CITIFUNDS(SM)
International
Growth &
Income
Portfolio
SEMI-ANNUAL REPORT
APRIL 30, 2000
INVESTMENT PRODUCTS: NOT FDIC INSURED * NO BANK GUARANTEE * MAY LOSE VALUE
<PAGE>
TABLE OF CONTENTS
Letter to Our Shareholders 1
................................................................................
Portfolio Environment and Outlook 2
................................................................................
Fund Facts 4
................................................................................
Portfolio Highlights 5
................................................................................
Fund Performance 6
................................................................................
CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
Statement of Assets and Liabilities 7
................................................................................
Statement of Operations 8
................................................................................
Statement of Changes in Net Assets 9
................................................................................
Financial Highlights 10
................................................................................
Notes to Financial Statements 12
................................................................................
INTERNATIONAL PORTFOLIO
Portfolio of Investments 16
................................................................................
Statement of Assets and Liabilities 18
................................................................................
Statement of Operations 19
................................................................................
Statement of Changes in Net Assets 20
................................................................................
Financial Highlights 20
................................................................................
Notes to Financial Statements 21
................................................................................
<PAGE>
LETTER TO OUR SHAREHOLDERS
Dear CitiFunds Shareholder:
During the six months ended April 30, 2000, stock and bond markets have been
highly challenging and volatile for almost all types of investments, including
international stocks. A strengthening global economy, rising interest rates and
shifting investor sentiment have created wide fluctuations in the prices of many
stocks and bonds. In the United States, robust economic growth and inflation
fears caused the Federal Reserve Board (the "Fed") to raise key short-term
interest rates three times during the reporting period. When added to the two
rate hikes implemented before the current reporting period began, the Fed has
raised interest rates a total of 1.25 percentage points since last summer.
Throughout the reporting period, the Fund's investment subadviser, Hotchkis
and Wiley continued to manage CitiFundsSM International Growth & Income
Portfolio with the goal of achieving its investment objective: to provide
current income and long-term growth of income accompanied by growth of capital.
This report reviews the Fund's investment activities and performance during
the reporting period and provides a summary of the subadviser's perspective on
and outlook for the value sector of the major international stock markets. Thank
you for your continued confidence and participation in these challenging times.
Sincerely,
/s/ Philip W. Coolidge
----------------------
Philip W. Coolidge
President
May 15, 2000
1
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PORTFOLIO ENVIRONMENT AND OUTLOOK
BY MOST MEASURES, PRICES OF DIVIDEND-PAYING, VALUE-ORIENTED INTERNATIONAL
STOCKS ENDED THE SIX-MONTH REPORTING PERIOD NEAR WHERE THEY BEGAN. Most major
international stock markets experienced record levels of day-to-day volatility
during the period. (Value investing consists of identifying securities of
companies that are believed to be undervalued but have good long term business
prospects.) In the view of management, this higher volatility was caused
primarily by a dramatic change in investor sentiment that occurred in the fourth
quarter of 1999.
With the exception of a brief rally in early January, value-oriented stocks
were virtually ignored by most investors until mid-March and continued to
provide lackluster performance. In contrast, growth stocks soared during
November and December, primarily because of optimism regarding the beneficial
effects of new information technologies and their impact on global businesses.
Many investors flocked to speculative technology companies that they believed
had the greatest future growth potential and prices seemed to be less of a
factor in their decisions.
During March of 2000, however, these long-standing trends began to reverse,
suggesting that global investors were rediscovering the long-neglected
dividend-paying sector of the major international stock markets. Positive
expectations regarding the information revolution dissipated when evidence of
renewed inflationary pressures appeared, triggering a decline in growth stocks
of all company sizes. In fact, between mid-March and the end of April, the U.S.
market experienced a substantial correction. The tech-laden NASDAQ Composite
Index* fell more than 35%, including a single-day drop of 10% on April 14, 2000.
Even though most international markets followed the NASDAQ decline, value stocks
easily outperformed growth stocks and many long-ignored stocks began to rally
strongly.
FACED WITH THESE TURBULENT MARKET CONDITIONS, CITIFUNDSSM INTERNATIONAL
GROWTH & INCOME PORTFOLIO CONTINUED TO FOLLOW ITS LONG-TERM STRATEGY OF
INVESTING IN HIGH-QUALITY, DIVIDEND-PAYING COMPANIES DEEMED TO BE UNDERVALUED
RELATIVE TO THEIR FUTURE PROSPECTS. Management searches for such values one
company at a time, assessing the merits of each opportunity individually rather
than based on an analysis of market-wide or macroeconomic trends.
Consistent with their approach, management avoided the speculative
high-flyers that most investors associate with the Internet. INSTEAD, THE
INVESTMENT TEAM CONTINUED TO FOCUS ON INDIVIDUAL COMPANIES THAT THEY THOUGHT HAD
HIGH QUALITY BUSINESSES NOT REFLECTED IN THEIR STOCK PRICES. Management found
several such opportunities primarily in large, well-established companies in the
consumer nondurables industry group.
As the investment environment evolved, management adapted the Portfolio's
holdings accordingly. For example, the managers increased their exposure to
stocks within the United Kingdom ("UK") because of what were believed to be
attractive valuations of individual companies relative to companies in other
markets. The British pound remained strong relative to the Euro, which investors
feared might hurt exports and had adversely affected stock prices in the UK. The
2
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Euro is the single currency of the European Monetary Union that was adopted by
Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands,
Austria, Portugal and Finland on January 1, 1999. Furthermore, the U.K.
marketplace was focused on telecommunications stocks in the wake of several
major mergers among telephone and media companies. Management sought to take
advantage of this period of temporary weakness by buying high-quality,
out-of-favor companies that were being ignored by distracted investors.
On the other hand, management reduced the Fund's exposure to German stocks
because of individual companies' high valuations and the apparent unwillingness
of German management teams to fully unlock shareholder value within their
companies. The investment team also continued to maintain a relatively light
exposure to Japanese companies, where technology and telecommunications stocks
had driven the market to what management deemed to be unsustainable levels.
In management's view, THE RECENT CORRECTION OF TECHNOLOGY STOCKS IS EVIDENCE
THAT INVESTORS ARE RETURNING TO A MORE RATIONAL APPROACH TO INVESTING in which
financial fundamentals and valuations really do matter. (Of course, no
guarantees can be given that this will occur.) While there is no way to predict
whether this encouraging development will persist, management believes that it
may be positive for international stocks over time.
The investment team expects heightened market volatility to persist over the
near term. In their opinion, the recent correction was a positive event, taking
some of the froth out of the market and setting new standards for valuations.
Over the longer term, MANAGEMENT BELIEVES THAT CONDITIONS ARE POSITIVE FOR MANY
DIVIDEND-PAYING COMPANIES IN INTERNATIONAL MARKETS. While no guarantees can be
given, management also thinks that as investors begin to recognize that these
companies are sound businesses, possess attractive growth prospects and are
inexpensively priced, the future prospects of select international stocks may
improve.
*The NASDAQ Composite Index is a market value-weighted index that measures all
domestic and non-U.S. based securities listed on the NASDAQ stock market.
3
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FUND FACTS
FUND OBJECTIVE
Current income and long-term growth of income accompanied by growth of capital.
INVESTMENT MANAGER, DIVIDENDS
International Portfolio Paid semi-annually, if any
Citibank, N.A.
PORTFOLIO SUBADVISER CAPITAL GAINS
Hotchkis and Wiley Distributed annually, if any
COMMENCEMENT OF OPERATIONS BENCHMARKS
March 2, 1998 o MSCI EAFE Index*
o Lipper International Equity Funds
NET ASSETS AS OF 4/30/00 Average**
Class A Shares
$8.2 million
Class B Shares
$81,759
* The MSCI EAFE Index is an unmanaged index of equity securities in 21
countries listed on the exchanges of Europe, Australia, New Zealand and
countries in the Far East.
** The Lipper International Equity Funds Average reflects the performance
(excluding sales charges) of mutual funds with similar objectives.
Investments in non-U.S. securities involve risks relating to political, social
and economic developments abroad, as well as risks resulting from the
differences between the regulations to which U.S. issuers and markets are
subject.
4
<PAGE>
PORTFOLIO HIGHLIGHTS
--------------------------------------------------------------------------------
INDUSTRIES AS A % OF THE PORTFOLIO AS OF APRIL 30, 2000
INDUSTRY % OF COMMON STOCKS
Diversified Telecommunication Services .......................... 11.2%
Banks ........................................................... 11.1%
Construction Materials .......................................... 5.5%
Media ........................................................... 4.5%
Oil & Gas ....................................................... 4.4%
Diversified Financials .......................................... 4.3%
Insurance ....................................................... 4.1%
Pharmaceuticals ................................................. 4.0%
Commercial Services & Supplies .................................. 3.2%
Leisure Equipment & Products .................................... 3.1%
Food Products ................................................... 2.7%
Machinery ....................................................... 2.7%
Aerospace & Defense ............................................. 2.6%
Computer Peripherals ............................................ 2.6%
Industrial Conglomerates ........................................ 2.5%
Beverages ....................................................... 2.4%
Transportation Infrastructure ................................... 2.1%
Office Electronics .............................................. 2.1%
Building Materials .............................................. 1.9%
Healthcare Equipment & Supplies ................................. 1.8%
Real Estate ..................................................... 1.8%
Chemicals ....................................................... 1.8%
Electrical Utilities ............................................ 1.7%
Metals & Mining ................................................. 1.7%
Multi-Utilities ................................................. 1.6%
Engineering ..................................................... 1.5%
Household Products .............................................. 1.4%
Tobacco ......................................................... 1.2%
Household Durables .............................................. 1.1%
Biotechnology ................................................... 1.1%
Paper & Forest Products ......................................... 1.0%
Retailers-Specialty ............................................. 1.0%
Multi-Line Retail ............................................... 1.0%
Containers & Packaging .......................................... 1.0%
Industrial Manufacturing ........................................ 0.8%
Electrical Equipment ............................................ 0.8%
Food & Drug Retailing ........................................... 0.7%
PORTFOLIO COMPOSITION AS OF APRIL 30, 2000
[The following table represents a pie chart in the printed piece.]
Australia 2%
Sweden 2%
Italy 2%
Ireland 4%
Hong Kong 4%
Canada 2%
Japan 11%
Spain 4%
Germany 5%
France 10%
Austria 1%
Netherlands 8%
Singapore 5%
Switzerland 5%
Portugal 2%
New Zealand 2%
Finland 1%
Great Britain 30%
5
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FUND PERFORMANCE
TOTAL RETURNS
SINCE
SIX ONE 3/2/98
ALL PERIODS ENDED APRIL 30, 2000 MONTHS** YEAR (INCEPTION)*
--------------------------------------------------------------------------------
CitiFunds International Growth & Income Portfolio
(Class A) without sales charge 6.23% 9.55% 6.15%
Lipper International Equity Funds Average 13.83% 24.76% 15.21%+
MSCI EAFE Index 6.84% 14.17% 12.98%+
CitiFunds International Growth & Income
Portfolio (Class A) with maximum
sales charge of 5.00% 0.92% 4.07% 3.67%
CitiFunds International Growth & Income Portfolio
(Class B) without deferred sales charge 5.94% 8.85% 11.47%#
Lipper International Equity Funds Average 13.83% 24.76% 22.92%++
MSCI EAFE Index 6.84% 14.17% 15.09%++
CitiFunds International Growth &Income Portfolio
(Class B) with maximum deferred
sales charge of 5.00% 0.64% 3.41% 7.22%#
* Average Annual Total Return
** Not Annualized
+ From 2/28/98
++ From 12/31/98
# Commencement of Operations 1/4/99
GROWTH OF A $10,000 INVESTMENT
A $10,000 investment in the Fund made on inception date would have grown to
$10,810 with sales charge (as of 4/30/00). The graph shows how the Fund compares
to its benchmarks over the same period.
[The following table represents a line chart in the printed piece.)
CitiFunds International Lipper International MSCI
Growth & Income Equity Funds EAFE
Portfolio (Class A) Average Index
3/2/98 9500 10000 10000
3/31/98 9975 10511 10310
4/30/98 10108 10655 10394
5/31/98 10023 10665 10346
6/30/98 9814 10583 10426
7/31/98 9624 10737 10535
8/31/98 8227 9203 9232
9/30/98 7838 8871 8951
10/31/98 8588 9529 9886
11/30/98 8940 10022 10396
12/31/98 9106 10330 10808
1/31/99 8691 10410 10779
2/28/99 8691 10135 10525
3/31/99 9087 10489 10967
4/30/99 9868 10970 11413
5/31/99 9636 10519 10828
6/30/99 9974 11073 11252
7/31/99 10254 11358 11590
8/31/99 10447 11458 11635
9/30/99 10254 11502 11755
10/31/99 10177 11944 12198
11/30/99 10379 12868 12625
12/31/99 10888 14409 13760
1/31/00 10410 13595 12887
2/29/00 10498 14403 13237
3/31/00 10947 14517 13753
4/30/00 10810 13596 13032
The graph includes the initial sales charge on the Fund (no comparable charge
exists for the indices) and assumes all dividends and distributions from the
Fund are reinvested at Net Asset Value.
Notes: All Fund performance numbers represent past performance, and are no
guarantee of future results. The Fund's share price and investment return will
fluctuate, so that the value of an investor's shares, when redeemed, may be
worth more or less than their original cost. Total returns include change in
share price and reinvestment of dividends and distributions, if any. Total
return figures "with sales charge" are provided in accordance with SEC
guidelines for comparative purposes for prospective investors and reflect
certain voluntary fee waivers which may be terminated at any time. If the
waivers were not in place, the Fund's returns would have been lower. The maximum
sales charge of 5.00% went into effect on January 4, 1999. Investors may not
invest directly in an index.
6
<PAGE>
CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (Unaudited)
=============================================================================
ASSETS:
Investment in International Portfolio, at value (Note 1A) $8,264,852
Tax reclaim receivable 54,838
Receivable From Sub-Administrator 5,761
-----------------------------------------------------------------------------
Total assets 8,325,451
-----------------------------------------------------------------------------
LIABILITIES:
Payable for shares of beneficial interest repurchased 2,500
Accrued expenses and other liabilities 40,794
-----------------------------------------------------------------------------
Total liabilities 43,294
-----------------------------------------------------------------------------
NET ASSETS $8,282,157
=============================================================================
NET ASSETS CONSIST OF:
Paid-in capital $8,094,342
Unrealized depreciation (2,534,829)
Accumulated net realized gain 2,692,941
Accumulated net investment income 29,703
-----------------------------------------------------------------------------
Total $8,282,157
=============================================================================
COMPUTATION OF
CLASS A SHARES:
Net Asset Value per share ($8,200,398/739,890 shares outstanding) $11.08
Offering price per share (11.08/0.95) $11.66*
=============================================================================
CLASS B SHARES:
Net Asset Value per share and offering price
($81,759/7,421 shares outstanding) $11.02**
=============================================================================
* Based upon single purchases of less than $25,000.
** Redemption price per share is equal to net asset value less any applicable
deferred contingent sales charge.
See notes to financial statements
7
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CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
================================================================================
INVESTMENT INCOME (NOTE 1B):
Dividend Income from International Portfolio $114,503
(net of foreign withholding tax of $18,956)
Interest Income from International Portfolio 9,701
Foreign Tax reclaims 4,463
Allocated Expenses from International Portfolio (52,116)
--------------------------------------------------------------------------------
$ 76,551
--------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 13,389
Service fees Class A (Note 3) 13,262
Service fees Class B (Note 3) 506
Transfer agent fees 31,057
Blue sky fees 21,730
Custody and fund accounting fees 13,505
Audit fees 11,060
Legal fees 6,962
Trustees fees 2,010
Other 779
--------------------------------------------------------------------------------
Total expenses 114,260
Less expenses assumed by the
Sub-Administrator (Note 6) (64,271)
Less aggregate amount waived by the Manager (Note 2) (13,389)
--------------------------------------------------------------------------------
Net expenses 36,600
--------------------------------------------------------------------------------
Net investment income 39,951
--------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN FROM
INTERNATIONAL PORTFOLIO:
Net realized gain 559,412
Unrealized appreciation 106,836
--------------------------------------------------------------------------------
Net realized and unrealized gain
from International Portfolio 666,248
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $706,199
================================================================================
See notes to financial statements
8
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CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31,
(Unaudited) 1999
================================================================================
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income $ 39,951 $ 137,473
Net realized gain 559,412 1,674,502
Unrealized appreciation 106,836 753,056
--------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 706,199 2,565,031
--------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Class A) (133,742) (261,030)
Net investment income (Class B) (821) --
--------------------------------------------------------------------------------
Decrease in net assets from distribution
to shareholders (134,563) (261,030)
--------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (Note 5):
CLASS A
Net proceeds from sale of shares 300,615 871,769
Net asset value of shares issued to shareholders
from reinvestment of distributions 133,742 261,030
Cost of shares repurchased (5,080,616) (8,337,578)
--------------------------------------------------------------------------------
Total Class A (4,646,259) (7,204,779)
--------------------------------------------------------------------------------
CLASS B*
Net proceeds from sale of shares 10,718 100,903
Net asset value of shares issued to
shareholders from reinvestment of distributions 795 --
Cost of shares repurchased (40,974) (91)
--------------------------------------------------------------------------------
Total Class B (29,461) 100,812
--------------------------------------------------------------------------------
Net decrease in net assets from transactions
in shares of beneficial interest (4,675,720) (7,103,967)
--------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS (4,104,084) (4,799,966)
--------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 12,386,241 17,186,207
--------------------------------------------------------------------------------
End of period (including undistributed
net investment income of
$29,703 and $124,315, respectively) $ 8,282,157 $12,386,241
================================================================================
* January 4, 1999 (Commencement of Operations).
See notes to financial statements
9
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CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
Financial Highlights
CLASS A
----------------------------------------------
FOR THE PERIOD
MARCH 2, 1998
SIX MONTHS (COMMENCEMENT
ENDED YEAR ENDED OF OPERATIONS) TO
APRIL 30, 2000 OCTOBER 31, OCTOBER 31,
(Unaudited) 1999 1998
================================================================================
Net Asset Value, beginning of period $10.55 $9.04 $10.00
--------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.165 0.091+ 0.079
Net realized and unrealized gain (loss)
on investments 0.490 1.561 (1.039)
--------------------------------------------------------------------------------
Total from operations 0.655 1.652 (0.960)
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.125) (0.142) --
--------------------------------------------------------------------------------
Net Asset Value, end of period $11.08 $10.55 $9.04
================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted) $8,200 $12,280 $17,186
Ratio of expenses to
average net assets (A) 1.65%* 1.65% 1.66%*
Ratio of net investment income to
average net assets 0.75%* 0.93% 1.76%*
Total return 6.23%** 18.50% (9.60)%**
Note: If Agents of the Fund for the periods indicated had not voluntarily waived
a portion of their fees, the net investment income per share and the ratios
would have been as follows:
Net investment income (loss)
per share $0.061 $(0.015)+ $0.061
RATIOS:
Expenses to average net assets (A) 3.10%* 2.73% 2.06%*
Net investment income to
average net assets (0.70)%* (0.15)% 1.36%*
================================================================================
* Annualized.
** Not Annualized.
+ The per share amounts were computed using monthly average of shares during
the period.
(A) Includes the Fund's share of International Portfolio allocated
expenses for the period indicated.
See notes to financial statements
10
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CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
CLASS B
-------------------------------------
FOR THE PERIOD
SIX MONTHS JANUARY 4, 1999
ENDED (COMMENCEMENT
APRIL 30, 2000 OF OPERATIONS) TO
(Unaudited) OCTOBER 31, 1999
================================================================================
Net Asset Value, beginning of period $10.48 $ 9.62
--------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.121 0.027+
Net realized and unrealized gain
on investments 0.500 0.833
--------------------------------------------------------------------------------
Total from operations 0.621 0.860
--------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.081) --
--------------------------------------------------------------------------------
Net Asset Value, end of period $11.02 $10.48
================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $82 $106
Ratio of expenses to average net assets (A) 2.40%* 2.40%*
Ratio of net investment income to
average net assets 0.00%* 0.18%*
Total return 5.94%** 8.94%**
Note: If Agents of the Fund for the periods indicated had not voluntarily waived
a portion of their fees, the net investment loss per share and the ratios would
have been as follows:
Net investment loss per share $(0.002) $(0.085)+
RATIOS:
Expenses to average net assets (A) 3.85%* 3.48%*
Net investment income to average net assets (1.45)%* (0.90)%*
================================================================================
* Annualized.
** Not Annualized.
+ The per share amounts were computed using monthly average of shares during
the period.
(A) Includes the Fund's share of International Portfolio allocated
expenses for the period indicated.
See notes to financial statements
11
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CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES CitiFunds International Growth & Income
Portfolio (the "Fund") is a separate diversified series of CitiFunds
International Trust (the "Trust"), a Massachusetts business trust. The Fund
commenced operations on March 2, 1998. The Trust is registered under the
Investment Company Act of 1940, as amended, as an open-end, management
investment company. The Fund currently invests all of its investable assets in
International Portfolio (the "Portfolio"), a management investment company for
which Citibank, N.A. ("Citibank") serves as Investment Manager. The value of
such investment reflects the Fund's proportionate interest (11.5% at April 30,
2000) in the net assets of the Portfolio. CFBDS, Inc. ("CFBDS") acts as the
Fund's Sub-Administrator and Distributor.
The Fund offers Class A and Class B shares. The Fund commenced its public
offering of Class B shares on January 4, 1999. Class A shares have a front-end,
or initial, sales charge effective January 4, 1999. This sales charge may be
reduced or eliminated in certain circumstances. Class B shares have no front end
sales charge, pay a higher ongoing distribution fee than Class A shares, and are
subject to a deferred sales charge if sold within five years of purchases. Class
B shares automatically convert into Class A shares after eight years. Expenses
of the Fund are borne pro-rata by the holders of each class of shares, except
that each class bears expenses unique to that class (including the Rule 12b-1
service and distribution fees applicable to such class), and votes as a class
only with respect to its own Rule 12b-1 plan. Shares of each class would receive
their pro-rata share of the net assets of the Fund if the Fund were liquidated.
Class A shares have a lower expense ratio than Class B shares. For the six
months ended April 30, 2000, CFBDS, acting as the distributor received $1,252
from sales of Class A and $355 in deferred sales charges from redemptions of
Class B shares.
The financial statements of the Portfolio, including the portfolio of
investments, are contained elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
The significant accounting policies consistently followed by the Fund are as
follows:
A. INVESTMENT VALUATION Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.
B. INVESTMENT INCOME The Fund earns income, net of Portfolio expenses, daily
based on its investment in the Portfolio.
C. FEDERAL TAXES The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investment transactions. Accordingly, no provision for federal income or
excise
12
<PAGE>
CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
tax is necessary. At October 31, 1999, the Fund, for federal income tax
purposes, had a capital loss carryover of $1,400,807 of which $575,213 will
expire on October 31, 2006 and of which $825,594 will expire on October 31,
2007. Such capital loss carryover will reduce the Fund's taxable income arising
from future net realized gain on investment transactions, if any, to the extent
permitted by the Internal Revenue Code, and thus will reduce the amount of the
distributions to shareholders which would otherwise be necessary to relieve the
Fund of any liability for federal income or excise tax.
D. EXPENSES The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and CFBDS. Expenses incurred by the Trust with
respect to any two or more funds or series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that fund. The Fund's share of the Portfolio's expenses are
charged against and reduce the amount of the Fund's investment in the Portfolio.
E. DISTRIBUTIONS Distributions to shareholders are recorded on the
ex-dividend date. The amount and character of income and net realized gains to
be distributed are determined in accordance with income tax rules and
regulations, which may differ from generally accepted accounting principles.
These differences are attributable to permanent book and tax accounting
differences. Reclassifications are made to the Fund's capital accounts to
reflect income and net realized gains available for distribution (or available
capital loss carryovers) under income tax rules and regulations.
F. OTHER All the net investment income, realized and unrealized gain and loss
of the Portfolio is allocated pro rata, based on respective ownership interests,
among the Fund and the other investors in the Portfolio at the time of such
determination. Investment transactions are accounted for on the trade date
basis. Realized gains and losses are determined on the identified cost basis.
2. MANAGEMENT FEES Citibank is responsible for overall management of the Fund's
business affairs, and has a Management Agreement with the Fund. Citibank also
provides certain administrative services to the Fund. These administrative
services include providing general office facilities and supervising the overall
administration of the Fund. CFBDS acts as Sub-Administrator and performs certain
duties and receives compensation from Citibank as from time to time is agreed to
by Citibank and CFBDS. Citibank is a wholly-owned subsidiary of Citigroup Inc.
The management fees paid to Citibank are accrued daily and payable monthly.
The management fee is computed at the annual rate of 0.25% of the Fund's average
daily net assets. The management fee amounted to $13,389, all of which was
voluntarily waived for the six months ended April 30, 2000.
13
<PAGE>
CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
The Trust pays no compensation directly to any Trustee or any other officer
who is affiliated with the Sub-Administrator, all of whom receive remuneration
for their services to the Trust from the Sub-Administrator or its affiliates.
3. SERVICE FEES The Fund maintains separate Service 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 Service Plan, 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 Fees for Class A shares amounted to $13,262 for
the six months ended April 30, 2000. Under the Class B Service 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. The Service Fees for Class B shares amounted to $506 for the six
months ended April 30, 2000. 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 may also make payments
to the Distributor and others for providing personal service or the maintenance
of shareholder accounts.
4. INVESTMENT TRANSACTIONS Increases and decreases in the Fund's investment in
the Portfolio for the six months ended April 30, 2000 aggregated $498,418 and
$5,251,124, respectively.
5. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees
to issue an unlimited number of full and fractional shares of beneficial
interest (without par value). Transactions in shares of beneficial interest were
as follows:
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31,
(Unaudited) 1999
================================================================================
CLASS A
Shares sold 27,455 90,447
Shares issued to shareholders from reinvestment
of distributions 12,281 28,250
Shares repurchased (464,205) (856,404)
--------------------------------------------------------------------------------
Net decrease (424,469) (737,707)
================================================================================
14
<PAGE>
CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31,
(Unaudited) 1999
================================================================================
CLASS B*
Shares sold 986 10,144
Shares issued to shareholders from reinvestment
of distributions 73 --
Shares repurchased (3,772) (10)
--------------------------------------------------------------------------------
Net increase (decrease) (2,713) 10,134
================================================================================
* January 4, 1999 (Commencement of Operations).
6. ASSUMPTIONS OF EXPENSE CFBDS has voluntarily agreed to pay a portion of the
unwaived expenses of the Fund for the six months ended April 30, 2000, which
amounted to $64,271.
15
<PAGE>
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS April 30, 2000
(Unaudited)
ISSUER SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCKS-- 99.1%
--------------------------------------------------------------------------------
AUSTRIA -- 0.9%
Boehler-Uddeholm 16,313 $ 635,620
-----------
AUSTRALIA -- 1.7%
--------------------------------------------------------------------------------
Australia & New Zealand
Banking Group 182,870 1,264,465
-----------
CANADA -- 2.1%
--------------------------------------------------------------------------------
Manulife Financial Corp. 98,329 1,543,757
-----------
FINLAND-- 1.0%
--------------------------------------------------------------------------------
UPM-Kymmene Oy 28,173 729,944
-----------
FRANCE -- 9.7%
--------------------------------------------------------------------------------
Aventis 30,614 1,683,787
BIC 22,036 877,442
BQE National Paris 21,110 1,706,089
Pernod-Ricard 17,289 781,942
Total 12,674 1,923,011
-----------
6,972,271
GERMANY -- 4.9%
--------------------------------------------------------------------------------
Depfadeutsche Pfandbriefban 450 45,205
Draegerwerk 75,819 654,807
Dyckerhoff 30,595 667,534
SGL Carbon * 5,633 435,230
Veba AG 23,403 1,174,417
Vossloh AG 35,189 537,437
-----------
3,514,630
-----------
GREAT BRITAIN -- 29.8%
--------------------------------------------------------------------------------
Allied Domecq 187,145 916,376
Allied Zurich 58,684 583,842
BAA 227,787 1,478,904
British Aerospace 302,758 1,861,948
British American
Tobacco plc 136,564 850,494
British
Telecommunications 56,962 1,019,901
CGU 55,318 793,233
Celltech Group 47,690 787,060
Cookson Group 299,615 881,658
Hanson 209,499 1,534,675
Lex Service 107,160 678,216
Lloyds TSB Group 62,572 610,833
Reckitt & Colman 95,814 985,692
Reed International 170,060 1,183,545
Royal Bank 63,002 982,872
Safeway 154,036 519,224
TI Group 198,805 1,080,259
Tomkins 294,737 905,163
Unilever 191,096 1,148,455
United News & Media 100,345 1,304,539
Williams 244,255 1,377,612
-----------
21,484,501
-----------
HONG KONG -- 4.5%
--------------------------------------------------------------------------------
Henderson Land
Development 164,000 717,969
Hong Kong Electric 390,000 1,219,188
New World
Development Co. 434,790 588,897
South China
Morning Post 695,486 741,095
-----------
3,267,149
-----------
IRELAND -- 3.7%
--------------------------------------------------------------------------------
Allied Irish Banks 122,074 1,218,533
Greencore Group 278,560 772,379
Jefferson Smurfit Group 318,760 695,483
-----------
2,686,395
-----------
ITALY -- 2.2%
--------------------------------------------------------------------------------
Telecom Italia SPA 112,000 1,565,979
-----------
JAPAN -- 10.9%
--------------------------------------------------------------------------------
Canon Inc. 33,000 1,509,235
Circle Japan Co. 19,100 744,443
Komatsu 273,000 1,314,262
Nintendo Co. 13,100 2,183,030
Promise Co. 13,500 1,093,598
Sanyo Shipan Financial 27,500 840,161
Yodogawa Steel Works 65,000 166,690
-----------
7,851,419
-----------
NETHERLANDS -- 8.2%
--------------------------------------------------------------------------------
ABN-Amro Holdings 31,562 649,897
Akzo Nobel 30,658 1,255,040
ING Groep 21,128 1,152,832
KPN 12,716 1,281,439
Philips Electronics 35,068 1,564,367
-----------
5,903,575
-----------
NEW ZEALAND -- 2.2%
--------------------------------------------------------------------------------
Telecom Corp. 379,972 1,605,275
-----------
PORTUGAL -- 1.8%
--------------------------------------------------------------------------------
Portugal
Telecommunications 113,881 1,270,303
-----------
16
<PAGE>
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS April 30, 2000
(Unaudited)
ISSUER SHARES VALUE
--------------------------------------------------------------------------------
SINGAPORE -- 4.6%
--------------------------------------------------------------------------------
Creative Technology Ltd. 68,988 $ 1,888,547
United Overseas Bank 209,000 1,457,427
-----------
3,345,974
-----------
SPAIN -- 3.5%
--------------------------------------------------------------------------------
Respol 58,690 1,200,489
Telefonica S.A.* 58,242 1,296,162
-----------
2,496,651
SWEDEN -- 1.9%
--------------------------------------------------------------------------------
Electrolux AB 45,330 765,949
Getinge Industrier 67,065 620,834
-----------
1,386,783
-----------
SWITZERLAND -- 5.5%
--------------------------------------------------------------------------------
Forbo Holdings 539 194,403
Geberit 4,286 1,389,275
Novartis 846 1,181,765
Schweizerische Industrie-
Gesellschaft Holding 1,284 644,029
Sulzer 843 539,661
-----------
3,949,133
-----------
TOTAL INVESTMENTS
(Identified Cost
$68,125,796) 99.1% 71,473,824
OTHER ASSETS,
LESS LIABILITIES 0.9 649,559
----- -----------
NET ASSETS 100.0% $72,123,383
-----------
* Non income producing securities
See notes to financial statements
17
<PAGE>
INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (Unaudited)
================================================================================
ASSETS:
Investments at value (Note 1A) (Identified Cost, $68,125,796) $71,473,824
Cash 531,700
Foreign currency, at value (cost $17,779) 17,383
Dividends receivable 559,644
Receivable for foreign currency sold 125,734
--------------------------------------------------------------------------------
Total assets 72,708,285
--------------------------------------------------------------------------------
LIABILITIES:
Payable for investments purchased 312,248
Payable for foreign currency purchased 127,891
Payable to affiliates--management fees (Note 2) 49,545
Accrued expenses and other liabilities 95,218
--------------------------------------------------------------------------------
Total liabilities 584,902
--------------------------------------------------------------------------------
NET ASSETS $72,123,383
--------------------------------------------------------------------------------
REPRESENTED BY:
Paid-in capital for beneficial interests $72,123,383
================================================================================
See notes to financial statements
18
<PAGE>
INTERNATIONAL PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (Unaudited)
================================================================================
INVESTMENT INCOME: (Note 1B)
Dividend income (net of foreign
withholding tax of $162,695) $986,184
Interest income 80,620
--------------------------------------------------------------------------------
Total investment income $ 1,066,804
--------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 364,053
Custody and fund accounting fees 99,463
Legal fees 8,858
Audit fees 8,645
Trustees fees 4,515
Other 674
--------------------------------------------------------------------------------
Total expenses 486,208
Less aggregate amount waived by the Manager (Note 2) (44,882)
--------------------------------------------------------------------------------
Net expenses 441,326
--------------------------------------------------------------------------------
Net investment income 625,478
--------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investment transactions 4,715,904
Net realized gain on foreign currency transactions 20,577
--------------------------------------------------------------------------------
Net realized gain on investment transactions
and foreign currency transactions 4,736,481
--------------------------------------------------------------------------------
Unrealized appreciation of investments, forward currency
contracts, foreign currency transactions 1,379,907
--------------------------------------------------------------------------------
Net realized and unrealized gain of investments and
foreign currency transactions 6,116,388
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,741,866
================================================================================
See notes to financial statements
19
<PAGE>
INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999
================================================================================
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income $ 625,478 $ 2,325,499
Net realized gain on investment transactions and
foreign currency transactions 4,736,481 17,581,494
Unrealized appreciation (depreciation) of
investments, forward currency contracts,
foreign currency transactions 1,379,907 9,962,721
--------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 6,741,866 29,869,714
--------------------------------------------------------------------------------
CAPITAL TRANSACTIONS:
Proceeds from contributions 4,420,282 9,449,606
Value of withdrawals (44,332,170) (164,972,221)
--------------------------------------------------------------------------------
Net decrease in net assets
from capital transactions (39,911,888) (155,522,615)
--------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS: (33,170,022) (125,652,901)
--------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 105,293,405 230,946,306
--------------------------------------------------------------------------------
End of period $ 72,123,383 $105,293,405
================================================================================
INTERNATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999
================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 72,123 $105,293
Ratio of expenses to average net assets 0.97%* 0.95%
Ratio of net investment income to
average net assets 1.37%* 1.41%
Portfolio turnover 26% 26%
Note: If Agents of the Portfolio had not voluntarily waived a portion of
their fees during the period indicated the ratios would be as follows:
RATIOS:
Expenses to average net assets 1.07%* 0.98%
Net investment income to
average net assets 1.27%* 1.38%
================================================================================
*Annualized.
See notes to financial statements
20
<PAGE>
INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES International Portfolio (the "Portfolio"), a
separate series of Asset Allocation Portfolios (the "Portfolio Trust"), is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company which was organized as a
trust under the laws of the State of New York. The Declaration of Trust permits
the Trustees to issue beneficial interests in the Portfolio. The Investment
Manager of the Portfolio is Citibank, N.A. ("Citibank"). Signature Financial
Group (Grand Cayman), Ltd. ("SFG") acts as the Portfolio's Sub-Administrator.
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
The significant accounting policies consistently followed by the Portfolio
are as follows:
A. INVESTMENT SECURITY VALUATIONS Equity securities are valued at the last
sale price on the exchange on which they are primarily traded, or at the quoted
bid price for securities in which there were no sales during the day, or for
unlisted securities not reported on the NASDAQ system. Securities listed on a
foreign exchange are valued at the last quoted sale price available. Bonds and
other fixed income securities (other than short-term obligations maturing in
sixty days or less) are valued on the basis of valuations furnished by a pricing
service, the use of which has been approved by the Board of Trustees. In making
such valuations, the pricing service utilizes both dealer-supplied valuations
and electronic data processing techniques which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon quoted prices or
exchanges or over-the-counter prices. Short-term obligations maturing in sixty
days or less are valued at amortized cost which constitutes fair value as
determined by the Trustees. Portfolio securities for which there are no such
quotations or valuations are valued at fair value as determined in good faith by
or under guidelines established by the Trustees. Trading in securities on most
foreign exchanges and over-the-counter markets is normally completed before the
close of the New York Stock Exchange and may also take place on days on which
the New York Stock Exchange is closed. If events materially affecting the value
of foreign securities occur between the time when the exchange on which they are
traded closes and the time when the Portfolio's net asset value is calculated,
such securities may be valued at fair value in accordance with procedures
established by and under the general supervision of the Trustees.
B. INCOME Interest income consists of interest accrued and discount earned,
adjusted for amortization of premium or discount on debt securities when
required for U.S. federal income tax purposes. Dividend income and other
distributions from investments are recorded on the ex-dividend date. Dividend
and interest
21
<PAGE>
INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
income is recorded net of foreign taxes withheld. Reclaims of recoverable
foreign taxes are the responsibility of the qualified investors.
C. FOREIGN CURRENCY TRANSLATION The accounting records of the Portfolio are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the current rate of exchange to determine the value of investments,
assets and liabilities. Purchases and sales of securities, as well as income and
expenses, are translated at the prevailing rate of exchange on the respective
dates of such transactions. The Portfolio does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuation arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments. Translations of foreign currency
includes net exchange gains and losses, disposition of foreign currency and the
difference between the amount of investment income and expenses recorded and the
amount actually received or paid.
D. FORWARD FOREIGN CURRENCY CONTRACTS The Portfolio may enter into forward
foreign currency contracts ("contracts") in connection with planned purchases or
sales of securities, or to hedge the U.S. dollar value of portfolio securities
denominated in a particular currency. The Portfolio could be exposed to risks if
the counter parties to the contracts are unable to meet the terms of their
contracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. The forward foreign currency exchange contracts are
adjusted by the daily exchange rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized gains or
losses until the contract settlement date.
E. U.S. FEDERAL TAXES The Portfolio is considered a partnership under the
U.S. Internal Revenue Code. Accordingly, no provision for federal income or
excise tax is necessary.
F. EXPENSES The Portfolio bears all costs of its operations other than
expenses specifically assumed by Citibank and SFG. Expenses incurred by the
Portfolio Trust with respect to any two or more portfolios or series are
allocated in proportion to the average net assets of each portfolio, except when
allocations of direct expenses to each portfolio can otherwise be made fairly.
Expenses directly attributable to a portfolio are charged to that portfolio.
G. OTHER Investment transactions are accounted for on the date the
investments are purchased or sold. Realized gains and losses on investment
transactions are determined on the identified cost basis.
2. MANAGEMENT FEES Citibank is responsible for overall management of the
Portfolio's business affairs, and has a separate Management Agreement with the
Portfolio. Citibank also provides certain administrative services to the
Portfolio. These administrative services include providing general office
facilities and supervising the overall administration of the Portfolio. SFG acts
as Sub-Administrator and performs certain duties and receives compensation from
Citibank as from time to time are agreed to by Citibank and SFG.
22
<PAGE>
INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Citibank has delegated the daily management of the Portfolio to Hotchkis and
Wiley (the "Subadviser"). Citibank is a wholly-owned subsidiary of Citigroup
Inc.
The management fee paid to Citibank, amounted to $130,833, of which $44,882
was voluntarily waived for the six months ended April 30, 2000. Management fees
are computed at the annual rate of 0.80% of the Portfolio's average daily net
assets less the aggregate amount, if any, payable by the Portfolio Trust
pursuant to the Sub-management Agreement with the Subadviser. The Portfolio pays
the Subadviser the following fees, which are accrued daily and payable monthly
and are at the annual rates equal to a percentage of the aggregate assets of the
Portfolio allocated to the Subadviser: 0.60% on first $10 million, 0.55% on next
$40 million, 0.45% on next $100 million, 0.35% on next $150 million, 0.30% on
remaining assets.
The management fees paid to the Subadviser amounted to $233,220 for the six
months ended April 30, 2000.
3. PURCHASES AND SALES OF INVESTMENTS Purchases and sales of investments, other
than short-term obligations, aggregated $22,670,392 and $60,195,470
respectively, for the six months ended April 30, 2000.
4. FEDERAL INCOME TAX BASIS OF INVESTMENTS The cost and unrealized appreciation
(depreciation) in value of the investment securities owned at April 30, 2000, as
computed on a federal income tax basis, are as follows:
Aggregate cost $68,125,796
================================================================================
Gross unrealized appreciation $ 8,966,164
Gross unrealized depreciation (5,618,136)
--------------------------------------------------------------------------------
Net unrealized appreciation $ 3,348,028
================================================================================
5. LINE OF CREDIT The Portfolio, along with various other Portfolios in the
CitiFunds Family, entered into an ongoing agreement with a bank which allows the
Portfolios collectively to borrow up to $75 million for temporary or emergency
purposes. Interest on the borrowings, if any, is charged to the specific fund
executing the borrowing at the base rate of the bank. The line of credit
requires a quarterly payment of a commitment fee based on the average daily
unused portion of the line of credit. For the six months ended April 30, 2000
the commitment fee allocated to the Portfolio was $132. Since the line of credit
was established, there have been no borrowings.
23
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
TRUSTEES AND OFFICERS
C. Oscar Morong Jr., Chairman
Philip W. Coolidge*, President
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
E. Kirby Warren
William S. Woods, Jr.***
SECRETARY
Robert Frenkel**
TREASURER
Linwood Downs*
* Affiliated Person of Sub-Administrator and Distributor
** Affiliated Person of the Investment Manager
*** Trustee Emeritus
INVESTMENT MANAGER
(of International Portfolio)
Citibank, N.A.
153 East 53rd Street, New York, NY 10043
DISTRIBUTOR
CFBDS, Inc.
21 Milk Street, 5th Floor
Boston, MA 02109
(617) 423-1679
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
LEGAL COUNSEL
Bingham Dana LLP
150 Federal Street, Boston, MA 02110
<PAGE>
================================================================================
THE CITIFUNDS FAMILY
LARGE CAP STOCKS
CitiFunds Growth & Income Portfolio
CitiFunds Large Cap Growth Portfolio
SMALL CAP STOCKS
CitiFunds Small Cap Growth Portfolio
CitiFunds Small Cap Value Portfolio
INTERNATIONAL STOCKS
CitiFunds International Growth & Income Portfolio
CitiFunds International Growth Portfolio
GROWTH WITH INCOME
CitiFunds Balanced Portfolio
BONDS
CitiFunds Short-Term U.S. Government Income Portfolio
CitiFunds Intermediate Income Portfolio
CitiFunds National Tax Free Income Portfolio
CitiFunds New York Tax Free Income Portfolio
CitiFunds California Tax Free Income Portfolio
MONEY MARKETS
CitiFunds Cash Reserves
CitiFunds U.S. Treasury Reserves
CitiFunds Tax Free Reserves
CitiFunds New York Tax Free Reserves
CitiFunds California Tax Free Reserves
CitiFunds Connecticut Tax Free Reserves
This report is prepared for the information of shareholders of CitiFunds
International Growth & Income Portfolio. It is authorized for distribution to
prospective investors only when preceded or accompanied by an effective
prospectus of CitiFunds International Growth & Income Portfolio.
For more information about any of the CitiFunds listed above, ask for a
prospectus (except for CitiFunds International Growth & Income Portfolio, which
preceded or accompanies this report) containing more complete information,
including all sales charges (if any), fees and expenses. Please read the
prospectus carefully before you invest or send money.
Although each money market fund seeks to maintain the value of your investment
at $1.00 per share, it is possible to lose money by investing in the funds.
Mutual fund shares are not guaranteed or insured by the Federal Deposit
Insurance Corporation or any other government agency.
CitiFunds are made available by CFBDS, Inc. as distributor. For more information
contact your Service Agent or call 1-800-625-4554.
(C)2000 Citicorp [Logo] Printed on recycled paper CFS/IGI/400
