Rule 497(e)
File Nos. 33-49552
811-6740
SUPPLEMENT DATED APRIL 1, 1998 TO PROSPECTUS DATED SEPTEMBER 30, 1997
CITIFUNDS(sm) INSTITUTIONAL CASH RESERVES
The date of the Prospectus shall now be April 1, 1998.
The following new section should precede the "Investment Information" section on
page 4 of the Prospectus:
CONDENSED FINANCIAL INFORMATION
The following table provides condensed financial information about the Fund for
the period indicated. The information below should be read in conjunction with
the unaudited financial statements of the Fund, which accompany the Statement of
Additional Information.
CITIFUNDS INSTITUTIONAL CASH RESERVES
FINANCIAL HIGHLIGHTS (UNAUDITED)
For the Period
October 17, 1997
(Commencement of Operations)
to February 28, 1998
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $1.00000
Net investment income 0.02011
Less dividends from net investment income (0.02011)
- --------------------------------------------------------------------------------
Net Asset Value, end of period $1.00000
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000's omitted) $435,977
Ratio of expenses to average net assets* 0.25%
Ratio of net investment income to average net assets 5.67%
Total return 2.03%**
Note: If agents of the Fund had not voluntarily
waived all or a portion of their fees from the
Fund for the period indicated and the expenses
were not reduced for the fees paid indirectly the
ratios and net investment income per share would
have been as follows:
Net investment income per share $0.01979
RATIOS:
Expenses to average net assets 0.42%*
Net investment income to average net assets 5.50%*
- --------------------------------------------------------------------------------
* Annualized
** Not annualized
See notes to financial statements
<PAGE>
Rule 497(e)
File Nos. 33-49552
811-6740
SUPPLEMENT DATED APRIL 1, 1998 TO STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER 30, 1997
CITIFUNDS(sm) INSTITUTIONAL CASH RESERVES
The date of the Statement of Additional Information shall now be April 1, 1998.
The second paragraph of the "Independent Accountants and Financial Statements"
section on page 12 of the Statement of Additional Information is hereby amended
in its entirety to read as follows:
The unaudited financial statements of the Fund (Portfolio of
Investments at February 28, 1998, Statement of Assets and Liabilities at
February 28, 1998, Statement of Operations for the period from October 17, 1997
(commencement of operations) to February 28, 1998, Statement of Changes in Net
Assets for the period from October 17, 1997 (commencement of operations) to
February 28, 1998 and Financial Highlights for the period from October 17, 1997
(commencement of operations) to February 28, 1998) accompany this Statement of
Additional Information.
<PAGE>
CITIFUNDS INSTITUTIONAL CASH RESERVES
PORTFOLIO OF INVESTMENTS
(Unaudited) FEBRUARY 28, 1998
PRINCIPAL
AMOUNT
ISSUER (000'S OMITTED) VALUE
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT (YANKEE) -- 15.6%
- --------------------------------------------------------------------------------
Bank of Nova Scotia
5.79% due 3/16/98 $10,000 $10,000,000
Bank of Tokyo Mitsubishi
6.00% due 5/18/98 12,000 12,000,000
CIBC
5.52% due 6/01/98 11,000 11,000,000
Commerzbank AG
5.52% due 6/17/98 12,000 12,000,000
Deutsche Bank AG
5.50% due 4/15/98 9,000 9,000,000
Societe Generale Bank
5.75% due 3/31/98 9,000 9,000,000
Swiss Bank
6.02% due 6/12/98 5,000 5,003,736
----------
68,003,736
----------
COMMERCIAL PAPER -- 29.6%
- --------------------------------------------------------------------------------
Associates Corp.
of North America
5.70% due 3/31/98 8,000 7,963,267
Bankers Trust N.Y
5.38% due 6/26/98 10,000 9,826,644
Barton Capital Corp.
5.50% due 4/20/98 5,575 5,533,265
Bear Steams Inc.
5.50% due 5/29/98 12,000 11,838,667
E I du Pont de
Nemours & Co.
5.55% due 3/06/98 10,000 9,993,833
Edison Asset
Securitization
5.50% due 4/14/98 10,097 10,030,668
General Electric
Capital Corp.
5.45% due 6/01/98 12,000 11,834,683
Goldman Sachs
Group L.P.
5.45% due 5/15/98 10,000 9,887,972
Grand Metropolitan
Capital Corp.
5.61% due 4/15/98 5,000 4,965,717
Merrill Lynch &
Co. Inc.
5.48% due 6/30/98 12,000 11,780,800
Pooled Accounts
Receivable Capital
Corp
5.53% due 3/16/98 2,294 2,289,067
5.47% due 3/18/98 9,188 9,165,663
Twin Towers Inc.
5.53% due 3/16/98 12,000 11,974,193
Zeneca Wilmington Co.
5.43% due 4/14/98 12,000 11,922,170
-----------
129,006,609
-----------
<PAGE>
DISCOUNT NOTE U.S. AGENCY -- 20.7%
- --------------------------------------------------------------------------------
Student Loan Marketing
Association
5.59% due 3/02/98 90,000 90,000,000
-----------
FLOATING RATE NOTES -- 10.8%
- --------------------------------------------------------------------------------
Morgan Guaranty
Trust Co.
5.77% due 3/23/98 9,000 9,000,052
Steers
5.625% due 11/10/98 10,000 9,998,654
Strategic Money
Market Trust
5.625% due 3/05/99 12,000 12,000,000
Strats Trust
5.639% due 12/15/98 10,000 10,000,000
Triangle Funding Ltd.
5.592% due 11/16/98 6,000 6,000,000
-----------
46,998,706
-----------
TIME DEPOSIT -- 12.0%
- --------------------------------------------------------------------------------
Chase Manhattan Bank
5.44% due 3/02/98 21,000 21,000,000
Svenska Handelsbanken
Grand Cayman
5.406% due 3/02/98 16,491 16,491,000
Westdeutsche Landesbank
5.44% due 3/02/98 15,000 15,000,000
-----------
52,491,000
-----------
<PAGE>
CITIFUNDS INSTITUTIONAL CASH RESERVES
PORTFOLIO OF INVESTMENTS
(Unaudited) FEBRUARY 28, 1998
PRINCIPAL
AMOUNT
ISSUER (000'S OMITTED) VALUE
- --------------------------------------------------------------------------------
UNITED STATES
GOVERNMENT AGENCY -- 8.0%
- --------------------------------------------------------------------------------
Federal Home Loan
Mortgage Discount
Notes
5.61% due 3/02/98 $35,000 $ 35,000,000
-------------
REPURCHASE AGREEMENTS -- 3.4%
- --------------------------------------------------------------------------------
CIBC/Wood Gundy
Repurchase Agreement
5.62% ue 3/02/98
(collateralized by $7,996,000
U.S. Treasury Bond
8.125% due 5/15/21,
valued at $10,094,950
and $5,000,000
U.S. Treasury Bond
6.25% due 8/15/23,
valued at $5,157,813) 15,000,000
-------------
ISSUER VALUE
- --------------------------------------------------------------------------------
Total Investments at
Amortized Cost 100.1% $436,500,051
Other Assets,
Less Liabilities (0.1) (523,087)
-------------
Net Assets 100.0% $435,976,964
=============
See notes to financial statements
<PAGE>
CITIFUNDS INSTITUTIONAL CASH RESERVES
STATEMENT OF ASSETS AND LIABILITIES
FOR THE PERIOD FEBRUARY 28, 1998 (Unaudited)
================================================================================
ASSETS:
Investment, at amortized cost (Note 1A) $436,500,051
Cash 647
Interest receivable 860,149
- --------------------------------------------------------------------------------
Total assets 437,360,847
- --------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 1,196,227
Payable to affiliate:
Management fees (Note 3) 31,317
Accrued expenses and other liabilities 156,339
- --------------------------------------------------------------------------------
Total liabilities 1,383,883
- --------------------------------------------------------------------------------
NET ASSETS for 435,976,964 shares of beneficial
interest outstanding $435,976,964
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid-in capital $435,976,964
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE $1.00
- --------------------------------------------------------------------------------
CITIFUNDS INSTITUTIONAL CASH RESERVES
STATEMENT OF OPERATIONS
FOR THE PERIOD OCTOBER 17, 1997* TO FEBRUARY 28, 1998 (Unaudited)
================================================================================
INVESTMENT INCOME (Note 1B) $5,021,112
EXPENSES:
Management fees (Note 3) $127,046
Registration fees 88,709
Custodian fees 55,746
Distribution fees (Note 4) 42,349
Auditing fees 11,364
Shareholder reports 9,998
Legal fees 6,800
Transfer agent fees 5,500
Trustee fees 3,107
Miscellaneous 7,886
- --------------------------------------------------------------------------------
Total expenses 358,505
- --------------------------------------------------------------------------------
Less aggregate amount waived by the Manager
and Distributor (Notes 3 and 4) (138,077)
Less fees paid indirectly (Note 1E) (9)
- --------------------------------------------------------------------------------
Net expenses 220,419
- --------------------------------------------------------------------------------
Net investment income $4,800,693
- --------------------------------------------------------------------------------
* Commencement of operations
See notes to financial statements
<PAGE>
CITIFUNDS INSTITUTIONAL CASH RESERVES
STATEMENT OF CHANGES IN NET ASSETS
PERIOD
OCTOBER 17, 1997*
TO
FEBRUARY 28, 1998
(Unaudited)
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income, declared as dividends to
shareholders (Note 2) $ 4,800,693
- --------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST AT
NET ASSETS VALUE OF $1.00 PER SHARE (Note 5):
Net proceeds from sale of shares 1,277,821,048
Cost of shares repurchased (841,844,084)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS 435,976,964
NET ASSETS:
Beginning of period --
- --------------------------------------------------------------------------------
End of period $ 435,976,964
- --------------------------------------------------------------------------------
CITIFUNDS INSTITUTIONAL CASH RESERVES
FINANCIAL HIGHLIGHTS
PERIOD
OCTOBER 17, 1997***
TO
FEBRUARY 28, 1998
(Unaudited)
================================================================================
Net Asset Value, beginning of period $1.00000
Net investment income 0.02011
Less dividends from net investment income (0.02011)
- --------------------------------------------------------------------------------
Net Asset Value, end of period $1.00000
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000's omitted) $435,977
Ratio of expenses to average net assets 0.25%*
Ratio of net investment income to average net assets 5.67%*
Total return 2.03%**
Note: If agents of the Fund had not voluntarily waived all or a portion of their
fees from the Fund for the period indicated and the expenses were not reduced
for the fees paid indirectly the ratios and net investment income per share
would have been as follows:
Net investment income per share $0.01979
RATIOS:
Expenses to average net assets 0.42%*
Net investment income to average net assets 5.50%*
*Annualized
**Not annualized
***Commencement of operations
See notes to financial statements
<PAGE>
CITIFUNDS INSTITUTIONAL CASH RESERVES
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES CitiFunds Institutional Cash Reserves (the
"Fund") is a separate non-diversified series of CitiFunds Institutional Trust
(the "Trust"), which is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as an open-end,
management investment company. The Investment Manager of the Fund is Citibank,
N.A. ("Citibank"). CFBDS, Inc. ("CFBDS") acts as the Fund's Sub-Administrator
and Distributor.
The preparation of financial statements in accordance with 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 in
conformity with generally accepted accounting principles and are as follows:
A. VALUATION OF INVESTMENTS Money market instruments are valued at amortized
cost, which the Trustees have determined in good faith constitutes fair value.
This method involves valuing a Fund security at its cost and thereafter assuming
a constant amortization to maturity of any discount or premium. The Fund's use
of amortized cost is subject to the Fund's compliance with certain conditions as
specified under Rule 2a-7 of the Investment Company Act of 1940.
B. INTEREST INCOME AND EXPENSES Interest income consists of interest accrued
and discount earned (including both original issue and market discount) on the
investments of the Fund, accrued ratably to the date of maturity, plus or minus
net realized gain or loss, if any, on investments. Expenses of the Fund are
accrued daily.
C. FEDERAL TAXES The Fund's policy is to comply with the provisions of the
Internal Revenue Code available to regulated investment companies and to
distribute to shareholders all of its net investment income. Accordingly, no
provision for federal income or excise tax is necessary.
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 in a 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.
E. FEES PAID INDIRECTLY The Fund's custodian bank calculates its fees based
on the Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expenses on the Statement of Operations.
F. REPURCHASE AGREEMENTS It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System or to have segregated within the custodian bank's
vault, all securi-
<PAGE>
CITIFUNDS INSTITUTIONAL CASH RESERVES
NOTES TO FINANCIAL STATEMENTS (Unaudited)
ties held as collateral in support of repurchase agreement investments.
Additionally, procedures have been established by the Fund to monitor, on a
daily basis, the market value of the repurchase agreement's underlying
investments to ensure the existence of a proper level of collateral.
G. OTHER -- Purchases, and maturities and sales of money market instruments
are accounted for on the date of the transaction.
2. DIVIDENDS The net income of the Fund is determined once daily, as of 4:00 pm,
Eastern standard time, and all of the net income of the Fund so determined is
declared as a dividend to shareholders of record at the time of such
determination. Dividends are distributed in the form of additional shares of the
Fund or, at the election of the shareholder, in cash on or prior to the last
business day of the month.
3. MANAGEMENT FEES Citibank is responsible for overall management of the Funds'
business affairs, and has a separate Management Agreement with each of the
Funds. Citibank also provides certain administrative services to the Funds.
These administrative services include providing general office facilities and
supervising the overall administration of the Funds. CFBDS acts as
Sub-Administrator and performs such duties and receives such compensation from
Citibank as from time to time is agreed to by Citibank and CFBDS.
The management fees paid to Citibank, as compensation for overall investment
management services amounted to $127,046, of which $95,728 was voluntarily
waived for the period ended February 28, 1998. The management fees are computed
at an annual rate of 0.20% of the Fund's average daily net assets.
4. DISTRIBUTION FEES The Fund has adopted a Service Plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, in which the Fund pays
fees for distribution, sales marketing and shareholder services at an annual
rate not to exceed 0.10% of the Fund's average daily net assets. The
Distribution fee amounted to $42,349 all of which was voluntarily waived for the
period ended February 28, 1998.
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).
6. INVESTMENT TRANSACTIONS Purchases, and maturities and sales of money market
instruments aggregated $4,486,974,203 and $4,050,474,151, respectively, for the
period ended February 28, 1998.
<PAGE>
CITIFUNDS INSTITUTIONAL CASH RESERVES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
7. FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost of investment
securities owned at February 28, 1998, for federal income tax purposes, amounted
to $436,500,051.
8. LINE OF CREDIT The Fund, along with other CitiFunds, entered into an
agreement with a bank which allows the Funds collectively to borrow up to $60
million for temporary or emergency purposes. Interest on 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 period ended
February 28, 1998, the commitment fee allocated to the Fund was $211. Since the
line of credit was established, there have been no borrowings.
