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SECURITIES ACT FILE NO. 33-52724
INVESTMENT COMPANY ACT FILE NO. 811-7236
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE ___
SECURITIES ACT OF 1933 |___|
___
Pre-Effective Amendment No. _____ |___|
___
Post-Effective Amendment No. 3 | X |
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and/or
REGISTRATION STATEMENT UNDER THE ___
INVESTMENT COMPANY ACT OF 1940 |___|
___
Amendment No. 4 | X |
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(Check appropriate box or boxes.)
CIGNA INSTITUTIONAL FUNDS GROUP
(Exact name of Registrant as specified in charter)
1380 Main Street, Springfield, Massachusetts 01103
(Address of principal executive offices)
Registrant's telephone number, including area code (800) 528-6718
Alfred A. Bingham III, One Financial Plaza, 1380 Main Street
Springfield, Massachusetts 01103
(Name and address of agent for service)
____________________________
Approximate date of proposed public offering: Continuous
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It is proposed that this filing will become effective (check appropriate box):
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| | Immediately upon filing pursuant to paragraph (b)
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| X | on August 15, 1995, pursuant to paragraph (b)
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|___| 60 days after filing pursuant to paragraph (a)(1)
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|___| on (date) pursuant to paragraph (a)(1)
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|___| 75 days after filing pursuant to paragraph (a)(2)
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|___| on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
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| X | this post-effective amendment designates a new effective date for a
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previously filed post-effective amendment.
___________________________
DECLARATION PURSUANT TO RULE 24f-2 UNDER THE INVESTMENT COMPANY ACT OF 1940
Registrant hereby declares pursuant to Rule 24f-2(a)(1) under the Investment
Company Act of 1940 that Registrant has registered an indefinite number of
shares and has paid the registration fee appropriate thereto. The Rule 24f-2
Notice for the most recent fiscal year of Registrant was filed on February 23,
1995. _________________________
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CIGNA
INTERNATIONAL
STOCK FUND
Prospectus
August 15, 1995
Application
Enclosed
<PAGE>
CIGNA INTERNATIONAL STOCK FUND
PROSPECTUS
August 15, 1995
This prospectus contains information about CIGNA International Stock Fund (the
"Fund"), which is sponsored by affiliates of CIGNA Corporation. The Fund is a
series of shares of CIGNA Institutional Funds Group, a Massachusetts business
trust (the "Trust"). The Fund is designed primarily as an investment vehicle
for institutional investors, including employer, association and other group
retirement plans, employee benefit trusts, financial institutions, endowments,
foundations, and corporations.
The address of the Fund is 1380 Main Street, Springfield, Massachusetts 01103,
and its telephone number is 1-800-528-6718.
The Fund's investment objective is to achieve long-term growth of capital by
investing primarily in common stock, convertible and non-convertible preferred
stock, and convertible debt of companies based outside the United States.
Income is an incidental consideration. There is, of course, no guarantee that
the Fund will achieve its investment objective. (See "Investment Objective and
Policies".)
This prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Additional information
about the Fund, contained in a Statement of Additional Information, has been
filed with the Securities and Exchange Commission and is available upon request
without charge by writing to CIGNA Funds Shareholder Services, Hartford,
Connecticut 06152-2210. The Statement of Additional Information relating to the
Fund and having the same date as this prospectus is incorporated by reference
into this prospectus. The Statement of Additional Information is not a
prospectus.
The toll-free number for access to routine account information and shareholder
assistance (8:00 a.m. to 5:00 p.m. Eastern Time) is 1-800-528-6718.
Please read this prospectus and retain it for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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EXPENSE TABLE
The following Expense Table lists the transaction expenses and approximate
annual operating expenses related to an investment in the Fund. Below the
Expense Table is an Example which shows the accumulated amount of these expenses
on a one-time $1,000 investment, assuming a 5% rate of return /1/, over the
stated investment periods.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of the offering price) None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of the offering price), None
Deferred Sales Load (as a percentage of
original purchase price or redemption proceeds, as applicable) None
Redemption Fees (as a percentage of amount redeemed, if applicable) None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee (reflects expense limitation) /2/ 0.00%
All Other Expenses /3/ 1.25%
------
Total Fund Operating Expenses (reflects expense limitation,
see note 2 below) 1.25%
======
</TABLE>
Example: You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period.
<TABLE>
<S> <C>
1 Year $ 13.00
3 Years $ 40.00
5 Years $ 69.00
10 Years $151.00
</TABLE>
The purpose of the Expense Table is to assist the investor in understanding the
various costs and expenses that an investor will bear directly or indirectly.
For the purpose of the Example, assume reinvestment of all dividends and
distributions. The Example should not be considered a representation of past or
future expenses. Actual expenses may be greater or lesser than those shown.
For a more complete description of the Management Fee, see "Investment Advisory
and Other Services."
___________________
/1/ The Example assumes a 5% annual rate of return pursuant to the requirements
of the United States Securities and Exchange Commission.
/2/ CIGNA Investments, Inc. ("CII"), the Fund's investment adviser, has agreed
to reimburse such portion of its .80% management fee, as is necessary, to
cause the Total Annual Operating Expenses of the Fund not to exceed 1.25%
of the Fund's average daily net asset value for such year. If such
reimbursement is not sufficient to cause the Total Annual Operating
Expenses not to exceed 1.25%, CII has agreed to absorb such other expenses
of the Fund as is necessary to keep such expenses from exceeding 1.25%.
These arrangements will continue in effect until the end of the fiscal year
ending December 31, 1995, and afterwards until further notice by amendment
to this prospectus. To the extent management fees are reimbursed by CII, or
expenses of the Fund are absorbed by CII, the total return to shareholders
will increase. Total return to shareholders will decrease to the extent
management fees are no longer reimbursed or expenses of the Fund are no
longer absorbed. Total Fund Operating Expenses for the 1994 fiscal year
were 2.35% of the Fund's average daily net asset value before expense
reimbursements.
/3/ Other Expenses are estimated based on actual expense for the 1994 fiscal
year. Other expenses include all expenses not specifically assumed by CII
or the Fund's investment sub-adviser, CIGNA International Investment
Advisors, Ltd., ("CIIA").
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FINANCIAL HIGHLIGHTS
The financial highlights for the period identified below and included in the
financial statements of CIGNA International Stock Fund have been examined by
Price Waterhouse LLP, independent accountants, whose report thereon was
unqualified. The following information should be read in conjunction with the
financial statements and notes thereto available with the Statement of
Additional Information.
<TABLE>
<CAPTION>
January 1, 1994 January 11, 1993**
to to
December 31, 1994 December 31, 1993
------------------ -------------------
<S> <C> <C>
Net asset value, beginning of period $13.21 $10.00
Income from investment operations
Net investment income*** 0.04 0.09
Net realized and unrealized gain on investments,
foreign currency transactions and translations 0.33 4.18
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Total from operations 0.37 4.27
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Less: Distributions
Dividends from net investment income (.04) (0.09)
Dividends in excess of net investment income - (0.02)
Distributions from capital gains (1.77) (0.95)
----
Total distributions (1.81) (1.06)
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Net asset value, end of period $11.77 $13.21
====== ======
Total Return 2.77% 42.73%
Ratios and Supplemental Data:
Net assets, end of period (000) $7,335 $7,136
Ratio of expenses to average net assets 1.25%/a/ 1.25%/*a/
Ratio of net investment income to average
net assets 0.32%/b/ 0.75%/*b/
Portfolio turnover rate 63% 66%
</TABLE>
/a. Annualized ratios of expenses to average net assets prior to expense
reimbursements were 2.35% and 2.75%, respectively, for 1994 and 1993. Per
share expenses prior to reduction were $0.29 and $0.30, respectively.
/b. Annualized ratios of net investment income to average net assets prior to
expense reimbursements were (0.78%) and (0.75%), respectively, for 1994
and 1993. Per share net investment income amounts prior to reduction were
$(0.10) and $(0.08), respectively.
/ * Annualized
/**/ Commencement of operations
/***/ Net investment income per share has been calculated in accordance with
SEC requirements, with the exception that end of year
accumulated/overdistributed net investment income has not been adjusted
to reflect current year permanent differences between financial and tax
accounting.
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Certain additional performance and other information is contained in the Fund's
most recent Annual Report to shareholders, a copy of which shall be provided
upon request and without charge to each person who receives a prospectus.
ABOUT THE FUND
CIGNA International Stock Fund (the "Fund") is the sole series of shares of
CIGNA Institutional Funds Group (the "Trust"), a Massachusetts business trust
established by a Master Trust Agreement dated as of August 10, 1992, and
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company (see "The Trust, Its Shares
and Board of Trustees"). The Fund was established pursuant to a resolution of
the Board of Trustees of the Trust adopted on August 10, 1992. The Fund
operates as a diversified, open-end management investment company and intends to
qualify as a regulated investment company for Federal Income tax purposes.
The Fund continually offers new shares for sale to the public, and stands ready
to redeem its outstanding shares for cash at their net asset value. The Fund's
investment adviser, CIGNA Investments, Inc. ("CII"), and CIGNA International
Investment Advisors, Ltd, the Fund's sub-adviser ("CIIA"), continuously review
and, from time to time, change the portfolio holdings of the Fund in pursuit of
the Fund's objective.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to achieve long-term growth of capital by
investing primarily in common stocks, convertible and non-convertible preferred
stocks, and convertible debt of companies based outside the United States.
Income is an incidental consideration. For these purposes, the phrase "based
outside the United States" means companies the principal headquarters of which
are located in a foreign country and which are organized under the laws of a
foreign country.
In selecting securities for the Fund, CIIA will generally seek to allocate the
Fund's assets among companies based in 8-12 different foreign countries. It is
the present intention of CIIA to invest primarily in the securities of companies
based in countries included or announced to be included in the Morgan Stanley
Capital International Europe, Australia and Far East Index (the "EAFE Index")
and Canada. As of March 31, 1995, the EAFE Index included the following
countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong
Kong, Ireland, Italy, Japan, Malaysia, Netherlands, New Zealand, Norway,
Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
Under normal conditions the Fund will maintain no less than 65% of its total
assets in the equity securities of companies based in at least five of the
aforementioned countries. This 65% figure represents a minimum level of
investment under normal circumstances. The actual level of investment will, of
course, fluctuate in accordance with CIIA's assessment of market conditions.
Ordinarily, the Fund will not invest more than 50% of its total assets in the
securities of companies based in Japan, nor more than 30% of its total assets in
the securities of companies based in the United Kingdom (see "Risk Factors" for
more information on the risks associated with investing in Japan and the United
Kingdom). The Fund will not ordinarily invest more than 25% of its total assets
in any other single developed country, such as Australia, Canada, France or
Germany. If, in CIIA's opinion, it becomes desirable to exceed this 25%
threshold, the Fund will issue a sticker supplement to the prospectus describing
the risk factors associated with investing in the relevant countries.
The Fund may invest up to 15% of its total assets in the equity and convertible
debt securities of companies based in developing countries as defined by the
Morgan Stanley Capital International Emerging Markets Index (the "Emerging
Market Index"). As of March 31, 1995, the Emerging Markets Index included the
following countries: Argentina, Brazil, Chile, Columbia, Greece, India,
Indonesia, Israel, Jordan, Korea,
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Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Portugal, South Africa,
Sri Lanka, Taiwan, Thailand, Turkey, and Venezuela. While the Fund intends to
invest primarily in the securities of companies based in countries included in
the EAFE Index and the Emerging Markets Index (the "Indices"), it will not
necessarily invest its assets according to the percentage weightings assigned by
the Indices to a particular country or company. Since Malaysia is included in
both the EAFE Index and the Emerging Market Index, securities of companies based
in Malaysia will not be included in the 15% limitation above.
The Fund intends to invest principally in the securities of companies which CIIA
believes possess a strong financial base and which it believes have
opportunities for growth within growing international economies and markets. In
determining the appropriate distribution of investments among various countries,
CIIA ordinarily considers the following factors: prospects for relative
economic growth; expected levels of inflation; relative price levels of the
various capital markets; government policies influencing business conditions;
and the range of individual investment opportunities available to the
international investor. CIIA's expectations with respect to currency movements
are also considered in evaluating investments in each country. While CIIA does
not generally hedge against currency risks, the Fund may from time to time
engage in foreign exchange transactions to hedge the Fund's exposure to changes
in foreign currency relative to the U.S. dollar. See "Foreign Exchange
Transactions." Once CIIA has determined that a particular country has favorable
investment characteristics, CIIA seeks to identify (a) those economic sectors
within the national economy that have the potential for strong and sustainable
growth and (b) those companies that stand to benefit from this expected outcome.
In this regard, CIIA seeks to focus on long-term political, demographic, and
sociological change to anticipate important valuation shifts in securities
prices.
In appropriate circumstances, such as when a direct investment by the Fund in
the securities of a particular country cannot be made or when the securities of
an investment company are more liquid than the underlying portfolio securities,
the Fund may, consistent with the provisions of the 1940 Act, invest in the
securities of closed-end investment companies that invest in foreign securities.
Since the Fund's shareholders would be subject to additional fees, including
management fees, for any asset so invested, CIIA will invest in such closed-end
investment companies only where, in its opinion, the potential returns justify
incurring the additional expense.
The Fund may invest in convertible preferred stock and convertible debt when, in
the opinion of CIIA, the yield or conversion price makes investment in such
instruments more attractive than investment in the underlying equity security.
The Fund will limit investments in convertible debt securities to 10% of the
Fund's net assets. The Fund will dispose of any bond, as soon as practicable
consistent with achieving an orderly disposition, that would cause the Fund to
hold more than 5% of its net assets in bonds rated below investment grade (i.e.,
bonds rated BB or Ba or below by Standard & Poor's or Moody's or if not so
rated, which in the opinion of CIIA are of comparable quality).
Under normal conditions the Fund will maintain 0 - 20% of its total assets in
cash or high quality money market instruments (such as banker's acceptances,
certificates of deposit, time deposits, and commercial paper), each of which may
be denominated in U.S. dollars or foreign currencies. When deemed appropriate
by CIIA, for temporary defensive purposes, the Fund may invest all or a major
portion of its assets in high quality money market instruments. See "Money
Market Instruments" in this prospectus and the Statement of Additional
Information for a description of the limitations on such investments by the
Fund. The Fund will not invest 25% or more of its assets in obligations issued
by a foreign government, its agencies, and instrumentalities.
The Fund's investment policies as described above are not designated as
fundamental policies and, therefore, may be changed without shareholder
approval. The Fund has adopted certain investment restrictions which are
presented in the Statement of Additional Information and which, together with
the investment objective of the Fund, cannot be changed without approval by
holders of a majority of its outstanding voting shares. As defined in the 1940
Act, this means the lesser of the vote of (a) 67% of the shares of the Fund at a
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<PAGE>
meeting where more than 50% of the outstanding shares are present in person or
by proxy; or (b) more than 50% of the outstanding shares of the Fund.
RISK FACTORS
The Fund is designed for long-term investors who can accept international risk
(see below). Because the Fund normally will be invested in international
securities markets, changes in the Fund's share price may have a low correlation
with movements in the U.S. markets. The Fund's net asset value will fluctuate,
reflecting changes in the market value of its portfolio positions. There is no
assurance that the Fund will achieve its investment objective. The Fund is
designed for investors seeking international diversification, and is not
intended as a complete investment program.
Generally, investments in securities of foreign companies involve greater risks
than are present with investments in comparable U.S. companies. The securities
of foreign issuers generally will not be registered with, nor the issuers
thereof be subject to, the reporting requirements of the United States
Securities and Exchange Commission ("SEC"). Accordingly, compared to U.S.
companies, there is generally less publicly available information about foreign
companies, and less government regulation and supervision of foreign stock
exchanges, brokers, and listed companies. Foreign companies generally are not
subject to uniform accounting, auditing, and financial reporting standards,
practices, and requirements comparable to those applicable to U.S. companies.
Furthermore, generally higher commission rates are charged abroad on portfolio
transactions and the dividends and interest payable on certain of the Fund's
foreign portfolio securities may be subject to foreign withholding taxes, thus
reducing the net amount available for distribution to the Fund's shareholder.
Securities of some foreign companies are less liquid, and their prices more
volatile, than securities of comparable U.S. companies. Securities trading
practices abroad may offer less protection to investors such as the Fund.
Settlement of transactions in some foreign markets may be delayed or may be less
frequent than in the U.S., which could affect the liquidity of the Fund's
portfolio. In addition, with respect to some foreign countries, there is the
possibility of confiscatory taxation or expropriation or nationalization of
assets; the establishment of exchange controls, currency blockage, or the
adoption of other restrictions; limitations on the removal of securities,
property, or other assets; political or social instability; and war or
diplomatic developments that could affect U.S. investments. CIIA will attempt
to take such factors into consideration in managing the Fund's investments.
Returns on foreign investments, such as those held by the Fund, are influenced
by not only the returns on foreign securities themselves, but also by currency
risk, i.e., changes in value of the currencies in which the stocks are
denominated. In a period when the U.S. dollar generally rises against foreign
currencies, the returns on foreign stocks for a U.S. investor may be diminished.
By contrast, in a period when the U.S. dollar generally declines, the returns on
foreign stocks may be enhanced.
Adverse changes in currency exchange rates may affect the value of foreign
securities and the value of their dividend or interest payments, and therefore
the Fund's share price and return. Some foreign currency values may be
volatile, and there is the possibility of governmental controls on currency
exchange or governmental intervention in currency markets, which could adversely
affect the Fund.
JAPAN. Japan currently has the highest per capita income and the second largest
GNP in the world. The Japanese economy has grown substantially over the last
four decades. Its growth rate averaged almost 5% in the 1970s and 1980s. In
1994, preliminary data indicates that the growth rate in Japan slowed to 0.6%.
Although Japan's economic growth declined to be possibly the lowest among the G-
7 countries in 1995, the Japanese economy seems capable of rebounding due to the
thickest savings cushion in the world, the partial liquidation of which could be
triggered by reconstruction demands of the earthquake, and deregulation in the
retail sector. Japan's economic growth in the early 1980s was due in part to
excessively relaxed monetary policies, leading to the creation of a financial
"bubble" and its subsequent burst in 1991. The Tokyo Stock Exchange was the
world's largest market in dollar terms in 1989, but fell to second place after
1990. The Japanese stock markets still constitute over 20% of the world's
equity capital markets. Japanese stock prices,
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as measured by the Tokyo Stock Exchange Price Index (TOPIX), increased by over
six times in the 1980s. However, the TOPIX declined 54.6% between 1990 and
1992, before rebounding by 10.1% in 1993 and 8.3% in 1994. The 45.9% decline
between 1990 and 1994 nonetheless translates into a decline of only 27.1% in
U.S. dollar terms, due to the relative strength of the yen against the U.S.
currency. The present obvious overvaluation of the yen is affecting the
earnings recovery pace of stock exchange listed companies, which tend to be more
export-oriented than the national average.
UNITED KINGDOM. The U.K., having declined in importance during the period of
the Cold War, still has the sixth largest GNP in the world and the third largest
stock market. Having received a reputation for labor unrest and poor industrial
performance, the U.K. is now regaining its identity as a major offshore
manufacturing center for Europe.
As a result of legislation which was intended to curb Trade Union power, unit
labor costs have remained firmly under control. Additionally, there is a
favorable corporate tax regime which has encouraged inward capital investment
with the result that the trade account is now almost in balance. At the same
time, the Public Sector Borrowing Requirement is firmly on the downward path,
provided the government does not slacken its fiscal policy.
Inflation remains under control but will probably increase to 4% by the year
end. Money supply has increased during the early part of 1995, but the economy
has not yet picked up because the GDP growth rate is still forecast to slow down
to 2.8% - 3.0%. Although Sterling has risen by 5% against the U.S. dollar, it
has fallen 8% against its EU trading partners. Consequently, exports are
expected to increase and with them manufacturing industry.
Were it not for the political weakness of John Major's government, and its
uncanny knack for inflicting grievous damage on itself, the London stock
Exchange would almost certainly be higher. Corporate earnings growth of 8% -
10% is expected during 1995. Given a yield of 4.1% on the FT-SE All Share and a
prospective price earnings ratio of 13.9X, London is not expensive in
international terms. Certainly the recent burst of takeover activity has shown
that London is cheap to corporate predators.
EMERGING MARKETS. Although the Fund will normally invest primarily in companies
located in major industrial or developed countries, the Fund may invest up to
15% of its total assets in companies located in developing countries as defined
by the Emerging Markets Index. Compared to the United States and other
developed countries, developing countries may have relatively unstable
governments, economies based on only a few industries, and securities markets
that are less liquid and trade a small number of securities. Prices on these
exchanges tend to be volatile and, in the past, securities in these countries
have offered greater potential for gain (as well as loss) than securities of
companies located in developed countries.
AMERICAN DEPOSITORY RECEIPTS
The Fund may also purchase U.S. dollar denominated American Depository Receipts
("ADRs"), which are traded in the U.S. on national securities exchanges or
over-the-counter and are issued by domestic banks. ADRs are not considered to
be foreign securities. The Fund does not expect to invest more than 10% of its
total assets in ADRs at any one time.
FOREIGN EXCHANGE TRANSACTION
While CIIA does not generally hedge against currency risks, the Fund may from
time to time engage in foreign exchange transactions to hedge against the Fund's
exposure to changes in foreign currencies relative to the U.S. dollar ("Base
Currency Hedging"). Normally, the Fund will not engage in cross-hedging (i.e.,
dealing in foreign exchange between currencies of the different countries in
which it has invested for the purpose of hedging against possible variations in
the foreign exchange rate between those countries). Both
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Base Currency Hedging and Cross-Hedging may be accomplished through direct
purchases or sales of currency, purchases of options on futures contracts with
respect to currency, and contractual agreements to purchase or sell a specified
currency at a specified future date (up to one year) at a price set at the time
of contract.
Such contractual commitments may be forward contracts entered into directly with
another party or exchange-traded futures contracts. The Fund may purchase and
sell options on futures contracts, forward contracts, or futures contracts which
are denominated in a particular currency to hedge the risk of fluctuations in
the value of another currency. The Fund's dealings in foreign exchange will be
limited to hedging involving either specific transactions or portfolio
positions. The Fund may engage in such foreign exchange transaction to hedge up
to 100% of the Fund's total assets. Transaction hedging is the purchase or sale
of currency with respect to specific receivables or payables of the Fund
accruing in connection with the purchase or sale of its portfolio securities,
the sale and redemption of shares of the Fund, or the payment of dividends and
distributions by the Fund. Position hedging is the purchase and sale of
currency with respect to portfolio securities positions denominated or quoted in
a foreign currency. The Fund will not speculate in foreign exchange. Further
information concerning certain futures contracts and related options is set
forth below.
STOCK INDEX FUTURES CONTRACTS AND RELATED OPTIONS, AND INTEREST RATE FUTURES
CONTRACTS AND RELATED OPTIONS
The Fund may purchase and sell stock index futures contracts or purchase options
thereon as a hedge against changes in market conditions. Similarly, the Fund
may purchase and sell interest rate futures contracts or purchase options
thereon to hedge against changes in interest rates. A stock index futures
contract is a bilateral agreement pursuant to which two parties agree to take or
make delivery of an amount of cash equal to a specified dollar or other currency
amount times the difference between the stock index value at the close of the
last trading day of the contract and the price at which the futures contract is
originally struck. No physical delivery of the underlying stocks in the index
is made. An interest rate futures contract is an agreement between two parties
to buy and sell a debt security for a set price on a future date. The Fund will
enter into futures contracts or purchase options thereon only as a hedge against
changes in the values of the securities held or which the Fund intends to
purchase. Generally, the Fund may elect to close a position in a futures
contract by taking an opposite position which will operate to terminate the
Fund's position in the futures contract. See the Statement of Additional
Information for a description of the Fund's investments in futures contracts and
options on futures contracts, including certain related risks.
The Fund will not use stock index or interest rate futures contracts or related
options to hedge more than 70% of the Fund's total assets.
RISK FACTORS RELATING TO FUTURES CONTRACTS AND FORWARD CURRENCY CONTRACTS
The use of options, financial futures, and options on financial futures may
involve risks not associated with other types of instruments which the Fund
intends to purchase. In particular, the Fund's positions in financial futures
and options may be closed out only on an exchange which provides a liquid
secondary market therefor, and there can be no assurance that a liquid secondary
market will exist for any particular futures contract or option. The inability
to close out options and futures positions could have an adverse impact on the
Fund's ability to effectively hedge its securities and might, in some cases,
require the Fund to deposit cash to meet applicable margin requirements. The
Fund's ability to hedge effectively through transactions in financial futures or
options depends on the degree to which price movements in its holdings correlate
with price movements of the financial futures and options. Inasmuch as the
Fund's futures and options will not duplicate such underlying securities, the
correlation will probably not be perfect. Consequently, the prices of the
securities being hedged may not move in the same amount as the hedging
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<PAGE>
instrument. It is possible that there may be a negative correlation between the
hedging instrument and the hedged securities, which would result in an
ineffective hedge and a loss to the Fund.
Forward currency contracts are less liquid than exchange-traded futures
contracts, and there is an increased risk of default by the counterparty as
compared to such futures contracts. There is no assurance that the Fund will be
able to close a forward contract prior to maturity and, under such
circumstances, the Fund may have exposure to adverse changes in exchange rates.
MONEY MARKET INSTRUMENTS
When deemed appropriate by CIIA, for temporary defensive purposes, the Fund may
hold cash or invest in money market instruments such as banker's acceptances,
certificates of deposit, repurchase agreements, time deposits, and commercial
paper denominated in U.S. dollar or foreign currencies.
The Fund will limit investments in U.S. dollar denominated commercial paper to
those which at the date of purchase are rated in one of the two highest rating
categories by at least two nationally recognized statistical rating
organizations ("NRSROs") or, if not so rated, which are determined by CIIA to be
of comparable quality. The Fund will limit its purchase of other U.S. dollar
denominated obligations of corporate issuers to those obligations which are
rated "AA" or better by Standard & Poor's and Moody's or, if not so rated, which
are determined by CIIA to be of comparable quality. These ratings are described
in the Statement of Additional Information.
In most cases money market instruments denominated in a foreign currency will
not be rated by a NRSRO. The Fund will limit investments in such international
money market instruments to the securities of issuers which have at least one
billion dollars of assets, and which are determined by CIIA to be of comparable
quality to permitted U.S. money market investments.
SECURITIES ISSUED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS
Some of the securities purchased by the Fund may be obligations that have been
purchased on a when-issued or delayed-delivery basis. Delivery and payment for
these securities could take place a month or more after the date of the
transaction, during which time the value of the purchase commitment will
fluctuate with the market for comparable securities. However, both the payment
and interest terms of the securities are fixed at the time the Fund makes a
commitment to purchase the securities. The Fund makes such commitments only
with the intention of actually acquiring the securities, but may sell the
securities before settlement date if it is deemed advisable for investment
reasons.
OPTIONS
The Fund may purchase and sell put and call options on foreign currencies, stock
indices, and interest rate futures as a hedging device. The purchase of options
affords the buyer an opportunity for gain corresponding to the increase or
decrease in the value of the optioned security. Purchased options have a
defined risk equal to the premium paid for the option. Generally, there are two
principal types of options: "American" options and "European" options. American
options are exercisable at any time during the option period. European options
are exercisable only on the last day of the option period. A call option on a
security gives the purchaser of the option the right to buy, and the writer the
obligation to sell, the underlying security at the exercise price. Conversely,
a put option on a security gives the purchaser the right to sell, and the writer
the obligation to buy, the underlying security at the exercise price.
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WARRANTS
The Fund may invest in warrants which entitle the holder to buy equity
securities at a specific price for a specific period of time. The Fund will
invest in warrants when, in the opinion of CIIA, investment in the warrant
presents greater potential for capital appreciation than an investment in the
underlying equity. Warrants may be considered more speculative than certain
other types of investments in that they do not entitle a holder to dividends or
voting rights with respect to the securities which may be purchased, nor do they
represent any rights to the assets of the issuing company. The value of a
warrant may be more volatile than the value of the warrant's underlying
securities. Also, the value of the warrant does not necessarily change with the
value of the underlying securities, and a warrant ceases to have value if it is
not exercised prior to the expiration date. Currently as a non-fundamental
limitation, investments in warrants, valued at the lower of cost or market, will
not exceed 5% of the value of the Fund's net assets. (Included within the
amount, but not to exceed 2% of the value of the Fund's net assets, may be
warrants which are not listed on the New York or American Stock Exchange).
PORTFOLIO TURNOVER
Ordinarily, the Fund does not purchase securities with the intention of engaging
in short-term trading. However, any particular security will be sold, and the
proceeds reinvested, whenever such action is deemed prudent from the viewpoint
of the Fund's investment objective, regardless of the holding period of that
security. It is anticipated that the Fund's annual portfolio turnover rate will
not exceed 100%. A higher rate of portfolio turnover may result in higher
transaction costs, including brokerage commissions. Also, to the extent that
higher portfolio turnover results in a higher rate of net realized capital gains
to the Fund, the portion of the Fund's distributions constituting taxable
capital gains may increase. See "Dividends and Capital Gains Distributions" and
"Tax Matters."
TOLL-FREE NUMBER FOR SHAREHOLDER INQUIRIES (1-800-528-6718)
For price, yield, account balances, latest transactions or other account
information, or for additional information or assistance between 8:00 a.m. and
5:00 p.m. Eastern Time (business days only), call CIGNA Funds Shareholder
Services toll-free at 1-800-528-6718.
FOR YOUR PROTECTION, CALLS REGARDING TRANSACTIONS WILL BE GIVEN A REFERENCE
NUMBER. WE STRONGLY SUGGEST YOU NOTE THE REFERENCE NUMBER PROVIDED. THIS WILL
GREATLY SPEED THE RESEARCH PROCESS SHOULD A QUESTION ARISE.
HOW TO PURCHASE SHARES
Shares of the Fund are sold on a continuing basis without a sales charge at the
Fund's net asset value per share (see "Pricing of Shares"). The minimum initial
aggregate investment in the Fund is $1,000,000. The minimum initial investment
in the Fund may be spread over the thirteen-month period after an investor opens
an account by marking the Letter of Intent ("LOI") section on the Application
and by signing the Application. The Fund, in its discretion, may accept initial
investments of smaller amounts.
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TO OPEN A NEW ACCOUNT
MAIL: Send your check, payable to CIGNA International Stock Fund, and completed
Application to:
CIGNA Funds Shareholder Services
Hartford, Connecticut 06152-2210
BANK WIRE: Before wiring funds you should obtain an account number, control
number, and bank account number by calling 1-800-528-6718; then complete an
Application and you or your registered representative should arrange to send it
to the address set forth above on the same day of the bank wire transfer.
Instruct your bank to wire the amount you specify to:
State Street Bank and Trust Company
Custody and Shareholder Services Division
Boston, MA
ABA #011000028
CIGNA International Stock Fund
Account Name: _______________________________________
Account # ___________________________________________
Control # ___________________________________________
In order for your investment to be made on the day of the wire, (1) you should
notify the Fund by 12:00 noon Eastern Time that you intend to make your
investment that day by wire, (2) the wire must be received by 4:00 p.m. Eastern
Time that day, and (3) you must submit a completed Application on the same day
you wire funds. Bank wires may be sent only on days on which the State Street
Bank and Trust Company is open for business.
TO MAKE ADDITIONAL PURCHASES
MAIL: Send your check payable to CIGNA International Stock Fund along with the
investment stub from your confirmation statement to:
CIGNA Funds Shareholder Services
Hartford, Connecticut 06152-2210
BANK WIRE: Follow instruction in "To Open a New Account."
Additional Information About Purchases
Certificates will not be issued or delivered to you unless you send a written
request to the address set forth under the section entitled "To Make Additional
Purchases." Please note that redemptions and exchanges by telephone are not
available to shareholders holding certificates.
The Fund reserves the right to limit purchases of shares for any one account or
related accounts to 2% of the total net asset value of the Fund, or may refuse
to sell shares of the Fund to any person.
For additional information about share purchases, call CIGNA Funds Shareholder
Services at 1-800-528-6718.
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<PAGE>
HOW TO REDEEM SHARES
MAIL: Send redemption requests, signed by all shareholders as registered, to
CIGNA Funds Shareholder Services, Hartford, Connecticut 06152-2210. Please
provide your account number, identify the Fund by name, and indicate either the
number of shares or the dollar amount to be redeemed.
REDEMPTION PRICE: The redemption price, which may be more or less than the
shareholder's cost, is the net asset value next determined as of 4:00 p.m.
Eastern Time on the day the redemption request is received by the transfer agent
in ACCEPTABLE FORM. Payment for shares redeemed will be mailed within seven
days. The redemption of shares that have been purchased by check may be delayed
for up to 15 calendar days from the purchase date to insure that the check used
to purchase shares has been cleared through the banking system.
ACCEPTABLE FORM: means that the request includes the following:
1. The account number and the name of the Fund.
2. The amount of the transaction (specified in dollars or shares).
3. The signatures of all owners exactly as they are registered on the account.
4. Any required signature guarantees (if applicable).
5. Other supporting legal documents that might be required, in the case of
estates, corporations, trusts and certain other accounts.
6. Any certificates that you hold for the account.
IF YOU HAVE QUESTIONS ABOUT THIS DEFINITION AS IT PERTAINS TO YOUR REQUEST,
PLEASE CALL CIGNA FUNDS SHAREHOLDER SERVICES (1-800-528-6718).
SIGNATURE GUARANTEE: For your protection, written instructions with a signature
guarantee may be required when the value of shares to be redeemed is more than
$50,000 or when proceeds are to be paid to someone other than the registered
owner(s) or sent to a different address. Signatures must be guaranteed by a
bank, a member firm of a national stock exchange, or other eligible guarantor
institution. When or if shares are registered in more than one name, each
owner's signature must be guaranteed separately in the same manner.
TELEPHONE: Telephone redemption is available to shareholders by giving the
transfer agent the authorization on your Application. Telephone redemption may
not be available when the value of the shares to be redeemed exceeds $50,000 and
is generally not available to owners of retirement plan custodial accounts.
During periods of extreme volume caused by dramatic economic or stock market
changes, the telephone redemption procedure may be temporarily discontinued at
the discretion of the Fund.
You may telephone your redemption request by calling toll-free 1-800-528-6718.
For your protection, telephone redemption proceeds will be sent only to the
address of record or the bank account you identified for this service on your
Application. Proceeds normally will be wired unless you request that the funds
be mailed. If your bank is a savings bank or any other bank that is not a
member of the Federal Reserve System, funds may not be wired unless your bank
has a correspondent bank that is a member of such system.
For your protection, all redemption transaction calls will be given a reference
number. Please note the reference number provided; it will greatly speed the
research process if questions arise. You will be asked to
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<PAGE>
reconfirm all telephone redemption instructions. The Fund may elect not to
honor such instructions unless you give your permission to record your call.
The Fund will not be held responsible for (a) any liability for acting upon any
redemption instructions given by telephone or, (b) the authenticity of such
instructions. As a result, a shareholder will bear the risk of loss in the case
of unauthorized transactions. The staff of the Securities and Exchange
Commission is currently considering whether such limitations on liability by
mutual funds are appropriate.
BANK WIRE: You may request that funds be wired to your bank if you have
provided written instructions to the transfer agent prior to your request.
These instructions should include the name of the bank, its address, its ABA
number, your account number, and the name on the bank account.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
If certificates have been issued for shares to be redeemed, the certificates
must be returned, duly endorsed, to CIGNA Funds Shareholder Services, Hartford,
Connecticut 06152-2210, before the redemption request will be processed.
Evidence of authority of the person seeking redemption may be required which, in
the judgment of the transfer agent, is sufficient to establish the authority of
the person signing the request. Additional legal documents may be required for
the redemption of shares held under fiduciary or qualified retirement plan
accounts.
In view of the relatively high cost of maintaining small accounts, the Fund
reserves the right to redeem all the shares in your account for their then-
current net asset value (which will be promptly paid to you) if at any time
redemptions bring the value of the shares in your account below $1,000,000 or if
you fail to meet the minimum initial investment of $1,000,000 during the
thirteen-month period after you open an account with the Fund. Before the
redemption is processed, however, you will be notified in writing at the address
on record with State Street Bank and Trust Company ("State Street") and allowed
60 days to purchase additional shares so that your account holds more than the
minimum.
For additional information about redemptions, call CIGNA Funds Shareholder
Services at 1-800-528-6718.
DEALER ORDERS
You may place purchase or redemption requests through your registered
representative. A completed Application is required to establish a new account.
Orders placed through a registered representative are priced as of the close of
business on the day the order is received by CIGNA Funds Shareholder Services or
the transfer agent. Registered representatives are responsible for the prompt
transmission of purchase and redemption orders placed through them by
shareholders. A stock power and signature guarantee are required before payment
can be made on redemption orders.
HOW TO CHANGE ACCOUNT OWNERSHIP
To change account ownership, you must submit a letter of instruction with a
signature guarantee and a new Form W-9 to the transfer agent. Additional
information may be obtained from your registered representative or by calling 1-
800-528-6718.
ACCOUNT STATEMENTS
Shareholders will receive statements confirming a transaction and providing a
current balance when shares are purchased, exchanged, or redeemed. The Fund
will also send a statement after the end of each calendar quarter.
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<PAGE>
PRICING OF SHARES
Fund shares are sold at their net asset value every day the New York Stock
Exchange ("NYSE") is open for trading. The Fund's net asset value is calculated
by dividing the number of outstanding shares into the net assets of the Fund.
Net assets are the excess of the Fund's assets over its liabilities. Net asset
value is determined as of 4:00 p.m. Eastern Time on each day the NYSE is open
for trading. Portfolio securities and other assets are valued on the basis of
market quotations or, if quotations are not readily available, by a method that
the Trust's Board of Trustees believes accurately reflects fair value. Orders
for purchases and redemption will not be processed if received when the NYSE is
closed. The NYSE is closed on New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Orders for shares taken by your registered representative will be promptly
executed at the offering price next determined after the purchase order is
received by the Fund in good order. Orders taken by registered representatives
after 4:00 p.m. Eastern Time will be executed at net asset value determined as
of 4:00 p.m. Eastern Time on such following business day. Existing shareholders
should transmit orders for the purchase of additional shares to CIGNA Funds
Shareholder Services. If received before 4:00 p.m. Eastern Time, such purchases
will be executed at the price determined as of 4:00 p.m. Eastern Time on the day
the Fund receives the shareholder's order.
CII may pay a fee to registered representatives of CIGNA Financial Advisors,
Inc. or other authorized broker-dealers which are members of the National
Association of Securities Dealers for sales of shares of the Fund. The fee
shall be calculated at a rate not to exceed 0.16% of the average net asset value
of the amount invested for the first year plus 0.04% of the average net asset
value of the amount invested for each subsequent year. These fees will be borne
by CII, and not by the Fund.
VALUATION OF INVESTMENTS
Equity securities, including warrants, that are listed on a United States or
foreign securities exchange are valued at the last sale price or, if no such
price is available, at the last bid price. Portfolio securities that are
primarily traded on foreign securities exchanges are generally valued at the
preceding closing prices of such securities on their respective exchanges. A
security that is listed or traded on more than one exchange is valued on the
exchange determined to be the primary market for such security by the Board of
Trustees or its delegates. Debt and equity securities actively traded in the
over-the-counter market, including listed securities whose primary markets are
believed to be over-the-counter, are valued at the most recent bid price which
may be based upon valuations furnished by a pricing service or from independent
securities dealers. Short-term investments with remaining maturities of up to
and including 60 days are valued at amortized cost, which approximates market
value. Other securities and assets of the Fund, with the exception of futures
contracts and options on futures contracts which are discussed below, are
appraised at fair value as determined in good faith by, or under the authority
of, the Board of Trustees of the Trust. For purposes of determining the Fund's
net asset value, all assets and liabilities initially expressed in foreign
currency values will be converted into United States dollar values at quotations
of such currencies against United States dollars as last quoted by a recognized
exchange or dealer. Trading in securities on European and Far Eastern
securities exchanges and over-the-counter markets is normally completed well
before the close of business on each business day in New York (i.e., a day on
which the New York Stock Exchange is open for trading). In addition, European
or Far Eastern securities trading generally in a particular country or countries
may not take place on all business days in New York. Furthermore, trading takes
place in Japanese markets on certain Saturdays and in various foreign markets on
days which are not business days in New York and on which the Fund's net asset
values are not calculated. Such net asset value calculation does not take place
contemporaneously with the determination of the prices of the majority of the
portfolio securities used in such calculation. Events affecting the values of
portfolio securities that occur between the time their prices are determined and
the close of the New York Stock Exchange will not be reflected in the Fund's
calculation
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<PAGE>
of net asset value unless CII deems that the particular event would materially
affect net asset value, in which case an adjustment will be made.
FUTURES CONTRACTS
Initial margin deposits made upon entering into futures contracts are recognized
as assets due from the broker (the Fund's agent in acquiring the futures
position). During the period the futures contract is open, changes in the value
of the contract are recognized as unrealized gains or losses by "marking-to-
market" on a daily basis to reflect the market value of the contract at the end
of each day's trading. Variation margin payments are made or received,
depending upon whether unrealized gains or losses are incurred. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
the Fund's basis in the contract.
OPTIONS ON FUTURES CONTRACTS
The premium paid by the Fund for the purchase of a call or put option on futures
contracts is recorded as an investment and subsequently "marked-to-market" to
reflect the current market value of the option purchased. The current market
value of a purchased option on futures contracts is the last reported sale price
or, if no sales are reported, the last bid price. If an option on futures
contracts which the Fund has purchased expires on the stipulated expiration
date, the Fund realizes a loss in the amount of the cost of the option. If the
Fund exercises a purchased put option on futures contracts, it realizes a gain
or loss from the sale of the underlying security and the proceeds from such sale
will be decreased by the premium originally paid. If the Fund exercises a
purchased call option on futures contracts, the cost of the security which the
Fund purchases upon exercise will be increased by the premium originally paid.
PERFORMANCE INFORMATION
The Fund may, from time to time, provide performance data (total return) to
shareholders or prospective investors. Performance data is historical, and
therefore should not be considered a representation of future results, and
should be considered in light of the Fund's investment objective and policies,
characteristics of its portfolio and periods selected.
Total return quotations will, unless otherwise indicated, be calculated
according to a standard formula described in regulations issued by the SEC.
This formula equates an amount invested in the Fund at the beginning of a stated
period to the redeemable value of that investment (assuming reinvestment of all
dividends and distributions and with recognition of all recurring charges) at
the end of the period. The resulting return quote is an average annual total
return across the stated period. In addition, the Fund may calculate its total
return pursuant to non-standard formulas (such as an aggregate return across a
stated period), provided that standard return quotes for the one-, five- and
ten-year periods (or from the Fund's inception, if shorter), ending no earlier
than the end of the last calendar quarter, are illustrated with equal
prominence.
Also, the Fund may compare its performance to the following market indices: the
Morgan Stanley Capital International Europe, Australia and Far East Index, the
Morgan Stanley Capital International Emerging Markets Index, the Standard &
Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average, and
the Consumer Price Index. The Fund may also compare its performance to
performance data of similar mutual funds as published by Lipper Analytical
Services, CDA Investment Technologies Inc., Frank Russell Co., SEI Research,
Micropal, Ltd., InterSec Research, Stanger, and Weisenberger.
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<PAGE>
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund declares and distributes dividends annually representing substantially
all net investment income. Substantially all net realized capital gains, if
any, are distributed on an annual basis as well. All such distributions will be
automatically reinvested for you in shares of the Fund at the net asset value
determined on the record date, or, if you have so elected on the Application,
will be paid in cash to you or someone you designate. Shareholders who reinvest
their dividends will receive a notice setting forth the amount of any dividends
paid and reinvested.
TAX MATTERS
The Fund intends to qualify and elect to be treated under the Internal Revenue
Code of 1986, as amended (the "Code"), as a regulated investment company ("RIC")
for each taxable year. As a RIC, the Fund will not be subject to Federal income
tax ("FIT") to the extent it distributes to its shareholders its net investment
income and net capital gains. The Fund is subject to a nondeductible 4% excise
tax if it does not meet certain distribution requirements under the Code. The
Fund intends to make sufficient distributions to avoid this excise tax.
Distributions received by tax-exempt shareholders will not be subject to FIT to
the extent permitted under applicable tax law. While it is anticipated that
many shareholders of the Fund will be tax-exempt institutions, the following
discussion may be of general interest to these shareholders as well as for those
shareholders of the Fund who do not have tax-exempt status.
Dividends declared to shareholders of record on a date in October, November, or
December will be taxable to shareholders in the year declared, as long as the
Fund pays the dividends no later than January of the following year.
Distributions of net investment income and of any net short-term capital gain
are taxable as ordinary income to shareholders whether received in cash or
reinvested in shares. Distributions of net capital gain, if properly designated
as capital gain dividends by the Fund, are taxable to shareholders as long-term
capital gain, regardless of how long the shares have been held and are not
eligible for the corporate dividends-received deduction. Distributions of net
investment income and net capital gains will be taxable as described above
whether received in cash or reinvested in shares. Shortly, after the end of
each year, the Fund will inform shareholders of the amount and FIT treatment of
all distributions paid during the year.
Pursuant to IRS regulations, the Fund will withhold FIT at a rate of 31% from
ordinary income dividends and capital gain distributions and from redemption
payments made to any shareholder who fails to furnish a certified or correct
taxpayer identification number, or, in certain cases, fails to properly report
income for FIT purposes. If more than 50% of the value of the Fund's total
assets consists of foreign stock or securities at the close of its taxable year,
the Fund may elect to pass through the credit or deduction for foreign taxes to
shareholders who are U.S. persons (i.e., citizens and residents and U.S.
domestic corporations, partnerships, trusts, and estates). As a result,
shareholders who want to take the benefit of the foreign tax credit or deduction
on their U.S. income tax returns would include in gross income, in addition to
taxable dividends actually received from the Fund, their proportionate share of
foreign taxes paid by the Fund.
The Fund may invest in shares of stock of an entity which is a "passive foreign
investment company" ("PFIC") which could subject the Fund to a U.S. Federal
Income Tax which cannot currently be eliminated by making distributions to Fund
shareholders. However, the Fund may be able to make certain elections so that
different FIT rules would apply. Depending on if an election is made or which
election is made in regard to the U.S. Federal Income Tax treatment of the PFIC
shares, both the amount that must be distributed and the amount that will be
taxed as ordinary or long-term capital gains will be affected. See "Tax
Matters" in the Statement of Additional Information for more information on
PFICs.
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<PAGE>
Shareholders who are not U.S. persons (i.e., U.S. citizens and residents and
U.S. domestic corporations, partnerships, trusts and estates) should consult
their tax advisers regarding U.S. and foreign tax consequences of ownership of
shares of the Fund including the likelihood that distributions to them would be
subject to withholding of U.S. tax at a rate of 30% (or at a lower rate under a
tax treaty).
Distributions may also be subject to state and local taxes depending on each
shareholder's tax situation.
Shareholders should consult their tax advisers regarding the particular tax
consequences of investing in the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
The investment adviser to the Fund is CIGNA Investments, Inc. ("CII"), an
indirect, wholly-owned subsidiary of CIGNA Corporation. CII also serves as
investment adviser for other investment companies, including investment
companies sponsored by affiliates of CIGNA Corporation, and for a number of
pension, advisory, corporate, and other accounts. CII is located at 900 Cottage
Grove Road, Bloomfield, Connecticut. Its mailing address is Hartford,
Connecticut 06152-2210. The sub-adviser to the Fund is CIGNA International
Investment Advisors, Ltd. ("CIIA"), which is also an indirect wholly-owned
subsidiary of CIGNA Corporation. CIIA also manages the investments of a number
of U.S. and non-U.S. pension, corporate, government, insurance, and other
accounts. CIIA is located at Park House, 16 Finsbury Circus, London, England
EC2 7AX. CII, CIIA and other affiliates of CIGNA Corporation manage combined
assets of approximately $70 billion.
Pursuant to a Master Investment Advisory Agreement, the Trust, on behalf of the
Fund, employs CII to provide certain management services to the Fund. CII and
CIIA have entered into a Sub-Advisory Agreement pursuant to which CIIA manages
the investment and reinvestment of a portion of the Fund's assets as is
specified from time to time by CII. Subject to the control and periodic review
of the Board of Trustees of the Trust, CII and CIIA, as applicable, will
determine what investments shall be purchased, held, sold, or exchanged by the
Fund and what portion, if any, of the assets of the Fund shall be held in cash
and other temporary investments. CII is responsible for overall management of
the business affairs of the Fund. Under the Master Investment Advisory
Agreement, CII is entitled to receive a monthly advisory fee equal to 0.80% (on
an annual basis) of the average daily net asset value of the Fund. While the
management fee is higher than the investment management fee charged by most
mutual funds, in CII's opinion it is comparable to fees being charged other
international equity funds by their investment advisers. Pursuant to the Sub-
Advisory Agreement, CII is to pay to CIIA a fee agreed upon by CII and CIIA from
time to time. Currently, and until further notice to shareholders by amendment
to this prospectus, CII has voluntarily agreed to waive such portion of the
advisory fee and reimburse the Fund as is necessary to cause the total annual
operating expenses of the Fund (including the Adviser's fee but excluding
interest, taxes, amortized organizational expenses, transaction costs in
acquiring and disposing of portfolio securities and extraordinary expenses) in
any fiscal year from exceeding 1.25% of the Fund's average daily net assets.
The payment of any expenses by CII increases the Fund's total return, while
payment by the Fund of such expenses lowers its total return.
The Investment Advisory Fees payable in 1993 and 1994 to CII were 0.00% of
average daily net assets in each year. Total expenses in each year, net of
amounts reimbursed to the Fund by CII, were 1.25% of average daily net assets in
1993 and 1994. Amounts payable by the Fund to CII as advisory fees and for
total expenses, including advisory fees, were reduced for 1993 by $47,611 and
$88,841, respectively, so as not to exceed the 1.25% of average daily net assets
voluntary expense limitation for 1993. Amounts payable by the Fund to CII as
advisory fees and for total expenses were reduced for 1994 by $56,609 and
$82,021, respectively, so as not to exceed the 1.25% of average daily net assets
voluntary expense limitation for 1994. Before reduction for the limitation, the
ratio of CII compensation to average daily net assets for 1993 and 1994 was
0.80%, and the expense ratio for all expenses, including advisory fees, for 1993
and 1994 was 2.75% and 2.35%, respectively.
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<PAGE>
The person primarily responsible for the day-to-day management of the Fund's
portfolio is Lee Mickelburough. He assumed this responsibility in February
1994. Mr. Mickelburough is Senior Portfolio Manager and Head of London Office
Equities for CIIA. Previously, Mr. Mickelburough was Resident Director and Head
of Australia Office for CIGNA International Investment Advisors Australia
Limited ("CIIAAL"). Before joining CIIAAL in 1989, Mr. Mickelburough was
Investment Manager for Tri-Continental Management Limited. A staff of
experienced international analysts supports Mr. Mickelburough in managing the
Fund's portfolio.
THE DISTRIBUTOR
The Trust currently has entered into a Distribution Agreement (the "Distribution
Agreement") with CIGNA Financial Advisors, Inc. ("CFA") to serve as principal
underwriter to distribute shares of the Fund. CFA is an indirect, wholly-owned
subsidiary of CIGNA Corporation. The address of CFA is 900 Cottage Grove Road,
Bloomfield, Connecticut. Its mailing address is Hartford, Connecticut 06152-
2323.
CUSTODIAN AND TRANSFER AGENT SERVICES
State Street Bank and Trust Company serves as transfer agent and dividend
disbursing agent for the Fund, distributes shareholder materials on behalf of
the Fund, and serves as custodian of the assets of the Fund.
THE TRUST, ITS SHARES AND BOARD OF TRUSTEES
The Trust currently offers a single series of shares. The Board of Trustees is
authorized in the Master Trust Agreement to create new series of shares without
the necessity of a vote of shareholders of the Trust. Under the Master Trust
Agreement, no annual or regular meetings of shareholders are required. Meetings
of shareholders of the Fund will be held from time to time to consider matters
requiring a vote of such shareholders in accordance with the requirements of the
1940 Act, state law or the provisions of the Master Trust Agreement. It is not
expected that shareholder meetings will be held annually.
Shareholders of each fund representing a series of shares of the Trust are
entitled to one vote per share (with proportionate voting for fractional
shares), irrespective of the relative net asset value of the shares of such
fund. However, on matters affecting an individual fund, a separate vote of
shareholders of that fund is required. Shareholders of a fund are not entitled
to vote on any matter which does not affect that fund but which requires a
separate vote of another fund. Examples of matters which will be voted on
separately by shareholders of each fund are the approval of the Master
Investment Advisory Agreement and any sub-advisory agreement. When issued,
shares of each fund are fully paid and nonassessable, have no preemptive or
subscription rights, and are fully transferable. There are no conversion
rights. Shares do not have cumulative voting rights, which means that in
situations in which shareholders elect Trustees, holders of more than 50% of the
shares voting for the election of Trustees can elect 100% of the Trustees of the
Trust and the holders of less than 50% of the shares voting for the election of
Trustees will not be able to elect any Trustees.
The Trustees are a self-perpetuating body and will continue in their positions
until they resign, die, or are removed by a written agreement signed by at least
two-thirds of the Trustees, by vote of the shareholders of the Trust voting not
less than two-thirds of the shares then outstanding, cast in person or by proxy
at any meeting called for that purpose, or by a written declaration signed by
shareholders voting not less than two-thirds of the shares then outstanding and
filed with the Trust's custodian.
A majority of the Trustees is not affiliated with CIGNA Corporation or any of
its subsidiary companies. The Trustees meet quarterly to review the results of
the Fund, to monitor investment activities and practices, and to review and act
upon future plans for the Fund. The role of the Trustees is not to approve
specific investment purchases and sales, but rather to exercise a control and
review function.
- 18 -
<PAGE>
Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Master Trust Agreement disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or executed on behalf of
the Trust. The Master Trust Agreement provides for indemnification from the
Trust's property for all losses and expenses of any shareholder held personally
liable for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its obligations.
- 19 -
<PAGE>
CIGNA INTERNATIONAL STOCK FUND
INVESTMENT ADVISER:
CIGNA Investments, Inc,
Hartford, CT 06152-2210
SUB-ADVISER:
CIGNA International Investment Advisors, Ltd.
Park House 16 Finsbury Circus
London, England EC2 7AX
TRANSFER AGENT:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
CUSTODIAN:
State Street Bank and Trust Company
P.O. Box 2351
Boston, MA 02107
PRINCIPAL UNDERWRITER:
CIGNA Financial Advisors, Inc,
Hartford, CT 06152-2323
INDEPENDENT ACCOUNTANTS:
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- 20 -
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Expense Table........................................................... 2
Financial Highlights.................................................... 3
About the Fund.......................................................... 4
Investment Objective and Policies....................................... 4
Toll-Free Number for Shareholder Inquiries.............................. 10
How to Purchase Shares.................................................. 10
How to Redeem Shares.................................................... 12
Dealer Orders........................................................... 13
How to Change Ownership................................................. 13
Account Statements...................................................... 13
Pricing of Shares....................................................... 14
Performance Information................................................. 15
Dividends and Capital Gains Distributions............................... 16
Tax Matters............................................................. 16
Investment Advisory and Other Services.................................. 17
The Distributor......................................................... 18
Custodian and Transfer Agent Services................................... 18
The Trust, Its Shares and Board of Trustees............................. 18
</TABLE>
- 21 -
<PAGE>
C I G N A I N T E R N A T I O N A L S T O C K F U N D
-----------------------------------------------------------
S T A T E M E N T O F A D D I T I O N A L I N F O R M A T I O N
A U G U S T 1 5, 1 9 9 5
This Statement of Additional Information is not a prospectus, but should be
read in conjunction with the prospectus for CIGNA International Stock Fund
(the "Fund") having the same date as the date of this Statement of
Additional Information. Much of the information contained herein expands
upon subjects discussed in the prospectus. No investment in shares of the
Fund should be made without first reading the prospectus. A copy of the
prospectus of the Fund may be obtained by writing to CIGNA Funds
Shareholder Services, Hartford, Connecticut 06152-2210.
The financial statements for CIGNA International Stock Fund for the year
ended December 31, 1994, as contained in the Annual Report to Shareholders,
are hereby incorporated by reference into this Statement of Additional
Information. The financial statements for the year ended December 31, 1994
have been examined by Price Waterhouse LLP, independent accountants, whose
report thereon also is incorporated herein by reference.
CIGNA International Stock Fund SAI
Page 1
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
General Information About the Trust........................................ 3
- -----------------------------------
Investment Objective and Policies.......................................... 3
- ---------------------------------
Cross-Reference to Prospectus:
About the Fund
Investment Objective and Policies
Options on Stock Indices................................................... 5
- ------------------------
Futures Contracts.......................................................... 5
- -----------------
Stock Index Futures Contracts, Interest Rate Futures Contracts
- --------------------------------------------------------------
and Foreign Currency Contracts.......................................... 5
------------------------------
Options on Futures Contracts............................................... 7
- ----------------------------
Risks as to Futures Contracts and Related Options.......................... 8
- -------------------------------------------------
Cross-Reference to Prospectus:
Investment Objective and Policies
Foreign Currency Transactions.............................................. 9
- -----------------------------
Investment Restrictions.................................................... 11
- -----------------------
Tax Matters................................................................ 12
- -----------
Cross-Reference to Prospectus:
Investment Objective and Policies
Tax Matters
Activities of Affiliated Companies......................................... 16
- ----------------------------------
Management of the Trust................................................. 16
-----------------------
Cross-Reference to Prospectus:
The Trust, Its Shares and Board of Trustees
Investment Advisory and Other Services..................................... 18
- --------------------------------------
Cross-Reference to Prospectus:
Investment Advisory and Other Services
Portfolio Turnover and Brokerage Allocation................................ 20
- -------------------------------------------
Purchase, Redemption and Pricing of Securities............................. 22
- ----------------------------------------------
Cross-Reference to Prospectus:
Toll-Free Number for Shareholder Inquiries
How to Purchase Shares
How to Redeem Shares
Pricing of Shares
Performance Information.................................................... 22
- -----------------------
Cross Reference to Prospectus:
Performance Information
Redemptions Paid in Cash................................................... 23
- ------------------------
Description of Money Market Instruments.................................... 24
- ---------------------------------------
Ratings of Securities...................................................... 25
- ---------------------
</TABLE>
CIGNA International Stock Fund SAI
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<PAGE>
GENERAL INFORMATION ABOUT THE TRUST
- -----------------------------------
The Fund is organized as the sole series of shares of CIGNA Institutional Funds
Group ("the Trust"), a Massachusetts business trust organized pursuant to a
Master Trust Agreement dated as of August 10, 1992, as amended from time to
time. Under the Master Trust Agreement, the Board of Trustees is authorized to
create new series of shares without the necessity of a vote of shareholders of
the Trust.
The assets received by the Trust from the issue or sale of shares of each of its
series of shares, and all income, earnings, profits and proceeds thereof,
subject only to the rights of creditors, are specifically allocated to the
appropriate series. They constitute the underlying assets of each series, are
required to be segregated on the books of account, and are to be charged with
the expenses with respect to such series. Any general expenses of the Trust not
readily identifiable as belonging to a particular series shall be allocated by
or under the direction of the Board of Trustees, primarily on the basis of
relative net assets.
Each share of each series represents an equal proportionate interest in that
series with each other share and is entitled to such dividends and distributions
out of the income belonging to such series as are declared by the Board. Upon
any liquidation of the Trust, shareholders of each series are entitled to share
pro rata in the net assets belonging to that series available for distribution.
INVESTMENT OBJECTIVE AND POLICIES
- ---------------------------------
For a general discussion of the investment objective and policies of the Fund,
see the section entitled "Investment Objective and Policies" in the prospectus.
Equity and Debt Securities
- --------------------------
The Fund will invest in securities listed on foreign securities exchanges or
securities traded in the over-the-counter market. Debt securities will be
acquired in new offerings or in principal trades with broker/dealers.
Ordinarily, the Fund will not purchase securities with the intention of engaging
in short-term trading. However, any particular security will be sold, and the
proceeds reinvested, whenever such action is deemed prudent from the viewpoint
of the Fund's investment objective, regardless of the holding period of that
security. The rating applied to a debt security or money market instrument (see
below) at the time the security is purchased by the Fund may be changed while
the Fund holds such security in its portfolio. This change may affect, but may
not compel, a decision to dispose of a security. Nonetheless, the Fund does not
intend to hold more than 5% of its net assets in bonds rated below investment
grade (i.e. bonds rated BB or Ba or below by Standard & Poor's or Moody's or if
not so rated, which in the opinion of CIIA are of comparable quality).
Therefore, the Fund will dispose of any bond, as soon as practicable consistent
with achieving an orderly disposition, that would cause the Fund to violate the
above-referenced limitation. If
CIGNA International Stock Fund SAI
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<PAGE>
the major rating services used by the Fund were to alter their standards or
systems for rating, the Fund would then employ ratings under the revised
standards or systems that would be comparable to those specified in its current
investment objective, policies and restrictions.
Money Market Instruments
- ------------------------
When deemed appropriate by CIIA, for temporary defensive purposes, the Fund may
invest in high quality, short-term money market instruments such as certificates
of deposit, time deposits, commercial paper, bankers' acceptances, short-term
U.S. Government obligations and repurchase agreements. Such investments will
have maturities of 60 days or less and normally are held to maturity. The types
of money market instruments in which the Fund presently invests are listed under
"Money Market Instruments" in the prospectus. If the Trustees determine that it
may be advisable to invest in other types of money market instruments the Fund
may invest in such instruments, if it is permitted to do so by its investment
objective, policies and restrictions. The underlying securities that are
subject to a repurchase agreement will be "marked-to-market" on a daily basis so
that the value of the securities can be determined in relation to the amount of
the repurchase agreement.
Repurchase Agreements
- ---------------------
The Fund may engage in repurchase agreement transactions in pursuit of its
investment objective. Under the terms of a typical repurchase agreement, a Fund
purchases an underlying U.S. Government security, including securities issued or
guaranteed by the U.S. Treasury or agencies and instrumentalities of the U.S.
Government, for a relatively short period (the maturity of repurchase agreements
is frequently between one and five days) subject to an obligation of the seller
to repurchase, and the Fund to resell, the security at an agreed upon price and
time, thereby determining the yield during the Fund's holding period. The
arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The Fund may enter into
repurchase agreements with banks having $1 billion or more of assets and with
broker/dealers having net capital of $100 million. The Fund requires that
sufficient securities be subject to a repurchase agreement so that the value of
the securities at least equals the amount of the repurchase agreement. Also,
the Fund requires that the underlying securities be held by the custodian of
Fund assets, either physically or under the Federal Book Entry System.
Repurchase agreements could involve certain risks in the event of default or
insolvency of the banks or broker/dealer, including possible delays or
restrictions upon a Fund's ability to dispose of the underlying securities.
CIGNA Investments, Inc. ("CII"), the Fund's investment adviser, in accordance
with procedures adopted by the Board of Trustees of the Trust, monitors and
evaluates the credit-worthiness of any banks and dealers with which the Fund
engages in repurchase agreements.
CIGNA International Stock Fund SAI
Page 4
<PAGE>
Non-Fundamental Investment Limitations
- --------------------------------------
Currently, as a non-fundamental limitation, the Fund will not invest in oil, gas
or other mineral leases, or real estate limited partnership interests.
Options on Stock Indices
- ------------------------
The Fund may purchase put options on stock indices in anticipation of or during
a market decline to attempt to offset a decrease in market value of its equity
securities.
Put options on stock indices are similar to put options on stock except that the
delivery requirements are different. Instead of giving the right to make
delivery of stock at a specified price, a put option on a stock index gives the
holder the right to receive an amount of cash upon exercise of the option if the
value of the underlying index has fallen below the exercise price. Receipt of
this cash amount will depend upon the closing level of the stock index upon
which the option is based being less than the exercise price of the option. The
amount of cash received will be equal to the difference between the closing
price of the index and the exercise price of the option expressed in dollars or
some other currency amount times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount. Gain or loss to the Fund on transactions in stock index options will
depend on price movements in the stock market generally (or in a particular
industry or segment of the market) rather than price movements of individual
securities. As with stock options, the Fund may offset its position in stock
index options prior to expiration by entering into a closing transaction on an
exchange or it may let the option expire unexercised.
A stock index assigns relative values to the stocks included in the index and
the index options are based on a broad market index such as the International
Market Index, or a narrower market index such as the Japan Index. Indices are
also based on industry or market segments such as the Computer Technology Index.
Futures Contracts
- -----------------
Stock Index Futures Contracts, Interest Rate Futures Contracts and Foreign
- --------------------------------------------------------------------------
Currency Futures Contracts
- --------------------------
A stock index assigns relative values to the common stocks included in the index
and the index fluctuates with changes in the market values of the common stocks
so included. A stock index futures contract is a bilateral agreement pursuant
to which two parties agree to take or make delivery of an amount of cash equal
to a specified dollar or other currency amount times the difference between the
stock index value at the close of the last trading day of the contract and the
price at which the futures contract is originally struck. No physical delivery
of the underlying stocks in the index is made. Currently, stock index futures
contracts can be purchased or sold primarily with respect to broad based stock
indices such as
CIGNA International Stock Fund SAI
Page 5
<PAGE>
the Standard & Poor's 500 Stock Index, the New York Stock Exchange Composite
Index, the American Stock Exchange Major Market Index, the NASDAQ - 100 Stock
Index, the Value Line Stock Index, the Nikkei 225 Stock Average, the Topix, the
FT-SE 100, the Major Market Index, the Matif Stock Index and the Australia All
Ordinaries.
The Fund will only enter into stock index futures contracts as a hedge against
changes resulting from market conditions in the values of the securities held or
which the Fund intends to purchase. When the Fund anticipates a significant
market or market sector advance, the purchase of a stock index futures contract
affords a hedge against not participating in such advance. Conversely, in
anticipation of or in a general market or market sector decline that adversely
affects the market values of the Fund's portfolio of securities, the Fund may
sell stock index futures contracts.
An interest rate futures contract is an agreement between two parties to buy and
sell a debt security for a set price on a future date. Currently, there are
futures contracts based on a variety of financial instruments, including the
Japanese 10 Year Bond, the German 10 Year Bond, the Australian 10 Year Bond,
long-term U.S. Treasury bonds, U.S. Treasury notes, U.S. Treasury bills,
Eurodollars; London InterBank Offer Rate ("LIBOR"), Sterling, Long Gilt, and the
Bond Buyer Municipal Bond Index.
The Fund will only enter into interest rate futures contracts for the purpose of
hedging debt securities in its portfolio or the value of debt securities which
the Fund intends to purchase. For example, if the Fund owned long-term debt
securities and CIIA expected interest rates to increase, the Fund might sell
interest rate futures contracts. If, on the other hand, the Fund held cash
reserves and interest rates were expected to decline, the Fund might purchase
interest rate futures contracts.
Futures contracts may also be used to hedge the risk of changes in the exchange
rate of foreign currencies.
In cases of purchases of futures contracts, an amount of cash and cash
equivalents, equal to the market value of the futures contracts (less any
related margin deposits) will be deposited in a segregated account with the
Trust's Custodian to collateralize the position and ensure that the use of such
futures contracts is unleveraged. Unlike when the Fund purchases or sells a
security, no price is paid or received by the Fund upon the purchase or sale of
a futures contract.
Initially, a Fund will be required to deposit with the custodian for the Fund
for the account of the broker a stated amount, as called for by the particular
contract, of cash or U.S. Treasury bills. This amount is known as "initial
margin." The nature of initial margin in futures transactions is different from
that of margin in securities transactions in that futures contract margin does
not involve the borrowing of funds by the customer to finance the transactions.
Rather, the initial margin is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of the
futures contract assuming all contractual
CIGNA International Stock Fund SAI
Page 6
<PAGE>
obligations have been satisfied. Subsequent payments, called "variation
margin," to and from the broker will be made on a daily basis as the price of
the futures contract fluctuates making the long and short positions in the
futures contract more or less valuable, a process known as "marking-to-market."
For example, when the Fund has purchased a stock index futures contract and the
price of the underlying stock index has risen, that position will have increased
in value and the Fund will receive from the broker a variation margin payment
with respect to that increase in value. Conversely, when the Fund has purchased
a stock index futures contract and the price of the underlying stock index has
declined, the position would be less valuable and the Fund would be required to
make a variation margin payment to the broker. Variation margin payments would
be made in a similar fashion when the Fund has purchased an interest rate
futures contract. At any time prior to expiration of the futures contract, the
Fund may elect to close the position by taking an opposite position which will
operate to terminate the Fund's position in the futures contract. A final
determination of variation margin is then made, additional cash is required to
be paid by or released to the Fund and the Fund realizes a loss or a gain.
Options on Futures Contracts
- ----------------------------
An option on a futures contract gives the purchaser (the Fund) the right, in
return for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the option exercise period. The
writer of the option is required upon exercise to assume an offsetting futures
position (a short position if the option is a call and a long position if the
option is a put) at a specified exercise price at any time during the period of
the option. Upon exercise of the option, the assumption of offsetting futures
positions by the writer and holder of the option will be accompanied by delivery
of the accumulated cash balance in the writer's futures margin account which
represents the amount by which the market price of the futures contract, at
exercise, exceeds, in the case of a call, or is less than, in the case of a put,
the exercise price of the option on the futures contract. If an option on a
futures contract is exercised on the last trading date prior to the expiration
date of the option, the settlement will be made entirely in cash equal to the
difference between the exercise price of the option and the closing price of the
futures contract on the expiration date.
The Fund will purchase put options on futures contracts to hedge against the
risk of falling prices for its portfolio securities. The Fund will purchase
call options on futures contracts as a hedge against a rise in the price of
securities which it intends to purchase. Options on futures contracts may also
be used to hedge the risks of changes in the exchange rate of foreign
currencies. The purchase of a put option on a futures contract is similar to
the purchase of protective put options on an index or a foreign currency. The
purchase of a call option on a futures contract is similar in some respects to
the purchase of a call option on an index or a foreign currency. Depending on
the pricing of the option compared to
CIGNA International Stock Fund SAI
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<PAGE>
either the price of the futures contract upon which it is based or the price of
the underlying securities or currency, it may or may not be less risky than
ownership of the futures contract or underlying securities or currency.
Risks As To Futures Contracts And Related Options
- -------------------------------------------------
There are several risks in connection with the use of futures contracts and
related options as hedging devices. One risk arises because of the imperfect
correlation between movements in the price of hedging instruments and movements
in the price of the stock, debt securities or foreign currency which are the
subject of the hedge. If the price of a hedging instrument moves less than the
price of the stocks, debt securities or foreign currency which are the subject
of the hedge, the hedge will not be fully effective. If the price of a hedging
instrument moves more than the price of the stock, debt securities or foreign
currency, the Fund will experience either a loss or a gain on the hedging
instrument which will not be completely offset by movements in the price of the
stock, debt securities or foreign currency which are the subject of the hedge.
The use of options on futures contracts involves the additional risk that
changes in the value of the underlying futures contract will not be fully
reflected in the value of the option.
Successful use of hedging instruments by the Fund is also subject to CIIA's
ability to predict correctly movements in the direction of the stock market, of
interest rates, or of foreign exchange rates. Because of possible price
distortions in the futures and options markets and because of the imperfect
correlation between movements in the prices of hedging instruments and the
investments being hedged, even a correct forecast by CIIA of general market
trends may not result in a completely successful hedging transaction.
It is also possible that where the Fund has sold futures contracts to hedge its
portfolio against a decline in the market, the market may advance and the value
of stocks or debt securities held in the Fund's portfolio may decline. If this
occurred, the Fund would lose money on the futures contracts and also experience
a decline in the value of its portfolio securities. Similar risks exist with
respect to foreign currency hedges.
Positions in futures contracts or options may be closed out only on an Exchange
on which such contracts are traded. Although the Fund intends to purchase or
sell futures contracts or purchase options only on Exchanges or Boards of Trade
where there appears to be an active market, there is no assurance that a liquid
market on an Exchange or Board of Trade will exist for any particular contract
or at any particular time. If there is not a liquid market at a particular
time, it may not be possible to close a futures position or purchase an option
at such time. In the event of adverse price movements under those
circumstances, the Fund would continue to be required to make daily cash
payments of maintenance margin on its futures positions. The extent to which
the Fund may engage in futures contracts or related options will be limited by
Internal Revenue Code requirements for qualification as a regulated investment
CIGNA International Stock Fund SAI
Page 8
<PAGE>
company and the Fund's intent to continue to qualify as such. The result of a
hedging program cannot be foreseen and may cause the portfolio of the Fund to
suffer losses which it would not otherwise sustain.
Foreign Currency Transactions
- -----------------------------
The Fund may engage in currency exchange transactions to protect against
uncertainty in the level of future currency exchange rates.
Generally, the Fund may engage in both "transaction hedging" and "position
hedging". When it engages in transaction hedging, the Fund enters into foreign
currency transactions with respect to specific receivables or payables,
generally arising in connection with the purchase or sale of portfolio
securities. The Fund will engage in transaction hedging when it desires to
"lock in" the U.S. dollar price of a security it has agreed to purchase or sell,
or the U.S. dollar equivalent of a dividend or interest payment in a foreign
currency. By transaction hedging the Fund will attempt to protect itself
against a possible loss resulting from an adverse change in the relationship
between the U.S. dollar and the applicable foreign currency during the period
between the date on which the security is purchased or sold or on which the
dividend or interest payment is declared, and the date on which such payments
are made or received.
The Fund may purchase or sell a foreign currency on a spot (or cash) basis at
the prevailing spot rate in connection with the settlement of transactions in
portfolio securities denominated in that foreign currency. The Fund may also
enter into contracts to purchase or sell foreign currencies at a future date
("forward contracts") and purchase and sell foreign currency futures contracts.
For transaction hedging purposes the Fund may also purchase exchange-listed call
and put options on foreign currencies. A put option on currency gives the Fund
the right to sell a currency at a specific exercise price . A call option on
currency gives the Fund the right to purchase a currency at a specific exercise
price. The time when call and put options are exercisable depends on whether
the options are American options or European options. American options are
exercisable at anytime during the option period. European options are
exercisable only on a designated date.
When it engages in position hedging, the Fund enters into foreign currency
exchange transactions to protect against a decline in the values of the foreign
currencies in which its portfolio securities are denominated or an increase in
the value of currency for securities which the Fund expects to purchase, when
the Fund holds cash or short-term investments. In connection with position
hedging, the Fund may purchase put or call options on foreign currency and
foreign currency futures contracts and buy or sell forward contracts and foreign
currency futures contracts. The Fund may also purchase or sell foreign currency
on a spot basis.
The precise matching of the amounts of foreign currency exchange transactions
and the value of the portfolio securities involved will
CIGNA International Stock Fund SAI
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<PAGE>
not generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature. For example, it may be necessary for
the Fund to purchase additional foreign currency on the spot market (and bear
the expense of such purchase) if the market value of the security or securities
being hedged is less than the amount of foreign currency the Fund is obligated
to deliver and a decision is made to sell the security or securities and make
delivery of the foreign currency. Conversely, it may be necessary to sell on
the spot market some of the foreign currency received upon the sale of the
portfolio security or securities if the market value of such security or
securities exceeds the amount of foreign currency the Fund is obligated to
deliver.
Transaction and position hedging do not eliminate fluctuations in the underlying
prices of the securities which the Fund owns or intends to purchase or sell.
They simply establish a rate of exchange which one can achieve at some future
point in time. Additionally, although these techniques tend to minimize the
risk of loss due to a decline in the value of the hedged currency, they tend to
limit any potential gain which might result from the increase in value of such
currency.
Regardless of whether CIIA determines that it is advisable to hedge the Fund's
currency risk, the Fund will have to convert its holdings of foreign currencies
into U.S. dollars from time to time. Although foreign exchange dealers
generally do not charge a fee for conversion, they do realize a profit based on
the difference (the "spread") between the prices at which they are buying and
selling various currencies.
Currency forward contracts - A forward currency contract is an agreement between
- --------------------------
two parties to purchase and sell a specific quantity of a currency at a price
specified at the time of the contract, with delivery and settlement at a
specified future date. In the case of purchases of forward currency contracts,
an amount of cash and cash equivalents, equal to the market value of the
portfolio security sold, will be deposited in a segregated account with the
Trust's Custodian to collateralize the position and ensure that the use of such
contracts is unleveraged.
In the case of a cancelable forward contract, the holder has the unilateral
right to cancel the contract at maturity by paying a specified fee. The
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks and their customers). A forward
contract generally has no deposit requirements, and no commissions are charged
at any stage for trades.
Forward currency contracts are less liquid than currency futures contracts, and
there is an increased risk of default by the counterparty as compared to futures
contracts. Forward currency contracts differ from currency futures contracts in
certain other respects as well. For example, the maturity date of a forward
contract may be any fixed number of days from the date in a given
CIGNA International Stock Fund SAI
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<PAGE>
month. Forward contracts may be in any amounts agreed upon by the parties
rather than predetermined amounts. Also, forward currency contracts are traded
directly between currency traders so no intermediary is required. A forward
contract generally requires no margin or other deposit.
At the maturity of a forward contract, the Fund may either accept or make
delivery of the currency specified in the contract, or at or prior to maturity
enter into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are usually
effected with the currency trader who is a party to the original forward
contract. There is no assurance that the Fund will be able to close a forward
contract prior to maturity and, under such circumstances, the Fund may have
exposure to adverse changes in exchange rates.
INVESTMENT RESTRICTIONS
- -----------------------
The Fund is subject to the following restrictions which may not be changed
without approval of the lesser of (i) 67% or more of the Fund's shares present
at a meeting if the holders of more than 50% of the outstanding shares are
present in person or represented by proxy, or (ii) more than 50% of the Fund's
outstanding shares. Any investment restriction that involves a maximum or
minimum percentage of securities or assets shall not be considered to be
violated unless an excess over or a deficiency under the percentage occurs
immediately after, and is caused by, an acquisition or disposition of securities
or utilization of assets by the Fund.
The Fund may not:
1. Purchase the securities of any issuer if such purchase would cause more than
5% of the value of its total assets to be invested in the securities of such
issuer (except U.S. Government securities including securities issued by its
agencies and instrumentalities).
2. Purchase the securities of any issuer if such purchase would cause more than
5% of the voting securities, or more than 10% of the securities of any class
of such issuer, to be held by the Fund.
3. Concentrate 25% or more of its total assets in a particular industry.
Investing in cash or high quality money market instruments, for defensive
purposes, securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or repurchase agreements secured by these
instruments shall not be considered investments in a particular industry.
4. Purchase securities of any company with a record of less than three years'
continuous operation (including that of predecessors) if such purchase would
cause the Fund's aggregate investments in all such companies taken at cost
to exceed 5% of the Fund's total assets taken at market value.
CIGNA International Stock Fund SAI
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<PAGE>
5. Invest for the purpose of influencing management or exercising control.
6. Make short sales of securities or purchase securities on margin, but it may
obtain such short-term credits as are necessary for the clearance of
purchases and sales of securities and may make margin payments in connection
with transactions in futures contracts.
7. Act as a securities underwriter except to the extent that the Fund may
invest up to 15% of its total assets in illiquid securities (including
repurchase agreements maturing in more than seven days) and, in connection
with the disposition of such securities the Fund may be deemed to be an
underwriter under the Securities Act of 1933.
8. Purchase or retain the securities of any issuer if those officers and
Trustees of the Trust or officers and directors of its investment adviser
who own beneficially more than 1/2 of 1% of the securities of such issuer
together own more than 5% of the securities of such issuer.
9. Make loans, except that it may purchase instruments and securities permitted
by its investment objectives and policies.
10. Borrow, except that the Fund may enter into forward contracts or futures
contracts, and that the right is reserved to borrow from banks to pay for
redemptions and for temporary purposes in an amount not exceeding one-third
of the value of its total assets (including the proceeds of such borrowing)
and may secure such borrowings by pledging up to one-third of the value of
its total assets. For the purpose of this restriction, collateral
arrangements with respect to margin for financial futures contracts are not
deemed to be a pledge of assets.
11. Invest in puts, calls, straddles, spreads or any combination thereof,
except, however, that the Fund may purchase and sell warrants, options,
options on futures contracts and options on stock indices.
12. Buy or sell commodities, commodity contracts, mortgages or real estate,
although the Fund may purchase and sell futures contracts and options
thereon and purchase the securities of real estate investment trusts; or
purchase interests in oil, gas or other mineral exploration or development
programs.
TAX MATTERS
- -----------
Each series of shares of the Trust is treated as a separate association taxable
as a corporation.
As noted in the prospectus for the Fund, distributions received by tax-exempt
shareholders will not be subject to federal income tax to the extent permitted
under applicable tax law. While it is anticipated that many of the shareholders
of the Fund will be
CIGNA International Stock Fund SAI
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<PAGE>
tax-exempt institutions, the following discussions may be of general interest to
these shareholders as well as for those shareholders of the Fund who do not have
tax-exempt status.
The Fund intends to qualify and elect to be treated under the Internal Revenue
Code of 1986 (the Code), as amended, as a regulated investment company (RIC) for
each taxable year. As of the date hereof, the Fund must, among other things
meet the following requirements: A. The Fund must generally derive at least 90%
of its gross income from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock, securities,
foreign currencies, or other income derived with respect to its business of
investing in such stock, securities or currencies. B. The Fund must derive less
than 30% of its gross income from the sale or disposition of any of the
following held less than three months: i) stock or securities, ii) options,
futures, or forward contracts (other than options, futures, or forward contracts
on foreign currencies), or iii) foreign currencies (or options, futures, or
forward contracts on foreign currencies) but only if such currencies are not
directly related to the Fund's business of investing in stock, securities or
options and futures thereon. Accordingly, the extent to which the Fund may
engage in futures contracts and related options may be materially limited by
this 30% test. C. The Fund must diversify its holdings so that, at the end of
each fiscal quarter: i) at least 50% of the market value of the Fund's total
assets is represented by cash, U.S. Government securities and other securities,
with such other securities limited, with respect to any one issuer, to an amount
not greater than 5% of the Fund's total assets and not more than 10% of the
outstanding voting securities of such issuer, and ii) not more than 25% of the
value of its total assets is invested in the securities of any one issuer (other
than U.S. Government securities).
As a RIC, the Fund will not be subject to Federal income tax (FIT) on its income
and gains distributed to shareholders if it distributes at least 90% of its
investment company taxable income for the taxable year.
The Fund is subject to a nondeductible 4% excise tax if it does not meet certain
distribution requirements under the Code. To avoid this excise tax, during each
calendar year, the Fund must distribute: 1) at least 98% of its ordinary income
(not taking into account any capital gains or losses) for the calendar year, 2)
at least 98% of its capital gains in excess of its capital losses for the twelve
month period ending on October 31 of the calendar year, and 3) all ordinary
income and capital gains from previous years that were not distributed during
such years.
Due to the nature of the Fund's investment objectives, it is anticipated that
none of the Fund's ordinary dividends will qualify for the 70% dividends
received deduction for corporate shareholders.
Dividends declared to shareholders of record on a date in October, November or
December will be taxable to shareholders in the year
CIGNA International Stock Fund SAI
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<PAGE>
declared as long as the Fund pays the dividends no later than January of the
following year.
Section 1092 of the Code affects the taxation of certain transactions involving
futures or options contracts. If a futures or options contract is part of a
"straddle" (which could include another futures or options contract or
underlying stock or securities), as defined in Section 1092 of the Code, then,
generally, losses are deferred first, to the extent that the modified "wash
sale" rules of the Section 1092 regulations apply, and second to the extent of
unrecognized gains on offsetting positions. Further, the Fund may be required
to capitalize, rather than deduct currently, any interest expense on
indebtedness incurred or continued to purchase or carry any positions that are
part of a straddle. Sections 1092 and 246 of the Code and the Regulations
thereunder also suspend the holding periods for straddle positions with possible
adverse effects regarding long-term capital gain treatment and the corporate
dividends-received deduction. In certain cases, the "wash sale" rules of
Section 1091 of the Code may operate to defer deductions for losses.
Section 1256 of the Code generally requires that certain futures and options be
"marked-to-market" at the end of each year for Federal income tax purposes.
Section 1256 further characterizes 60% of any gain or loss with respect to such
futures and options as long-term capital gain or loss and 40% as short-term
capital gain or loss. If such a future or option is held as an offsetting
position and can be considered a straddle under Section 1092 of the Code such a
straddle will constitute a mixed straddle. A mixed straddle will be subject to
both Section 1256 and Section 1092 unless certain elections are made by the
Fund.
If more than 50% of the value of the Fund's total assets consist of foreign
stock or securities at the close of its taxable year, the Fund may elect to pass
through the credit or deduction for foreign taxes to shareholders who are U.S.
persons (i.e., U.S. citizens and residents and U.S. domestic corporations,
partnerships, trusts, and estates). As a result, shareholders who want to take
the benefit of the foreign tax credit or deduction on their U.S. income tax
returns would include in gross income, in addition to taxable dividends actually
received from the Fund, their proportionate share of foreign taxes paid by the
Fund. If the Fund makes such an election, it will report to shareholders,
shortly after the end of the taxable year, their proportionate share of gross
foreign source income and foreign taxes paid by the Fund.
The Fund may invest in shares of stock of a foreign entity which is classified
under the Internal Revenue Code as a Passive Foreign Investment Company
("PFIC"). Investments in PFIC's may affect the character of gains, the timing
of recognition of gains or losses, and the amount of gains or losses recognized.
In addition, such investments may subject the Fund to a U.S. federal income tax
which cannot currently be eliminated by making distributions to Fund
shareholders.
CIGNA International Stock Fund SAI
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<PAGE>
A foreign corporation may be classified as a PFIC for a taxable year if 75% or
more of its gross income is passive income or the average holdings of assets
that produce passive income is at least one half of its total assets. Passive
income would include investment income, including but not limited to, interest
and dividend income. Under IRS rules, the Fund may be taxed on its share of
gain from a disposition of the PFIC stock, or an excess distribution from the
PFIC stock whether or not the income is distributed by the Fund to its
shareholders. In general, such gains or excess distributions are held to be
earned ratably over the period the Fund held the PFIC stock. Amounts allocated
to the Fund's prior taxable years will be taxed at the highest corporate rate in
effect for that year and an interest factor will be added to the tax. Excess
distributions and gains from the disposition of the PFIC stock are treated as
ordinary income.
Where feasible, the Fund intends to make either (1) a qualified electing fund
("QEF") election or (2) a mark-to-market election under IRS rules in order to
avoid the imposition of a Fund level tax on its PFIC holdings.
If a QEF election is made the Fund must include in its gross income its share of
the ordinary earnings and net capital gains from the PFIC shares in the year
that the election is made (and all future years the PFIC stock is held)
regardless of whether distributions are received from the PFIC in the current
year. This income would then be passed through to shareholders.
Under a mark-to-market election, if the fair market value ("FMV") of the Fund's
PFIC shares at the end of its taxable year is greater than the FMV of the shares
at the beginning of its taxable year (or the date of purchase whichever is
later), the difference will be included in the Fund's gross income whether or
not the Fund's shares are sold in that year. This income would then be passed
through to shareholders as ordinary income. Any mark-to-market gain recognized
by the Fund would be added to its tax basis in the PFIC shares. If, however, as
of the end of the Fund's taxable year the FMV of the PFIC shares has decreased
relative to their FMV at the beginning of the year (or the date of purchase
whichever is later), the Fund would not be entitled to recognize the loss.
Shareholders who are not U.S. persons (i.e., U.S. citizens and residents and
U.S. domestic corporations, partnerships, trusts and estates) should consult
their tax advisers regarding U.S. and foreign tax consequences of ownership of
shares of the Fund including the likelihood that distributions to them would be
subject to withholding of U.S. tax at a rate of 30% (or at a lower rate under a
tax treaty).
The Fund will engage in certain foreign currency transactions which may be
subject to taxation under Section 988. Generally, Section 988 requires that
most foreign currency gains and losses be treated as ordinary income and loss,
not capital gain and loss.
CIGNA International Stock Fund SAI
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<PAGE>
Upon a sale or redemption of the Fund shares, a shareholder who is not a dealer
in securities will realize gain or loss which will be treated as long-term
capital gain or loss if the shares have been held for more than one year, and
otherwise as short-term capital gain or loss. However, if a shareholder
disposes of shares held for six months or less, any loss realized will be
characterized as long-term capital loss to the extent of any capital gain
dividends made to such shareholder prior to such disposition. In addition,
shareholders need to consider the general wash sale rule which may impact
shareholders who sell their shares at a loss and purchase shares within a sixty-
one day time frame.
ACTIVITIES OF AFFILIATED COMPANIES
- ----------------------------------
From time to time, as purchases of securities are made for the portfolios of
companies affiliated with CIGNA Corporation it is
possible that two or more portfolios may simultaneously purchase or sell the
same security. To the extent that two or more such portfolios, buying or
selling the same security, increase the total demand or supply, there may be an
adverse effect on the price of such security or on the amount which the Fund can
purchase or sell.
MANAGEMENT OF THE TRUST
- -----------------------
The Trustees and the executive officers of the Trust are listed below, together
with information as to their principal occupations during the past five years
and other principal business affiliations. With the exception of Mr. Forde,
each currently holds the equivalent position as Trustee and/or officer of CIGNA
Annuity Funds Group, CIGNA High Income Shares, CIGNA Variable Products Group,
and holds a similar position as Director and/or executive officer of INA
Investment Securities, Inc. Correspondence with any Trustee or officer may be
addressed to the Trust, One Financial Plaza, Springfield, Massachusetts 01103.
R. BRUCE ALBRO*, 52, Senior Managing Director and Division Head, CIGNA Portfolio
Advisers, a division of CII; Chairman of the Board and President, CIGNA Annuity
Funds Group, CIGNA Institutional Funds Group, CIGNA Variable Products Group,
CIGNA High Income Shares and INA Investment Securities, Inc. Mr. Albro is also
an officer or director of various other entities which are subsidiaries or
affiliates of CIGNA. Previously Trustee, CIGNA Funds Group; Managing Director -
Division Head, CII; Managing Director, CII; Senior Vice President, CII and CIGNA
Investment Management Company and President, CIGNA Capital Brokerage, Inc.
HUGH R. BEATH, 63, Managing Director, AdMedia Corporate Advisors, Inc. and
Chairman of the Board of Directors, Beath Advisors, Inc. Previously Trustee,
CIGNA Funds Group; Chairman, President and Chief Executive Officer, ADVO-System,
Inc. (presently known as ADVO, Inc.) (direct mail advertising); Executive Vice
President, Operations, John Blair & Co. (marketing and communications);
President, Specialty Grocery Products Division, R. J. Reynolds Industries
(consumer products); and Vice President and Treasurer, Heublein, Inc. (maker of
distilled spirits).
CIGNA International Stock Fund SAI
Page 16
<PAGE>
RUSSELL H. JONES, 51, Vice President, Kaman Corporation (helicopters and
aircraft components, scientific research); Trustee, Connecticut Policy and
Economic Counsel; Corporator, Hartford Seminary; Secretary, Bloomfield Chamber
of Commerce.
PAUL J. MCDONALD, 51, Executive Vice President, Finance and Chief Financial
Officer, Friendly Ice Cream Corporation (family restaurants/dairy products);
Chairman, Dean's Advisory Council, University of Massachusetts School of
Management; Vice Chairman, Springfield YMCA; Corporator, Springfield Institution
for Savings; Trustee, Springfield College. Previously, Vice President, Finance
and Chief Financial Officer, Friendly Ice Cream Corporation.
ARTHUR C. REEDS, III*, 51, President, CIGNA Investment Management (formerly
known as CIGNA Investment Division); President and Director, CIGNA Investment
Group, Inc. and CII; Director, CIGNA International Investment Advisors, Ltd.
Mr. Reeds is also an officer or director of various other entities which are
subsidiaries or affiliates of CIGNA. Previously Trustee, CIGNA Funds Group;
Managing Director - Division Head, CIGNA Portfolio Advisers, a division of CII;
Senior Vice President, CII.
ALFRED A. BINGHAM III, 50, Vice President and Treasurer, CIGNA Annuity Funds
Group, CIGNA Institutional Funds Group, CIGNA Variable Products Group, CIGNA
High Income Shares and INA Investment Securities, Inc.; Assistant Vice
President, CII; previously Vice President and Treasurer, CIGNA Funds Group;
Senior Vice President and Treasurer, CIGNA Investments, Inc.; Vice President and
Treasurer, CIGNA Capital Brokerage, Inc.
RICHARD H. FORDE, 42, Managing Director CIGNA Investments, Inc. (CII) CIGNA
Investment Management - International Division; Vice President, CIGNA
Institutional Funds Group; previously Managing Director, CII; Senior Vice
President, CII; Vice President, CII.
LAWRENCE S. HARRIS, 53, Senior Managing Director, CII; Vice President, CIGNA
Annuity Funds Group, CIGNA Institutional Funds Group, CIGNA Variable Products
Group, CIGNA High Income Shares and INA Investment Securities, Inc.; previously
Managing Director-Division Head, CII; Vice President, CIGNA Funds Group; Senior
Vice President and Director, Alliance Capital Management L.P.
JEFFREY S. WINER, 37, Counsel, CIGNA; Vice President and Secretary, CIGNA
Annuity Funds Group, CIGNA Institutional Funds Group, CIGNA Variable Products
Group, CIGNA High Income Shares and INA Investment Securities, Inc.; previously
Attorney, CIGNA; Associate, Tarlow, Levy, Harding & Droney (private law firm).
*Trustees identified with an asterisk are considered interested persons within
the meaning of the Investment Company Act of 1940, as amended, because of their
affiliation with CIGNA Corporation or its affiliates.
The Board has created an Audit Committee from among its members which meets
periodically with representatives of Price Waterhouse LLP,
CIGNA International Stock Fund SAI
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<PAGE>
independent accountants for the Trust, a Contracts Committee which, as part of
its duties, considers the terms and the renewal of the Master Investment
Advisory Agreement with CII and the Sub-Advisory Agreement with CIIA, and a
Nominating Committee which considers the identification of new members of the
Board and the compensation of Trustees. The Nominating Committee, Audit
Committee and Contracts Committee consist of Trustees who are not affiliated
with CIGNA Corporation or any of its subsidiaries.
The Trust pays no compensation to any of its officers, other than the
reimbursement of the costs of the Office of the Treasurer and the Office of the
Secretary, or to any of its Trustees who are officers or employees of CIGNA
Corporation or its affiliates. The following table shows compensation paid by
the Trust and other investment companies in the CIGNA fund complex to Trust
Trustees in 1994:
<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Benefits Estimated Trust
Accrued As Annual and CIGNA
Aggregate Part of Benefits Fund Complex
Name of Person, Compensation Trust Upon Paid to
Position with Trust from Trust Expense Retirement Trustees (c)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
R. Bruce Albro, Trustee, $ - $ - $ - $ -
Chairman and President
Hugh R. Beath, Trustee 1,600 - - 22,400
(a)
Nathaniel S. Howe, 1,600 - - 22,400
Trustee (b)
Worth Loomis, Trustee 1,600 - - 22,400
Arthur C. Reeds III, - - - -
Trustee - - - -
------------- ----------- ------------- --------------
$4,800 $67,200
============= =========== ============= ==============
</TABLE>
(a) All of Mr. Beath's 1994 compensation was deferred under a deferred
compensation plan for all CIGNA funds (the "Plan") in which he had an aggregate
balance of $62,705 as of December 31, 1994. The Plan permits Trustees to defer
receipt of all compensation or to revoke the election to defer receipt of
Trustee fees and receive payment directly.
(b) All of Mr. Howe's 1994 compensation was deferred under a deferred
compensation plan (the "Plan") for all CIGNA funds in which he had an aggregate
balance of $177,025 as of December 31, 1994. The Plan permits Trustees to defer
receipt of all compensation or to revoke the election to defer receipt of
Trustee fees and receive payment directly.
(c) There were four (4) investment companies besides the Trust in the CIGNA fund
complex.
CIGNA International Stock Fund SAI
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<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
- --------------------------------------
Pursuant to a Master Investment Advisory Agreement between the Trust (on behalf
of the Fund) and CIGNA Investments, Inc. ("CII") and a Sub-Advisory Agreement
between CII and CIGNA International Investment Advisors, Ltd. ("CIIA"), CIIA
manages the investment and reinvestment of the assets of the Fund. CII and CIIA
are indirect, wholly-owned subsidiaries of CIGNA Corporation, and are affiliated
persons of the Fund's principal underwriter, CIGNA Financial Advisors, Inc. CII
is responsible for overall management of the business affairs of the Fund.
Subject to the control and periodic review of the Board of Trustees of the
Trust, and CII, CIIA determines what investments shall be purchased, held, sold
or exchanged for the account of the Fund and what portion, if any, of the assets
of the Fund shall be held in cash and other temporary investments. Accordingly,
the role of the Trustees is not to approve specific investments, but rather to
exercise a control and review function.
Pursuant to the Master Investment Advisory Agreement the gross management fee
paid to CII by CIGNA International Stock Fund will be recorded daily at the
annual rate of .80% of the average daily net assets of the Fund during the year.
Pursuant to the Sub-Advisory Agreement, CII is to pay CIIA a fee agreed upon by
CII and CIIA from time to time.
If total expenses of the Fund (excluding taxes, interest and portfolio brokerage
commissions, but including the investment advisory fee) exceed 1.25% per annum
of the average daily net assets of the Fund, CII has agreed to pay any such
excess. The Fund incurred a management fee payable to CII of $47,611 and
$56,609 in 1993 and 1994, respectively. However, due to the 1.25% limitation
mentioned above, CII waived the entire $47,611 and $56,609 and reimbursed an
additional $41,230 and $25,412 to the Fund in 1993 and 1994, respectively.
In addition to any expense limitations referred to in the prospectus, the Master
Investment Advisory Agreement provides for certain limitations on the expenses
that the Fund may bear before CII will waive part or all of its management fee.
CII will waive its fee (and if necessary, CII will reimburse the Fund) to the
extent the total of all ordinary business expenses of the Fund (including
advisory and distribution fees, but excluding interest, taxes and transaction
costs incurred in acquiring and disposing of portfolio securities) exceed the
most restrictive applicable statutory expense limit. The total expenses of the
Fund are not expected to exceed such limit.
The Trust pays all expenses not specifically assumed by CII or CIIA, including
but not limited to compensation and expenses of Trustees who are not Directors,
officers or employees of CII, CIIA, CFA or any other affiliates of CIGNA
Corporation; registration, filing and other fees in connection with filings with
regulatory authorities; the fees and expenses of independent accountants; costs
of printing and mailing registration statements, prospectuses, proxy statements,
and annual and periodic reports to shareholders; custodian and transfer agent
fees; taxes and corporate fees; legal fees incurred in connection with the
affairs of the Fund; and expenses of meetings of shareholders and Trustees.
CII, at its own expense, furnishes to the Trust office space and facilities and,
except with respect to the Office of the Treasurer and Office of the Secretary
as provided in the Master Investment Advisory Agreement, all personnel for
managing the affairs of the Trust and each of its series of
CIGNA International Stock Fund SAI
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<PAGE>
shares. The Trust and other registered investment companies advised by CII have
agreed to reimburse CII for its costs of maintaining the Office of the Treasurer
and the Office of the Secretary as provided in their respective investment
advisory agreements. CII has estimated that in 1995 the total expenses of the
Office of the Treasurer are not expected to exceed $257,000 and the expenses of
the Office of the Secretary are not expected to exceed $86,000. The portion of
these expenses allocated to the Fund for calendar year 1995 is not expected to
exceed $12,941 for the Office of the Treasurer and $4,341 for the Office of the
Secretary. In 1994, the costs reimbursed by the Fund for the Office of the
Treasurer and the Office of the Secretary were $10,325 and $3,760, respectively.
The Master Trust Agreement acknowledges CIGNA Corporation's control over the
name "CIGNA." The Trust and each Fund using the name "CIGNA" would be obliged
to change their names to eliminate the word "CIGNA" (to the extent they could
lawfully do so) in the event CIGNA Corporation were to withdraw its permission
for use of such name. CIGNA Corporation has agreed not to withdraw such
permission from the Trust or any series of the Trust using the name "CIGNA," so
long as an affiliate of CIGNA Corporation shall be the investment adviser for
such series.
The custodian for the Trust is State Street Bank and Trust Company ("State
Street"), P.O. Box 2351, Boston, Massachusetts 02107. Under its Custodian
Agreement with the Trust, State Street maintains the portfolio securities of the
Fund, administers the purchases and sales of portfolio securities, collects
interest and dividends and other distributions made on the securities held in
the portfolio of the Fund, determines the net asset value of shares of the Fund
on a daily basis and performs such other ministerial duties as are included in
the Custodian Agreement, which is on file with the Securities and Exchange
Commission. State Street also serves as the transfer agent for the Trust. Its
address is 225 Franklin Street, Boston, Massachusetts 02110. The Transfer Agency
and Service Agreement is on file with the Securities and Exchange Commission.
Price Waterhouse LLP acts as independent accountants for the Trust. Its offices
are at 160 Federal Street, Boston, Massachusetts 02110. It is anticipated that
Price Waterhouse LLP representatives will annually perform an audit of the
financial statements of the Trust and will provide accounting advice and
services throughout the year. Price Waterhouse LLP will report its activities
and the results of its audit to the Audit Committee of the Board of Trustees.
Price Waterhouse LLP also provides certain tax advice to the Trust.
PORTFOLIO TURNOVER AND BROKERAGE ALLOCATION
- -------------------------------------------
It is anticipated that the Fund's annual portfolio turnover rate will not exceed
100%.
With respect to Fund transactions, it is the policy of CII and CIIA (the
"Advisers") on behalf of their clients, including the Fund, to have purchases
and sales of portfolio securities executed at the most favorable prices,
considering all costs of the transaction, including brokerage commissions and
spreads, and research services, consistent with obtaining best execution.
In seeking best execution, the Advisers will select brokers/dealers on the basis
of their professional capability and the value and quality of their brokerage
services. Brokerage services include the ability to execute most
CIGNA International Stock Fund SAI
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<PAGE>
effectively large orders without adversely affecting markets and the positioning
of securities in order to effect orderly sales for clients.
The officers of the Advisers will determine, generally without limitation, the
brokers/dealers through whom, and the commission rates or spreads at which,
securities transactions for client accounts are executed. The officers of the
Advisers may select a broker/dealer who may receive a commission for portfolio
transactions exceeding the amount another broker/dealer would have charged for
the same transaction if they determine that such amount of commission is
reasonable in relation to the value of the brokerage or research services
performed or provided by the executing broker/dealer, viewed in terms of either
that particular transaction or the Advisers' overall responsibilities to the
client for whose account such portfolio transaction is executed and other
accounts advised by the Advisers or accounts advised by other investment
advisers which are related persons of the Advisers.
If two or more brokers/dealers are considered able to offer the same favorable
price with the equivalent likelihood of best execution, the officers of the
Advisers may prefer the broker/dealer who has furnished research services.
Research services include market information, analysis of specific issues,
presentation of special situations and trading opportunities on a timely basis,
advice concerning industries, economic factors and trends, portfolio strategy
and performance of accounts. Research services are used in advising all
accounts, including accounts advised by related persons of the Advisers, and not
all such services are necessarily used by the Advisers in connection with the
specific account that paid commissions to the broker/dealer providing such
services.
The overall reasonableness of brokerage commissions paid is evaluated
continually. Such evaluation includes review of what competing brokers/dealers
are willing to charge for similar types of services and what discounts are being
granted by brokerage firms. The evaluation also considers the timeliness and
accuracy of the research received.
In addition, the Advisers may, if permitted by applicable law, use brokerage
commissions to pay for products or services (other than brokerage and research
services) obtained from broker/dealers and third parties in accordance with SEC
Release 34-23170 dated April 23, 1986. Pursuant to that Release, products and
services which provide lawful and appropriate assistance to the Advisers'
investment decision-making process may be paid for with brokerage commissions to
the extent such products and services are used in that process. Where the
research service product has a mixed use, that is, the product may serve a
number of functions certain of which are not related to the making of investment
decisions, the Advisers allocate the cost of the product on a basis which they
deem reasonable, according to the various uses of the product, and maintain
records documenting the allocation process followed. Only that portion of the
cost of the product allocable to research services is paid from the Fund. The
Fund will not acquire research services through the generation of credits with
respect to principal transactions or transactions in financial futures, except
in new issue fixed price underwritings. During 1994, brokerage commissions paid
by the Fund amounted to $34,157, substantially all of which was paid to firms
which provide research services to CIIA.
As of December 31, 1994, Sanford C. Bernstein & Co., Inc. ("SCB") reported
beneficial ownership of approximately 8.8% of the outstanding voting stock of
CIGNA Corporation. Accordingly, CIGNA may be deemed to be an affiliated person
CIGNA International Stock Fund SAI
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<PAGE>
of SCB pursuant to the provisions of the Investment Company Act of 1940, as
amended. As long as CIGNA may be deemed to be an affiliated person of SCB, the
Fund will not engage in any transaction with SCB when it is acting for its own
account and will engage in brokerage transactions with SCB only under
circumstances where the commission, spread or profit received by it is fair and
reasonable pursuant to rules established by the Securities and Exchange
Commission and procedures adopted and monitored by the Board of Trustees of the
Trust. During 1994, the Fund did not engage in brokerage transactions with SCB.
Neither the Trust nor the Advisers presently allocate brokerage commissions to,
or place orders for portfolio transactions with, either directly or indirectly,
brokers or dealers based on their sales of Fund shares. Except as noted,
neither the Trust nor the Advisers utilize an affiliated broker or dealer in
effecting Fund portfolio transactions and do not recapture commissions paid in
such transactions.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES
- ----------------------------------------------
The Fund reserves the right to revise the redemption procedures on 30-days'
notice. The Fund may suspend redemptions or postpone the date of payment during
any period when: (a) the New York Stock Exchange is closed for other than
customary weekend and holiday closings or trading on such Exchange is
restricted; (b) the Securities and Exchange Commission has by order permitted
such suspension for the protection of the Fund's shareholders; or (c) an
emergency exists as determined by the Securities and Exchange Commission making
disposal of portfolio securities or valuation of net assets of the Fund not
reasonably practicable.
Although it is not anticipated that such action will be necessary, the Fund may
compel the redemption of, or reject any order for, or refuse to give effect on
the books of the Fund to the transfer of, shares of the Fund as a means of
avoiding the concentration of ownership of the Fund which would prevent the Fund
from qualifying as a regulated investment company under the Internal Revenue
Code. Any such redemption will be at the then-current net asset value of the
shares redeemed.
A Fund's net asset value is calculated by dividing the number of outstanding
shares into the net assets of the Fund. Net assets are the excess of a Fund's
assets over its liabilities.
PERFORMANCE INFORMATION
- -----------------------
Total return figures for the Fund are neither fixed nor guaranteed, and the
Fund's principal is not insured. Performance quotations reflect historical
information and should not be considered representative of the Fund's
performance for any period in the future. Performance is a function of a number
of factors which can be expected to fluctuate. The Fund may provide performance
information in reports, sales literature and advertisements. The Fund may also,
from time to time, quote information about the Fund published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about the Fund. The following is a list of
such publications or media entities:
Advertising Age Financial Times Kiplinger
Barron's Financial Weekly Money
CIGNA International Stock Fund SAI
Page 22
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Barron's/Nelson's Financial World Mutual Fund Forecaster
Best's Review Forbes Nation's Business
Broker World Fortune New York Times
Business Week Global Investor Pensions World
Changing Times Hartford Courant Pensions & Investments
Christian Science Monitor Institutional Investor Personal Investor
Consumer Reports Insurance Forum Philadelphia Inquirer
Economist Insurance Weekly The Times (London)
Equity International International Business USA Today
FACS of the Week Week U.S. News & World Report
Far Eastern Investing Wall Street Journal
Economic Review Investor's Chronicle Washington Post
Financial Adviser Investor's Daily CNN
Financial Planning Journal of the American CNBC
Financial Product News Society of CLu & ChFC PBS
Financial Services Week
Each Fund may also compare its performance to performance data of similar mutual
funds as published by the following services:
Lipper Analytical Services Stanger
CDA Investment Technologies, Inc. Weisenberger
Frank Russell Co. Micropal, Ltd.
InterSec Research
Although performance data may be useful to prospective investors in comparing
with other funds and other potential investments, investors should note that the
methods of computing performance of other potential investments are not
necessarily comparable to the methods employed by the Fund.
Total Return Quotations
- -----------------------
The standard formula for calculating total return, as described in the
prospectus, is as follows:
P(1+T)/n/=ERV
Where P = A hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the 1, 5, or 10 year periods
(or fractional portion of such period).
Cumulative total return across a stated period may be calculated as follows:
P(1+V)=ERV
Where P = A hypothetical initial payment of $1,000.
V = cumulative total return.
ERV = ending redeemable value of a hypothetical $1,000
payment at the end of the stated period.
CIGNA International Stock Fund SAI
Page 23
<PAGE>
REDEMPTIONS PAID IN CASH
- ------------------------
Pursuant to Rule 18f-1 under the Investment Company Act of 1940, as amended, the
Fund has committed to pay in cash all requests for redemption by any shareholder
of record, limited in amount with respect to each shareholder during any 90 day
period to the lesser of $250,000 or 1% of the net assets of the Fund at the
beginning of such period. This election is irrevocable while such Rule is in
effect unless the Securities and Exchange Commission by order upon application
permits the withdrawal of the Fund's notification of election. Redemptions by
any one shareholder during any 90 day period in excess of $250,000 or 1% of the
net assets of the Fund may be made in readily marketable securities.
DESCRIPTION OF MONEY MARKET INSTRUMENTS
- ---------------------------------------
U.S. GOVERNMENT DIRECT OBLIGATIONS--issued by the U.S. Treasury and include
bills, notes, and bonds.
. Treasury bills are issued with maturities of up to one year. They are
issued in bearer form, are sold on a discount basis and are payable
at par value at maturity.
. Treasury notes are longer-term interest bearing obligations with
original maturities of one to ten years.
. Treasury bonds are longer-term interest bearing obligations with
original maturities from ten to thirty years.
BANKERS' ACCEPTANCES--A bankers' acceptance is a bill of exchange or time draft
drawn on and accepted by a commercial bank. It is used by corporations to
finance the shipment and storage of goods and to furnish dollar exchange. When
the draft is accepted by a bank, the bank guarantees to pay the face value of
the instrument on its maturity date. An investor can purchase a bankers'
acceptance in the secondary market at the going rate of discount for a specific
maturity. In addition to purchasing bankers acceptances from domestic branches
and foreign branches of U.S. commercial banks, bankers' acceptances denominated
in each case in U.S. dollars, may be purchased from foreign branches and U.S.
branches of foreign banks having at least one billion dollars (U.S.) of assets.
Maturities are generally six months or less.
CERTIFICATES OF DEPOSIT--A certificate of deposit (CD) is a negotiable interest-
bearing instrument with a specific maturity. Certificates of deposit are issued
by banks and savings and loan institutions in exchange for the deposit of funds
and normally can be traded in the secondary market, prior to maturity. The Fund
may invest in U.S. dollar denominated CD's issued by domestic branches and
foreign branches of U.S. banks which are members of the Federal Reserve System;
by foreign branches and U.S. branches of foreign banks and by U.S. domiciled
savings and loan institutions having in each case at least one billion dollars
(U.S.) of assets. CD's issued by foreign branches of U.S. banks are called
"Eurodollar CD's" while
CIGNA International Stock Fund SAI
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<PAGE>
CD's issued by U.S. branches of foreign banks are called "Yankee CD's."
TIME DEPOSITS--A time deposit is a non-negotiable receipt issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits denominated in U.S. dollars or
other currencies may be purchased from domestic branches and foreign branches of
U.S. banks which are members of the Federal Reserve System (not including
savings and loan institutions) and from foreign branches and U.S. branches of
foreign banks having at least one billion dollars (U.S.) of assets. The Fund
shall not invest in time deposits maturing in more than seven days.
U.S. dollar denominated certificates of deposit, time deposits and bankers'
acceptances issued by foreign branches of U.S. banks or by foreign banks either
in the U.S. or abroad may present investment risks in addition to the risks
involved in investments in obligations of, or guaranteed by, domestic banks.
Such risks include future political and economic developments, the possible
imposition of withholding taxes on interest income payable on such obligations,
the possible seizure or nationalization of foreign deposits, the possible
establishment of exchange controls or the adoption of other governmental
restrictions. Generally, foreign branches of U.S. banks and U.S. branches of
foreign banks are subject to fewer U.S. regulatory restrictions than are
applicable to domestic banks, and foreign branches of U.S. banks may be subject
to less stringent reserve requirements than domestic banks. U.S. branches of
foreign banks and foreign branches of U.S. banks may provide less public
information than, and may not be subject to the same accounting, auditing and
financial record-keeping standards as, domestic banks. Foreign branches of
foreign banks generally would not be subject to any U.S. regulatory restrictions
or disclosure, financial record-keeping or accounting requirements.
COMMERCIAL PAPER--Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other business entities.
Maturities on these issues vary from a few days to nine months. Commercial
paper may be purchased from U.S. domiciled issuers. Commercial paper may also
be purchased from foreign issuers issued either in the U.S. ("Yankee" commercial
paper) or abroad.
OTHER CORPORATE OBLIGATIONS--The Fund may purchase notes, bonds and debentures
issued by corporations and other business entities if at the time of purchase
there is less than one year remaining until maturity or if they carry a variable
or floating rate of interest.
VARIABLE AND FLOATING RATE INSTRUMENTS--Certain debt instruments in which the
Fund invests may carry variable or floating rates of interest. Such instruments
bear interest at rates which are not fixed, but which vary with changes in
specified market rates or indices, such as a Federal Reserve composite index.
CIGNA International Stock Fund SAI
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<PAGE>
RATINGS OF SECURITIES
- ---------------------
Description of Standard & Poor's Corporation ("S&P") and Moody's Investors
Service, Inc. ("Moody's") commercial paper and bond ratings:
COMMERCIAL PAPER RATINGS--S&P commercial paper ratings are graded into four
categories, ranging from "A" for the highest quality obligations to "D" for the
lowest. Issues assigned an "A" rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2, and 3 to indicate the relative degree of safety. The two highest
categories, A-1 and A-2, are described as follows:
"A-1" This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus
(+) sign designation.
"A-2" Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated "A-1."
Moody's employs three designations, all judged to be investment grade, to
indicate the relative repayment capacity of rated issuers. The two highest
designations are as follows:
Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:
. Leading market positions in well-established industries.
. High rates of return on funds employed.
. Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
. Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
. Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
CIGNA International Stock Fund SAI
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<PAGE>
BOND RATINGS--S&P describes its ratings for corporate bonds as follows:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
Moody's describes its ratings for bonds as follows:
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A - Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
CIGNA International Stock Fund SAI
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<PAGE>
REGISTRATION STATEMENT
on
FORM N-1A
PART C: OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
PART A:
None
PART B:
The following Financial Statements are incorporated by reference into Part
B from the Annual Report to Shareholders of CIGNA International Stock Fund, and
filed with the Securities and Exchange Commission on February 28, 1995:
Investments in Securities, December 31, 1994
Statement of Assets and Liabilities, December 31, 1994
Statement of Operations, Year-ended December 31, 1994
Statement of Changes in Net Assets, Years-ended December 31, 1994 and 1993
Notes to Financial Statements
(b) Exhibits
(1) The Master Trust Agreement dated as of August 10, 1992, incorporated
by reference to Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement filed December 31, 1992.
(2) The By-Laws of the Registrant, incorporated by reference to the
Registrant's initial Registration Statement filed September 30, 1992.
(2a) Amendment No. 1 to By-Laws dated February 11, 1994, incorporated by
reference to Post-Effective Amendment No. 2 to the Registrant's
Registration Statement filed April 28, 1994.
(3) None.
(4) None.
(5a) The Master Investment Advisory Agreement dated as of December 28,
1992 between CIGNA Institutional Funds Group and CIGNA Investments,
Inc., incorporated by reference to Pre-Effective Amendment No. 1 to
the Registrant's Registration Statement filed December 31, 1992.
(5b) The Sub-Advisory Agreement dated as of December 28, 1992 between
CIGNA Investments, Inc. and CIGNA International Investment Advisors,
Ltd., incorporated by reference to Pre-Effective Amendment No. 1 to
the Registrant's Registration Statement filed December 31, 1992.
(6) The Distribution Agreement dated as of December 28, 1992 between
CIGNA Institutional Funds Group and CIGNA Securities, Inc. (n/k/a
CIGNA Financial Advisors, Inc.), incorporated by reference to Pre-
Effective Amendment No. 1 to the Registrant's Registration Statement
filed December 31, 1992.
(7) None.
<PAGE>
(8) The Custodian Contract dated as of January 5, 1993 between CIGNA
Institutional Funds Group and State Street Bank and Trust Company,
incorporated by reference to Post-Effective amendment No. 1 to the
Registrant's Registration Statement filed June 3, 1993.
(9a) The Transfer Agency and Service Agreement dated as of January 5, 1993
between CIGNA Institutional Funds Group and State Street Bank and
Trust Company, incorporated by reference to Post-Effective Amendment
No. 1 to the Registrant's Registration Statement filed June 3, 1993.
(9b) The Form of Deferred Fee Agreement, incorporated by reference to the
Registrant's initial Registration Statement filed September 30, 1992.
* (10) Opinion of Counsel.
* (11) Consent of Price Waterhouse.
(12) None.
(13) None.
(14) None.
(15) None.
(16) None.
* (17) Financial Data Schedule.
(18) None.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
Name: CIGNA International Stock Fund
(1)
Title of Class: Shares of Beneficial Interest
(2)
Number of Record Holders as of March 31, 1995: -1-
ITEM 27. INDEMNIFICATION
The Master Trust Agreement, dated as of August 10, 1992 provides, among other
things, for the indemnification out of the Registrant's assets (or the assets of
a series of the Registrant where applicable) of the Trustees and officers of the
Registrant against all liabilities incurred by them in such capacity, except for
liability by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of their duties. Trustees may consult counsel or other
experts concerning the meaning and operation of the Master Trust Agreement, and
may rely upon the books and records of the Registrant. Trustees are not liable
for errors of judgment, mistakes of fact or law, or for the negligence of other
Trustees or the Registrant's officers or agents.
- --------------
*Filed Herewith
-2-
<PAGE>
Trustees are not required to give a bond or other security for the performance
of their duties. Payments in compromise of any action brought against a Trustee
or officer may be paid by the Registrant if approved by either a majority of
disinterested Trustees or by independent legal counsel. The right of
indemnification under the Master Trust Agreement is not exclusive of any other
rights to which the Trustees or officers may be entitled.
The Master Trust Agreement also provides that shareholders shall be indemnified
and held harmless by the applicable series of the Registrant with respect to
actions brought against them in their capacity as shareholders. Also, the
Master Trust Agreement provides that creditors of a series of the Registrant may
look only to the assets of that series for payment; and neither shareholders nor
Trustees, nor officers of the Registrant shall be personally liable therefor.
All instruments executed on behalf of the Registrant are required to contain a
statement to the effect of the foregoing.
CIGNA Investments, Inc., the Registrant and other investment companies managed
by CIGNA Investments, Inc., their officers, trustees, directors and employees
(the "Insured Parties") are insured under an Investment Management Errors and
Omissions Insurance Policy in the amount of $10,000,000 offered by Lexington
Insurance Company, an affiliate of American International Group on a joint
policy basis with CIGNA Investments, Inc. and CIGNA International Investment
Advisors, Ltd. Premiums and policy benefits are allocated among participating
companies pursuant to Rule 17d-1(e)(7) under the Investment Company Act of 1940.
In addition, the Registrant and other investment companies managed by CIGNA
Investments, Inc. are insured under a National Union Fire Insurance Company of
Pittsburgh, PA Investment Company Blanket Bond with a stated maximum coverage of
$10,000,000. Premiums and policy benefits are allocated among participating
companies pursuant to Rule 17g-1 under the Investment Company Act of 1940.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
CIGNA Investments, Inc. ("CII") serves as investment adviser to CIGNA
Institutional Funds Group and its series of shares known as CIGNA International
Stock Fund; to two series of shares of CIGNA Annuity Funds Group known as CIGNA
Annuity Income Fund and CIGNA Annuity Money Market Fund; to CIGNA Variable
Products Group and its series of shares known as Companion Fund and to CIGNA
High Income Shares (CIGNA Institutional Funds Group, CIGNA Annuity Funds Group,
CIGNA High Income Shares and CIGNA Variable Products Group known collectively as
the "Trusts"); and to INA Investment Securities, Inc. ("IIS"), all of which
(except for IIS and CIGNA High Income Shares) are open-end investment companies,
and certain other clients, most of which are affiliated with CIGNA Corporation.
For a description of the business of CII, see its most recent Form ADV (File No.
80l-l8094) filed with the Securities and Exchange Commission. The principal
address of each of the foregoing companies is as follows:
CII - 900 Cottage Grove Road, Bloomfield, Connecticut 06002
The Trusts and each of their series of shares - 1380 Main Street,
Springfield, Massachusetts 01103
IIS - Two Liberty Place, 1601 Chestnut Street, Philadelphia, Pennsylvania
19192
-3-
<PAGE>
Substantial business and other connections of the directors and officers of CII
during the past two fiscal years are listed below:
Names of Officers and Directors Positions with the Adviser and
of the Investment Adviser Other Business Connections
- ------------------------------- ------------------------------------------
Harold W. Albert Director and Counsel, CII; Director, CIGNA
International Investment Advisors, Ltd.**;
Chief Counsel, CIGNA Investment Management, a
division of CIGNA Corporation*; Counsel, CIGNA
Investment Advisory Company, Inc.*; Director,
Senior Vice President and Chief Counsel, CIGNA
Investment Group, Inc.*; Director, Connecticut
General Pension Services, Inc.*
Robert W. Burgess Director, CII and CIGNA International
Investment Advisors, Ltd.**; Chief Financial
Officer, CIGNA Investment Management, a
division of CIGNA Corporation*; Director and
Senior Vice President, CIGNA Investment Group,
Inc.*; Director, Connecticut General Pension
Services, Inc.*
Arthur C. Reeds, III President, CIGNA Investment Management, a
division of CIGNA Corporation*; President and
Director, CII and CIGNA Investment Group,
Inc.*; President, CIGNA Investment Advisory
Company, Inc.*; Director, CIGNA International
Investment Advisors, Ltd.**; Trustee, the
Trusts; Director, IIS; previously Managing
Director - Division Head, CII; Director and
Managing Director - Division Head, CIGNA
Investment Advisory Company, Inc.*.
R. Bruce Albro Senior Managing Director, CII and CIGNA
Investment Advisory Company, Inc.*; Chairman
of the Board, President and Trustee, the
Trusts; Chairman of the Board, President and
Director, IIS; previously Managing Director -
Division Head, CII; Managing Director, CII.
Mary Louise Casey Senior Managing Director, CII.
Richard H. Forde Senior Managing Director, CII and CIGNA
Investment Advisory Company, Inc.*; President,
Senior Managing Director and Director, CIGNA
International Investment Advisors, Ltd.**;
Vice President, CIGNA Institutional Funds
Group; previously Managing Director, CII,
CIGNA Investment Advisory Company, Inc.* and
CIGNA International Investment Advisors,
Ltd.**
Edward F. Guay Senior Managing Director and Chief Economist,
CII; Managing Director, CIGNA Investment
Advisory Company, Inc.*; previously, Managing
Director, CII.
-4-
<PAGE>
Lawrence S. Harris Senior Managing Director, CII and CIGNA
Investment Advisory Company, Inc.*; Vice
President, CIGNA Annuity Funds Group, CIGNA
High Income Shares, CIGNA Variable Products
Group and IIS; previously Managing Director -
Division Head, CII and CIGNA Investment
Advisory Company, Inc.*
Malcolm S. Smith Senior Managing Director, CII; Director and
Senior Managing Director, CIGNA Investment
Advisory Company, Inc.*; previously Managing
Director -Division Head, CII and CIGNA
Investment Advisory Company, Inc.*
Philip J. Ward Senior Managing Director, CII; Director and
Senior Managing Director, CIGNA Investment
Advisory Company, Inc.*; previously Managing
Director -Division Head, CII and CIGNA
Investment Advisory Company, Inc.*
J. Robert Andrews Managing Director, CII.
Julia B. Bazenas Managing Director, CII; previously Vice
President, CII.
Mark E. Benoit Managing Director, CII; previously Vice
President, CII.
Susan B. Bosworth Managing Director, CII; previously Vice
President, CII.
Thomas J. Bowen Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*
Richard H. Chase Managing Director, CII; previously Vice
President, CII.
Rosemary C. Clarke Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*
James F. Coggins, Jr. Managing Director, CII.
Dorothy Cunningham Managing Director, CII; previously Vice
President, CII.
Robert F. DeLucia Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*
Lawrence A. Drake Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*
Denise T. Duffee Managing Director, CII; previously Vice
President, CII.
John G. Eisele Managing Director, CII; previously Vice
President, CII.
Robert Fair Managing Director, CII; previously Vice
President, CII.
-5-
<PAGE>
John P. Feeney Managing Director, CII; previously Vice
President, CII.
Thomas R. Foley Managing Director, CII; previously Vice
President, CII.
Chris W. Jacobs Managing Director, CII.
David R. Johnson Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*
Richard H. Kupchunos Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*; previously Senior
Vice President, CII.
James R. Kuzemchak Managing Director, CII.
David A. Leone Managing Director, CII; previously Vice
President, CII.
Edward Lewis Managing Director, CII.
Timothy J. Lord Managing Director, CII.
Thomas P. Mahoney Managing Director, CII.
Richard B. McGauley Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*
Bret E. Meck Managing Director, CII; previously Vice
President, CII.
Stephen J. Olstein Managing Director, CII.
Stephen A. Osborn Managing Director, CII.
Alan C. Petersen Managing Director, CII; Vice President, CIGNA
High Income Shares.
Robert E. Peterson Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*
Anthony J. Pierson Managing Director, CII.
Leon Pouncy Managing Director, CII; previously Vice
President, CII.
Donald F. Rieger, Jr. Managing Director, CII.
James H. Rogers Managing Director, CII; previously Vice
President, CII.
James G. Schelling Managing Director, CII.
Linda W. Schumann Managing Director, CII.
Thomas M. Smith Managing Director, CII; previously Vice
President, CII.
James W. Spann Managing Director, CII.
-6-
<PAGE>
Joseph W. Springman Managing Director, CII and CIGNA Investment
Advisory Company, Inc.*
Susan S. Sullivan Managing Director, CII.
William A. Taylor Managing Director, CII; previously Vice
President, CII.
George Varga Managing Director, CII; previously Vice
President, CII.
Stephen H. Wilson Managing Director, CII.
James A. White Senior Vice President, CII and CIGNA
Investment Advisory Company, Inc.*
Barry L. Adams Vice President, CII, CIGNA Investment Advisory
Company, Inc.*, CIGNA Investment Group, Inc.*,
CIGNA International Investment Advisors,
Ltd.** and Connecticut General Pension
Services, Inc.*
Jean M. Anderson Vice President, CII.
Paul A. Bankson Vice President, CII; Vice President,
Connecticut General Pension Services, Inc.*
Paul Bergsteinsson Vice President, CII, CIGNA Investment Advisory
Company Inc.*, CIGNA International Investment
Advisors, Ltd.** and Connecticut General
Pension Services, Inc.*
Marcy F. Blender Vice President, CII, CIGNA Investment Advisory
Company, Inc.*, CIGNA Investment Group, Inc.*
and Connecticut General Pension Services,
Inc.*; previously Treasurer, CIGNA
International Investment Advisors, Ltd.**,
CIGNA Investment Group, Inc.* and Connecticut
General Pension Services, Inc.*
Marguerite A. Boslaugh Vice President, CII.
Gail E. Bruhn Vice President, CII.
William C. Carlson Vice President, CII.
Antonio M. Caxide Vice President, CII.
Rosemary S. Cleaves Vice President, CII; President and Director,
Connecticut General Pension Services, Inc.*
Nancy M. Corrigan Vice President, CII; previously Director
Business Planning and Control, CIGNA
Investment Division (now known as CIGNA
Investment Management), a division of CIGNA
Corporation*.
Lee P. Crockett Vice President, CII; previously Vice
President, Textron Investment Management Co.,
Inc., Providence, RI.
-7-
<PAGE>
Michael P. Daly Vice President and Economist, CII.
Mark V. DePucchio Vice President, CII.
Eric C. DiMiceli Vice President, CII.
Celia R. Dondes Vice President, CII.
Michael Q. Doyle Vice President, CII.
Ronald J. Dupont Vice President, CII and CIGNA Investment
Advisory Company, Inc.*
Robert W. Eccles Vice President, CII.
Richard L. Fletcher Vice President, CII.
Jonathan S. Frankel Vice President, CII.
Ivy B. Freedman Vice President, CII.
Keith A. Gollenberg Vice President, CII.
Maurice Gordon Vice President, CII.
William J. Grady Vice President, CII.
Mark R. Harrison Vice President, CII.
Debra J. Height Vice President, CII.
Chuel D. Hwang Vice President, CII.
Edward B. Johns Vice President, CII.
Thomas W. Johnson Vice President, CII.
William E. Johnson Vice President, CII; previously Assistant Vice
President, CIGNA Investment Division (now
known as CIGNA Investment Management), a
division of CIGNA Corporation*.
Patricia F. Judd Vice President, CII.
Peter K. Kofoed Vice President, CII; previously Associate and
Asset Manager-Real Estate, CIGNA Investment
Division (now known as CIGNA Investment
Management), a division of CIGNA Corporation*.
Mark S. Korinek Vice President, CII.
James R. Lagasse Vice President, CII.
Mary S. Law Vice President, CII.
Paul T. Martin Vice President, CII.
Joseph G. Mazon Vice President, CII.
-8-
<PAGE>
Daniel McDonough Vice President, CII; Vice President, CIGNA
International Investment Advisors, Ltd.**
Linda L. Morel Vice President, CII.
Stephen J. Myott Vice President, CII; previously Assistant
Treasurer of various entities which are
subsidiaries or affiliates of CIGNA
Corporation*.
Alpha O. Nicholson, III Vice President, CII.
Donald E. Norton Vice President, CII.
Ann Marie O'Rourke Vice President, CII; previously Assistant Vice
President-Real Estate Investment Accounting
and Director-Real Estate Investment
Accounting, CIGNA Investment Division (now
known as CIGNA Investment Management), a
division of CIGNA Corporation*.
Pamela S. Peck Vice President, CII.
Scott S. Piccone Vice President, CII.
Geoffrey R. Plume Vice President, CII.
Thomas J. Podgorski Vice President, CII.
Claire M. Porter Vice President, CII.
Suresh Raghaven Vice President, CII.
Michael J. Riccio Vice President, CII.
Stephen L. Roberts Vice President, CII.
Timothy F. Roberts Vice President and Compliance Officer, CII;
Vice President, International Finance/Global
Compliance, CIGNA Investment Management, a
division of CIGNA Corporation*; Vice
President - Finance and Compliance Officer,
CIGNA International Investment Advisors,
Ltd.**; Compliance Officer, CIGNA Investment
Advisory Company, Inc.*
Peter F. Roby Vice President, CII.
Frank Sataline, Jr. Vice President, CII.
Doreen M. Schlicht Vice President, CII.
John R. Schumann Vice President, CII.
John A. Shaw Vice President, CII.
Thomas P. Shea, III Vice President, CII.
Stephen C. Stachelek Vice President, CII.
-9-
<PAGE>
Carlton C. Taylor Vice President, CII.
Patrick H. Thompson Vice President, CII.
Ruth D. VanWinkle Vice President, CII and CIGNA Investment
Advisory Company, Inc.*
Victor J. Visockis, Jr. Vice President, CII.
Henry C. Wagner, III Vice President, CII.
William Weissenburger, Jr. Vice President, CII; Assistant Vice President,
Connecticut General Pension Services, Inc.*
Carey A. White Vice President, CII.
Deborah B. Wiacek Vice President, CII.
William S. Woodsome Vice President, CII.
Alfred A. Bingham III Assistant Vice President, CII; Vice President
and Treasurer, the Trusts and IIS; previously
Senior Vice President and Treasurer, CII.
David C. Kopp Secretary, CII, CIGNA Investment Advisory
Corporation*, CIGNA International Investment
Advisors, Ltd.**, CIGNA Investment Group,
Inc.* and Connecticut General Pension
Services, Inc.*; Assistant General Counsel and
Assistant Corporate Secretary, CIGNA
Corporation*; Corporate Secretary, Connecticut
General Life Insurance Company*.
- ------------------------
*900 Cottage Grove Road, Bloomfield, CT
**Park House, 16 Finsbury Circus, London, England
-10-
<PAGE>
CIGNA International Investment Advisors, Ltd. ("CIIA") serves as sub-adviser to
CIGNA International Stock Fund, a series of shares of the Registrant. CIIA is
an indirect, wholly-owned subsidiary of CIGNA Corporation and an affiliate of
CII. The principal address of CIIA is Park House, 7th Floor, 16 Finsbury
Circus, London EC2M 7AX, England.
Substantial business and other connections of the Directors and officers of CIIA
during the past two fiscal years are listed below:
Names of Officers and Directors Positions with the Adviser and
of the Investment Adviser Other Business Connections
- ------------------------------- ------------------------------------------
Harold W. Albert Director, CIIA; Director and Counsel, CII*;
Chief Counsel, CIGNA Investment Management, a
division of CIGNA Corporation*; Counsel, CIGNA
Investment Advisory Company, Inc.*; Director,
Senior Vice President and Chief Counsel, CIGNA
Investment Group, Inc.*; Director, Connecticut
General Pension Services, Inc.*
Robert W. Burgess Director, CIIA and CII*; Chief Financial
Officer, CIGNA Investment Management, a
division of CIGNA Corporation*; Director and
Senior Vice President, CIGNA Investment Group,
Inc.*; Director, Connecticut General Pension
Services, Inc.*
Richard H. Forde Director, President and Senior Managing
Director, CIIA; Senior Managing Director, CII*
and CIGNA Investment Advisory Company, Inc.*;
Vice President, CIGNA Institutuional Funds
Group; previously Managing Director, CIIA,
CII* and CIGNA Investment Advisory Company,
Inc.*
Arthur C. Reeds, III Director, CIIA; President, CIGNA Investment
Management, a division of CIGNA Corporation*;
President and Director, CII and CIGNA
Investment Group, Inc.*; President, CIGNA
Investment Advisory Company, Inc.*; Trustee,
the Trusts; Director, IIS; previously,
Managing Director -Division Head, CII;
Director and Managing Director - Division
Head, CIGNA Investment Advisory Company, Inc.*
John Townley Director, Resident Director and Division
Head - International Systems, CIIA; previously
Administrative Head - London Office, CIIA.
Barry L. Adams Vice President and Assistant Treasurer, CIIA.
Paul Bergsteinsson Vice President and Assistant Treasurer, CIIA;
Vice President, Treasurer or Assistant
Treasurer of various other entities which are
subsidiaries or affiliates of CIGNA
Corporation*.
Antonio M. Caxide Vice President, CIIA and CII.
-11-
<PAGE>
Matthew P. Hutchinson Vice President, CIIA; previously, Fund
Manager, CIIA.
Daniel McDonough Vice President, CIIA and CII.
Lee C. Mickelburough Vice President, CIIA.
Timothy F. Roberts Vice President - Finance and Compliance
Officer, CIIA; Vice President and Compliance
Officer, CII*; Vice President, International
Finance/Global Compliance, CIGNA Investment
Management, a division of CIGNA Corporation*;
Compliance Officer, CIGNA Investment Advisory
Company, Inc.*
Flora Kong Financial Controller, CIIA.
Joel W. Messing Counsel, CIIA.
David C. Kopp Secretary, CIIA, CII*, CIGNA Investment
Advisory Corporation*, CIGNA Investment Group,
Inc.* and Connecticut General Pension
Services, Inc.*; Assistant General Counsel and
Assistant Corporate Secretary, CIGNA
Corporation*; Corporate Secretary, Connecticut
General Life Insurance Company*.
- ----------------------
* 900 Cottage Grove Road, Bloomfield, CT
** Park House, 16 Finsbury Circus, London, England
-12-
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) CIGNA Financial Advisors, Inc. is the principal underwriter for CIGNA
International Stock Fund.
(b) The Officers and Directors of CIGNA Financial Advisors, Inc. as of June 12,
1995 are:
<TABLE>
<CAPTION>
Positions and Offices
Name and Principal with Principal Positions and Offices
Business Address* Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Edward M. Berube Director --------
John Wilkinson Director --------
Vacancy Director --------
Edward M. Berube President --------
Michael D. Arnold Vice President --------
Roy H. Bubbs Vice President --------
Karen R. Matheson Vice President --------
Joy P. McConnell Vice President --------
Peter R. Scanlon Vice President --------
Robert A. Picarello Chief Counsel --------
Assistant Secretary
H. Edward Cohen Assistant Vice President --------
Robert B. Pinkham Assistant Vice President --------
Vacancy Assistant Vice President-Compliance --------
David C. Kopp Secretary --------
Allan P. Wick Treasurer --------
Vice President
David A. Carlson Assistant Secretary --------
Dawn M. Cormier Assistant Secretary --------
Howard R. Loos Assistant Secretary --------
David M. Porcello Assistant Secretary --------
Pamela S. Williams Assistant Secretary --------
Mary K. Cristino Assistant Treasurer --------
</TABLE>
(c) Not Applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940 (15 U.S.C. 80a-30(a)) and the Rules (17 CFR
270.31a-1 to 31a-3) promulgated thereunder and records relating to shareholder
records are maintained by State Street Bank and Trust Company, Boston,
Massachusetts. Registrant's corporate records and financial records are
maintained c/o CIGNA Investments, Inc., 900 Cottage Grove Road, Bloomfield, CT
06002.
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
(a) Not Applicable.
(b) Not Applicable.
(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to shareholders,
upon request and without charge.
- ----------------------
* 900 Cottage Grove Road, Bloomfield, CT
-13-
<PAGE>
SIGNATURES
Registrant represents that no material event requiring disclosure in the
prospectus, other than as provided in Rule 485(b)(1), has occurred since the
filing date of Registrant's last Post-Effective Amendment.
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, CIGNA Institutional Funds Group, certifies
that it meets all the requirements for effectiveness of this Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Bloomfield, and State of Connecticut on the 11th day of August, 1995.
CIGNA INSTITUTIONAL FUNDS GROUP
R. Bruce Albro
Chairman of the Board of Trustees
and President
By ______________________________
Jeffrey S. Winer
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
R. Bruce Albro Chairman of August 11, 1995
the Board of
Trustees and
President (principal
executive officer)
By _______________________________
Jeffrey S. Winer
Attorney-in-Fact
-------------------------------
Alfred A. Bingham III Treasurer August 11, 1995
(principal
financial officer
and principal
accounting officer)
This Amendment to the Registration Statement has also been signed below by
Jeffrey S. Winer, Attorney-in-Fact, on behalf of the following Trustees on the
date indicated, such Trustees being all of the Trustees currently holding the
office of Trustee of the Registrant.
R. Bruce Albro Paul J. McDonald
Russell H. Jones Arthur C. Reeds, III
By _________________________________ August 11, 1995
Jeffrey S. Winer
<PAGE>
SIGNATURES
Registrant represents that no material event requiring disclosure in the
prospectus, other than as provided in Rule 485(b)(1), has occurred since the
effective date of Registrant's Registration Statement.
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, CIGNA Institutional Funds Group, certifies
that it meets all the requirements for effectiveness of this Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Bloomfield, and State of Connecticut on the 11th day of August, 1995.
CIGNA INSTITUTIONAL FUNDS GROUP
R. Bruce Albro
Chairman of the Board of Trustees
and President
By /s/ Jeffrey S. Winer
--------------------------------
Jeffrey S. Winer
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
R. Bruce Albro Chairman of August 11, 1995
the Board of
Trustees and
President (principal
executive officer)
By /s/ Jeffrey S. Winer
---------------------------
Jeffrey S. Winer
Attorney-in-Fact
/s/ Alfred A. Bingham III Treasurer August 11, 1995
---------------------------
Alfred A. Bingham III (principal
financial officer
and principal
accounting officer)
This Amendment to the Registration Statement has also been signed below by
Jeffrey S. Winer, Attorney-in-Fact, on behalf of the following Trustees on the
date indicated, such Trustees being all of the Trustees currently holding the
office of Trustee of the Registrant.
R. Bruce Albro Paul J. McDonald
Russell H. Jones Arthur C. Reeds, III
By /s/ Jeffrey S. Winer August 11, 1995
------------------------------------
Jeffrey S. Winer
<PAGE>
SECURITIES ACT FILE NO. 33-52724
INVESTMENT COMPANY ACT FILE NO. 811-7236
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___
Post-Effective Amendment No. 3 | X |
---
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ___
Amendment No. 4 | X |
---
CIGNA INSTITUTIONAL FUNDS GROUP
(Exact Name of Registrant as Specified in Charter)
1380 Main Street, Springfield, MA 01103
(Address of Principal Executive Office)
EXHIBITS
<PAGE>
EXHIBIT INDEX
* (10) Consent of Counsel
* (11) Consent of Price Waterhouse
* (17) Financial Data Schedule
- ------------------------
* Filed Herewith
<PAGE>
EXHIBIT 24.1
CIGNA INSTITUTIONAL FUNDS GROUP
POWER OF ATTORNEY
The undersigned hereby appoint Alfred A. Bingham III and Jeffrey S. Winer, each
of them singly, attorney for me and in my name and on my behalf to sign any
Registration Statement under the Securities Act of 1933 and any Registration
Statement under the Investment Company Act of 1940 for CIGNA Institutional Funds
Group, and any amendment to any such Registration Statement to be filed not
later than September 29, 1995 with the Securities and Exchange Commission under
the Securities Act of 1933 and under the Investment Company Act of 1940, and
generally to do and perform all things necessary to be done in that connection,
hereby ratifying and confirming my signature as it may be signed by my said
attorney to any and all Registration Statements and amendments.
Signed this 3rd day of August, 1995.
------
/s/ R. Bruce Albro
--------------------------------------
R. Bruce Albro,
Chairman of the Board and President
/s/ R. Bruce Albro
--------------------------------------
R. Bruce Albro, Trustee
/s/ Arthur C. Reeds, III,
--------------------------------------
Arthur C. Reeds, III, Trustee
<PAGE>
EXHIBIT 99.B.2
CIGNA INSTITUTIONAL FUNDS GROUP
POWER OF ATTORNEY
The undersigned hereby appoints Alfred A. Bingham III and Jeffrey S. Winer, each
of them singly, attorney for me and in my name and on my behalf to sign any
Registration Statement under the Securities Act of 1933 and any Registration
Statement under the Investment Company Act of 1940 for CIGNA Institutional Funds
Group, and any amendment to any such Registration Statement to be filed not
later than September 29, 1995 with the Securities and Exchange Commission under
the Securities Act of 1933 and under the Investment Company Act of 1940, and
generally to do and perform all things necessary to be done in that connection,
hereby ratifying and confirming my signature as it may be signed by my said
attorney to any and all Registration Statements and amendments.
Signed this 7th day of August, 1995.
------
/s/ Russell H. Jones
--------------------------------------
Russell H. Jones, Trustee
<PAGE>
EXHIBIT 99.B.3
CIGNA INSTITUTIONAL FUNDS GROUP
POWER OF ATTORNEY
The undersigned hereby appoints Alfred A. Bingham III and Jeffrey S. Winer, each
of them singly, attorney for me and in my name and on my behalf to sign any
Registration Statement under the Securities Act of 1933 and any Registration
Statement under the Investment Company Act of 1940 for CIGNA Institutional Funds
Group, and any amendment to any such Registration Statement to be filed not
later than September 29, 1995 with the Securities and Exchange Commission under
the Securities Act of 1933 and under the Investment Company Act of 1940, and
generally to do and perform all things necessary to be done in that connection,
hereby ratifying and confirming my signature as it may be signed by my said
attorney to any and all Registration Statements and amendments.
Signed this 4th day of August, 1995.
/s/ Paul J. McDonald
--------------------------------------
Paul J. McDonald, Trustee
<PAGE>
Exhibit 10
[LETTERHEAD OF GOODWIN, PROCTER & HOAR APPEARS HERE]
August 9, 1995
CIGNA Institutional Funds Group
1380 Main Street
Springfield, MA 01103
Ladies and Gentlemen:
Reference is made to Post-Effective Amendment No. 3 to the Registration
Statement of CIGNA Institutional Funds Group (the "Trust") on Form N-1A
(Registration No. 33-52724) filed with the Securities and Exchange Commission
with respect to the CIGNA International Stock Fund series of the Trust, and
specifically to Item 24(b) thereof. We hereby consent to the incorporation by
reference therein of our opinion, dated June 1, 1993 filed as Exhibit (10) to
Post-Effective Amendment No. 1 to such Registration Statement.
Very truly yours,
/s/ Goodwin,Procter & Hoar
GOODWIN, PROCTER & HOAR
<PAGE>
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 3 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 15, 1995, relating to the financial
statements and financial highlights appearing in the December 31, 1994 Annual
Report to Shareholders of CIGNA International Stock Fund, which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the heading "Investment Advisory and Other Services" in the Statement
of Additional Information.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
August 8, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT FOR THE YEAR ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> CIGNA INTERNATIONAL STOCK FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 6,385,034
<INVESTMENTS-AT-VALUE> 7,082,267
<RECEIVABLES> 40,127
<ASSETS-OTHER> 1,019
<OTHER-ITEMS-ASSETS> 268,181
<TOTAL-ASSETS> 7,391,594
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 56,689
<TOTAL-LIABILITIES> 56,689
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,528,707
<SHARES-COMMON-STOCK> 623,140
<SHARES-COMMON-PRIOR> 540,250
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (55,008)
<ACCUMULATED-NET-GAINS> 158,343
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 702,863
<NET-ASSETS> 7,334,905
<DIVIDEND-INCOME> 114,940
<INTEREST-INCOME> 1,883
<OTHER-INCOME> 0
<EXPENSES-NET> 93,138
<NET-INVESTMENT-INCOME> 23,685
<REALIZED-GAINS-CURRENT> 900,988
<APPREC-INCREASE-CURRENT> (725,785)
<NET-CHANGE-FROM-OPS> 198,888
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 20,707
<DISTRIBUTIONS-OF-GAINS> 977,504
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 82,890
<NET-CHANGE-IN-ASSETS> 198,888
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 179,851
<OVERDISTRIB-NII-PRIOR> (2,978)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 59,609
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 175,159
<AVERAGE-NET-ASSETS> 7,451,842
<PER-SHARE-NAV-BEGIN> 13.21
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> .33
<PER-SHARE-DIVIDEND> .04
<PER-SHARE-DISTRIBUTIONS> 1.77
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.77
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
