CONSULTING GROUP CAPITAL MARKETS FUNDS (the "Trust")
Supplement dated April 1, 1998 to the
Prospectus dated December 29, 1997
On March 18, 1998 the Trust's Board of Trustees approved the following:
The hiring of David L. Babson & Co., Inc. ("Babson") as an
additional investment adviser to Small Capitalization Value Equity
Investments ("Small Cap Value Portfolio"). The Consulting Group, a
division of Mutual Management Corp.("MMC") the Trust's Investment
Manager, recommended the hiring of an additional active adviser due
to the rapid growth of assets experienced in the Small Cap Value
Portfolio. The hiring of Babson resulted in the entering into of an
investment advisory agreement dated as of April 1, 1998 between MMC
and Babson. Under the terms of the agreement, Babson will be
receiving 0.50% of the first $100 million and 0.45% thereafter, a
fee that is computed daily and paid monthly based on the value of
the average net assets of the Small Cap Value Portfolio allocated to
Babson. Prior to the hiring of Babson, the Small Cap Value
Portfolio had been allocated 50% to an index strategy and 50% to an
active strategy. With the hiring of Babson, the structure of the
Small Cap Value Portfolio will remain 50% index and 50% active,
however the active portion of the portfolio will be split among NFJ
Investment Group ("NFJ") and Babson, 35% and 15%, respectively.
Babson, located in Cambridge, Massachusetts was founded in 1940 and
currently manages approximately $20 billion in assets.
The hiring of Mellon Capital Management Corporation ("Mellon") as
the investment adviser to the index portion of the Small Cap Value
Portfolio. Mellon is currently the investment adviser to the index
portion of Small Capitalization Growth Investments ("Small Cap
Growth Portfolio"). By consolidating the index portion of each of
these two portfolios, Mellon has agreed to reduce their advisory
fee to 0.06% for both the Small Cap Growth and Small Cap Value
Portfolios.
A new investment advisory agreement between MMC and NFJ reflecting
an increase in the advisory fee paid by MMC to NFJ. NFJ currently
receives 0.30% for its services, a fee that is computed daily and
paid monthly based on the average net assets of the Small Cap Value
Portfolio allocated to NFJ. Shareholders recently approved
increasing the management fee paid by the Small Cap Value Portfolio
to MMC by 0.20%. This increase will be applied to NFJ as follows:
0.50% on the first $450 million; 0.45% thereafter.
A new investment advisory agreement between MMC and Standish, Ayer
& Wood, Inc. ("Standish, Ayer") reflecting a decrease in the
advisory fee paid by MMC to Standish, Ayer on behalf of
Intermediate Fixed Income Investments. Pursuant to this new
agreement MMC will pay Standish, Ayer 0.20% of the first $500
million and 0.15% thereafter.
A new investment advisory agreement between MMC and National Asset
Management Corporation ("NAM") investment adviser to Long-Term
Bond Investments. Recently, the principals of NAM became the sole
holders of all of NAM's issued and outstanding common stock which
was formerly owned by National City Corporation. This transaction
resulted in a change in control resulting in an assignment of the
current investment advisory agreement between MMC and NAM.
Pursuant to the Investment Company Act of 1940 an assignment
results in the automatic termination of the investment advisory
agreement. Accordingly, the Board of Trustees approved a new
investment advisory agreement identical to the prior agreement. In
addition, all the principals of NAM have signed employment
contracts ensuring the stability of their investment management
team.
The termination of PanAgora Asset Management Inc. ("PanAgora") as
the investment adviser to the index portion of Large Capitalization
Growth Investments ("Large Cap Growth Portfolio"). The
Consulting Group recommended that PanAgora be replaced by Barclays
Global Investors ("Barclays") because Barclays has agreed to
manage this portfolio for 0.02% instead of 0.05% that MMC was
paying PanAgora.
Shareholder of these Portfolios will soon receive an information
statement regarding these changes.
In addition, on March 24, 1998 Provident Investment Counsel ("PIC")
adviser to a portion of the assets of the Large Cap Growth Portfolio
announced that Paula Blacher, co-portfolio manager to this Portfolio
had resigned from the firm. Thomas J. Condon, co-portfolio manager,
will continue to manage the Large Cap Growth Portfolio until PIC
determines a successor to Ms. Blacher. The Consulting Group has
determined that this personnel change will not negatively impact the
management of the Large Cap Growth Portfolio.
FD 01440 4/98
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