CONSULTING GROUP CAPITAL MARKETS FUNDS (the "Trust")
Supplement dated January 4, 1999 to the
Prospectus dated November 27, 1998
On December 17, 1998 the Trust's Board of Trustees approved the
following:
- - The termination of Palley-Needelman Asset Management Inc.
("Palley-Needelman") as investment adviser to Balanced Investments
("Balanced Portfolio"). Palley-Needelman will be replaced with
Laurel Capital Advisors, LLP ("Laurel Capital") who will manage
the equity portion of the Balanced Portfolio and Seix Investment
Advisors ("Seix") who will manage the fixed-income portion of the
Balanced Portfolio. Laurel Capital and Seix will manage
approximately 60% and 40% respectively of the Balanced Portfolio's
assets. Laurel Capital will seek the Balanced Portfolio's
investment objective of total return by investing primarily in
common stocks that are undervalued and which exhibit improving
earnings momentum. Laurel Capital will attempt to remain fully
invested, while maintaining sector weightings similar to the S&P 500
Index Seix combines traditional research with proprietary analysis
that seeks to identify undervalued fixed-income securities such as
U.S. government securities and corporate bonds. Seix places an
emphasis on those securities that have a potential for income while
maintaining a duration that is approximately equal to the Lehman
Aggregate Index. Pursuant to investment advisory agreements entered
into between the Trust's Manager, Mutual Management Corp. ("MMC")
and Laurel Capital and Seix, Laurel Capital and Seix will receive
0.30% and 0.25% respectively, a fee that is computed daily and paid
monthly based on the value of the average net assets of the Balanced
Portfolio allocated to each adviser. Laurel Capital, located in
Pittsburgh, Pennsylvania is an affiliate of The Mellon Bank and
currently manages approximately $13 billion in assets. Seix,
located in Woodcliff Lake, New Jersey manages approximately $3.6
billion in assets.
- - The hiring of Barclays Global Fund Advisors ("Barclays") as an
additional investment advisor to Large Capitalization Value Equity
Investments ("Large Capitalization Value Portfolio"). The
Consulting Group, a division of MMC, recommended Barclays as an
additional adviser because it was determined that their pure index
investment style would complement the investment style of the
Portfolio's other investment advisers- The Boston Company Asset
Management, Inc. ('TBCAM") and Parametric Portfolio Associates
("Parametric"). The hiring of Barclays resulted in the entering
into of an investment advisory agreement dated January 4, 1999
between MMC and Barclays. Under the terms of the agreement,
Barclays will be receiving a fee of 0.02% that is computed daily and
paid monthly based on the value of the average net assets of the
Large Capitalization Value Portfolio allocated to Barclays. With
the hiring of Barclays, the structure of the Large Capitalization
Value Portfolio will be as follows: Parametric 55%; TBCAM 20% and
Barclays 25%.
- - A new investment advisory agreement between MMC and Provident
Investment Counsel Inc. ("Provident") reflecting a decrease in the
advisory fee paid by MMC to Provident on behalf of Large
Capitalization Growth Investments ("Large Capitalization Growth
Portfolio"). Pursuant to this new agreement, MMC will pay
Provident 0.30% of the first $100 million and 0.25% thereafter on
the assets of the Large Capitalization Growth Portfolio allocated to
Provident.
Shareholders of the Balanced, Large Capitalization Growth and Large
Capitalization Value Portfolios will soon receive an information
statement regarding these changes.
FD 01585
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