt securities, which may be more
susceptible to adverse economic conditions than other investment grade
holdings. These securities are often subordinated to the prior claims of
other senior lenders, and uncertainties exist as to an issuer's ability to
meet principal and interest payments. At October 31, 1995, 100% of the
Fund's portfolio was invested in securities rated Ba (59%) or B (41%) by
Moody's Investor Services, Inc.
<PAGE>30
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------

2. Investment transactions:

Aggregate purchases, sales and maturities, net realized gain and unrealized
appreciation of securities, excluding temporary cash investments, as of and
for the fiscal year ended October 31, 1995 were as follows:

<TABLE>
<CAPTION>
<S> <C>
Purchases:
Investment securities other
than U.S. Government obligations........................... $ 40,995,440
==============

Sales and Maturities:
Investment securities other
than U.S. Government obligations........................... $ 11,521,356
==============

Net Realized Gain:
Investment securities other
than U.S. Government obligations........................... $ 402,706
==============

Unrealized Appreciation (Depreciation) as of October 31, 1995:
Appreciation................................................. $ 1,424,870
Depreciation................................................. (16,500)
--------------

Net unrealized appreciation................................ $ 1,408,370
==============

For federal income tax purposes, the cost of
investments owned at October 31, 1995.......................... $ 39,473,301
==============
</TABLE>

3. Capital Stock:
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year
Ended Ended
October 31, 1995 October 31, 1994(1)
----------------- ------------------
<S> <C> <C>
Shares:
Shares sold............................................ 1,184,564 274,764
Shares issued for reinvestment of dividends............ 73,708 4,299
------------- -----------
1,258,272 279,063
Less shares redeemed................................... (372,501) (565)
------------- -----------
Net increase in shares................................. 885,771 278,498
============= ===========

Amounts:
Sales.................................................. $ 41,440,000 $ 9,580,377
Reinvestment of dividends.............................. 2,630,871 149,023
------------- -----------
44,070,871 9,729,400
Less redemptions....................................... (12,990,000) (19,661)
------------- -----------

Net increase........................................... $ 31,080,871 $ 9,709,739
============= ===========

Capital stock authorized (shares) 100,000,000
<FN>
(1) From inception of operations on July 6, 1994.
</TABLE>
<PAGE>31
- --------------------------------------------------------------------------------
CMC HIGH YIELD FUND
A Portfolio of CMC Fund Trust
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------

4. Transactions with affiliates and related parties:

Investment management fees incurred......................... $106,597

Investment management fee
computation basis (percentage of daily net assets
per annum)................................................ .40 of 1%

Transfer agent fee (included in shareholder
servicing costs).......................................... $18,000

Fees earned by trustees not affiliated with the Fund's
investment advisor or transfer agent (included
in other expenses)........................................ $368

The investment advisor of the Fund is Columbia Management Co. The advisor,
at its discretion, reimbursed certain operating expenses for the Fund in the
amount of $17,511.

The transfer agent for the Fund is Columbia Trust Company, a subsidiary of
Columbia Funds Management Company. The transfer agent is compensated based
on a per account fee or a minimum of $1,500 per month.

The contracts for investment advisory and transfer agent services must be
renewed annually by a majority vote of the Fund's shareholders or by the
Trustees of CMC Fund Trust.

Certain officers and trustees of CMC Fund Trust are also officers and
directors of Columbia Management Co., Columbia Trust Company and Columbia
Funds Management Company. They did not receive any direct payments from
the Fund.
<PAGE>32
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------

To the Shareholders and Trustees of CMC Fund Trust:

We have audited the accompanying statement of assets and liabilities
of CMC High Yield Fund, a portfolio of CMC Fund Trust, including the
schedule of investments, as of October 31, 1995, and the related statement
of operations for the year then ended, the statements of changes in net
assets for the period from inception, July 6, 1994 to October 31, 1994 and
for the year ended October 31, 1995 and the financial highlights for the
periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1995, by correspondence
with the custodian, and confirmation by correspondence with brokers as to
securities purchased but not received at that date or other auditing
procedures where confirmations from brokers were not received. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

We have also audited the financial statements of the CMC Small Cap
Fund and the CMC International Stock Fund, portfolios of the Trust, as of
and for the year ended October 31, 1995, and we have issued an unqualified
opinion thereon. The Annual Report containing our report on the financial
statements of the CMC Small Cap Fund and the CMC International Stock Fund
is available from the Trust.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of CMC High Yield Fund, a portfolio of CMC Fund Trust, as of
October 31, 1995, the results of its operations for the year then ended,
the changes in its net assets for the period from inception, July 6, 1994
to October 31, 1994 and for the year ended October 31, 1995, and the
financial highlights for the periods indicated therein, in conformity with
generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Portland, Oregon
December 1, 1995
<PAGE>C-1
CMC FUND TRUST

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits
---------------------------------

(a) Index to Financial Statements.

CMC Small Cap Fund -- Included in the Statement of
Additional Information
CMC International Stock Fund -- Included in the Statement
of Additional Information
CMC High Yield Fund -- Included in the Statement of
Additional Information

(b) Exhibits:

(1A) Restated Declaration of Trust. Incorporated by
reference to Exhibit 1A of the Registration Statement.

(1B) Amendment to Restated Declaration of Trust.
Incorporated by reference to Exhibit 1B of the
Registration Statement.

(2) Bylaws. Incorporated by reference to Exhibit 2 of the
Registration Statement.

(4A) Specimen Stock Certificate for CMC Small Cap Fund.
Incorporated by reference to Exhibit 4A of the
Registration Statement.

(4B) Specimen Stock Certificate for CMC International Stock
Fund. Incorporated by reference to Exhibit 4B of the
Registration Statement.

(4C) Specimen Stock Certificate for CMC High Yield Fund.
Incorporated by reference to Exhibit 4C of the
Registration Statement.

(5A) Investment Advisory Contract for CMC Small Cap Fund.
Incorporated by reference to Exhibit 5 of the
Registration Statement.

(5B) Investment Advisory Contract for CMC International
Stock Fund. Incorporated by reference to Exhibit 5B of
the Registration Statement.

(5C) Investment Advisory Contract for CMC High Yield Fund.
Incorporated by reference to Exhibit 5C of the
Registration Statement.

(8A) Custodian Contract between United States National Bank
of Oregon and CMC Fund Trust. Incorporated by
reference to Exhibit 8A of the Registration Statement.

(8B) Custodian Contract between CMC Fund Trust and Morgan
Stanley Trust Company. Incorporated by reference to
Exhibit 8B of the Registration Statement.

(9A) Transfer Agent Agreement for CMC Small Cap Fund.
Incorporated by reference to Exhibit 9 of the
Registration Statement.

(9B) Transfer Agent Agreement for CMC International Stock
Fund. Incorporated by reference to Exhibit 9B of the
Registration Statement.

(9C) Transfer Agent Agreement for CMC High Yield Fund.
Incorporated by reference to Exhibit 9C of the
Registration Statement.

(11) Consent of Independent Accountants relating to
financial statements of CMC Small Cap Fund, CMC
International Stock Fund, and CMC High Yield Fund.
<PAGE>C-2

(12) See paragraph (a) of this Item 24.

(17) All Powers of Attorney for each of the Trustees
have been previously filed and are incorporated herein
by reference to Exhibit 17 of the Registration
Statement.

(27A) Financial Data Schedule for CMC Small Cap Fund.

(27B) Financial Data Schedule for CMC International Stock
Fund.

(27C) Financial Data Schedule for CMC High Yield Fund.

Item 25. Persons Controlled by or Under Common Control with
Registrant
--------------------------------------------------

The Registrant has an investment advisory contract with Columbia
Management Co., an Oregon corporation (the "Adviser"). Columbia Daily
Income Company, Columbia Growth Fund, Inc., Columbia Special Fund, Inc.,
Columbia Fixed Income Securities Fund, Inc., Columbia Municipal Bond Fund,
Inc., Columbia Real Estate Equity Fund, Inc., Columbia U.S. Government
Securities Fund, Inc., Columbia Balanced Fund, Inc., Columbia Common Stock
Fund, Inc., Columbia International Stock Fund, Inc., and Columbia High
Yield Fund, Inc., each an Oregon corporation, have investment advisory
contracts with Columbia Funds Management Company, an Oregon corporation
("CFMC"). J. Jerry Inskeep, Jr. and James F. Rippey, Trustees and officers
of the Registrant, own 21.1% and 27.3%, respectively, of the voting
securities of CFMC; 32.3% each of the voting securities of Columbia
Financial Center Incorporated, an Oregon corporation; 41.1% each of the
voting securities of the Adviser; and 3.5% and .9%, respectively, of the
voting securities of Columbia Trust Company. CFMC owns 79% of the voting
securities of Columbia Trust Company. See "Management" in the Statement of
Additional Information.

Item 26. Number of Holders of Securities
-------------------------------

CMC Small Cap Fund -- At November 30, 1995, all outstanding shares of
CMC Small Cap Fund were held by 69 shareholders.

CMC International Stock Fund -- At November 30, 1995, all outstanding
shares of CMC International Stock Fund were held by 20 shareholders.

CMC High Yield Fund -- At November 30, 1995, all outstanding shares of
CMC High Yield Fund were held by 20 shareholders.

Item 27. Indemnification
---------------

Under the Declaration of Trust and Bylaws of the Registrant, any
trustee or officer of the Registrant may be indemnified by the Registrant
against all expenses incurred by the trustee or officer in connection with
any claim, action, suit or proceeding, civil or criminal, by reason of his
or her being a trustee or officer of the Registrant, to the fullest extent
not prohibited by law and the Investment Company Act of 1940 (the "1940
Act") and related regulations and interpretations of the Securities and
Exchange Commission ("SEC").

Insofar as reimbursement or indemnification for expenses incurred by a
director or officer in legal proceedings arising under the Securities Act
of 1933 (the "1933 Act") may be permitted by the above provisions or
otherwise, the Registrant has been advised that in the opinion of the SEC
such reimbursement or indemnification is against public policy as expressed
in the Act and therefore unenforceable. In the event that any claim for
indemnification under the above provisions is asserted by an officer or
trustee in connection with the securities being registered, the Registrant,
unless in the opinion of its counsel the matter has already been settled by
controlling precedent, will (except insofar as such claim seeks
reimbursement of expenses paid or incurred by an officer or trustee in the
successful defense of any such action, suit or proceeding or claim, issue,
or matter therein) submit to a court of appropriate jurisdiction the
question whether indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of
such issue.

The Registrant's trustees and officers are named insureds under an
insurance policy issued by ICI Mutual Insurance Company.

<PAGE>C-3
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------

Information regarding the businesses of Columbia Management Co. and
its officers and directors is set forth under "Management of the Fund" in
the Prospectus and under "Management" and "Investment Advisory and Other
Fees Paid to Affiliates" in the Statement of Additional Information and is
incorporated herein by reference. Columbia Trust Company also acts as
trustee and/or agent for the investment of the assets of pension and profit
sharing plans in pooled accounts.

Item 29. Principal Underwriters
----------------------

Not applicable.

Item 30. Location of Accounts and Records
--------------------------------

The records required to be maintained under Section 31(a) of the 1940
Act and Rules 31a-1 to 31a-3 thereunder are maintained by CMC Fund Trust,
Columbia Management Co., and Columbia Trust Company at 1300 SW Sixth
Avenue, Portland, Oregon 97201. Records relating to the Registrant's
portfolio securities are also maintained by United States National Bank of
Oregon, 321 SW Sixth Avenue, Portland, Oregon 97208 and Morgan Stanley
Trust Company, One Evertrust Plaza, Jersey City, New Jersey 07302.

Item 31. Management Services
-------------------

Not applicable.

Item 32. Undertakings
------------

(a) The Registrant hereby undertakes to promptly call a meeting of the
shareholders of the Registrant for the purpose of voting in the removal of
any trustee of the Registrant when requested in writing by shareholders of
at least 10 percent of the outstanding shares of the Registrant. The
Registrant undertakes to assist its shareholders in communicating with
other shareholders of the Registrant to the extent required by Section 16
of the 1940 Act or any regulations promulgated thereunder.

(b) The Registrant hereby undertakes, upon request and without charge,
to furnish a copy of the Registrant's annual report to shareholders to each
person to whom a prospectus is delivered.
<PAGE>C-4
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Portland and State of Oregon on
the 15th day of December, 1995.

CMC FUND TRUST

By: GEORGE L. HANSETH
-------------------------------------
George L. Hanseth
Vice President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the 15th day of December,
1995 by the following persons in the capacities indicated.

(i) Principal executive officer:

* JAMES F. RIPPEY President and Trustee
-----------------------------
James F. Rippey

(ii) Principal accounting and
financial officer:

GEORGE L. HANSETH Vice President
----------------------------- and Trustee
George L. Hanseth

(iii) Trustees:

* J. JERRY INSKEEP, JR. Chairman and
----------------------------- and Trustee
J. Jerry Inskeep, Jr.

* RICHARD L. WOOLWORTH Trustee
-----------------------------
Richard L. Woolworth

* JOHN A. KEMP Trustee
-----------------------------
John A. Kemp

* ALEXANDER S. MACMILLAN Trustee
-----------------------------
Alexander S. Macmillan

* PETER C. OLSON Trustee
-----------------------------
Peter C. Olson

* PETER T. SHAND Trustee
-----------------------------
Peter T. Shand

*By: GEORGE L. HANSETH
-----------------------------
George L. Hanseth
Attorney-In-Fact
<PAGE>C-6
CMC FUND TRUST

EXHIBIT INDEX
Sequential
Exhibit Description Page No.
- ------- ----------- -----------

(1A) Restated Declaration of Trust. Incorporated by
reference to Exhibit 1A of the Registration Statement.

(1B) Amendment to the Restated Declaration of Trust.
Incorporated by reference to Exhibit 1B of the
Registration Statement.

(2) Bylaws. Incorporated by reference to Exhibit 2 of
the Registration Statement

(4A) Specimen Stock Certificate for CMC Small Cap
Fund. Incorporated by reference to Exhibit 4A of
the Registration Statement.

(4B) Specimen Stock Certificate for CMC International
Stock Fund. Incorporated by reference to Exhibit 4B
of the Registration Statement.

(4C) Specimen Stock Certificate for CMC High Yield
Fund. Incorporated by reference to Exhibit 4C of
the Registration Statement.

(5A) Investment Advisory Contract for CMC Small Cap
Fund. Incorporated by reference to Exhibit 5 of
the Registration Statement.

(5B) Investment Advisory Contract for CMC International
Stock Fund. Incorporated by reference to Exhibit 5B
of the Registration Statement.

(5C) Investment Advisory Contract for CMC High Yield
Fund. Incorporated by reference to Exhibit 5C of
the Registration Statement.

(8A) Custodian Contract between United States National
Bank of Oregon and CMC Fund Trust. Incorporated by
reference to Exhibit 8A of the Registration Statement.

(8B) Custodian Contract between CMC Fund Trust and Morgan
Stanley Trust Company. Incorporated by reference to
Exhibit 8B of the Registration Statement.

(9A) Transfer Agent Agreement for CMC Small Cap Fund.
Incorporated by reference to Exhibit 9 of the
Registration Statement.

(9B) Transfer Agent Agreement for CMC International
Stock Fund. Incorporated by reference to Exhibit 9B
of the Registration Statement.

(9C) Transfer Agent Agreement for CMC High Yield Fund.
Incorporated by reference to Exhibit 9C of the
Registration Statement.

(11) Consent of Independent Accountants relating to
financial statements of CMC Small Cap Fund, CMC
International Stock Fund and CMC High Yield Fund.

(12) See paragraph (a) of this Item 24.

(17) All Powers of Attorney for each of the Trustees
have been previously filed and are incorporated
herein by reference to Exhibit 17 of the
Registration Statement.

(27A) Financial Data Schedule for CMC Small Cap Fund.

(27B) Financial Data Schedule for CMC International
Stock Fund.

(27C) Financial Data Schedule for CMC High Yield Fund.

<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------

To the Board of Trustees of CMC Fund Trust:

We consent to the inclusion in Post-Effective Amendment No. 10 to the
Registration Statement of CMC Fund Trust on Form N-1A (File No. 33-30394)
of our reports dated December 1, 1995, on our audits of the financial
statements and the financial highlights of the CMC Small Cap Fund, CMC
International Stock Fund, and CMC High Yield Fund, portfolios of CMC Fund
Trust, which reports are included in the Annual Reports to Shareholders for
the year ended October 31, 1995, which is included in the Registration
Statement. We also consent to the reference to our Firm under the caption
"Independent Accountants".

COOPERS & LYBRAND L.L.P.

Portland, Oregon
December 1, 1995

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE AUDITED ANNUAL REPORT OF CMC SMALL CAP FUND (A PORTFOLIO OF CMC
TRUST) DATED 10/31/95 AND THE AUDITED ANNUAL REPORT OF CMC SMALL CAP
FUND (A PORTFOLIO OF CMC TRUST) DATED 10/31/94 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000854126
<NAME> CMC FUND TRUST
<SERIES>
<NUMBER> 01
<NAME> CMC SMALL CAP FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 401,800,778
<INVESTMENTS-AT-VALUE> 486,139,265
<RECEIVABLES> 8,108,265
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 56,954,566
<TOTAL-ASSETS> 551,202,096
<PAYABLE-FOR-SECURITIES> 11,729,012
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,305,725
<TOTAL-LIABILITIES> 14,034,737
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 453,107,672
<SHARES-COMMON-STOCK> 9,593,018
<SHARES-COMMON-PRIOR> 9,482,895
<ACCUMULATED-NII-CURRENT> (18,884)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (259,916)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 84,338,487
<NET-ASSETS> 537,167,359
<DIVIDEND-INCOME> 4,191,211
<INTEREST-INCOME> 1,475,122
<OTHER-INCOME> 0
<EXPENSES-NET> 3,638,876
<NET-INVESTMENT-INCOME> 2,027,457
<REALIZED-GAINS-CURRENT> 37,975,837
<APPREC-INCREASE-CURRENT> 54,175,558
<NET-CHANGE-FROM-OPS> 94,178,852
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,453,395
<DISTRIBUTIONS-OF-GAINS> 38,291,597
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,462,141
<NUMBER-OF-SHARES-REDEEMED> 2,030,154
<SHARES-REINVESTED> 678,136
<NET-CHANGE-IN-ASSETS> 69,215,404
<ACCUMULATED-NII-PRIOR> (30,090)
<ACCUMULATED-GAINS-PRIOR> (652,025)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,528,353
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,638,876
<AVERAGE-NET-ASSETS> 474,727,450
<PER-SHARE-NAV-BEGIN> 49.35
<PER-SHARE-NII> .22
<PER-SHARE-GAIN-APPREC> 10.88
<PER-SHARE-DIVIDEND> .16
<PER-SHARE-DISTRIBUTIONS> 4.29
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 56.00
<EXPENSE-RATIO> .77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE AUDITED ANNUAL REPORT OF CMC INTERNATIONAL STOCK FUND (A PORTFOLIO
OF CMC TRUST) DATED 10/31/95 AND THE AUDITED ANNUAL REPORT OF CMC
INTERNATIONAL STOCK FUND (A PORTFOLIO OF CMC TRUST) DATED 10/31/94
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000854126
<NAME> CMC FUND TRUST
<SERIES>
<NUMBER> 02
<NAME> CMC INTERNATIONAL STOCK FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 63,175,899
<INVESTMENTS-AT-VALUE> 66,404,182
<RECEIVABLES> 35,958,763
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 2,050,908
<TOTAL-ASSETS> 104,413,853
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 35,656,301
<TOTAL-LIABILITIES> 35,656,301
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 71,981,032
<SHARES-COMMON-STOCK> 1,855,088
<SHARES-COMMON-PRIOR> 2,133,697
<ACCUMULATED-NII-CURRENT> (9,470)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (6,713,954)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,499,944
<NET-ASSETS> 68,757,552
<DIVIDEND-INCOME> 992,444
<INTEREST-INCOME> 443,037
<OTHER-INCOME> 0
<EXPENSES-NET> 714,699
<NET-INVESTMENT-INCOME> 720,782
<REALIZED-GAINS-CURRENT> (6,219,463)
<APPREC-INCREASE-CURRENT> 51,662
<NET-CHANGE-FROM-OPS> (5,447,019)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 369,047
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 310,371
<NUMBER-OF-SHARES-REDEEMED> 598,816
<SHARES-REINVESTED> 9,854
<NET-CHANGE-IN-ASSETS> (15,540,628)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (855,696)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 543,358
<INTEREST-EXPENSE> 669
<GROSS-EXPENSE> 714,699
<AVERAGE-NET-ASSETS> 72,632,889
<PER-SHARE-NAV-BEGIN> 39.51
<PER-SHARE-NII> .39
<PER-SHARE-GAIN-APPREC> (2.64)
<PER-SHARE-DIVIDEND> .20
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 37.06
<EXPENSE-RATIO> .98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE AUDITED ANNUAL REPORT OF CMC HIGH YIELD FUND (A PORTFOLIO OF CMC
TRUST) DATED 10/31/95 AND THE AUDITED ANNUAL REPORT OF CMC HIGH YIELD
FUND (A PORTFOLIO OF CMC TRUST) DATED 10/31/94 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000854126
<NAME> CMC FUND TRUST
<SERIES>
<NUMBER> 03
<NAME> CMC HIGH YIELD FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 39,473,301
<INVESTMENTS-AT-VALUE> 40,881,671
<RECEIVABLES> 1,055,459
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 344,298
<TOTAL-ASSETS> 42,281,428
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 89,915
<TOTAL-LIABILITIES> 89,915
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 40,790,610
<SHARES-COMMON-STOCK> 1,164,269
<SHARES-COMMON-PRIOR> 278,498
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7,467)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,408,370
<NET-ASSETS> 42,191,513
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,613,710
<OTHER-INCOME> 0
<EXPENSES-NET> 142,645
<NET-INVESTMENT-INCOME> 2,471,065
<REALIZED-GAINS-CURRENT> 402,706
<APPREC-INCREASE-CURRENT> 1,507,468
<NET-CHANGE-FROM-OPS> 4,381,239
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,471,065
<DISTRIBUTIONS-OF-GAINS> 401,049
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,184,564
<NUMBER-OF-SHARES-REDEEMED> 372,501
<SHARES-REINVESTED> 73,708
<NET-CHANGE-IN-ASSETS> 32,589,996
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (9,124)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 106,597
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 160,156
<AVERAGE-NET-ASSETS> 26,395,044
<PER-SHARE-NAV-BEGIN> 34.48
<PER-SHARE-NII> 3.31
<PER-SHARE-GAIN-APPREC> 2.11
<PER-SHARE-DIVIDEND> 3.31
<PER-SHARE-DISTRIBUTIONS> .35
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 36.24
<EXPENSE-RATIO> .54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>