<PAGE>
Rule 497(e) File Nos. 33-36556 and 811-6154
Supplement dated January 4, 1999
to
Prospectus dated May 1, 1998, as Supplemented October 5, 1998
for
CitiFunds(SM) International Growth Portfolio
Beginning on January 4, 1999, CitiFunds International Growth Portfolio will
offer two classes of shares: Class A and Class B.
Shares of the Fund that are outstanding on January 4, 1999 will be classified as
Class A shares. No sales charge will be payable as a result of this
classification. Investors holding Fund shares on that date will be able to
exchange those shares, and any shares acquired through capital appreciation and
the reinvestment of dividends and capital gains distributions on those shares,
into Class A shares of other CitiFunds and mutual funds managed or advised by
Citibank, N.A. without paying a sales charge.
Investors purchasing shares of the Fund on or after January 4, 1999 may select
Class A or Class B shares, with different sales charges and expense levels.
Please determine which class of shares best fits your particular situation.
See "Classes of Shares" below.
EXPENSE SUMMARY
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The following tables summarize estimated shareholder transaction and annual
operating expenses for Class A and Class B shares of the Fund and the underlying
Portfolio in which the Fund invests. For more information on costs and expenses,
see "Management" -- page 15 of the Prospectus and "General Information --
Expenses" -- page 21 of the Prospectus.*
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
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Maximum sales load imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales load imposed on reinvested dividends none none
Maximum deferred sales load (as a percentage
of original purchase price or redemption
proceeds, whichever is less) none(1) 5.00%
Redemption fee none none
Exchange fee none none
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(1)Except for purchases of $500,000 or more.
See "Class A Shares" below.
CLASS A CLASS B
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ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 1.00% 1.00%
12b-1 Fees (including service fees)
(after fee waivers and reimbursements) (1)(2) 0.00% 1.00%
Other Expenses
Shareholder Servicing Agent Fees 0.25% --
Other Operating Expenses
(after fee waivers and reimbursements) (2) 0.50% 0.50%
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Total Fund Operating Expenses
(after fee waivers and reimbursements)(2) 1.75% 2.50%
- -------------------------------------------------------------------------------
* These tables are intended to assist investors in understanding the various
costs and expenses that a shareholder of the Fund will bear, either
directly or indirectly. The tables show the fees paid to various service
providers after giving effect to expected voluntary partial fee waivers and
reimbursements. There can be no assurance that the fee waivers and
reimbursements reflected in the tables will continue at these levels. The
information in the tables and in the example below is based on the Fund's
expenses for the fiscal year ended December 31, 1997, as revised to reflect
current fees.
(1) 12b-1 distribution fees are asset-based sales charges. Long-term
shareholders in the Fund could pay more in sales charges than the economic
equivalent of the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc.
(2) Absent fee waivers, 12b-1 Fees, Other Operating Expenses and Total Fund
Operating Expenses would be 0.15%, 0.50% and 1.90%, respectively, for Class
A shares, and 1.00%, 0.65% and 2.65%, respectively, for Class B shares.
12b-1 fees for Class A shares assume a 0.05% fee for electronic print or
media advertising expenses.
EXAMPLE: A shareholder would pay the following expenses on a $1,000
investment, assuming a 5% annual return and redemption at the end of each
period indicated below:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CITIFUNDS INTERNATIONAL GROWTH PORTFOLIO
Class A $67 $102 $140 $246
Class B
Assuming redemption at end of period $75 $108 $143 $265
Assuming no redemption $25 $78 $133 $265
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The Example assumes that all dividends are reinvested. Without waivers and
reimbursements, the amounts in the Example would be $68, $107, $148 and $261 for
Class A shares, and $77, $112, $151 and $295 for Class B shares, assuming
redemption at the end of the period ($27, $82, $141 and $295 assuming no
redemption). For Class B shares, where redemption at the end of the period is
assumed, amounts in the Example assume deduction of the maximum applicable
contingent deferred sales charge, and all ten year amounts in the Example assume
conversion to Class A shares approximately eight years after purchase. The
assumption of a 5% annual return is required by the Securities and Exchange
Commission for all mutual funds, and is not a prediction of the Fund's future
performance. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OF THE FUND. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
CLASSES OF SHARES. Beginning on January 4, 1999, the Fund will offer two classes
of shares, Class A and Class B. The main features of the classes are summarized
in this paragraph. More detailed information appears below. Please determine
which class of shares best fits your particular circumstances. Class A shares
have a front-end, or initial, sales charge. This sales charge may be reduced or
eliminated in certain circumstances. Class A shares have lower annual expenses
than Class B shares. Class B shares have no front-end sales charge, but are
subject to a deferred sales charge if you sell within five years of purchase.
Class B shares have higher annual expenses than Class A shares. Class B shares
automatically convert into Class A shares after eight years. Both classes of
shares are sold at net asset value for that class. Net asset value may differ by
class because Class B shares have higher expenses.
When you place purchase orders and make redemption requests, please specify
whether you wish to purchase or redeem Class A or Class B shares. If you fail to
specify, purchase orders will be deemed to be for Class A shares, and Class A
shares will be redeemed first.
CLASS A SHARES
o Class A shares are sold at net asset value plus a front-end, or initial,
sales charge. The percentage sales charge goes down as the amount of your
investment in Class A shares goes up. See the chart below for the percentage
sales charge. After the initial sales charge is deducted from your
investment, the balance of your investment is invested in the Fund.
The sales charge may also be reduced or eliminated in certain circumstances, as
described in "Class A Shares - Sales Charge Waivers" and "--Sales Charge
Reductions" below. If you qualify to purchase Class A shares without a sales
load, you should purchase Class A shares rather than Class B shares because
Class A shares pay lower fees.
<TABLE>
<CAPTION>
BROKER/DEALER
SALES CHARGE SALES CHARGE COMMISSION
AMOUNT OF AS A % OF AS A % OF AS A % OF
YOUR INVESTMENT OFFERING PRICE YOUR INVESTMENT OFFERING PRICE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $25,000 5.00% 5.26% 4.50%
$25,000 to less than $50,000 4.00% 4.17% 3.60%
$50,000 to less than $100,000 3.50% 3.63% 3.15%
$100,000 to less than $250,000 3.00% 3.09% 2.70%
$250,000 to less than $500,000 2.00% 2.04% 1.80%
$500,000 or more none* none* up to 1.00%
- ------------------------------------------------------------------------------------------------------------
*A contingent deferred sales charge may apply in certain instances. See below.
</TABLE>
o Class A shares pay distribution and service fees of up to 0.10% of the
average daily net assets represented by the Class A shares. These fees are
currently being waived. This fee waiver is voluntary and may be terminated at
any time.
o Purchases of $500,000 or more are not subject to an initial sales charge, but
are subject to a 1% contingent deferred sales charge in the event of certain
redemptions within 12 months following purchase. See below.
o The Distributor will pay commissions to brokers, dealers and other
institutions that sell Class A shares of the Fund as shown in the table
above. The Distributor retains approximately 10% of the sales charge imposed
on Class A shares.
CLASS A SHARES -- SALES CHARGE WAIVERS:
o Reinvestment. The sales charge does not apply to Class A shares acquired
through the reinvestment of dividends and capital gains distributions.
o Eligible Purchasers. Class A shares may be purchased without a sales charge
by:
- tax exempt organizations under Section 501(c)(3-13) of the Internal Revenue
Code
- trust accounts for which Citibank, N.A. or any subsidiary or affiliate of
Citibank acts as trustee and exercises discretionary investment management
authority
- accounts for which Citibank or any subsidiary or affiliate of Citibank
performs investment advisory services or charges fees for acting as
custodian
- directors or trustees (and their immediate families), and retired directors
or trustees (and their immediate families), of any investment company for
which Citibank or any subsidiary or affiliate of Citibank serves as the
investment adviser or as a service or shareholder servicing agent
- employees of Citibank and its affiliates, CFBDS, Inc. and its affiliates or
any Shareholder Servicing Agent and its affiliates (including immediate
families of any of the foregoing), and retired employees of Citibank and
its affiliates or CFBDS and its affiliates (including immediate families of
any of the foregoing)
- investors participating in a fee-based or promotional arrangement sponsored
or advised by Citibank or its affiliates
- investors participating in a rewards program that offers Fund shares as an
investment option based on an investor's balances in selected Citigroup
Inc. products and services
- employees of members of the National Association of Securities Dealers,
Inc., provided that such sales are made upon the assurance of the purchaser
that the purchase is made for investment purposes and that the securities
will not be resold except through redemption or repurchase
- separate accounts used to fund certain unregistered variable annuity
contracts
- direct rollovers by plan participants from a 401(k) plan offered to
Citigroup employees
- shareholder accounts established through a reorganization or similar form
of business combination approved by the Fund's Board of Trustees or by the
Board of Trustees of any other CitiFund or mutual fund managed or advised
by Citibank (all of such funds being referred to herein as CitiFunds) the
terms of which entitle those shareholders to purchase shares of the Fund or
any other CitiFund at net asset value without a sales charge
- employee benefit plans qualified under Section 401(k) of the Internal
Revenue Code with accounts outstanding on January 4, 1999
- employee benefit plans qualified under Section 401 of the Internal Revenue
Code, including salary reduction plans qualified under Section 401(k) of
the Code, subject to minimum requirements as may be established by CFBDS
with respect to the amount of purchase; currently, the amount invested by
the qualified plan in the Fund or in any combination of CitiFunds must
total a minimum of $1 million
- accounts associated with Copeland Retirement Programs
- investors purchasing $500,000 or more of Class A shares; however, a
contingent deferred sales charge will be imposed on the investments in the
event of certain share redemptions within 12 months following the share
purchase, at the rate of 1% of the lesser of the value of the shares
redeemed (not including reinvested dividends and capital gains
distributions) or the total cost of the shares; the contingent deferred
sales charge on Class A shares will be waived under the same circumstances
as the contingent deferred sales charge on Class B shares will be waived;
in determining whether a contingent deferred sales charge on Class A shares
is payable, and if so, the amount of the charge:
/\ it is assumed that shares not subject to the contingent deferred sales
charge are the first redeemed followed by other shares held for the
longest period of time
/\ all investments made during a calendar month will age one month on the
last day of the month and each subsequent month
/\ any applicable contingent deferred sales charge will be deferred upon
an exchange of Class A shares for Class A shares of another CitiFund
and deducted from the redemption proceeds when the exchanged shares are
subsequently redeemed (assuming the contingent deferred sales charge is
then payable)
/\ the holding period of Class A shares so acquired through an exchange
will be aggregated with the period during which the original Class A
shares were held
- subject to appropriate documentation, investors where the amount invested
represents redemption proceeds from a mutual fund (other than a CitiFund),
if:
/\ the redeemed shares were subject to an initial sales charge or a
deferred sales charge (whether or not actually imposed), and
/\ the redemption has occurred no more than 60 days prior to the purchase
of Class A shares of the Fund
- an investor who has a business relationship with an investment consultant
or other registered representative who joined a broker-dealer which has a
sales agreement with CFBDS from another investment firm within six months
prior to the date of purchase by the investor, if:
/\ the investor redeems shares of another mutual fund sold through the
investment firm that previously employed that investment consultant or
other registered representative, and either paid an initial sales
charge or was at some time subject to, but did not actually pay, a
deferred sales charge or redemption fee with respect to the redemption
proceeds,
/\ the redemption is made within 60 days prior to the investment in the
Fund, and
/\ the net asset value of the shares of the Fund sold to that investor
without a sales charge does not exceed the proceeds of the redemption
CLASS A SHARES -- SALES CHARGE REDUCTIONS:
o Reduced Sales Charge Plan. A qualified group may purchase shares as a single
purchaser under the reduced sales charge plan. The purchases by the group are
lumped together and the sales charge is based on the lump sum. A qualified
group must:
- have been in existence for more than six months
- have a purpose other than acquiring Fund shares at a discount
- satisfy uniform criteria that enable CFBDS to realize economies of scale in
its costs of distributing shares
- have more than ten members
- be available to arrange for group meetings between representatives of the
Fund and the members
- agree to include sales and other materials related to the Fund in its
publications and mailings to members at reduced or no cost to the
Distributor
- seek to arrange for payroll deduction or other bulk transmission of
investments to the Fund
o Right of Accumulation. Eligible investors are permitted to purchase Class A
shares of the Fund at the public offering price applicable to the total of:
- the dollar amount then being purchased, plus
- an amount equal to the then-current net asset value or cost (whichever is
higher) of the purchaser's combined holdings in certain CitiFunds and
certain other mutual funds managed or advised by Citibank
See the Statement of Additional Information for more information.
o Letter of Intent. If an investor anticipates purchasing $25,000 or more of
Class A shares of the Fund alone or in combination with Class B shares of the
Fund or any of the classes of certain other CitiFunds and certain other
mutual funds managed or advised by Citibank within a 13-month period, by
completing a letter of intent the investor may obtain the shares at the same
reduced sales charge as though the total quantity were invested in one lump
sum, subject to granting a power of attorney to redeem shares if the intended
purchases are not completed. See the Statement of Additional Information for
more information.
o Reinstatement Privilege. Shareholders who have redeemed Class A shares may
reinstate their Fund account without a sales charge up to the dollar amount
redeemed (with a credit for any contingent deferred sales charge paid) by
purchasing Class A shares of the Fund within 90 days after the redemption. To
take advantage of this reinstatement privilege, shareholders must notify
their Shareholder Servicing Agent in writing at the time the privilege is
exercised.
CLASS B SHARES
o Class B shares are sold at net asset value without a front-end sales charge,
but they are subject to a contingent deferred sales charge.
o Class B shares pay a combined distribution and service fee of 1.00% of the
average daily net assets represented by the Class B shares.
o Class B shares have a contingent deferred sales charge (CDSC). This sales
charge goes down the longer you hold your Class B shares. See the chart below
for the amount of the sales charge. The sales charge is deducted from your
redemption proceeds if you redeem your Class B shares within five years of
purchasing them.
REDEMPTION DURING CDSC ON SHARES BEING SOLD
- ---------------------------------------------------------------------
1\s/\t/ year since purchase 5.00%
2\n/\d/ year since purchase 4.00%
3\r/\d/ year since purchase 3.00%
4\t/\h/ year since purchase 2.00%
5\t/\h/ year since purchase 1.00%
6\t/\h/ year (or later) since purchase None
- ---------------------------------------------------------------------
o The CDSC is based on the original purchase price or the current market value
of the shares being sold, whichever is less.
o There is no CDSC on Class B shares representing capital appreciation or on
Class B shares acquired through reinvestment of dividends or capital gains
distributions.
o The Fund will assume that a redemption of Class B shares is made:
- first, of Class B shares representing capital appreciation
- next, of shares representing the reinvestment of dividends and capital
gains distributions
- finally of other shares held by the investor for the longest period of time
o The holding period of Class B shares of the Fund acquired through an exchange
with another CitiFund will be calculated from the date that the Class B
shares were initially acquired in the other CitiFund, and Class B shares
being redeemed will be considered to represent, as applicable, capital
appreciation or dividend and capital gains distribution reinvestments in the
other fund. When determining the amount of the CDSC, the Fund will use the
CDSC schedule of any fund from which you have exchanged shares that would
result in you paying the highest CDSC.
o Class B shares automatically convert to Class A shares of the Fund
approximately eight years after issuance, together with a pro rata portion of
all Class B shares representing dividends and other distributions paid in
additional Class B shares. Shares are converted based on the relative net
asset values per share of the two classes on the first business day of the
month in which the eighth anniversary of the issuance of the Class B shares
occurs. Because the net asset value of a Class A share may be higher than
that of a Class B share, you may receive fewer Class A shares than the number
of Class B shares converted, but the dollar value will be the same.
o Commissions will be paid to brokers, dealers and other institutions that sell
Class B shares in the amount of 4.50% of the purchase price of Class B shares
sold by these entities. These commissions are not paid on exchanges from
other CitiFunds or on sales of Class B shares to investors exempt from the
CDSC. Entities that sell Class B shares will also receive a portion of the
service fee payable under the Class B Distribution Plan at an annual rate
equal to 0.25% of the average daily net assets represented by the Class B
shares sold by them.
CLASS B SHARES -- CDSC ELIMINATION:
o Reinvestment. There is no CDSC on shares representing capital appreciation or
on shares acquired through reinvestment of dividends or capital gains
distributions.
o Waivers. The CDSC will be waived in connection with:
- exchanges into certain CitiFunds
- a total or partial redemption made within one year of the death of the
shareholder; this waiver is available where the deceased shareholder is
either the sole shareholder or owns the shares with his or her spouse as a
joint tenant with right of survivorship, and applies only to redemption of
shares held at the time of death
- a lump sum or other distribution in the case of an Individual Retirement
Account (IRA), a self-employed individual retirement plan (Keogh Plan) or a
custodian account under Section 403(b) of the Internal Revenue Code, in
each case following attainment of age 59 1/2
- a total or partial redemption resulting from any distribution following
retirement in the case of a tax-qualified retirement plan
- a redemption resulting from a tax-free return of an excess contribution to
an IRA
EXCHANGES
o Shares of the Fund may be exchanged for shares of the same class of certain
other CitiFunds, or may be acquired through an exchange of shares of the same
class of those funds. Class A shares also may be exchanged for shares of
certain CitiFunds that offer only a single class of shares, unless the Class
A shares are subject to a contingent deferred sales charge. Class B shares
may not be exchanged for shares of CitiFunds that offer only a single class
of shares. No initial sales charge is imposed on shares being acquired
through an exchange unless Class A shares are being acquired and the sales
charge of the fund being exchanged into is greater than the current sales
charge for Class A shares of the Fund (in which case an initial sales charge
will be imposed at a rate equal to the difference). No contingent deferred
sales charge is imposed on Class B shares when they are exchanged for Class B
shares of certain other CitiFunds.
If you are exchanging into a fund that imposes a sales charge, you may
qualify for share prices which do not include the sales charge or which
reflect a reduced sales charge, if the Fund shares you are exchanging were:
(a) purchased with a sales charge, (b) acquired through a previous exchange
from shares purchased with a sales charge, (c) outstanding as of January 4,
1999 or (d) acquired through capital appreciation or the reinvestment of
dividends and capital gains distributions on those shares. To qualify for
this sales charge waiver or reduced sales charge, at the time of exchange you
must notify your Shareholder Servicing Agent. Any such qualification may be
subject to confirmation, through a check of appropriate records and
documentation, of your existing share balances and any sales charges paid on
prior share purchases.
This exchange privilege may be changed or terminated at any time with at
least 60 days' notice, when notice is required by applicable rules and
regulations.
DISTRIBUTION PLANS. The Fund maintains separate Distribution Plans for Class A
and Class B shares, which have been adopted in accordance with Rule 12b-1 under
the 1940 Act. Under the Class A Plan, the Fund may pay monthly fees at an annual
rate not to exceed 0.10% of the average daily net assets represented by Class A
shares of the Fund. Under the Class B Plan, the Fund may pay a combined monthly
distribution and service fee at an annual rate not to exceed 1.00% of the
average daily net assets represented by Class B shares of the Fund. These fees
may be used to make payments to the Distributor for distribution services and to
others as compensation for the sale of shares of the applicable class of the
Fund, for advertising, marketing or other promotional activity, and for
preparation, printing and distribution of prospectuses, statements of additional
information and reports for recipients other than regulators and existing
shareholders. The Fund also may make payments to the Distributor and others for
providing personal service or the maintenance of shareholder accounts. Under the
Class A Plan, Class A shares may also pay an additional fee of up to 0.05% of
the average daily net assets represented by the Class A shares in anticipation
of, or as reimbursement for, expenses incurred in connection with print or
electronic media advertising in connection with the sale of Class A shares. The
Fund did not pay this fee during its most recent fiscal year, and does not
anticipate paying it during the current fiscal year.
The amounts paid to each recipient pursuant to the Plans may vary based upon
certain factors, including, among other things, the levels of sales of Fund
shares and/or shareholder services provided. Recipients may receive different
compensation for sales of Class A and Class B shares.
The Distributor provides to the Trustees quarterly a written report of amounts
expended pursuant to the Plans and the purposes for which the expenditures were
made.
During the period they are in effect, the Plans and related Distribution
Agreements obligate the Fund to pay fees to the Distributor and others as
compensation for their services, not as reimbursement for specific expenses
incurred. Thus, even if these entities' expenses exceed the fees provided for
under the applicable Plan, the Fund will not be obligated to pay more than those
fees and, if their expenses are less than the fees paid to them, they will
realize a profit. The Fund will pay the fees to the Distributor and others until
the applicable Plan or Distribution Agreement is terminated or not renewed. In
that event, the Distributor's or other recipient's expenses in excess of fees
received or accrued through the termination date will be the Distributor's or
other recipient's sole responsibility and not obligations of the Fund.
The Distributor may make payments for distribution and/or shareholder servicing
activities out of its past profits and other available sources. The Distributor
may also make payments for marketing, promotional or related expenses to
dealers. The amount of these payments is determined by the Distributor and may
vary. Citibank may make similar payments under similar arrangements.
From time to time, the Distributor or Citibank may provide additional
promotional bonuses, incentives or payments to dealers that sell shares of the
Fund. These may include payments for travel expenses, including lodging,
incurred in connection with trips taken by invited registered representatives
and their guests to locations within and outside the United States for meetings
or seminars of a business nature. In some instances, these bonuses, incentives
or payments may be offered only to dealers who have sold or may sell significant
amounts of shares. Certain dealers may not sell all classes of shares.
<PAGE>
CONDENSED FINANCIAL INFORMATION The information in the following table
supplements the financial information contained in "Condensed Financial
Information" in the Prospectus. The numbers in the table below are unaudited.
For more recent performance information, call 1-800-625-4554.
CITIFUNDS
INTERNATIONAL GROWTH
PORTFOLIO
SIX MONTHS ENDED
JUNE 30, 1998
(UNAUDITED)
- -------------------------------------------------------------------------------
Net Asset Value, beginning of period $11.42
- -------------------------------------------------------------------------------
Income from Operations:
Net investment income 0.024
Net realized and unrealized gain (loss) on investments 1.808
- -------------------------------------------------------------------------------
Total from operations 1.832
- -------------------------------------------------------------------------------
Less Dividends From:
Net investment income (0.009)
Net realized gain on investments (0.563)
- -------------------------------------------------------------------------------
Total from distributions (0.572)
- -------------------------------------------------------------------------------
Net Asset Value, end of period $12.68
- -------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $19,968
Ratio of expenses to average net assets (A) 1.75%*
Ratio of net investment income (loss) to average net assets 0.40%*
Portfolio turnover 54%
Total Return 16.16%**
- -------------------------------------------------------------------------------
Note: If certain agents of the Fund and its underlying portfolio had not
voluntarily agreed to waive all or a portion of their fees for the periods
indicated and expenses were not reduced for fees paid indirectly, the net
investment income per share and the ratios would have been as follows:
- -------------------------------------------------------------------------------
Net investment income (loss) per share $0.024
RATIOS:
Expenses to average net assets (A) 1.80%*
Net investment income (loss) to average net assets 0.35%*
- -------------------------------------------------------------------------------
(A) Includes allocated expenses for the period indicated from
International Equity Portfolio.
* Annualized
** Not annualized
<PAGE>
Rule 497(e) File Nos. 33-36556 and 811-6154
Supplement dated January 4, 1999 to Statement of Additional
Information dated May 1, 1998 for
CitiFunds(SM) International Growth Portfolio
SALES CHARGES. Shares of the Fund are sold at net asset value, plus, in the case
of Class A shares, a front-end, or initial, sales charge that may be reduced on
purchases involving substantial amounts and that may be eliminated in certain
circumstances. A contingent deferred sales charge is imposed on redemptions of
certain Class B shares made within five years of purchase.
PERFORMANCE. Total rates of return for the Fund may be calculated on investments
at various sales charge levels or at net asset value. Any performance data which
is based on a reduced sales charge or net asset value would be reduced if the
maximum sales charge were taken into account.
DETERMINATION OF NET ASSET VALUE. Net asset value is calculated separately for
each class. Per share net asset value of the classes of the Fund's shares can be
expected to differ because the Class B shares bear higher expenses than Class A
shares.
LETTER OF INTENT. If an investor anticipates purchasing $25,000 or more of Class
A shares of the Fund alone or in combination with Class B shares of the Fund or
any of the classes of certain other CitiFunds and certain other mutual funds
managed or advised by Citibank (all of such funds being referred to herein as
CitiFunds) within a 13-month period, the investor may obtain the shares at the
same reduced sales charge as though the total quantity were invested in one lump
sum by completing a letter of intent on the terms described below. Subject to
acceptance by CFBDS, Inc., the Fund's distributor, and the conditions mentioned
below, each purchase will be made at a public offering price applicable to a
single transaction of the dollar amount specified in the letter of intent.
o The shareholder's Shareholder Servicing Agent must inform CFBDS that the
letter of intent is in effect each time shares are purchased.
o The shareholder makes no commitment to purchase additional shares, but if his
or her purchases within 13 months plus the value of shares credited toward
completion of the letter of intent do not total the sum specified, an
increased sales charge will apply as described below.
o A purchase not originally made pursuant to a letter of intent may be included
under a subsequent letter of intent executed within 90 days of the purchase
if CFBDS is informed in writing of this intent within the 90-day period.
o The value of shares of the Fund presently held, at cost or maximum offering
price (whichever is higher), on the date of the first purchase under the
letter of intent, may be included as a credit toward the completion of the
letter, but the reduced sales charge applicable to the amount covered by the
letter is applied only to new purchases.
o Instructions for issuance of shares in the name of a person other than the
person signing the letter of intent must be accompanied by a written
statement from the Shareholder Servicing Agent stating that the shares were
paid for by the person signing the letter.
o Neither income dividends nor capital gains distributions taken in additional
shares will apply toward the completion of the letter of intent.
o The value of any shares redeemed or otherwise disposed of by the purchaser
prior to termination or completion of the letter of intent are deducted from
the total purchases made under the letter of intent.
If the investment specified in the letter of intent is not completed (either
prior to or by the end of the 13-month period), the Shareholder Servicing Agent
will redeem, within 20 days of the expiration of the letter of intent, an
appropriate number of the shares in order to realize the difference between the
reduced sales charge that would apply if the investment under the letter of
intent had been completed and the sales charge that would normally apply to the
number of shares actually purchased. By completing and signing the letter of
intent, the shareholder irrevocably grants a power of attorney to the or
Shareholder Servicing Agent to redeem any or all shares purchased under the
letter of intent, with full power of substitution.
RIGHT OF ACCUMULATION. A shareholder qualifies for cumulative quantity discounts
on the purchase of Class A shares when his or her new investment, together with
the current offering price value of all holdings of that shareholder in the
CitiFunds, reaches a discount level. For example, if a Fund shareholder owns
shares valued at $50,000 and purchases an additional $50,000 of Class A shares
of the Fund, the sales charge for the additional $50,000 purchase would be at
the rate of 3.00% (the rate applicable to single transactions from $100,000 to
less than $250,000). A shareholder must provide the Shareholder Servicing Agent
with information to verify that the quantity sales charge discount is applicable
at the time the investment is made.
CONVERSION OF CLASS B SHARES. A shareholder's Class B shares will automatically
convert to Class A shares in the Fund approximately eight years after the date
of issuance, together with a pro rata portion of all Class B shares representing
dividends and other distributions paid in additional Class B shares. The
conversion will be effected at the relative net asset values per share of the
two classes on the first business day of the month in which the eighth
anniversary of the issuance of the Class B shares occurs. If a shareholder
effects one or more exchanges among Class B shares of the CitiFunds during the
eight-year period, the holding periods for the shares so exchanged will be
counted toward the eight-year period. Because the per share net asset value of
the Class A shares may be higher than that of the Class B shares at the time of
conversion, a shareholder may receive fewer Class A shares than the number of
Class B shares converted, although the dollar value will be the same.
SERVICE FEES. The Fund pays fees for distribution and shareholder servicing
pursuant to a Distribution Plan adopted with respect to each class of shares of
the Fund in accordance with Rule 12b-I under the Investment Company Act of 1940,
as amended. The Plan with respect to Class A shares provides that the Fund may
pay monthly fees at an annual rate not to exceed 0. 10% of the average daily net
assets represented by Class A shares of the Fund. The Plan with respect to Class
B shares provides that the Fund may pay a combined monthly distribution and
service fee of up to 1.00% of the average daily net assets represented by the
Class B shares. Under the Class A Plan, Class A shares may also pay an
additional fee of up to 0.05% of the average daily net assets represented by the
Class A shares in anticipation of, or as reimbursement for, expenses incurred in
connection with print or electronic media advertising in connection with the
sale of Class A shares. The Fund did not pay this fee during its most recent
fiscal year, and does not anticipate paying it during the current fiscal year.
FINANCIAL STATEMENTS. The financial statements (unaudited) for CitiFunds
International Growth Portfolio (Portfolio of Investments at June 30, 1998,
Statement of Assets and Liabilities at June 30, 1998, Statement of Operations
for the six months ended June 30, 1998, Statement of Changes in Net Assets for
the six months ended June 30, 1998 and the year ended December 31, 1997, and
Financial Highlights for the six months ended June 30, 1998 and the years ended
December 31, 1997, 1996, 1995, 1994 and 1993), which are included in the
Semi-Annual Report to Shareholders of CitiFunds International Growth Portfolio,
are incorporated herein by reference.
<PAGE>
Rule 497(e) File Nos. 33-36556 and 811-6154
Supplement dated January 4, 1999 to Prospectus dated January 7, 1998
for
CitiFunds(SM) International Growth &
Income Portfolio
Beginning on January 4, 1999, CitiFunds International Growth & Income
Portfolio will offer two classes of shares: Class A and Class B.
Shares of the Fund that are outstanding on January 4, 1999 will be classified
as Class A shares. No sales charge will be payable as a result of this
classification. Investors holding Fund shares on that date will be able to
exchange those shares, and any shares acquired through capital appreciation
and the reinvestment of dividends and capital gains distributions on those
shares, into Class A shares of other CitiFunds and mutual funds managed or
advised by Citibank, N.A. without paying a sales charge.
Investors purchasing shares of the Fund on or after January 4, 1999 may select
Class A or Class B shares, with different sales charges and expense levels.
Please determine which class of shares best fits your particular situation.
See "Classes of Shares" below.
EXPENSE SUMMARY
- --------------------------------------------------------------------------------
The following tables summarize estimated shareholder transaction and annual
operating expenses for Class A and Class B shares of the Fund and its
underlying Portfolio. For more information on costs and expenses, see
"Management" -- page 13 of the Prospectus and "General Information --
Expenses" -- page 19 of the Prospectus.*
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
- -------------------------------------------------------------------------------
Maximum sales load imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales load imposed on reinvested dividends none none
Maximum deferred sales load (as a percentage
of original purchase price or redemption proceeds,
whichever is less) none(1) 5.00%
Redemption fee none none
Exchange fee none none
- -------------------------------------------------------------------------------
(1)Except for purchases of $500,000 or more. See "Class A Shares" below.
CLASS A CLASS B
- -------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
Management Fees(1) 1.05% 1.05%
12b-1 Fees (including service fees)(2) 0.25% 1.00%
Other Expenses (after fee waivers and reimbursements)(3) 0.35% 0.35%
- -------------------------------------------------------------------------------
Total Fund Operating Expenses (after fee waivers
and reimbursements)(3) 1.65% 2.40%
- -------------------------------------------------------------------------------
* These tables are intended to assist investors in understanding the various
costs and expenses that a shareholder will bear, either directly or
indirectly. The tables show the fees paid to various service providers
after giving effect to expected voluntary partial fee waivers and
reimbursements. There can be no assurance that the fee waivers and
reimbursements reflected in the tables will continue at these levels.
Because the Fund is newly organized, all amounts in the tables and in the
example below are estimated for the current fiscal year and information is
given in the example below only for one and three year periods.
(1) A combined fee for investment advisory and administrative services.
(2) Includes fees for distribution and shareholder servicing. Long-term
shareholders in the Fund could pay more in sales charges than the economic
equivalent of the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc.
(3) Absent fee waivers, other expenses and total fund operating expenses would
be 0.60% and 1.90%, respectively, for Class A shares, and 0.60% and 2.65%,
respectively, for Class B shares.
EXAMPLE: A shareholder would pay the following expenses on a $1,000
investment, assuming a 5% annual return and redemption at the end of each
period indicated below:
ONE THREE
YEAR YEARS
- -------------------------------------------------------------------------------
CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
Class A $66 $99
Class B
Assuming redemption at end of period $74 $105
Assuming no redemption $24 $75
- -------------------------------------------------------------------------------
The Example assumes that all dividends are reinvested. Without waivers and
reimbursements, the amounts in the Example would be $68 and $107 for Class A
shares; and $77 and $112 for Class B shares, assuming redemption at the end of
the period ($27 and $82 assuming no redemption). For Class B shares, where
redemption at the end of the period is assumed, amounts in the Example assume
deduction of the maximum applicable contingent deferred sales charge. The
assumption of a 5% annual return is required by the Securities and Exchange
Commission for all mutual funds, and is not a prediction of the Fund's future
performance. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OF THE FUND. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
CLASSES OF SHARES. Beginning on January 4, 1999, the Fund will offer two
classes of shares, Class A and Class B. The main features of the classes are
summarized in this paragraph. More detailed information appears below. Please
determine which class of shares best fits your particular circumstances. Class
A shares have a front-end, or initial, sales charge. This sales charge may be
reduced or eliminated in certain circumstances. Class A shares have lower
annual expenses than Class B shares. Class B shares have no front-end sales
charge, but are subject to a deferred sales charge if you sell within five
years of purchase. Class B shares have higher annual expenses than Class A
shares. Class B shares automatically convert into Class A shares after eight
years. Both classes of shares are sold at net asset value for that class. Net
asset value may differ by class because Class B shares have higher expenses.
When you place purchase orders and make redemption requests, please specify
whether you wish to purchase or redeem Class A or Class B shares. If you fail
to specify, purchase orders will be deemed to be for Class A shares, and Class
A shares will be redeemed first.
CLASS A SHARES:
o Class A shares are sold at net asset value plus a front-end, or initial,
sales charge. The percentage sales charge goes down as the amount of your
investment in Class A shares goes up. See the chart below for the percentage
sales charge. After the initial sales charge is deducted from your
investment, the balance of your investment is invested in the Fund.
The sales charge may also be reduced or eliminated in certain circumstances,
as described in "Class A Shares -- Sales Charge Waivers" and "-- Sales Charge
Reductions" below. If you qualify to purchase Class A shares without a sales
load, you should purchase Class A shares rather than Class B shares because
Class A shares pay lower fees.
<TABLE>
<CAPTION>
BROKER/DEALER
SALES CHARGE SALES CHARGE COMMISSION
AMOUNT OF AS A % OF AS A % OF AS A % OF
YOUR INVESTMENT OFFERING PRICE YOUR INVESTMENT OFFERING PRICE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $25,000 5.00% 5.26% 4.50%
$25,000 to less than $50,000 4.00% 4.17% 3.60%
$50,000 to less than $100,000 3.50% 3.63% 3.15%
$100,000 to less than $250,000 3.00% 3.09% 2.70%
$250,000 to less than $500,000 2.00% 2.04% 1.80%
$500,000 or more none* none* up to 1.00%
- ------------------------------------------------------------------------------------------------------------
*A contingent deferred sales charge may apply in certain instances. See below.
</TABLE>
o Class A shares pay service fees of 0.25% of the average daily net assets
represented by the Class A shares.
o Purchases of $500,000 or more are not subject to an initial sales charge, but
are subject to a 1% contingent deferred sales charge in the event of certain
redemptions within 12 months following purchase. See below.
o The Distributor will pay commissions to brokers, dealers and other
institutions that sell Class A shares of the Fund as shown in the table
above. The Distributor retains approximately 10% of the sales charge imposed
on Class A shares. Entities that sell Class A shares will also receive the
service fee payable under the Class A Service Plan at an annual rate equal to
0.25% of the average daily net assets represented by the Class A shares sold
by them.
CLASS A SHARES -- SALES CHARGE WAIVERS:
o Reinvestment. The sales charge does not apply to Class A shares acquired
through the reinvestment of dividends and capital gains distributions.
o Eligible Purchasers. Class A shares may be purchased without a sales charge
by:
- tax exempt organizations under Section 501(c)(3-13) of the Internal Revenue
Code
- trust accounts for which Citibank, N.A. or any subsidiary or affiliate of
Citibank acts as trustee and exercises discretionary investment management
authority
- accounts for which Citibank or any subsidiary or affiliate of Citibank
performs investment advisory services or charges fees for acting as
custodian
- directors or trustees (and their immediate families), and retired directors
or trustees (and their immediate families), of any investment company for
which Citibank or any subsidiary or affiliate of Citibank serves as the
investment adviser or as a shareholder servicing or service agent
- employees of Citibank and its affiliates, CFBDS, Inc. and its affiliates or
any Service Agent and its affiliates (including immediate families of any
of the foregoing), and retired employees of Citibank and its affiliates or
CFBDS and its affiliates (including immediate families of any of the
foregoing)
- investors participating in a fee-based or promotional arrangement sponsored
or advised by Citibank or its affiliates
- investors participating in a rewards program that offers Fund shares as an
investment option based on an investor's balances in selected Citigroup
Inc. products and services
- employees of members of the National Association of Securities Dealers,
Inc., provided that such sales are made upon the assurance of the purchaser
that the purchase is made for investment purposes and that the securities
will not be resold except through redemption or repurchase
- separate accounts used to fund certain unregistered variable annuity
contracts
- direct rollovers by plan participants from a 401(k) plan offered to
Citigroup employees
- shareholder accounts established through a reorganization or similar form
of business combination approved by the Fund's Board of Trustees or by the
Board of Trustees of any other CitiFund or mutual fund managed or advised
by Citibank (all of such funds being referred to herein as CitiFunds) the
terms of which entitle those shareholders to purchase shares of the Fund or
any other CitiFund at net asset value without a sales charge
- employee benefit plans qualified under Section 401(k) of the Internal
Revenue Code with accounts outstanding on January 4, 1999
- employee benefit plans qualified under Section 401 of the Internal Revenue
Code, including salary reduction plans qualified under Section 401(k) of
the Code, subject to minimum requirements as may be established by CFBDS
with respect to the amount of purchase; currently, the amount invested by
the qualified plan in the Fund or in any combination of CitiFunds must
total a minimum of $1 million
- accounts associated with Copeland Retirement Programs
- investors purchasing $500,000 or more of Class A shares; however, a
contingent deferred sales charge will be imposed on the investments in the
event of certain share redemptions within 12 months following the share
purchase, at the rate of 1% of the lesser of the value of the shares
redeemed (not including reinvested dividends and capital gains
distributions) or the total cost of the shares; the contingent deferred
sales charge on Class A shares will be waived under the same circumstances
as the contingent deferred sales charge on Class B shares will be waived;
in determining whether a contingent deferred sales charge on Class A shares
is payable, and if so, the amount of the charge:
/\ it is assumed that shares not subject to the contingent deferred sales
charge are the first redeemed followed by other shares held for the
longest period of time
/\ all investments made during a calendar month will age one month on the
last day of the month and each subsequent month
/\ any applicable contingent deferred sales charge will be deferred upon
an exchange of Class A shares for Class A shares of another CitiFund
and deducted from the redemption proceeds when the exchanged shares are
subsequently redeemed (assuming the contingent deferred sales charge is
then payable)
/\ the holding period of Class A shares so acquired through an exchange
will be aggregated with the period during which the original Class A
shares were held
- subject to appropriate documentation, investors where the amount invested
represents redemption proceeds from a mutual fund (other than a CitiFund),
if:
/\ the redeemed shares were subject to an initial sales charge or a
deferred sales charge (whether or not actually imposed), and
/\ the redemption has occurred no more than 60 days prior to the purchase
of Class A shares of the Fund
- an investor who has a business relationship with an investment consultant
or other registered representative who joined a broker-dealer which has a
sales agreement with CFBDS from another investment firm within six months
prior to the date of purchase by the investor, if:
/\ the investor redeems shares of another mutual fund sold through the
investment firm that previously employed that investment consultant or
other registered representati ve, and either paid an initial sales
charge or was at some time subject to, but did not actually pay, a
deferred sales charge or redemption fee with respect to the redemption
proceeds,
/\ the redemption is made within 60 days prior to the investment in the
Fund, and
/\ the net asset value of the shares of the Fund sold to that investor
without a sales charge does not exceed the proceeds of the redemption
CLASS A SHARES -- SALES CHARGE REDUCTIONS:
o Reduced Sales Charge Plan. A qualified group may purchase shares as a single
purchaser under the reduced sales charge plan. The purchases by the group are
lumped together and the sales charge is based on the lump sum. A qualified
group must:
- have been in existence for more than six months
- have a purpose other than acquiring Fund shares at a discount
- satisfy uniform criteria that enable CFBDS to realize economies of scale in
its costs of distributing shares
- have more than ten members
- be available to arrange for group meetings between representatives of the
Fund and the members
- agree to include sales and other materials related to the Fund in its
publications and mailings to members at reduced or no cost to the
Distributor
- seek to arrange for payroll deduction or other bulk transmission of
investments to the Fund
o Right of Accumulation. Eligible investors are permitted to purchase Class A
shares of the Fund at the public offering price applicable to the total of:
- the dollar amount then being purchased, plus
- an amount equal to the then-current net asset value or cost (whichever is
higher) of the purchaser's combined holdings in certain CitiFunds and
certain other mutual funds managed or advised by Citibank
See the Statement of Additional Information for more information.
o Letter of Intent. If an investor anticipates purchasing $25,000 or more of
Class A shares of the Fund alone or in combination with Class B shares of the
Fund or any of the classes of certain other CitiFunds and certain other
mutual funds managed or advised by Citibank within a 13-month period, by
completing a letter of intent the investor may obtain the shares at the same
reduced sales charge as though the total quantity were invested in one lump
sum, subject to granting a power of attorney to redeem shares if the intended
purchases are not completed. See the Statement of Additional Information for
more information.
o Reinstatement Privilege. Shareholders who have redeemed Class A shares may
reinstate their Fund account without a sales charge up to the dollar amount
redeemed (with a credit for any contingent deferred sales charge paid) by
purchasing Class A shares of the Fund within 90 days after the redemption. To
take advantage of this reinstatement privilege, shareholders must notify the
Transfer Agent or, if they are customers of a Service Agent, their Service
Agent in writing at the time the privilege is exercised.
CLASS B SHARES:
o Class B shares are sold at net asset value without a front-end
sales charge, but they are subject to a contingent deferred sales charge.
o Class B shares pay a combined distribution and service fee of 1.00% of the
average daily net assets represented by the Class B shares.
o Class B shares have a contingent deferred sales charge (CDSC). This sales
charge goes down the longer you hold your Class B shares. See the chart below
for the amount of the sales charge. The sales charge is deducted from your
redemption proceeds if you redeem your Class B shares within five years of
purchasing them.
REDEMPTION DURING CDSC ON SHARES BEING SOLD
- --------------------------------------------------------------------------------
1st year since purchase 5.00%
2nd year since purchase 4.00%
3rd year since purchase 3.00%
4th year since purchase 2.00%
5th year since purchase 1.00%
6th year (or later) since purchase None
- --------------------------------------------------------------------------------
o The CDSC is based on the original purchase price or the current market value
of the shares being sold, whichever is less.
o There is no CDSC on Class B shares representing capital appreciation or on
Class B shares acquired through reinvestment of dividends or capital gains
distributions.
o The Fund will assume that a redemption of Class B shares is made:
- first, of Class B shares representing capital appreciation
- next, of shares representing the reinvestment of dividends and capital
gains distributions
- finally of other shares held by the investor for the longest period of time
o The holding period of Class B shares of the Fund acquired through an exchange
with another CitiFund will be calculated from the date that the Class B
shares were initially acquired in the other CitiFund, and Class B shares
being redeemed will be considered to represent, as applicable, capital
appreciation or dividend and capital gains distribution reinvestments in the
other fund. When determining the amount of the CDSC, the Fund will use the
CDSC schedule of any fund from which you have exchanged shares that would
result in you paying the highest CDSC.
o Class B shares automatically convert to Class A shares of the Fund
approximately eight years after issuance, together with a pro rata portion of
all Class B shares representing dividends and other distributions paid in
additional Class B shares. Shares are converted based on the relative net
asset values per share of the two classes on the first business day of the
month in which the eighth anniversary of the issuance of the Class B shares
occurs. Because the net asset value of a Class A share may be higher than
that of a Class B share, you may receive fewer Class A shares than the number
of Class B shares converted, but the dollar value will be the same.
o Commissions will be paid to brokers, dealers and other institutions that sell
Class B shares in the amount of 4.50% of the purchase price of Class B shares
sold by these entities. These commissions are not paid on exchanges from
other CitiFunds or on sales of Class B shares to investors exempt from the
CDSC. Entities that sell Class B shares will also receive a portion of the
service fee payable under the Class B Service Plan at an annual rate equal to
0.25% of the average daily net assets represented by the Class B shares sold
by them.
CLASS B SHARES -- CDSC ELIMINATION:
o Reinvestment. There is no CDSC on shares representing capital appreciation or
on shares acquired through reinvestment of dividends or capital gains
distributions.
o Waivers. The CDSC will be waived in connection with:
- exchanges into certain CitiFunds
- a total or partial redemption made within one year of the death of the
shareholder; this waiver is available where the deceased shareholder is
either the sole shareholder or owns the shares with his or her spouse as a
joint tenant with right of survivorship, and applies only to redemption of
shares held at the time of death
- a lump sum or other distribution in the case of an Individual Retirement
Account (IRA), a self-employed individual retirement plan (Keogh Plan) or a
custodian account under Section 403(b) of the Internal Revenue Code, in
each case following attainment of age 59 1/2
- a total or partial redemption resulting from any distribution following
retirement in the case of a tax-qualified retirement plan
- a redemption resulting from a tax-free return of an excess contribution to
an IRA
EXCHANGES
o Shares of the Fund may be exchanged for shares of the same class of certain
other CitiFunds, or may be acquired through an exchange of shares of the same
class of those funds. Class A shares also may be exchanged for shares of
certain CitiFunds that offer only a single class of shares, unless the Class
A shares are subject to a contingent deferred sales charge. Class B shares
may not be exchanged for shares of CitiFunds that offer only a single class
of shares. No initial sales charge is imposed on shares being acquired
through an exchange unless Class A shares are being acquired and the sales
charge for Class A shares of the fund being exchanged into is greater than
the current sales charge of the Fund (in which case an initial sales charge
will be imposed at a rate equal to the difference). No contingent deferred
sales charge is imposed on Class B shares when they are exchanged for Class B
shares of certain other CitiFunds.
If you are exchanging into a fund that imposes a sales charge, you may
qualify for share prices which do not include the sales charge or which
reflect a reduced sales charge, if the Fund shares you are exchanging were:
(a) purchased with a sales charge, (b) acquired through a previous exchange
from shares purchased with a sales charge, (c) outstanding as of January 4,
1999 or (d) acquired through capital appreciation or the reinvestment of
dividends and capital gains distributions on those shares. To qualify for
this sales charge waiver or reduced sales charge, at the time of exchange you
must notify the Transfer Agent, or if you are a customer of a Service Agent,
your Service Agent. Any such qualification may be subject to confirmation,
through a check of appropriate records and documentation, of your existing
share balances and any sales charges paid on prior share purchases.
This exchange privilege may be changed or terminated at any time with at
least 60 days' notice, when notice is required by applicable rules and
regulations.
SERVICE PLANS. The Fund maintains separate Service Plans, which have been
adopted in accordance with Rule 12b-1 under the 1940 Act, for Class A and
Class B shares. Under the Class A Plans, the Fund may pay monthly fees at an
annual rate not to exceed 0.25% of the average daily net assets represented by
Class A shares of the Fund. Under the Class B Plans, the Fund may pay a
combined monthly distribution and service fee of up to 1.00% of the average
daily net assets represented by the Class B shares. These fees may be used to
make payments to the Distributor for distribution services and to Service
Agents and others as compensation for the sale of shares of the applicable
class of the Fund, for advertising, marketing or other promotional activity,
and for preparation, printing and distribution of prospectuses, statements of
additional information and reports for recipients other than regulators and
existing shareholders. The Fund also may make payments to the Distributor,
Service Agents and others for providing personal service or the maintenance of
shareholder accounts.
The amounts paid to each Service Agent and other recipient may vary based upon
certain factors, including, among other things, the levels of sales of Fund
shares and/or shareholder services provided by the Service Agent. Service
Agents and others may receive different compensation for sales of Class A and
Class B shares.
The Distributor provides to the Trustees quarterly a written report of amounts
expended pursuant to the Plans and the purposes for which the expenditures
were made.
During the period they are in effect, the Plans and related Distribution
Agreements obligate the Fund to pay fees to the Distributor, Service Agents
and others as compensation for their services, not as reimbursement for
specific expenses incurred. Thus, even if these entities' expenses exceed the
fees provided for under the Plans, the Fund will not be obligated to pay more
than those fees and, if their expenses are less than the fees paid to them,
they will realize a profit. The Fund will pay the fees to the Distributor,
Service Agents and others until the Plans or Distribution Agreements are
terminated or not renewed. In that event, the Distributor's or Service Agent's
expenses in excess of fees received or accrued through the termination date
will be the Distributor's or Service Agent's sole responsibility and not
obligations of the Fund.
The Distributor may make payments for distribution and/or shareholder
servicing activities out of its past profits and other available sources. The
Distributor may also make payments for marketing, promotional or related
expenses to dealers. The amount of these payments is determined by the
Distributor and may vary. Citibank may make similar payments under similar
arrangements.
From time to time, the Distributor or Citibank may provide additional
promotional bonuses, incentives or payments to dealers that sell shares of the
Fund. These may include payments for travel expenses, including lodging,
incurred in connection with trips taken by invited registered representatives
and their guests to locations within and outside the United States for
meetings or seminars of a business nature. In some instances, these bonuses,
incentives or payments may be offered only to dealers who have sold or may
sell significant amounts of shares. Certain dealers may not sell all classes
of shares.
<PAGE>
CONDENSED FINANCIAL INFORMATION. The information in the following table
supplements the financial information contained in "Condensed Financial
Information" in the Prospectus. The numbers in the table below are unaudited.
For more current performance information, call 1-800-625-4554.
<TABLE>
<CAPTION>
CITIFUNDS INTERNATIONAL
GROWTH & INCOME
PORTFOLIO
FOR PERIOD
MARCH 2, 1998+ TO
APRIL 30, 1998
(UNAUDITED)
- ---------------------------------------------------------------------------------------------------
<S> <C>
Net Asset Value, beginning of period $10.00
- -------------------------------------------------------------------------------------------------
Income from Operations:
Net investment income 0.025
Net realized and unrealized gain on investments 0.615
- -------------------------------------------------------------------------------------------------
Total from operations 0.640
- -------------------------------------------------------------------------------------------------
Less Dividends From:
Net investment income --
Net realized gain on investments --
- -------------------------------------------------------------------------------------------------
Total from distributions --
- -------------------------------------------------------------------------------------------------
Net Asset Value, end of period $10.64
- -------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $20,062
Ratio of expenses to average net assets (A) 1.65%*
Ratio of net investment income to average net assets 2.10%*
Portfolio turnover 19%
Total Return 6.40%**
- -------------------------------------------------------------------------------------------------
Note: If certain agents of the Fund had not voluntarily agreed to waive all or
a portion of their fees for the periods indicated and expenses were not
reduced for fees paid indirectly, the net investment income per share and the
ratios would have been as follows:
- -------------------------------------------------------------------------------------------------
Net investment income per share $0.018
RATIOS:
Expenses to average net assets (A) 1.90%*
Net investment income to average net assets 1.85%*
- -------------------------------------------------------------------------------------------------
(A) Includes allocated expenses for the period indicated from the International Portfolio.
+ Commencement of Operations
* Annualized
** Not annualized
</TABLE>
<PAGE>
Rule 497(e) File Nos. 33-36556 and 811-6154
Supplement dated January 4, 1999 to Statement of Additional Information
dated January 7, 1998 for
CitiFunds(SM) International Growth &
Income Portfolio
SALES CHARGES. Shares of the Fund are sold at net asset value, plus, in the
case of Class A shares, a front-end, or initial, sales charge that may be
reduced on purchases involving substantial amounts and that may be eliminated
in certain circumstances. A contingent deferred sales charge is imposed on
redemptions of certain Class B shares made within five years of purchase.
PERFORMANCE. Total rates of return for the Fund may be calculated on
investments at various sales charge levels or at net asset value. Any
performance data which is based on a reduced sales charge or net asset value
would be reduced if the maximum sales charge were taken into account.
DETERMINATION OF NET ASSET VALUE. Net asset value is calculated separately
for each class. Per share net asset value of the classes of the Fund's shares
can be expected to differ because the Class B shares bear higher expenses than
Class A shares.
LETTER OF INTENT. If an investor anticipates purchasing $25,000 or more of
Class A shares of the Fund alone or in combination with Class B shares of the
Fund or any of the classes of certain other CitiFunds and certain other mutual
funds managed or advised by Citibank (all of such funds being referred to
herein as CitiFunds) within a 13-month period, the investor may obtain the
shares at the same reduced sales charge as though the total quantity were
invested in one lump sum by completing a letter of intent on the terms
described below. Subject to acceptance by CFBDS, Inc., the Fund's distributor,
and the conditions mentioned below, each purchase will be made at a public
offering price applicable to a single transaction of the dollar amount
specified in the letter of intent.
o The shareholder or, if the shareholder is a customer of a Service Agent, his
or her Service Agent must inform CFBDS that the letter of intent is in effect
each time shares are purchased.
o The shareholder makes no commitment to purchase additional shares, but if his
or her purchases within 13 months plus the value of shares credited toward
completion of the letter of intent do not total the sum specified, an
increased sales charge will apply as described below.
o A purchase not originally made pursuant to a letter of intent may be included
under a subsequent letter of intent executed within 90 days of the purchase
if CFBDS is informed in writing of this intent within the 90-day period.
o The value of shares of the Fund presently held, at cost or maximum offering
price (whichever is higher), on the date of the first purchase under the
letter of intent, may be included as a credit toward the completion of the
letter, but the reduced sales charge applicable to the amount covered by the
letter is applied only to new purchases.
o Instructions for issuance of shares in the name of a person other than the
person signing the letter of intent must be accompanied by a written
statement from the Transfer Agent or Service Agent stating that the shares
were paid for by the person signing the letter.
o Neither income dividends nor capital gains distributions taken in additional
shares will apply toward the completion of the letter of intent.
o The value of any shares redeemed or otherwise disposed of by the purchaser
prior to termination or completion of the letter of intent are deducted from
the total purchases made under the letter of intent.
If the investment specified in the letter of intent is not completed (either
prior to or by the end of the 13-month period), the Transfer Agent will
redeem, within 20 days of the expiration of the letter of intent, an
appropriate number of the shares in order to realize the difference between
the reduced sales charge that would apply if the investment under the letter
of intent had been completed and the sales charge that would normally apply to
the number of shares actually purchased. By completing and signing the letter
of intent, the shareholder irrevocably grants a power of attorney to the
Transfer Agent to redeem any or all shares purchased under the letter of
intent, with full power of substitution.
RIGHT OF ACCUMULATION. A shareholder qualifies for cumulative quantity
discounts on the purchase of Class A shares when his or her new investment,
together with the current offering price value of all holdings of that
shareholder in the CitiFunds, reaches a discount level. For example, if a Fund
shareholder owns shares valued at $50,000 and purchases an additional $50,000
of Class A shares of the Fund, the sales charge for the additional $50,000
purchase would be at the rate of 3.00% (the rate applicable to single
transactions from $100,000 to less than $250,000). A shareholder must provide
the Transfer Agent with information to verify that the quantity sales charge
discount is applicable at the time the investment is made.
CONVERSION OF CLASS B SHARES. A shareholder's Class B shares will
automatically convert to Class A shares in the Fund approximately eight years
after the date of issuance, together with a pro rata portion of all Class B
shares representing dividends and other distributions paid in additional Class
B shares. The conversion will be effected at the relative net asset values per
share of the two classes on the first business day of the month in which the
eighth anniversary of the issuance of the Class B shares occurs. If a
shareholder effects one or more exchanges among Class B shares of the
CitiFunds during the eight-year period, the holding periods for the shares so
exchanged will be counted toward the eight-year period. Because the per share
net asset value of the Class A shares may be higher than that of the Class B
shares at the time of conversion, a shareholder may receive fewer Class A
shares than the number of Class B shares converted, although the dollar value
will be the same.
SERVICE FEES. The Fund pays fees for distribution and shareholder servicing
pursuant to a Service Plan adopted with respect to each class of shares of the
Fund in accordance with Rule 12b-1 under the Investment Company Act of 1940,
as amended. The Service Plan with respect to Class A shares provides that the
Fund may pay monthly fees at an annual rate not to exceed 0.25% of the average
daily net assets represented by Class A shares of the Fund. The Service Plan
with respect to Class B shares provides that the Fund may pay a combined
monthly distribution and service fee of up to 1.00% of the average daily net
assets represented by the Class B shares.
FINANCIAL STATEMENTS. The financial statements (unaudited) for CitiFunds
International Growth & Income Portfolio (Portfolio of Investments at April 30,
1998, Statement of Assets and Liabilities at April 30, 1998, Statement of
Operations for the period March 2, 1998 (commencement of operations) to April
30, 1998, Statement of Changes in Net Assets for the period March 2, 1998
(commencement of operations) to April 30, 1998, and Financial Highlights for
the period March 2, 1998 (commencement of operations) to April 30, 1998),
which are included in the Semi-Annual Report to Shareholders of CitiFunds
International Growth & Income Portfolio, are incorporated herein by reference.
