As filed with the Securities and Exchange Commission on
April 28, 1995
File No. 811-8434
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 1
THE PREMIUM PORTFOLIOS*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
ELIZABETHAN SQUARE, GEORGE TOWN, GRAND CAYMAN, CAYMAN
ISLANDS, BWI
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(809) 945-1824
SUSAN JAKUBOSKI, ELIZABETHAN SQUARE, GEORGE TOWN,
GRAND CAYMAN, CAYMAN ISLANDS, BWI
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
ROGER P. JOSEPH, BINGHAM, DANA & GOULD,
150 FEDERAL STREET, BOSTON, MA 02110
_______________________________________________________
* Relates only to International Equity Portfolio.
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EXPLANATORY NOTE
Beneficial interests in the Registrant are not
registered under the Securities Act of 1933, as amended
(the "1933 Act"), because such interests are issued
solely in private placement transactions which do not
involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the
Registrant may be made only by investment companies,
common or commingled trust funds or similar
organizations or entities which are "accredited
investors" within the meaning of Regulation D under the
1933 Act. This Registration Statement does not
constitute an offer to sell, or the solicitation of an
offer to buy, any beneficial interests in the
Registrant.
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PART A
Responses to Items 1 through 3 and 5A have been
omitted pursuant to paragraph 4 of Instruction F of the
General Instructions to Form N-1A.
Item 4. General Description of Registrant.
International Equity Portfolio (the "Portfolio")
is a separate series of The Premium Portfolios (the
"Trust"). Citibank, N.A. ("Citibank" or the "Adviser")
is the investment adviser for the Portfolio. The Trust
is an open-end management investment company which was
organized as a trust under the laws of the State of New
York on September 13, 1993. Beneficial interests in
the Portfolio are issued solely in private placement
transactions which do not involve any "public offering"
within the meaning of Section 4(2) of the U.S.
Securities Act of 1933, as amended (the "1933 Act").
Investments in the Portfolio may be made only by
investment companies, common or commingled trust funds
or similar organizations or entities which are
"accredited investors" within the meaning of Regulation
D under the 1933 Act. This Registration Statement does
not constitute an offer to sell, or the solicitation of
an offer to buy, any "security" within the meaning of
the 1933 Act.
BENEFICIAL INTERESTS IN THE PORTFOLIO ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, CITIBANK, N.A. OR ANY OF ITS AFFILIATES, ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER AGENCY AND INVOLVE INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.
INVESTMENT OBJECTIVE AND POLICIES:
The investment objective of the Portfolio is long-
term capital growth. Dividend income, if any, is
incidental to this investment objective.
The Portfolio seeks its objective by investing
primarily in common stocks of companies organized in
countries other than the United States, including
developing countries ("non-U.S. issuers"). As a non-
fundamental policy, at least 65% of the value of the
Portfolio's total assets is invested in equity
securities and at least 65% of the value of the
Portfolio's total assets is invested in securities of
issuers organized in at least three countries other
than the United States. For purposes of this policy,
equity securities are defined as common stock,
securities convertible into common stock and trust or
limited partnership interests, and include securities
purchased directly or in the form of sponsored American
Depositary Receipts ("ADRs"), European Depositary
Receipts ("EDRs") or other similar securities
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representing common stock of non-U.S. issuers. The
Adviser seeks opportunities to invest in non-U.S.
economies which are growing faster than that of the
U.S.
In selecting common stocks the Adviser emphasizes
securities issued by established companies with medium
to large market capitalizations, i.e., $750 million or
more, and seasoned management teams ("Established
Companies") which the Adviser believes possess above
average prospects for growth. The Adviser may also
select other securities of non-U.S. issuers which it
believes provide an opportunity for appreciation, such
as fixed income securities, convertible and non-
convertible bonds, preferred stock and warrants. The
Portfolio's assets usually consist of issues listed on
securities exchanges, and its long-term non-convertible
debt investments carry at least a Baa rating from
Moody's Investors Service, Inc. ("Moody's") or a BBB
rating from Standard & Poor's Ratings Group ("S&P") or
are determined by the Adviser to be of equivalent
quality.
CERTAIN ADDITIONAL INVESTMENT POLICIES:
TEMPORARY INVESTMENTS. During periods of unusual
economic or market conditions or for temporary
defensive purposes or liquidity, the Portfolio may
invest without limit in cash and in U.S. dollar-
denominated high quality money market and short-term
instruments. These investments may result in a lower
yield than would be available from investments with a
lower quality or longer term.
OTHER PERMITTED INVESTMENTS. For more information
regarding the Portfolio's permitted investments and
investment practices, see "Permitted Investments and
Investment Practices." The Portfolio will not
necessarily invest or engage in each of the investments
and investment practices described in "Permitted
Investments and Investment Practices" but reserves the
right to do so.
INVESTMENT RESTRICTIONS. Part B of this
Registration Statement contains a list of specific
investment restrictions which govern the investment
policies of the Portfolio, including a limitation that
the Portfolio may borrow money from banks in an amount
not to exceed 33-1/3% of the Portfolio's net assets for
extraordinary or emergency purposes (e.g., to meet
redemption requests); securities will not be purchased
for the Portfolio at any time at which borrowings
exceed 5% of the Portfolio's net assets (taken at
market value). Certain of these specific restrictions
may not be changed without approval by holders of a
majority of the outstanding securities of the
Portfolio. Except as otherwise indicated, the
Portfolio's investment objectives and policies may be
changed without approval by the holders of the
outstanding securities of the Portfolio. If a
percentage or rating restriction (other than a
restriction as to borrowing) is adhered to at the time
an investment is made, a later change in percentage or
rating resulting from changes in the Portfolio's
securities will not be a violation of policy.
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PORTFOLIO TURNOVER. Securities of the Portfolio
will be sold whenever the Adviser believes it is
appropriate to do so in light of the Portfolio's
investment objectives, without regard to the length of
time a particular security may have been held. The
turnover rate for the Portfolio is not expected to
exceed 100% annually; for the period May 1, 1994
(commencement of operations) through December 31, 1994
the Portfolio's turnover rate was 25%. The amount of
brokerage commissions and realization of taxable
capital gains will tend to increase as the level of
portfolio activity increases.
BROKERAGE TRANSACTIONS. The primary consideration
in placing the Portfolio's security transactions with
broker-dealers for execution is to obtain and maintain
the availability of execution at the most favorable
prices and in the most effective manner possible.
RISK CONSIDERATIONS:
The risks of investing in the Portfolio vary
depending upon the nature of the securities held, and
the investment practices employed, on its behalf.
Certain of these risks are described below.
CHANGES IN NET ASSET VALUE. The Portfolio's net
asset value will fluctuate based on changes in the
values of the underlying portfolio securities. This
means that an investment in the Portfolio may be worth
more or less at redemption than at the time of
purchase. Equity securities fluctuate in response to
general market and economic conditions and other
factors, including actual and anticipated earnings,
changes in management, political developments and the
potential for takeovers and acquisitions. During
periods of rising interest rates the value of debt
securities generally declines, and during periods of
falling rates the value of these securities generally
increases. Changes by recognized rating agencies in
the rating of any debt security, and actual or
perceived changes in an issuer's ability to make
principal or interest payments, also affect the value
of these investments.
CREDIT RISK OF DEBT SECURITIES. Investors should
be aware that securities offering above average yields
may at times involve above average risks. Securities
rated Baa by Moody's or BBB by S&P and equivalent
unrated securities may have speculative
characteristics. Adverse economic or changing
circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than
is the case for higher grade obligations.
NON-U.S. SECURITIES. Investments in non-U.S.
securities involve risks relating to political, social
and economic developments abroad, as well as risks
resulting from the differences between the regulations
to which U.S. and non-U.S issuers and markets are
subject. These risks may include expropriation,
confiscatory taxation, withholding taxes on dividends
and interest, limitations on the use or transfer of
portfolio assets and political or social instability.
Enforcing legal rights may be difficult, costly and
slow in non-U.S.
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countries, and there may be special problems enforcing
claims against non-U.S. governments. In addition, non-
U.S. companies may not be subject to accounting
standards or governmental supervision comparable to
U.S. companies, and there may be less public
information about their operations. Non-U.S. markets
may be less liquid and more volatile than U.S. markets,
and may offer less protection to investors such as the
Portfolio.
Because non-U.S. securities often are denominated
in currencies other than the U.S. dollar, changes in
currency exchange rates will affect the Portfolio's net
asset value, the value of dividends and interest earned
and gains and losses realized on the sale of
securities. In addition, some non-U.S. currency values
may be volatile and there is the possibility of
governmental controls on currency exchanges or
governmental intervention in currency markets.
The Portfolio may invest its assets in issuers
located in developing countries, which are generally
defined as countries in the initial stages of their
industrialization cycles with low per capita income.
All of the risks of investing in non-U.S. securities
are heightened by investing in issuers in developing
countries. Investors should be aware that investing in
the equity and fixed income markets of developing
countries involves exposure to economic structures that
are generally less diverse and mature, and to political
systems which can be expected to have less stability,
than those of developed countries. Historical
experience indicates that the markets of developing
countries have been more volatile than the markets of
developed countries with more mature economies; such
markets often have provided higher rates of return and
greater risks. These heightened risks include (i)
greater risks of expropriation, confiscatory taxation
and nationalization, and less social, political and
economic stability; (ii) the small current size of
markets for securities of issuers based in developing
countries and the currently low or non-existent volume
of trading, resulting in a lack of liquidity and in
price volatility; (iii) certain national policies which
may restrict the Portfolio's investment opportunities
including restrictions on investing in issuers or
industries deemed sensitive to relevant national
interests; and (iv) the absence of developed legal
structures. Such characteristics can be expected to
continue in the future.
The costs attributable to non-U.S. investing, such
as the costs of maintaining custody of securities in
non-U.S. countries, frequently are higher than those
attributable to U.S. investing. As a result, the
operating expense ratios of the Portfolio may be higher
than those of investment companies investing
exclusively in U.S. securities.
INVESTMENT PRACTICES. Certain of the investment
practices employed for the Portfolio may entail certain
risks. See "Permitted Investments and Investment
Practices" below.
PERMITTED INVESTMENTS AND INVESTMENT PRACTICES:
REPURCHASE AGREEMENTS. The Portfolio may enter
into repurchase agreements in order to earn a return on
temporarily available cash. Repurchase agreements are
transactions in which
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an institution sells the Portfolio a security at one
price, subject to the Portfolio's obligation to resell
and the selling institution's obligation to repurchase
that security at a higher price normally within a seven
day period. There may be delays and risks of loss if
the seller is unable to meet its obligation to
repurchase.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may
enter into reverse repurchase agreements. Reverse
repurchase agreements involve the sale of securities
held by the Portfolio and the agreement by the
Portfolio to repurchase the securities at an
agreed-upon price, date and interest payment. When the
Portfolio enters into reverse repurchase transactions,
securities of a dollar amount equal in value to the
securities subject to the agreement will be maintained
in a segregated account with the Portfolio's custodian.
The segregation of assets could impair the Portfolio's
ability to meet its current obligations or impede
investment management if a large portion of the
Portfolio's assets are involved. Reverse repurchase
agreements are considered to be a form of borrowing.
LENDING OF PORTFOLIO SECURITIES. Consistent with
applicable regulatory requirements and in order to
generate additional income, the Portfolio may lend its
portfolio securities to broker-dealers and other
institutional borrowers. Such loans must be callable
at any time and continuously secured by collateral
(cash or U.S. Government securities) in an amount not
less than the market value, determined daily, of the
securities loaned. It is intended that the value of
securities loaned by the Portfolio would not exceed 33-
1/3% of the Portfolio's total assets.
In the event of the bankruptcy of the other party
to a securities loan, a repurchase agreement or a
reverse repurchase agreement, the Portfolio could
experience delays in recovering either the securities
lent or cash. To the extent that, in the meantime, the
value of the securities lent has increased or the value
of the securities purchased has decreased, the
Portfolio could experience a loss.
RULE 144A SECURITIES. The Portfolio may purchase
restricted securities that are not registered for sale
to the general public if the Adviser determines that
there is a dealer or institutional market in the
securities. In that case, the securities will not be
treated as illiquid for purposes of the Portfolio's
investment limitations. The Trustees will review these
determinations. These securities are known as "Rule
144A securities", because they are traded under SEC
Rule 144A among qualified institutional buyers.
Institutional trading in Rule 144A securities is
relatively new, and the liquidity of these investments
could be impaired if trading in Rule 144A securities
does not develop or if qualified institutional buyers
become, for a time, uninterested in purchasing Rule
144A securities.
PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS. The
Portfolio may invest up to 15% of its net assets in
securities for which there is no readily available
market. These illiquid securities may include
privately placed restricted securities for which no
institutional market exists. The absence of a trading
market can make it difficult to ascertain a market
value for illiquid investments. Disposing of illiquid
investments may involve time-consuming negotiation and
legal expenses, and it may be difficult
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or impossible for the Portfolio to sell them promptly
at an acceptable price.
"WHEN-ISSUED" SECURITIES. In order to ensure the
availability of suitable securities, the Portfolio may
purchase securities on a "when-issued" or on a "forward
delivery" basis, which means that the securities would
be delivered to the Portfolio at a future date beyond
customary settlement time. Under normal circumstances,
the Portfolio takes delivery of the securities. In
general, the Portfolio does not pay for the securities
until received and does not start earning interest
until the contractual settlement date. While awaiting
delivery of the securities, the Portfolio establishes a
segregated account consisting of cash, cash equivalents
or high quality debt securities equal to the amount of
the Portfolio's commitments to purchase "when-issued"
securities. An increase in the percentage of the
Portfolio's assets committed to the purchase of
securities on a "when-issued" basis may increase the
volatility of its net asset value.
CURRENCY EXCHANGE CONTRACTS. Forward currency
exchange contracts may be entered into for the
Portfolio for the purchase or sale of non-U.S. currency
for hedging purposes against adverse rate changes or
otherwise to achieve the Portfolio's investment
objective. A currency exchange contract allows a
definite price in dollars to be fixed for securities of
non-U.S. issuers that have been purchased or sold (but
not settled) for the Portfolio. Entering into such
exchange contracts may result in the loss of all or a
portion of the benefits which otherwise could have been
obtained from favorable movements in exchange rates.
In addition, entering into such contracts means
incurring certain transaction costs and bearing the
risk of incurring losses if rates do not move in the
direction anticipated.
SHORT SALES "AGAINST THE BOX." In a short sale,
the Portfolio sells a borrowed security and has a
corresponding obligation to the lender to return the
identical security. The Portfolio may engage in short
sales only if at the time of the short sale it owns or
has the right to obtain, at no additional cost, an
equal amount of the security being sold short. This
investment technique is known as a short sale "against
the box." The Portfolio may make a short sale as a
hedge, when it believes that the value of a security
owned by the Portfolio (or a security convertible or
exchangeable for such security) may decline, or when
the Portfolio wants to sell the security at an
attractive current price but wishes to defer
recognition of gain or loss for tax purposes. Not more
than 40% of the Portfolio's total assets would be
involved in short sales "against the box."
OTHER INVESTMENT COMPANIES. Subject to applicable
statutory and regulatory limitations, assets of the
Portfolio may be invested in shares of other registered
investment companies. The Portfolio may invest up to
5% of its assets in closed-end investment companies
which primarily hold securities of non-U.S. issuers.
<PAGE>
Item 5. Management of the Portfolio.
The Portfolio is supervised by a Board of
Trustees. Citibank is the investment adviser. A
majority of the Trustees are not affiliated with the
Adviser. More information on the Trustees and officers
of the Portfolio appears under "Management" in Part B.
The Portfolio draws on the strength and experience
of Citibank. Citibank offers a wide range of banking
and investment services to customers across the United
States and throughout the world, and has been managing
money since 1822. Its portfolio managers are
responsible for investing in money market, equity and
fixed income securities. Citibank and its affiliates
manage more than $73 billion in assets worldwide.
Citibank is a wholly-owned subsidiary of Citicorp.
Citibank manages the Portfolio's assets pursuant
to an investment advisory agreement (the "Advisory
Agreement"). Subject to policies set by the Trustees,
Citibank makes investment decisions. Citibank's
address is 153 East 53rd Street, New York, New York
10043.
Henry B. W. de Vismes was appointed Manager of the
Portfolio at its inception in 1994. Prior to that,
since March 1991, he managed Landmark International
Equity Fund, an investor in the Portfolio. He also
manages individual international portfolios and has
responsibility for international equity strategy,
global asset allocation and global stock selection for
Citibank. Mr. de Vismes came to Citibank in 1991 after
19 years at London-based merchant bank Kleinwort Benson
Group, where he managed a U.S.-based international
equity fund.
For its services under the Advisory Agreement, the
Adviser receives an investment advisory fee, which is
accrued daily and paid monthly, equal to 1.00% of the
Portfolio's average daily net assets on an annualized
basis for the Portfolio's then current fiscal year.
The investment advisory fee of the Portfolio is higher
than those paid by most investment companies in
general, but it is similar to the fees paid by other
investment companies that also invest primarily in non-
U.S. securities. The Trustees have determined that
this advisory fee is reasonable in light of the
investment policy of investing primarily in non-U.S.
securities. The Adviser may voluntarily agree to waive
a portion of its investment advisory fee.
For the period May 1, 1994 (commencement of
operations) to December 31, 1994, the investment
advisory fee paid to Citibank under the Advisory
Agreement was $218,950.
Citibank and its affiliates may have deposit, loan
and other relationships with the issuers of securities
purchased on behalf of the Portfolio, including
outstanding loans to such issuers which may be repaid
in whole or in part with the proceeds of securities so
purchased. Citibank has informed the Trust that, in
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making its investment decisions, it does not obtain or
use material inside information in the possession of
any division or department of Citibank or in the
possession of any affiliate of Citibank.
The Glass-Steagall Act prohibits certain financial
institutions, such as Citibank, from underwriting
securities of open-end investment companies, such as
the Trust. Citibank believes that its services under
the Advisory Agreement and the activities performed by
it as sub-administrator are not underwriting and are
consistent with the Glass-Steagall Act and other
relevant federal and state laws. However, there is no
controlling precedent regarding the performance of the
combination of investment advisory and
sub-administrative activities by banks. State laws on
this issue may differ from applicable federal law, and
banks and financial institutions may be required to
register as dealers pursuant to state securities laws.
Changes in either federal or state statutes or
regulations, or in their interpretations, could prevent
Citibank from continuing to perform these services. If
Citibank were to be prevented from acting as the
Adviser or sub-administrator, the Trust would seek
alternative means for obtaining these services. The
Trust does not expect that shareholders would suffer
any adverse financial consequences as a result of any
such occurrence.
The Portfolio has an administrative services plan
(the "Administrative Services Plan") which provides
that the Portfolio may obtain the services of an
administrator, a transfer agent and a custodian, and
may enter into agreements providing for the payment of
fees for such services. Under the Administrative
Services Plan, fees paid to the Portfolio's
administrator may not exceed 0.05% of the Portfolio's
average daily net assets on an annualized basis for the
Portfolio's then-current fiscal year.
Signature Financial Group (Cayman), Ltd., either
directly or through a wholly-owned subsidiary ("SFG"),
provides certain administrative services to the
Portfolio under an administrative services agreement.
These administrative services include providing general
office facilities, supervising the overall
administration of the Portfolio, and providing persons
satisfactory to the Board of Trustees to serve as
Trustees and officers of the Portfolio. These Trustees
and officers may be directors, officers or employees of
SFG or its affiliates.
For these services, SFG receives fees accrued
daily and paid monthly of 0.05% of the assets of the
Portfolio, on an annualized basis for the Portfolio's
then-current fiscal year. However, SFG has voluntarily
agreed to waive a portion of the fees payable to it as
necessary to maintain the projected rate of total
operating expenses.
SFG is a wholly-owned subsidiary of Signature
Financial Group, Inc.
Pursuant to a sub-administrative services
agreement, Citibank performs such sub-administrative
duties for the Portfolio as from time to time are
agreed upon by Citibank and SFG. Citibank's
compensation as sub-administrator is paid by SFG.
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Investors Bank & Trust Company acts as the
custodian of the Portfolio's assets. Securities may be
held by a sub-custodian bank approved by the Trustees.
In addition to amounts payable under the Advisory
Agreement and the Administrative Services Plan, the
Portfolio is responsible for its own expenses,
including, among other things, the costs of securities
transactions, the compensation of Trustees that are not
affiliated with the Adviser, government fees, taxes,
accounting and legal fees, expenses of communicating
with investors, interest expense, and insurance
premiums.
All fee waivers are voluntary and may be reduced
or terminated at any time.
Item 6. Capital Stock and Other Securities.
Investments in the Portfolio have no pre-emptive
or conversion rights and are fully paid and non-
assessable, except as set forth below. The Trust is
not required to hold, and has no current intention of
holding, annual meetings of investors, but the Trust
will hold special meetings of investors when in the
judgment of the Trustees it is necessary or desirable
to submit matters for an investor vote. Investors have
under certain circumstances (e.g., upon application and
submission of certain specified documents to the
Trustees by a specified number of investors) the right
to communicate with other investors in connection with
requesting a meeting of investors for the purpose of
removing one or more Trustees. Investors also have the
right to remove one or more Trustees without a meeting
by a declaration in writing by a specified number of
investors. Upon liquidation or dissolution of the
Portfolio, investors would be entitled to share pro
rata in the net assets of the Portfolio available for
distribution to its investors.
The Trust reserves the right to create and issue a
number of series, in which case investors in each
series would participate equally in the earnings,
dividends and assets of the particular series.
Currently, the Trust has five series.
The Trust is organized as a trust under the laws
of the State of New York. Under the Declaration of
Trust, the Trustees are authorized to issue beneficial
interests in the Portfolio. Each investor in the
Portfolio is entitled to a vote in proportion to the
amount of its beneficial interest in the Portfolio.
Investments in the Portfolio may not be transferred,
but an investor may withdraw all or any portion of its
investment at any time. The Declaration of Trust of
the Trust provides that entities investing in the
Portfolio are each liable for all obligations of the
Portfolio. It is not expected that the liabilities of
the Portfolio would ever exceed its assets.
The net asset value of the Portfolio (i.e., the
value of its securities and other assets less its
liabilities) is determined each day on which the New
York Stock Exchange (the "Exchange") is open for
trading ("Business Day") (and on such other days as are
deemed necessary in order to comply with Rule 22c-1
under the U.S. Investment Company Act of 1940, as
amended (the "1940 Act")).
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This determination is made once during each day as of
the close of regular trading on such Exchange. Values
of the Portfolio's assets are determined on the basis
of their market or other fair value, as described in
Item 19 of Part B.
Each investor in the Portfolio may add to or
reduce its investment in the Portfolio on each Business
Day. As of the close of regular trading on the
Exchange, on each Business Day, the value of each
investor's beneficial interest in the Portfolio is
determined by multiplying the net asset value of the
Portfolio by the percentage, effective for that day,
which represents that investor's share of the aggregate
beneficial interests in the Portfolio. Any additions
or withdrawals, which are to be effected on that day,
are then effected. Thereafter, the investor's
percentage of the aggregate beneficial interests in the
Portfolio is then re-computed as the percentage equal
to the fraction (i) the numerator of which is the value
of such investor's investment in the Portfolio as of
the close of regular trading on such day plus or minus,
as the case may be, the amount of any additions to or
withdrawals from the investor's investment in the
Portfolio effected on such day, and (ii) the
denominator of which is the aggregate net asset value
of the Portfolio as of the same time on such day plus
or minus, as the case may be, the amount of the net
additions to or withdrawals from the aggregate
investments in the Portfolio by all investors in the
Portfolio. The percentage so determined is then
applied to determine the value of the investor's
interest in the Portfolio as of the close of regular
trading on the following Business Day of the Portfolio.
The Trust has determined that the Portfolio is
properly treated as a partnership for U.S. federal and
New York state income tax purposes. Accordingly, the
Trust is not subject to any U.S. federal or New York
state income taxes, but each investor in the Portfolio
must take into account its share of the Portfolio's
ordinary income and capital gains in determining its
income tax liability. The determination of such share
is made in accordance with the governing instruments of
the Trust and the U.S. Internal Revenue Code of 1986,
as amended (the "Code"), and regulations promulgated
thereunder.
The Trust intends to conduct its activities and
those of the Portfolio so that they will not be deemed
to be engaged in the conduct of a U.S. trade or
business for U.S. federal income tax purposes.
Therefore, it is not anticipated that an investor in
the Portfolio, other than an investor which would be
deemed a "U.S. person" for U.S. federal income tax
purposes, will be subject to U.S. federal income
taxation (other than a 30% withholding tax on dividends
and certain interest income) solely by reason of its
investment in the Portfolio. There can be no assurance
that the U.S. Internal Revenue Service may not
challenge the above conclusions or take other positions
that, if successful, might result in the payment of
U.S. federal income taxes by investors in the
Portfolio.
Item 7. Purchase of Securities.
Beneficial interests in the Portfolio are issued
solely in private placement transactions which do not
involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act.
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Investments in the Portfolio may only be made by
investment companies, common or commingled trust funds
or similar organizations or entities which are
"accredited investors" within the meaning of Regulation
D under the 1933 Act. This Registration Statement does
not constitute an offer to sell, or the solicitation of
an offer to buy, any "security" within the meaning of
the 1933 Act.
An investment in the Portfolio is made without a
sales load. All investments are made at net asset
value next determined after an order is received by the
Portfolio. There is no minimum initial or subsequent
investment in the Portfolio. However, since the
Portfolio intends to be as fully invested at all times
as is reasonably practicable in order to enhance the
yield on its assets, investments must be made in
federal funds (i.e., moneys credited to the account of
the Portfolio's custodian bank by a U.S. Federal
Reserve Bank).
The Trust reserves the right to cease accepting
investments for the Portfolio at any time or to reject
any investment order.
The exclusive placement agent for the Portfolio is
The Landmark Funds Broker-Dealer Services, Inc.
("LFBDS"). The address of LFBDS is c/o SFG,
Elizabethan Square, George Town, Grand Cayman, Cayman
Islands, BWI. LFBDS receives no compensation for
serving as the exclusive placement agent for the
Portfolio.
Item 8. Redemption or Repurchase.
An investor in the Portfolio may withdraw all or
any portion of its investment at any time after a
withdrawal request in proper form is received by the
Portfolio from the investor. The proceeds of a
withdrawal will be paid by the Portfolio in federal
funds normally on the Business Day the withdrawal is
effected, but in any event within seven days. See
"Purchase, Redemption and Pricing of Securities" in
Part B of this Registration Statement regarding the
Trust's right to pay the redemption price in kind with
readily marketable securities (instead of cash).
Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with
respect to any withdrawal may be suspended or the
payment of the withdrawal proceeds postponed during any
period in which the Exchange is closed (other than
weekends or holidays) or trading on the Exchange is
restricted, or, to the extent otherwise permitted by
the 1940 Act, if an emergency exists.
Item 9. Pending Legal Proceedings.
Not applicable.
<PAGE>
PART B
Item 10. Cover Page.
Not applicable.
Item 11. Table of Contents.
Page
General Information and History B-01
Investment Objective and Policies B-01
Management of the Trust B-14
Control Persons and Principal Holders of
Securities B-16
Investment Advisory and Other Services B-16
Brokerage Allocation and Other Practices B-19
Capital Stock and Other Securities B-20
Purchase, Redemption and Pricing of
Securities B-22
Tax Status B-24
Underwriters B-26
Calculations of Performance Data B-26
Financial Statements B-26
Item 12. General Information and History.
Not applicable.
Item 13. Investment Objective and Policies.
Part A contains additional information about the
investment objective and policies of the International
Equity Portfolio (the "Portfolio"), a series of The
Premium Portfolios (the "Trust"). This Part B should
be read in conjunction with Part A.
The investment objective of the Portfolio is long-
term capital growth. Dividend income, if any, is
incidental to this investment objective. The
investment objective of the Portfolio may be changed
without approval by the Portfolio's investors. Of
course, there can be no assurance that the Portfolio
will achieve its investment objective.
Part A contains a discussion of the various types
of securities in which the Portfolio may invest and the
risks involved in such investments. The following
supplements the
<PAGE>
information contained in Part A concerning the
investment objective, policies and techniques of the
Portfolio.
The Portfolio seeks its objective by investing
primarily in common stocks of companies organized in
countries other than the United States, including
developing countries ("non-U.S. issuers"). As a non-
fundamental policy, at least 65% of the value of the
Portfolio's total assets is invested in equity
securities and at least 65% of the value of the
Portfolio's total assets is invested in securities of
issuers organized in at least three countries other
than the United States. For purposes of this policy,
equity securities are defined as common stock,
securities convertible into common stock and trust or
limited partnership interests, and include securities
purchased directly or in the form of sponsored American
Depositary Receipts ("ADRs"), European Depositary
Receipts ("EDRs") or other similar securities
representing common stock of non-U.S. issuers. The
Adviser seeks opportunities to invest in non-U.S.
economies which are growing faster than that of the
U.S.
In selecting common stocks the Adviser emphasizes
securities issued by established companies with medium
to large market capitalizations, i.e., $750 million or
more, and seasoned management teams ("Established
Companies") which the Adviser believes possess above
average prospects for growth. The Adviser may also
select other securities of non-U.S. issuers which it
believes provide an opportunity for appreciation, such
as fixed income securities, convertible and non-
convertible bonds, preferred stock and warrants. The
Portfolio's assets usually consist of issues listed on
securities exchanges, and its long-term non-convertible
debt investments carry at least a Baa rating from
Moody's Investors Service, Inc. ("Moody's") or a BBB
rating from Standard & Poor's Ratings Group ("S&P") or
are determined by the Adviser to be of equivalent
quality.
The Trust has also adopted the following policies
with respect to the Portfolio's investments in (i)
warrants and (ii) securities of issuers with less than
three years' continuous operation. The Trust's
purchases of warrants for the Portfolio will not exceed
5% of the Portfolio's net assets. Included within that
amount, but not exceeding 2% of its net assets, may be
warrants which are not listed on the New York Stock
Exchange or the American Stock Exchange. Any such
warrants will be valued at their market value except
that warrants which are attached to securities at the
time such securities are acquired for the Portfolio
will be deemed to be without value for the purpose of
this restriction. The Trust will not invest more than
5% of the Portfolio's assets in companies which,
including their respective predecessors, have a record
of less than three years' continuous operation.
The policies described above and those described
below are not fundamental and may be changed without
investor approval.
<PAGE>
REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements
collateralized by securities in which the Portfolio may
otherwise invest. Repurchase agreements are agreements
by which the Portfolio purchases a security and
simultaneously commits to resell that security to the
seller (which is usually a member bank of the U.S.
Federal Reserve System or a member firm of the New York
Stock Exchange (or a subsidiary thereof)) at an agreed-
upon date within a number of days (usually not more
than seven) from the date of purchase. The resale
price reflects the purchase price plus an agreed-upon
market rate of interest which is unrelated to the
coupon rate or maturity of the purchased security. A
repurchase agreement involves the obligation of the
seller to pay the agreed upon price, which obligation
is in effect secured by the value of the underlying
security, usually U.S. Government or Government agency
issues. Under the Investment Company Act of 1940, as
amended (the "1940 Act), repurchase agreements may be
considered to be loans by the buyer. The Portfolio's
risk is limited to the ability of the seller to pay the
agreed-upon amount on the delivery date. If the seller
defaults, the underlying security constitutes
collateral for the seller's obligation to pay although
the Portfolio may incur certain costs in liquidating
this collateral and in certain cases may not be
permitted to liquidate this collateral. All repurchase
agreements entered into by the Portfolio are fully
collateralized, with such collateral being marked to
market daily.
SECURITIES OF NON-U.S. ISSUERS
The Portfolio will invest in securities of non-
U.S. issuers. Investing in securities issued by
companies whose principal business activities are
outside the United States may involve significant risks
not present in U.S. investments. For example, the
value of such securities fluctuates based on the
relative strength of the U.S. dollar. In addition,
there is generally less publicly available information
about non-U.S. issuers, particularly those not subject
to the disclosure and reporting requirements of the
U.S. securities laws. Non-U.S. issuers are generally
not bound by uniform accounting, auditing and financial
reporting requirements comparable to those applicable
to U.S. issuers. Investments in securities of non-U.S.
issuers also involve the risk of possible adverse
changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitation on
the removal of funds or other assets of the Portfolio,
political or financial instability or diplomatic and
other developments which would affect such investments.
Further, economies of other countries or areas of the
world may differ favorably or unfavorably from the
economy of the U.S.
It is anticipated that in most cases the best
available market for securities of non-U.S. issuers
would be on exchanges or in over-the-counter markets
located outside the U.S. Non-U.S. securities markets,
while growing in volume and sophistication, are
generally not as developed as those in the U.S., and
securities of some non-U.S. issuers (particularly those
located in developing countries) may be less liquid and
more volatile than
<PAGE>
securities of comparable U.S. companies. Non-U.S.
security trading practices, including those involving
securities settlement where the Portfolio's assets may
be released prior to receipt of payments, may expose
the Portfolio to increased risk in the event of a
failed trade or the insolvency of a non-U.S. broker-
dealer. In addition, non-U.S. brokerage commissions
are generally higher than commissions on securities
traded in the U.S. and may be non-negotiable. In
general, there is less overall governmental supervision
and regulation of non-U.S. securities exchanges,
brokers and listed companies than in the U.S.
Investments in closed-end investment companies
which primarily hold securities of non-U.S. issuers may
entail the risk that the market value of such
investments may be substantially less than their net
asset value and that there would be duplication of
investment management and other fees and expenses.
American Depositary Receipts ("ADRs"), European
Depositary Receipts ("EDRs"), Global Depositary
Receipts ("GDRs") and other forms of depositary
receipts for securities of non-U.S. issuers provide an
alternative method for the Portfolio to make non-U.S.
investments. These securities are not usually
denominated in the same currency as the securities into
which they may be converted. Generally, ADRs, in
registered form, are designed for use in U.S.
securities markets and EDRs and GDRs, in bearer form,
are designed for use in European and global securities
markets. ADRs are receipts typically issued by a U.S.
bank or trust company evidencing ownership of the
underlying securities. EDRs and GDRs are European and
global receipts, respectively, evidencing a similar
arrangement. ADRs, EDRs and GDRs are subject to many
of the same risks that apply to other investments in
non-U.S. securities.
The Portfolio may invest in securities of non-U.S.
issuers that impose restrictions on transfer within the
United States or to United States persons. Although
securities subject to such transfer restrictions may be
marketable abroad, they may be less liquid than
securities of non-U.S. issuers of the same class that
are not subject to such restrictions.
CURRENCY EXCHANGE TRANSACTIONS
Because the Portfolio may buy and sell securities
denominated in currencies other than the U.S. dollar,
and receive interest, dividends and sale proceeds in
currencies other than the U.S. dollar, the Portfolio
may enter into currency exchange transactions to
convert U.S. currency to non-U.S. currency and non-U.S.
currency to U.S. currency, as well as convert one non-
U.S. currency to another non-U.S. currency. The
Portfolio either enters into these transactions on a
spot (i.e., cash) basis at the spot rate prevailing in
the currency exchange markets, or uses forward
contracts to purchase or sell non-U.S. currencies. The
Portfolio may also enter into currency hedging
transactions in an attempt to protect the value of its
assets as measured in U.S. dollars from unfavorable
changes in currency exchange rates and control
regulations. (Although the Portfolio's assets are
valued
<PAGE>
daily in terms of U.S. dollars, the Trust does not
intend to convert the Portfolio's holdings of non-U.S.
currencies into U.S. dollars on a daily basis.) The
Portfolio does not currently intend to speculate in
currency exchange rates or forward contracts.
The Portfolio may convert currency on a spot basis
from time to time, and investors should be aware of the
costs of currency conversion. Although currency
exchange dealers 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. Thus, a dealer may
offer to sell a currency at one rate, while offering a
lesser rate of exchange should the Portfolio desire to
resell that currency to the dealer.
A forward contract involves an obligation to
purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of
the contract, agreed upon by the parties, at a price
set at the time of the contract. These 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 requirement, and no fees or
commissions are charged at any stage for trades.
When the Portfolio enters into a contract for the
purchase or sale of a security denominated in a non-
U.S. currency, it may desire to "lock in" the U.S.
dollar price of the security. By entering into a
forward contract for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of non-U.S.
currency involved in the underlying security
transaction, the Portfolio will be able to protect
against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and
the non-U.S. currency during the period between the
date the security is purchased or sold and the date on
which payment is made or received.
When the Adviser believes that the currency of a
particular country may suffer a substantial decline
against the U.S. dollar, the Portfolio may enter into a
forward contract to sell, for a fixed amount of U.S.
dollars, the amount of non-U.S. currency approximating
the value of some or all of the Portfolio's securities
denominated in such non-U.S. currency. The precise
matching of the forward contract amounts and the value
of the securities involved is not generally possible
since the future value of such securities in non-U.S.
currencies changes as a consequence of market movements
in the value of those securities between the date the
forward contract is entered into and the date it
matures. The projection of a short-term hedging
strategy is highly uncertain. The Portfolio does not
enter into such forward contracts or maintain a net
exposure to such contracts where the consummation of
the contracts obligates the Portfolio to deliver an
amount of non-U.S. currency in excess of the value of
the Portfolio's securities or other assets denominated
in that currency. Under normal circumstances,
consideration of the prospect for currency parities
will be incorporated in the investment decisions made
with regard to overall diversification
<PAGE>
strategies. However, the Adviser believes that it is
important to have the flexibility to enter into such
forward contracts when it determines that the best
interests of the Portfolio will be served.
The Portfolio generally would not enter into a
forward contract with a term greater than one year. At
the maturity of a forward contract, the Portfolio will
either sell the security and make delivery of the non-
U.S. currency, or retain the security and terminate its
contractual obligation to deliver the non-U.S. currency
by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same
maturity date, the same amount of the non-U.S.
currency. If the Portfolio retains the security and
engages in an offsetting transaction, the Portfolio
will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract
prices. If the Portfolio engages in an offsetting
transaction, it may subsequently enter into a new
forward contract to sell the non-U.S. currency. Should
forward prices decline during the period between the
date the Portfolio enters into a forward contract for
the sale of the non-U.S. currency and the date it
enters into an offsetting contract for the purchase of
such currency, the Portfolio will realize a gain to the
extent the selling price of the currency exceeds the
purchase price of the currency. Should forward prices
increase, the Portfolio will suffer a loss to the
extent that the purchase price of the currency exceeds
the selling price of the currency.
It is impossible to forecast with precision the
market value of the Portfolio's securities at the
expiration of a forward contract. Accordingly, it may
be necessary for the Portfolio to purchase additional
non-U.S. currency on the spot market if the market
value of the security is less than the amount of non-
U.S. currency the Portfolio is obligated to deliver and
if a decision is made to sell the security and make
delivery of such currency. Conversely, it may be
necessary to sell on the spot market some of the non-
U.S. currency received upon the sale of the security if
its market value exceeds the amount of such currency
the Portfolio is obligated to deliver.
The Portfolio may also purchase put options on a
non-U.S. currency in order to protect against currency
rate fluctuations. If the Portfolio purchases a put
option on a non-U.S. currency and the value of the U.S.
currency declines, the Portfolio will have the right to
sell the non-U.S. currency for a fixed amount in U.S.
dollars and will thereby offset, in whole or in part,
the adverse effect on the Portfolio which otherwise
would have resulted. Conversely, where a rise in the
U.S. dollar value of another currency is projected, and
where the Portfolio anticipates investing in securities
traded in such currency, the Portfolio may purchase
call options on the non-U.S. currency.
The purchase of such options could offset, at
least partially, the effects of adverse movements in
exchange rates. However, the benefit to the Portfolio
from purchases of non-U.S. currency options will be
reduced by the amount of the premium and related
transaction costs. In addition, where currency
exchange rates do not move in the direction or to the
extent anticipated, the Portfolio could sustain losses
on transactions in non-U.S.
<PAGE>
currency options which would require it to forgo a
portion or all of the benefits of advantageous changes
in such rates.
The Portfolio may write options on non-U.S.
currencies for hedging purposes or otherwise to achieve
its investment objectives. For example, where the
Portfolio anticipates a decline in the value of the
U.S. dollar value of a non-U.S. security due to adverse
fluctuations in exchange rates it could, instead of
purchasing a put option, write a call option on the
relevant currency. If the expected decline occurs, the
option will most likely not be exercised, and the
diminution in value of the security held by the
Portfolio will be offset by the amount of the premium
received.
Similarly, instead of purchasing a call option to
hedge against an anticipated increase in the cost of a
non-U.S. security to be acquired because of an increase
in the U.S. dollar value of the currency in which the
underlying security is primarily traded, the Portfolio
could write a put option on the relevant currency
which, if rates move in the manner projected, will
expire unexercised and allow the Portfolio to hedge
such increased cost up to the amount of the premium.
However, the writing of a currency option will
constitute only a partial hedge up to the amount of the
premium, and only if rates move in the expected
direction. If this does not occur, the option may be
exercised and the Portfolio would be required to
purchase or sell the underlying currency at a loss
which may not be offset by the amount of the premium.
Through the writing of options on currencies, the
Portfolio also may be required to forgo all or a
portion of the benefits which might otherwise have been
obtained from favorable movements in exchange rates.
Put and call options on non-U.S. currencies
written by the Portfolio will be covered by segregation
of cash, short-term money market instruments or high
quality debt securities in an account with the
custodian in an amount sufficient to discharge the
Portfolio's obligations with respect to the option, by
acquisition of the non-U.S. currency or of a right to
acquire such currency (in the case of a call option) or
the acquisition of a right to dispose of the currency
(in the case of a put option), or in such other manner
as may be in accordance with the requirements of any
exchange on which, or the counterparty with which, the
option is traded and applicable laws and regulations.
Investing in ADRs presents many of the same risks
regarding currency exchange rates as investing directly
in securities denominated in currencies other than the
U.S. dollar. Because the securities underlying ADRs
are traded primarily in non-U.S. currencies, changes in
currency exchange rates will affect the value of ADRs.
For example, a decline in the U.S. dollar value of
another currency in which securities are primarily
traded will reduce the U.S. dollar value of such
securities, even if their value in the other currency
remains constant, and thus will reduce the value of the
ADRs covering such securities. The Portfolio may
employ any of the above described non-U.S. currency
hedging techniques to protect the value of its assets
invested in ADRs.
<PAGE>
The Portfolio's dealings in non-U.S. currency
contracts are limited to the transactions described
above. Of course, the Portfolio is not required to
enter into such transactions and does not do so unless
deemed appropriate by the Adviser. It should also be
realized that these methods of protecting the value of
the Portfolio's securities against a decline in the
value of a currency do not eliminate fluctuations in
the underlying prices of the securities. Additionally,
although such contracts tend to minimize the risk of
loss due to a decline in the value of the hedged
currency, they also tend to limit any potential gain
which might result should the value of such currency
increase.
The Portfolio has established procedures
consistent with policies of the Securities and Exchange
Commission (the "SEC") concerning forward contracts.
Since those policies currently recommend that an amount
of the Portfolio's assets equal to the amount of the
purchase be held aside or segregated to be used to pay
for the commitment, the Portfolio expects always to
have cash, cash equivalents or high quality debt
securities available sufficient to cover any
commitments under these contracts or to limit any
potential risk.
SHORT SALES "AGAINST THE BOX"
In a short sale, the Portfolio sells a borrowed
security and has a corresponding obligation to the
lender to return the identical security. The
Portfolio, in accordance with applicable investment
restrictions, may engage in short sales only if at the
time of the short sale it owns or has the right to
obtain, at no additional cost, an equal amount of the
security being sold short. This investment technique
is known as a short sale "against the box."
In a short sale, the seller does not immediately
deliver the securities sold and is said to have a short
position in those securities until delivery occurs. If
the Portfolio engages in a short sale, the collateral
for the short position is maintained for the Portfolio
by the custodian or qualified sub-custodian. While the
short sale is open, an amount of securities equal in
kind and amount to the securities sold short or
securities convertible into or exchangeable for such
equivalent securities are maintained in a segregated
account for the Portfolio. These securities constitute
the Portfolio's long position.
The Portfolio does not engage in short sales
against the box for investment purposes. The Portfolio
may, however, make a short sale against the box as a
hedge, when it believes that the price of a security
may decline, causing a decline in the value of a
security owned by the Portfolio (or a security
convertible or exchangeable for such security), or when
the Portfolio wants to sell the security at an
attractive current price, but also wishes to defer
recognition of gain or loss for federal income tax
purposes or for purposes of satisfying certain tests
applicable to regulated investment companies under the
Internal Revenue Code. In such case, any future losses
in the Portfolio's long position should be reduced by a
gain in the short position. Conversely, any gain in
the long position should be reduced by a loss in the
<PAGE>
short position. The extent to which such gains or
losses are reduced depends upon the amount of the
security sold short relative to the amount the
Portfolio owns. There are certain additional
transaction costs associated with short sales against
the box, but the Portfolio endeavors to offset these
costs with the income from the investment of the cash
proceeds of short sales.
The Adviser does not expect that more than 40% of
the Portfolio's total assets would be involved in short
sales against the box. The Adviser does not currently
intend to engage in such sales.
LENDING OF SECURITIES
Consistent with applicable regulatory requirements
and in order to generate income, the Portfolio may lend
its securities to broker-dealers and other
institutional borrowers. Such loans will usually be
made only to member banks of the U.S. Federal Reserve
System and to member firms of the New York Stock
Exchange (and subsidiaries thereof). Loans of
securities would be secured continuously by collateral
in cash, cash equivalents, or U.S. Treasury obligations
maintained on a current basis at an amount at least
equal to the market value of the securities loaned.
The cash collateral would be invested in high quality
short-term instruments. The Portfolio would have the
right to call a loan and obtain the securities loaned
at any time on customary industry settlement notice
(which will not usually exceed five days). During the
existence of a loan, the Portfolio would continue to
receive the equivalent of the interest or dividends
paid by the issuer on the securities loaned and would
also receive compensation based on investment of the
collateral. The Portfolio would not, however, have the
right to vote any securities having voting rights
during the existence of the loan, but would call the
loan in anticipation of an important vote to be taken
among holders of the securities or of the giving or
withholding of their consent on a material matter
affecting the investment. As with other extensions of
credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower
fail financially. However, the loans would be made
only to entities deemed by the Adviser to be of good
standing, and when, in the judgment of the Adviser, the
consideration which can be earned currently from loans
of this type justifies the attendant risk. If the
Adviser determines to make loans, it is not intended
that the value of the securities loaned by the
Portfolio would exceed 33 1/3% of the value of its
total assets.
WHEN-ISSUED SECURITIES
The Portfolio may purchase securities on a "when-
issued" or on a "forward delivery" basis. It is
expected that, under normal circumstances, the
Portfolio would take delivery of such securities. When
the Portfolio commits to purchase a security on a "when-
issued" or on a "forward delivery" basis, it sets up
procedures consistent with SEC policies. Since those
policies currently require that an amount of the
Portfolio's assets equal
<PAGE>
to the amount of the purchase be held aside or
segregated to be used to pay for the commitment, the
Portfolio will always have cash, cash equivalents or
high quality debt securities sufficient to cover any
commitments or to limit any potential risk. However,
even though the Portfolio does not intend to make such
purchases for speculative purposes and intends to
adhere to the provisions of SEC policies, purchases of
securities on such bases may involve more risk than
other types of purchases. For example, the Portfolio
may have to sell assets which have been set aside in
order to meet redemptions. Also, if the Adviser
determines it is advisable as a matter of investment
strategy to sell the "when-issued" or "forward
delivery" securities, the Portfolio would be required
to meet its obligations from the then available cash
flow or the sale of securities, or, although it would
not normally expect to do so, from the sale of the
"when-issued" or "forward delivery" securities
themselves (which may have a value greater or less than
the Portfolio's payment obligation).
RULE 144A SECURITIES
The Portfolio may purchase securities that are not
registered ("Rule 144A securities") under the
Securities Act of 1933 (the "1933 Act"), but can be
offered and sold to "qualified institutional buyers"
under Rule 144A under the 1933 Act. However, the
Portfolio will not invest more than 15% of its net
assets in illiquid investments, which includes
securities for which there is no readily available
market, securities subject to contractual restrictions
on resale and Rule 144A securities, unless the Trustees
of the Trust determine, based on the trading markets
for the specific Rule 144A security, that it is liquid.
The Trustees may adopt guidelines and delegate to the
Adviser the daily function of determining and
monitoring liquidity of Rule 144A securities. The
Trustees, however, retain oversight and are ultimately
responsible for the determinations.
Since it is not possible to predict with assurance
exactly how the market for Rule 144A securities will
develop, the Trustees will carefully monitor the
Portfolio's investments in Rule 144A securities,
focusing on such factors, among others, as valuation,
liquidity and availability of information. The
liquidity of investments in Rule 144A securities could
be impaired if trading in Rule 144A securities does not
develop or if qualified institutional buyers become for
a time uninterested in purchasing Rule 144A securities.
INVESTMENT RESTRICTIONS
FUNDAMENTAL RESTRICTIONS
The Trust, on behalf of the Portfolio, has adopted
the following policies which may not be changed without
approval by holders of a majority of the outstanding
voting securities of the Portfolio, which as used in
this Part B means the vote of the lesser of (i) 67% or
more of the outstanding voting securities of the
Portfolio present at a meeting at which the holders of
more than 50% of the outstanding voting securities of
the Portfolio are
<PAGE>
present or represented by proxy, or (ii) more than 50%
of the outstanding voting securities of the Portfolio.
The term "voting securities" as used in this paragraph
has the same meaning as in the 1940 Act.
The Portfolio may not:
(1) Borrow money, except that as a temporary
measure for extraordinary or emergency purposes it may
borrow from banks in an amount not to exceed 1/3 of the
current value of its net assets, including the amount
borrowed (the Portfolio may not purchase any securities
at any time at which borrowings exceed 5% of the total
assets of the Portfolio, taken at market value). It is
intended that the Portfolio would borrow money only
from banks and only to accommodate requests for the
repurchase of beneficial interests in the Portfolio
while effecting an orderly liquidation of portfolio
securities.
(2) Purchase any security or evidence of interest
therein on margin, except that such short-term credit
may be obtained for the Portfolio as may be necessary
for the clearance of purchases and sales of securities.
(3) Underwrite securities issued by other
persons, except insofar as the Trust acting on behalf
of the Portfolio may technically be deemed an
underwriter under the Securities Act of 1933 in selling
a security.
(4) Make loans to other persons except (a)
through the lending of its portfolio securities and
provided that any such loans not exceed 33-1/3% of the
Portfolio's net assets, (b) through the use of fixed
time deposits or repurchase agreements or the purchase
of short-term obligations or (c) by purchasing a
portion of an issue of debt securities of types
commonly distributed privately to financial
institutions. The purchase of short-term commercial
paper or a portion of an issue of debt securities which
is part of an issue to the public shall not be
considered the making of a loan.
(5) Purchase or sell real estate (including
limited partnership interests but excluding securities
secured by real estate or interests therein), interests
in oil, gas or mineral leases, commodities or commodity
contracts in the ordinary course of business (the
Portfolio reserves the freedom of action to hold and to
sell real estate acquired as a result of the ownership
of securities by the Portfolio).
(6) With respect to 75% of the Portfolio's total
assets, purchase securities of any issuer if such
purchase at the time thereof would cause more than 5%
of the Portfolio's assets (taken at market value) to be
invested in the securities of such issuer (other than
securities or obligations issued or guaranteed by the
United States or any agency or instrumentality of the
United States); provided that for purposes of this
restriction the issuer
<PAGE>
of an option or futures contract shall not be deemed to
be the issuer of the security or securities underlying
such contract.
(7) With respect to 75% of the total assets of
the Portfolio, purchase securities of any issuer if
such purchase at the time thereof would cause more than
10% of the voting securities of such issuer to be held
by the Portfolio.
(8) Concentrate its investments in any particular
industry (including the securities of foreign
governments or multilateral lending institutions),
except that positions in futures or options contracts
shall not be subject to this restriction.
(9) Issue any senior security (as that term is
defined in the 1940 Act) if such issuance is
specifically prohibited by the 1940 Act or the rules
and regulations promulgated thereunder, except as
appropriate to evidence a debt incurred without
violating Investment Restriction (1) above.
STATE AND FEDERAL RESTRICTIONS
In order to comply with certain state and federal
statutes and policies the Portfolio does not as a
matter of operating policy:
(i) borrow money for any purpose in excess of 10%
of the net assets of the Portfolio (taken at cost)
(moreover, the Portfolio will not purchase any
securities for the Portfolio at any time at which
borrowings exceed 5% of the total assets of the
Portfolio (taken at market value)),
(ii) pledge, mortgage or hypothecate for any
purpose in excess of 10% of the net assets of the
Portfolio (taken at market value),
(iii) sell any security which the Portfolio
does not own unless by virtue of its ownership of other
securities there is at the time of sale a right to
obtain securities, without payment of further
consideration, equivalent in kind and amount to the
securities sold and provided that if such right is
conditional the sale is made upon the same conditions,
(iv) invest for the purpose of exercising control
or management,
(v) purchase securities issued by any registered
investment company, except by purchase in the open
market where no commission or profit to a sponsor or
dealer results from such purchase other than the
customary broker's commission, or except when such
purchase, though not made in the open market, is part
of a plan of merger or consolidation; provided,
however, that the Portfolio will not purchase the
securities of any registered investment company if such
purchase at the time thereof would
<PAGE>
cause more than 10% of the total assets of the
Portfolio (taken in each case at the greater of cost or
market value) to be invested in the securities of such
issuers or would cause more than 3% of the outstanding
voting securities of any such issuer to be held for the
Portfolio (for purposes of this clause (v) securities
of non-U.S. banks shall be treated as investment
company securities, except that debt securities and non-
voting preferred stock of non-U.S. banks are not
subject to the 10% limitation described herein),
(vi) taken together with any investments described
in clause (ix) below, invest more than 10% of the net
assets of the Portfolio in securities that are not
readily marketable, including debt securities for which
there is no established market and fixed time deposits
and repurchase agreements maturing in more than seven
days,
(vii) purchase or retain any securities issued
by an issuer any of whose officers, directors, trustees
or security holders is an officer or Trustee of the
Trust, or is an officer or director of the Adviser, if
after the purchase of the securities of such issuer by
the Portfolio, one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or
securities, or both, all taken at market value, of such
issuer, and such persons owning more than 1/2 of 1% of
such shares or securities together own beneficially
more than 5% of such shares or securities, or both, all
taken at market value,
(viii) write, purchase or sell any put or call
option or any combination thereof or enter into any
futures contract, except that this restriction shall
not prevent the Portfolio from entering into
transactions involving non-U.S. currencies as described
in Part A and this Part B,
(ix) taken together with any investments described
in clause (vi) above, invest in securities which are
subject to legal or contractual restrictions on resale
(other than fixed time deposits, repurchase agreements
maturing in not more than seven days and securities
which may be resold pursuant to Rule 144A under the
1933 Act if the Board of Trustees determines that a
liquid market exists for such securities) if, as a
result thereof, more than 10% of the net assets of the
Portfolio (taken at market value) would be so invested
(including fixed time deposits and repurchase
agreements maturing in more than seven days), or
(x) make short sales of securities or maintain a
short position, unless at all times when a short
position is open it owns an equal amount of such
securities or securities convertible into or
exchangeable, without payment of any further
consideration, for securities of the same issue as, and
equal in amount to, the securities sold short, and
unless not more than 10% of the net assets of the
Portfolio (taken at market value) is held as collateral
for such sales at any one time (the Portfolio does not
presently intend to make such short sales for
investment purposes).
<PAGE>
These policies are not fundamental and may be
changed by the Trust without the approval of the
holders of the beneficial interests in the Portfolio in
response to changes in the various state and federal
requirements.
As a non-fundamental policy, the Trust on behalf
of the Portfolio will not knowingly invest in
securities which are subject to legal or contractual
restrictions on resale (other than repurchase
agreements maturing in not more than seven days) if, as
a result thereof, more than 15% of the Portfolio's net
assets (taken at market value) would be so invested
(including repurchase agreements maturing in more than
seven days).
PERCENTAGE AND RATING RESTRICTIONS
If a percentage or rating restriction on
investment or utilization of assets set forth above or
referred to in Part A is adhered to at the time an
investment is made or assets are so utilized, a later
change in percentage resulting from changes in the
value of the securities or a later change in the rating
of the securities held for the Portfolio will not be
considered a violation of policy.
Item 14. Management of the Trust.
The Trustees and officers of the Trust and their
principal occupations during the past five years are
set forth below. Their titles may have varied during
that period. Asterisks indicate that those Trustees
and officers are "interested persons" (as defined in
the 1940 Act) of the Trust. Unless otherwise indicated
below, the address of each Trustee and officer is 6 St.
James Avenue, Boston, Massachusetts. The address of
the Trust is Elizabethan Square, George Town, Grand
Cayman, Cayman Islands, British West Indies.
TRUSTEES
ELLIOTT J. BERV -- Chairman and Director, Catalyst,
Inc. (Management Consultants)(since June, 1992);
President, Chief Operating Officer and Director, Deven
International, Inc. (International Consultants)(June,
1991 to June, 1992); President and Director, Elliott J.
Berv & Associates (Management Consultants)(since May,
1984). His address is 15 Stornoway Drive, Cumberland
Foreside, Maine.
PHILIP W. COOLIDGE* -- President of the Trust; Chief
Executive Officer, Signature Financial Group, Inc. and
The Landmark Funds Broker-Dealer Services, Inc. (since
December, 1988).
<PAGE>
MARK T. FINN -- President and Director, Delta
Financial, Inc. (since June, 1983); Chairman of the
Board and Chief Executive Officer, FX 500 Ltd.
(Commodity Trading Advisory Firm) (since April, 1990);
Director, Vantage Consulting Group, Inc. (since
October, 1988). His address is 3500 Pacific Avenue,
P.O. Box 539, Virginia Beach, Virginia.
WALTER E. ROBB, III -- President, Benchmark Consulting
Group, Inc. (since 1991); Principal, Robb Associates
(corporate financial advisers)(since 1978); President,
Benchmark Advisors, Inc. (Corporate Financial
Advisors)(since 1989); Trustee of certain registered
investment companies in the MFS Family of Funds. His
address is 35 Farm Road, Sherborn, Massachusetts.
OFFICERS
PHILIP W. COOLIDGE* -- President of the Trust; Chief
Executive Officer, Signature Financial Group, Inc. and
The Landmark Funds Broker-Dealer Services, Inc. (since
December, 1988).
JAMES B. CRAVER* -- Secretary and Treasurer of the
Trust; Senior Vice President and General Counsel,
Signature Financial Group, Inc. and The Landmark Funds
Broker-Dealer Services, Inc. (since January, 1991);
Partner, Baker & Hostetler (Attorneys) (prior to
January, 1991).
SUSAN JAKUBOSKI* -- Vice President, Assistant Treasurer
and Assistant Secretary of the Trust (since August,
1994); Manager, Signature Financial Group (Cayman) Ltd.
(since August, 1994); Senior Fund Administrator,
Signature Financial Group, Inc. (since August, 1994);
Assistant Treasurer, Signature Broker-Dealer Services,
Inc. (since September, 1994); Fund Compliance
Administrator, Concord Financial Group (November, 1990
to August, 1994); Senior Fund Accountant, Neuberger &
Berman Management, Inc. (from February, 1988 to
November, 1990); Customer Service Representative,
I.B.J. Schroder (prior to 1988). Her address is
Elizabethan Square, George Town, Grand Cayman, Cayman
Islands, British West Indies.
MOLLY S. MUGLER* -- Assistant Secretary of the Trust;
Legal Counsel and Assistant Secretary, Signature
Financial Group, Inc. (since December, 1988); Assistant
Secretary, The Landmark Funds Broker-Dealer Services,
Inc. (since December, 1988).
BARBARA M. O'DETTE* -- Assistant Treasurer of the
Trust; Assistant Treasurer, Signature Financial Group,
Inc. and The Landmark Funds Broker-Dealer Services,
Inc. (since December, 1988).
<PAGE>
The Trustees and officers of the Trust also hold
comparable positions with certain other funds for which
SFG or an affiliate serves as the administrator.
The Declaration of Trust provides that the Trust
will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with
litigation in which they may be involved because of
their offices with the Trust, unless, as to liability
to the Trust or its investors, it is finally
adjudicated that they engaged in willful misfeasance,
bad faith, gross negligence or reckless disregard of
the duties involved in their offices, or unless with
respect to any other matter it is finally adjudicated
that they did not act in good faith in the reasonable
belief that their actions were in the best interests of
the Trust. In the case of settlement, such
indemnification will not be provided unless it has been
determined by a court or other body approving the
settlement or other disposition, or by a reasonable
determination, based upon a review of readily available
facts, by vote of a majority of disinterested Trustees
or in a written opinion of independent counsel, that
such officers or Trustees have not engaged in willful
misfeasance, bad faith, gross negligence or reckless
disregard of their duties.
Item 15. Control Persons and Principal Holders of
Securities.
As of December 31, 1994, Landmark International
Equity Fund (the "Fund") owned approximately 90.1%, and
Citi International Equity Fund, Ltd. owned
approximately 9.9%, of the outstanding interests in the
Portfolio. Because the Fund controls the Portfolio,
the Fund could take actions without the approval of any
other investor. The Fund has informed the Portfolio
that whenever it is requested to vote on matters
pertaining to the fundamental policies of the
Portfolio, it will hold a meeting of its shareholders
and will cast its vote as instructed by its
shareholders. It is anticipated that any other
investor in the Portfolio which is an investment
company registered under the 1940 Act would follow the
same or a similar practice. The Fund is a series of
Landmark International Equity Fund, a Massachusetts
business trust organized on August 7, 1990 and
registered under the 1940 Act as an investment company.
Item 16. Investment Advisory and Other Services.
Citibank, N.A. ("Citibank" or the "Adviser")
manages the assets of the Portfolio pursuant to an
investment advisory agreement (the "Advisory
Agreement"). Subject to such policies as the Board of
Trustees may determine, the Adviser manages the
Portfolio's securities and makes investment decisions
for the Portfolio. The Adviser furnishes at its own
expense all services, facilities and personnel
necessary in connection with managing the Portfolio's
investments and effecting securities transactions for
the Portfolio. The Advisory Agreement continues in
effect until September 13, 1995 and thereafter as long
as such continuance is specifically approved at least
annually by the Board of Trustees or by a vote of a
majority of the outstanding voting securities of
<PAGE>
the Portfolio, and, in either case, by a majority of
the Trustees who are not parties to the Advisory
Agreement or interested persons of any such party, at a
meeting called for the purpose of voting on the
Advisory Agreement.
The Advisory Agreement provides that the Adviser
may render services to others. The Advisory Agreement
is terminable without penalty on not more than 60 days'
nor less than 30 days' written notice by the Trust when
authorized either by a vote of a majority of the
outstanding voting securities of the Portfolio or by a
vote of a majority of the Board of Trustees, or by the
Adviser on not more than 60 days' nor less than 30
days' written notice, and will automatically terminate
in the event of its assignment. The Advisory Agreement
provides that neither the Adviser nor its personnel
shall be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or
for any act or omission in the execution of security
transactions for the Portfolio, except for willful
misfeasance, bad faith or gross negligence or reckless
disregard of its or their obligations and duties under
the Advisory Agreement. For the period May 1, 1994
(commencement of operations) to December 31, 1994, the
investment advisory fee paid to Citibank under the
Advisory Agreement was $218,950.
Pursuant to an administrative services agreement
(the "Administrative Services Agreement"), SFG (in its
capacity under the Administrative Services Agreement,
the "Administrator") provides the Trust with general
office facilities and supervises the overall
administration of the Trust, including, among other
responsibilities, the negotiation of contracts and fees
with, and the monitoring of performance and billings
of, the Trust's independent contractors and agents; the
preparation and filing of all documents required for
compliance by the Trust with applicable laws and
regulations; and arranging for the maintenance of books
and records of the Trust. The Administrative Services
Agreement with SFG continues in effect if such
continuance is specifically approved at least annually
by the Board of Trustees or by a vote of a majority of
the outstanding voting securities of the Trust and, in
either case, by a majority of the Trustees who are not
parties to the Administrative Services Agreement or
interested persons of any such party. The
Administrator provides persons satisfactory to the
Board of Trustees to serve as Trustees and officers of
the Trust. Such Trustees and officers, as well as
certain other employees and Trustees of the Trust, may
be directors, officers or employees of the
Administrator or its affiliates. For the period May 1,
1994 (commencement of operations) through December 31,
1994, the Trust paid the Administrator $10,948 under
the Administrative Services Agreement with respect to
the Portfolio.
The Administrative Services Agreement provides
that SFG may render administrative services to others.
The Administrative Services Agreement terminates
automatically if it is assigned and may be terminated
without penalty by vote of a majority of the
outstanding voting securities of the Trust or by either
party on not more than 60 days' nor less than 30 days'
written notice. The Administrative Services Agreement
also provides that neither SFG, as the Administrator,
nor its personnel shall be liable for any
<PAGE>
error of judgment or mistake of law or for any act or
omission in the administration or management of the
Trust, except for willful misfeasance, bad faith or
gross negligence in the performance of its or their
duties or by reason of reckless disregard of its or
their obligations and duties under the Administrative
Services Agreement.
SFG is a wholly-owned subsidiary of Signature
Financial Group, Inc. SFG is a company organized under
the laws of the Cayman Islands. Its principal place of
business is in George Town, Grand Cayman, British West
Indies.
Pursuant to a sub-administrative services
agreement, Citibank performs such sub-administrative
duties for the Trust as from time to time are agreed
upon by Citibank and SFG. Citibank's sub-
administrative duties may include providing equipment
and clerical personnel necessary for maintaining the
Trust's organization, participation in the preparation
of documents required for compliance by the Trust with
applicable laws and regulations, the preparation of
certain documents in connection with meetings of
Trustees and shareholders, and other functions which
would otherwise be performed by the Administrator. For
performing such sub-administrative services, Citibank
receives compensation as from time to time is agreed
upon by SFG, not in excess of the amount paid to SFG
for its services under the Administrative Services
Agreement with the Trust. All such compensation is
paid by SFG.
The Trust has adopted an administrative services
plan (the "Administrative Plan") which provides that
the Trust may obtain the services of an administrator,
a transfer agent and a custodian, and may enter into
agreements providing for the payment of fees for such
services. Under the Administrative Plan, the
administrative services fee payable to the
Administrator from the Portfolio may not exceed 0.05%
of the Portfolio's average daily net assets on an
annualized basis for its then-current fiscal year.
The Administrative Plan continues in effect if
such continuance is specifically approved at least
annually by a vote of both a majority of the Trustees
and a majority of the Trustees who are not "interested
persons" of the Portfolio and who have no direct or
indirect financial interest in the operation of the
Administrative Plan or in any agreement related to such
Plan ("Qualified Trustees"). The Administrative Plan
requires that the Trust provide to the Board of
Trustees and the Board of Trustees review, at least
quarterly, a written report of the amounts expended
(and the purposes therefor) under the Administrative
Plan. The Administrative Plan may be terminated at any
time by a vote of a majority of the Qualified Trustees
or, with respect to the Portfolio, by a vote of a
majority of the outstanding voting securities of the
Portfolio. The Administrative Plan may not be amended
to increase materially the amount of permitted expenses
thereunder without the approval of a majority of the
outstanding voting securities of the Trust and may not
be materially amended in any case without a vote of the
majority of both the Trustees and the Qualified
Trustees.
<PAGE>
The Trust, on behalf of the Portfolio, has entered
into a Custodian Agreement with Investors Bank & Trust
Company ("IBT") pursuant to which IBT acts as custodian
for the Portfolio. The Trust, on behalf of the
Portfolio, has entered into a Fund Accounting Agreement
with Signature Financial Services, Inc. ("SFSI")
pursuant to which SFSI provides fund accounting
services to the Portfolio. Pursuant to a Transfer
Agency and Service Agreement with the Trust, on behalf
of the Portfolio, SFSI provides transfer agency
services to the Portfolio.
The principal business address of IBT is One
Lincoln Plaza, Boston, Massachusetts 02111. The
address of SFSI is 6 St. James Avenue Boston,
Massachusetts 02116.
Price Waterhouse are the chartered accountants for
the Trust, providing audit services, and assistance and
consultation with respect to the preparation of filings
with the U.S. Securities and Exchange Commission. The
address of Price Waterhouse is Suite 3000, 1 First
Canadian Place, Toronto, Ontario M5X 1H7, Canada.
Item 17. Brokerage Allocation and Other Practices.
The Trust trades securities for the Portfolio if
it believes that a transaction net of costs (including
custodian charges) will help achieve the Portfolio's
investment objectives. Changes in the Portfolio's
investments are made without regard to the length of
time a security has been held, or whether a sale would
result in the recognition of a profit or loss.
Therefore, the rate of turnover is not a limiting
factor when changes are appropriate. The turnover rate
for the Portfolio is not expected to exceed 100%
annually. Specific decisions to purchase or sell
securities for the Portfolio are made by a portfolio
manager who is an employee of the Adviser and who is
appointed and supervised by its senior officers. The
portfolio manager may serve other clients of the
Adviser in a similar capacity.
The primary consideration in placing portfolio
securities transactions with broker-dealers for
execution is to obtain and maintain the availability of
execution at the most favorable prices and in the most
effective manner possible. The Adviser attempts to
achieve this result by selecting broker-dealers to
execute transactions on behalf of the Portfolio and
other clients of the Adviser on the basis of their
professional capability, the value and quality of their
brokerage services, and the level of their brokerage
commissions. In the case of securities traded in the
over-the-counter market (where no stated commissions
are paid but the prices include a dealer's markup or
markdown), the Adviser normally seeks to deal directly
with the primary market makers, unless in its opinion,
best execution is available elsewhere. In the case of
securities purchased from underwriters, the cost of
such securities generally includes a fixed underwriting
commission or concession. From time to time,
soliciting dealer fees are available to the Adviser on
the tender of the Portfolio's securities in so-called
tender or exchange offers. Such soliciting dealer fees
are in effect recaptured for the Portfolio by the
Adviser. At present no other recapture arrangements
are in effect.
<PAGE>
Under the Advisory Agreement, in connection with
the selection of such brokers or dealers and the
placing of such orders, the Adviser is directed to seek
for the Portfolio in its best judgment, prompt
execution in an effective manner at the most favorable
price. Subject to this requirement of seeking the most
favorable price, securities may be bought from or sold
to broker-dealers who have furnished statistical,
research and other information or services to the
Adviser or the Portfolio, subject to any applicable
laws, rules and regulations.
The investment advisory fee that the Portfolio
pays to the Adviser will not be reduced as a
consequence of the Adviser's receipt of brokerage and
research services. While such services are not
expected to reduce the expenses of the Adviser, the
Adviser would, through the use of the services, avoid
the additional expenses which would be incurred if it
should attempt to develop comparable information
through its own staff.
In certain instances there may be securities that
are suitable as an investment for the Portfolio as well
as for one or more of the Adviser's other clients.
Investment decisions for the Portfolio and for the
Adviser's other clients are made with a view to
achieving their respective investment objectives. It
may develop that a particular security is bought or
sold for only one client even though it might be held
by, or bought or sold for, other clients. Likewise, a
particular security may be bought for one or more
clients when one or more clients are selling the same
security. Some simultaneous transactions are
inevitable when several clients receive investment
advice from the same investment adviser, particularly
when the same security is suitable for the investment
objectives of more than one client. When two or more
clients are simultaneously engaged in the purchase or
sale of the same security, the securities are allocated
among clients in a manner believed to be equitable to
each. It is recognized that in some cases this system
could adversely affect the price of or the size of the
position obtainable for the security for the Portfolio.
When purchases or sales of the same security for the
Portfolio and for other portfolios managed by the
Adviser occur contemporaneously, the purchase or sale
orders may be aggregated in order to obtain any price
advantages available to large volume purchases or
sales.
For the period May 1, 1994 to December 31, 1994,
the Portfolio paid brokerage commissions of $48,435.
Item 18. Capital Stock and Other Securities.
Under the Declaration of Trust, the Trustees are
authorized to issue beneficial interests in the Trust
and to establish series, each of which shall be a
subtrust, the beneficial interests in which shall be
separate and distinct from the beneficial interests in
any other series. The Portfolio is one of the series
of the Trust. Investors in the Portfolio are entitled
to participate pro rata in distributions of taxable
income, loss, gain and credit of the Portfolio. Upon
liquidation or dissolution of the Portfolio, investors
are entitled to share pro rata in the Portfolio's net
assets available for distribution to its
<PAGE>
investors. Interests in the Portfolio have no
preference, pre-emptive, conversion or similar rights
and are fully paid and non-assessable, except as set
forth below. Interests in the Portfolio may not be
transferred.
Each investor is entitled to a vote in proportion
to its percentage of the aggregate beneficial interests
in the Portfolio. Investors in the Portfolio do not
have cumulative voting rights, and investors holding
more than 50% of the aggregate beneficial interests in
the Trust may elect all of the Trustees if they choose
to do so and in such event the other investors in the
Trust would not be able to elect any Trustee. The
Trust is not required to hold, and has no current
intention of holding, annual meetings of investors but
the Trust will hold special meetings of investors when
in the judgment of the Trustees it is necessary or
desirable to submit matters for an investor vote.
The Trust may enter into a merger or
consolidation, or sell all or substantially all of its
assets, if approved by a vote of a majority, as defined
in the 1940 Act, of the holders of the Trust's
outstanding voting securities voting as a single class,
or of the affected series of the Trust, as the case may
be, or if authorized by an instrument in writing
without a meeting, consented to by holders of not less
than a majority of the interests of the affected
series. However, if the Trust or the affected series
is the surviving entity of the merger, consolidation or
sale of assets, no vote of interest holders is
required. Any series of the Trust may be dissolved (i)
by the affirmative vote of not less than two-thirds of
the outstanding beneficial interests in such series at
any meeting of holders of beneficial interests or by an
instrument in writing signed by a majority of the
Trustees and consented to by not less than two-thirds
of the outstanding beneficial interests, (ii) by the
Trustees by written notice to holders of the beneficial
interests in the series or (iii) upon the bankruptcy or
expulsion of a holder of a beneficial interest in the
series, unless the remaining holders of beneficial
interests, by majority vote, agree to continue the
series. The Trust may be dissolved by action of the
Trustees upon the dissolution of the last remaining
series.
The Portfolio is a series of the Trust, organized
as a trust under the laws of the State of New York.
The Trust's Declaration of Trust provides that
investors in the Portfolio are each liable for all
obligations of the Portfolio. The Declaration of Trust
also provides that the Trust may maintain appropriate
insurance (for example, fidelity bonding and errors and
omissions insurance) for the protection of the Trust,
its investors, Trustees, officers, employees and agents
covering possible tort and other liabilities. Thus,
the risk of an investor incurring financial loss on
account of investor liability is limited to
circumstances in which both inadequate insurance
existed and the Trust itself was unable to meet its
obligations. It is not expected that the liabilities
of the Portfolio would ever exceed its assets.
The Declaration of Trust further provides that
obligations of the Trust are not binding upon the
Trustees individually and that the Trustees will not be
liable for any action or failure to act, but nothing in
the Declaration of Trust protects a Trustee
<PAGE>
against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
Item 19. Purchase, Redemption and Pricing of
Securities.
Beneficial interests in the Portfolio are issued
solely in private placement transactions which do not
involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the
Portfolio may only be made by investment companies,
common or commingled trust funds or similar
organizations or entities which are "accredited
investors" within the meaning of Regulation D under the
1933 Act. This Registration Statement does not
constitute an offer to sell, or the solicitation of an
offer to buy, any "security" within the meaning of the
1933 Act.
The net asset value of the Portfolio (i.e., the
value of its securities and other assets less its
liabilities, including expenses payable or accrued) is
determined each day during which the New York Stock
Exchange (the "Exchange") is open for trading
("Business Day"). As of the date of this Registration
Statement, the Exchange is open for trading every
weekday except for the following holidays (or the days
on which they are observed): New Year's Day,
Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. This determination of net asset value
of the Portfolio is made once each day as of the close
of regular trading on the Exchange. As set forth in
more detail below, purchases and withdrawals will be
effected at the time of determination of net asset
value next following the receipt of any purchase or
withdrawal order.
For the purpose of calculating the Portfolio's net
asset value, all assets and liabilities initially
expressed in non-U.S. currencies will be converted into
U.S. dollars at the prevailing market rates at the time
of valuation. Equity securities are valued at the last
sale price on the exchange on which they are primarily
traded or on the NASDAQ system for unlisted national
market issues, or at the last quoted bid price for
securities in which there were no sales during the day
or for unlisted securities not reported on the NASDAQ
system. Securities listed on a non-U.S. exchange are
valued at the last quoted sale price available before
the time when net assets are valued. Bonds and other
fixed income securities (other than short-term
obligations) are valued on the basis of valuations
furnished by a pricing service, use of which has been
approved by the Board of Trustees of the Trust. In
making such valuations, the pricing service utilizes
both dealer-supplied valuations and electronic data
processing techniques that take into account
appropriate factors such as institutional-size trading
in similar groups of securities, yield, quality, coupon
rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon
quoted prices or exchange or over-the-counter prices,
since such valuations are believed to reflect more
accurately the fair value of such securities. Short-
term obligations (maturing in 60 days or less) are
valued at amortized cost, which constitutes fair value
as determined by the Board of Trustees. Futures
contracts are normally valued at the settlement
<PAGE>
price on the exchange on which they are traded.
Securities for which there are no such valuations are
valued at fair value as determined in good faith by or
at the direction of the Board of Trustees.
Trading in securities on most non-U.S. exchanges
and over-the-counter markets is normally completed
before the close of regular trading on the Exchange and
may also take place on days on which the Exchange is
closed. If events materially affecting the value of
non-U.S. securities occur between the time when the
exchange on which they are traded closes and the time
when a Fund's net asset value is calculated, such
securities will be valued at fair value in accordance
with procedures established by and under the general
supervision of the Board of Trustees.
Interest income on long-term obligations held for
the Portfolio is determined on the basis of interest
accrued plus amortization of "original issue discount"
(generally, the difference between issue price and
stated redemption price at maturity) and premiums
(generally, the excess of purchase price over stated
redemption price at maturity). Interest income on
short-term obligations is determined on the basis of
interest accrued less amortization of premium.
Each investor in the Portfolio may add to or
reduce its investment in the Portfolio on each Business
Day. As of the close of regular trading on the
Exchange, on each Business Day, the value of each
investor's beneficial interest in the Portfolio is
determined by multiplying the net asset value of the
Portfolio by the percentage, effective for that day,
which represents that investor's share of the aggregate
beneficial interests in the Portfolio. Any additions
or withdrawals, which are to be effected on that day,
are then effected. Thereafter, the investor's
percentage of the aggregate beneficial interests in the
Portfolio is re-computed as the percentage equal to the
fraction (i) the numerator of which is the value of
such investor's investment in the Portfolio as of the
close of regular trading on such day plus or minus, as
the case may be, the amount of any additions to or
withdrawals from the investor's investment in the
Portfolio effected on such day, and (ii) the
denominator of which is the aggregate net asset value
of the Portfolio as of the same time on such day plus
or minus, as the case may be, the amount of the net
additions to or withdrawals from the aggregate
investments in the Portfolio by all investors in the
Portfolio. The percentage so determined is then
applied to determine the value of the investor's
interest in the Portfolio as of the close of regular
trading on the following Business Day of the Portfolio.
Subject to compliance with applicable regulations,
the Trust has reserved the right to pay the redemption
price of beneficial interests in the Portfolio, either
totally or partially, by a distribution in kind of
readily marketable securities (instead of cash). The
securities so distributed would be valued at the same
amount as that assigned to them in calculating the net
asset value for the beneficial interests being sold.
If a holder of beneficial interests received a
distribution in kind, such holder could incur brokerage
or other charges in converting the securities to cash.
<PAGE>
The Trust may suspend the right of redemption or
postpone the date of payment for beneficial interests
in the Portfolio more than seven days during any period
when (a) trading in the markets the Portfolio normally
utilizes is restricted, or an emergency, as defined by
the rules and regulations of the SEC exists making
disposal of the Portfolio's investments or
determination of its net asset value not reasonably
practicable; (b) the Exchange is closed (other than
customary weekend and holiday closings); or (c) the SEC
has by order permitted such suspension.
Item 20. Tax Status.
The Trust is organized as a trust under New York
law. The Trust has determined that the Portfolio is
properly treated as a partnership for U.S. federal and
New York State income tax purposes. Accordingly, under
those tax laws, the Trust is not subject to any income
tax, but each investor in the Portfolio must take into
account its share of the Portfolio's ordinary income
and capital gains in determining its income tax
liability. The determination of such share is made in
accordance with the governing instruments of the Trust
and the U.S. Internal Revenue Code of 1986, as amended
(the "Code"), and regulations promulgated thereunder.
The Trust's taxable year-end ends December 31.
Although, as described above, the Trust is not subject
to U.S. federal income tax, it files appropriate U.S.
federal income tax returns.
The Trust believes that, in the case of an
investor in the Portfolio that seeks to qualify as a
regulated investment company ("RIC") under the Code,
the investor should be treated for U.S. federal income
tax purposes as an owner of an undivided interest in
the assets and operations of the Portfolio, and
accordingly should be deemed to own a proportionate
share of each of the assets of the Portfolio and be
entitled to treat as earned by it the portion of the
Portfolio's gross income attributable to that share.
The Trust also believes that each such investor should
be deemed to hold its proportionate share of the
Portfolio's assets for the period the Portfolio has
held the assets or for the period the investor has been
a partner in the Portfolio, whichever is shorter. Each
investor should consult its tax advisers regarding
whether, in light of its particular tax status and any
special tax rules applicable to it, this approach
applies to its investment in the Portfolio, or whether
the Portfolio should be treated, as to it, as a
separate entity as to which the investor has no direct
interest in Portfolio assets or operations.
In order to enable an investor in the Portfolio
that is otherwise eligible to qualify as a RIC under
the Code to so qualify, the Trust intends that the
Portfolio will satisfy the requirements of Subchapter M
of the Code relating to the nature of the Portfolio's
gross income and the composition (diversification) and
holding period of the Portfolio's assets as if those
<PAGE>
requirements were directly applicable to the Portfolio
and to allocate and permit withdrawals of its net
investment income and any net realized capital gains in
a manner that will enable an investor that is a RIC to
comply with the qualification requirements imposed by
Subchapter M of the Code.
The Trust will allocate at least annually among
the Portfolio's investors each investor's distributive
share of the Portfolio's net investment income, net
realized capital gains, and any other items of income,
gain, loss, deduction, or credit in a manner intended
to comply with the Code and applicable U.S. Treasury
regulations.
To the extent the cash proceeds of any withdrawal
or distribution exceed an investor's adjusted tax basis
in its partnership interest in the Portfolio, the
investor will generally realize gain for U.S. federal
income tax purposes. If, upon a complete withdrawal
(i.e., a redemption of its entire interest in the
Portfolio), the investor's adjusted tax basis in its
partnership interest in the Portfolio exceeds the
proceeds of the withdrawal, the investor will generally
realize a loss for federal income tax purposes. An
investor's adjusted tax basis in its partnership
interest in the Portfolio will generally be the
aggregate price paid therefor, increased by the amounts
of its distributive shares of items of realized net
income and gain (including income, if any, exempt from
U.S. Federal income tax), and reduced, but not below
zero, by the amounts of its distributive shares of
items of net loss and the amounts of any distributions
received by the investor.
The Portfolio may be subject to foreign
withholding taxes with respect to income on certain
securities of non-U.S. issuers. These taxes may be
reduced or eliminated under the terms of an applicable
U.S. income tax treaty. Foreign exchange gains and
losses realized by the Portfolio will generally be
treated as ordinary income and losses for federal
income tax purposes. Certain uses of foreign currency
and foreign currency forward contracts and investment
by the Portfolio in certain "passive foreign investment
companies" may be limited, or a tax election may be
made, if available, in order to enable an investor that
is a RIC to preserve its qualification as a RIC and to
avoid imposition of a tax on such an investor.
The Portfolio's transactions in forward currency
contracts will be subject to special tax rules that may
affect the amount, timing, and character of Portfolio
income. For example, certain positions held for the
Portfolio on the last business day of each taxable year
will be marked to market (i.e., treated as if closed
out) on that day, and any gain or loss associated with
the positions will be treated as 60% long-term and 40%
short-term capital gain or loss. Certain positions
held for the Portfolio that substantially diminish its
risk of loss with respect to other positions in its
portfolio may constitute "straddles," and may be
subject to special tax rules that would cause deferral
of Portfolio losses, adjustments in the holding periods
of Portfolio securities, and conversion of short-term
into long-term capital losses. Certain tax elections
exist for straddles that may alter the effects of these
rules.
<PAGE>
There are certain tax issues which will be
relevant to only certain investors, specifically,
investors which are segregated asset accounts and
investors who contribute assets other than cash to the
Portfolio. It is intended that such segregated asset
accounts will be able to satisfy diversification
requirements applicable to them and that such
contributions of assets will not be taxable provided
certain requirements are met. Such investors are
advised to consult their own tax advisers as to the tax
consequences of an investment in the Portfolio.
The Trust intends to conduct its activities and
those of the Portfolio so that they will not be deemed
to be engaged in the conduct of a U.S. trade or
business for U.S. federal income tax purposes.
Therefore, it is not anticipated that an investor in
the Portfolio, other than an investor which would be
deemed a "U.S. person" for U.S. federal income tax
purposes, will be subject to U.S. federal income
taxation (other than a 30% withholding tax on dividends
and certain interest income) solely by reason of its
investment in the Portfolio. There can be no assurance
that the U.S. Internal Revenue Service may not
challenge the above conclusions or take other positions
that, if successful, might result in the payment of
U.S. federal income taxes by investors in the
Portfolio.
The above discussion does not address the special
tax rules applicable to certain classes of investors,
such as tax-exempt entities, insurance companies, and
financial institutions, or the state, local, or non-
U.S. tax laws that may be applicable to certain
investors. Investors should consult their own tax
advisers with respect to the special tax rules that may
apply in their particular situations, as well as the
state, local, or foreign tax consequences to them of
investing in the Portfolio.
Item 21. Underwriters.
The Landmark Funds Broker-Dealer Services, Inc.,
exclusive placement agent for the Portfolio, receives
no compensation for serving in this capacity.
Investment companies, insurance company separate
accounts, common and commingled trust funds and similar
organizations and entities may continuously invest in
the Portfolio.
Item 22. Calculations of Performance Data.
Not applicable.
Item 23. Financial Statements.
See below.
<PAGE>
PART C
Item 24. Financial Statements and Exhibits.
(a) Financial Statements Included in Part A:
Not applicable.
Financial Statements Included in Part B:
Portfolio of Investments at December 31, 1994*
Statement of Assets and Liabilities at December 31, 1994*
Statement of Operations for the Period May 1, 1994
(Commencement of Operations) to December 31, 1994*
Statement of Changes in Net Assets*
Financial Highlights*
Notes to Financial Statements - December 31, 1994*
Independent Auditors' Report - February 3, 1995*
____________________
* Incorporated herein by reference to the Annual Report of
the Registrant relating to International Equity Portfolio
(the "Portfolio") for the fiscal year ended December 31,
1994, filed with the Securities and Exchange Commission
on March 9, 1995
(b) Exhibits
* 1(a) Copy of the Declaration of Trust of the
Trust
** 1(b) Form of Amendment to Declaration of Trust
* 2 By-laws of the Trust
*** 5 Form of Investment Advisory Agreement
between the Registrant and Citibank, N.A.,
as investment adviser
* 6 Form of Placement Agency Agreement between
the Registrant and The Landmark Funds
Broker-Dealer Services, Inc., as exclusive
placement agent
*** 8 Form of Custodian Agreement between the
Registrant and Investors Bank & Trust
Company, as custodian
<PAGE>
* 9(a) Form of Fund Accounting Agreement between
the Registrant and Signature Financial
Services, Inc.
* 9(b) Form of Administrative Services Agreement
between the Registrant and Signature
Financial Group (Cayman) Ltd., as
administrator
* 9(c) Form of Amended and Restated
Administrative Services Plan of the
Registrant
11 Consent of Independent Accountants
27 Financial Data Schedule
_______________________
*Incorporated by reference to the registration
statement on Form N-1A of the Registrant relating to
its series Government Income Portfolio File
No. 811-3438, filed March 21, 1994.
**Incorporated by reference to the registration
statement on Form N-1A of the Registrant relating to
its series Balanced Portfolio File No. 811-8502, filed
April 28, 1994.
***Incorporated by reference to the registration
statement on Form N-1A of the Registrant relating to
the Portfolio, filed March 21, 1994.
Item 25. Persons Controlled by or under Common Control
with Registrant.
Not applicable.
Item 26. Number of Holders of Securities.
(1) (2)
Title of Class Number of Record Holders
(as of 3/31/95)
Beneficial Interests 2
Item 27. Indemnification.
Reference is hereby made to Article V of the
Declaration of Trust (Exhibits 1(a) and 1(b) to this
Registration Statement).
<PAGE>
The Trustees and officers of the Trust and the
personnel of the Registrant's administrator are insured
under an errors and omissions liability insurance
policy. The Registrant and its officers are also
insured under the fidelity bond required by Rule 17g-1
under the Investment Company Act of 1940, as amended.
Item 28. Business and Other Connections of Investment
Adviser.
Citibank, N.A. ("Citibank") is a commercial bank
offering a wide range of banking and investment
services to customers across the United States and
throughout the world. Citibank is a wholly-owned
subsidiary of Citicorp, a registered bank holding
company. In addition to Balanced Portfolio, Equity
Portfolio, Government Income Portfolio, and Small Cap
Equity Portfolio, other series of the Trust, Citibank
also serves as investment adviser to the following
registered investment companies (or series thereof):
Tax Free Reserves Portfolio, U.S. Treasury Reserves
Portfolio, Cash Reserves Portfolio, Landmark Multi-
State Tax Free Funds (Landmark New York Tax Free
Reserves, Landmark Connecticut Tax Free Reserves and
Landmark California Tax Free Reserves), Landmark Fixed
Income Funds (Landmark Intermediate Income Fund),
Landmark Tax Free Income Funds (Landmark National Tax
Free Income Fund and Landmark New York Tax Free Income
Fund) and Landmark VIP Funds (Landmark VIP U.S.
Government Portfolio, Landmark VIP Balanced Portfolio,
Landmark VIP Equity Portfolio and Landmark VIP
International Equity Portfolio). As of December 31,
1994, Citibank and its affiliates managed assets in
excess of $73 billion worldwide. The principal place
of business of Citibank is located at 399 Park Avenue,
New York, New York 10043.
The Chairman of the Board and a Director of
Citibank is John S. Reed. The following are Vice
Chairmen of the Board and Directors of Citibank: Paul
J. Collins, Pei-yuan Chia, William R. Rhodes and H.
Onno Ruding. Christopher J. Steffen is a Senior
Executive Vice-President of Citicorp and Director of
Citibank. Other Directors of Citibank are D. Wayne
Calloway, Chairman and Chief Executive Officer,
PepsiCo, Inc., Purchase, New York; Colby H. Chandler,
Former Chairman and Chief Executive Officer, Eastman
Kodak Company; Kenneth T. Derr, Chairman and Chief
Executive Officer, Chevron Corporation; H.J. Haynes,
Senior Counselor, Bechtel Group, Inc., San Francisco,
California; Rozanne L. Ridgway, President, The Atlantic
Council of the United States; Robert B. Shapiro,
President and Chief Operating Officer, Monsanto
Company; Frank A. Shrontz, Chairman and Chief Executive
Officer, The Boeing Company, Seattle, Washington; Mario
Henrique Simonsen, Vice Chairman, Brazilian Institute
of Economics, The Getulio Vargas Foundation; Roger B.
Smith, Former Chairman and Chief Executive Officer,
General Motors Corporation; Franklin A. Thomas,
President, The Ford Foundation, New York, New York; and
Edgar S. Woolard, Jr., Chairman and Chief Executive
Officer, E.I. du Pont de Nemours & Company.
<PAGE>
Each of the individuals named above is also a
Director of Citicorp. In addition, the following
persons have the affiliations indicated:
D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, Pepsico, Inc.
Colby H. Chandler Director, Digital Equipment Corporation
Director, Ford Motor Company
Director, J.C. Penney Company, Inc.
Pei-yuan Chia none
Paul J. Collins Director, Kimberly-Clark
Corporation
Kenneth T. Derr Director, Chevron Corporation
Director, Potlatch Corporation
H.J. Haynes Director, Bechtel Group, Inc.
Director, Boeing Company
Director, Fremont Group, Inc.
Director, Hewlett-Packard Company
Director, Paccar Inc.
Director, Saudi Arabian Oil Company
John S. Reed Director, Monsanto Company
Director, Philip Morris Companies
Incorporated
William R. Rhodes Director, Private Export Funding
Corporation
Rozanne L. Ridgway Director, 3M
Director, Bell Atlantic Corporation
Director, Boeing Company
Director, Emerson Electric Company
Member-International Advisory Board,
New Perspective Fund, Inc.
Director, RJR Nabisco, Inc.
Director, Sara Lee Corporation
Director, Union Carbide Corporation
<PAGE>
H. Onno Ruding Member, Board of Supervisory Directors,
Amsterdam Trustee's Kantoor
Advisor, Intercena (C&A) (Netherlands)
Member, Board of Supervisory Directors,
Pechiney Nederland N.V.
Member, Board of Advisers, Robeco
N.V.
Advisory Director, Unilever N.V.
Advisory Director, Unilever PLC
Robert B. Shapiro Director, G.D. Searle & Co.
Director, Liposome Technology,
Inc.
Director, Monsanto Company
Director, The Nutrasweet Company
Frank A. Shrontz Director, 3M
Director, Baseball of Seattle,
Inc.
Director, Boeing Company
Director, Boise Cascade Corp.
Mario Henrique Director, Companhia Bozano Simonsen
Simonsen Comercioe E Industria
Director, Companhia Monteia & Aranha
President, Simposium Consultoria E
Servicos Tecnicos LTDA
Roger B. Smith Director, International Paper Company
Director, Johnson & Johnson
Director, Pepsico, Inc.
Director, Rubatex Corporation
Christopher J. none
Steffen
Franklin A. Thomas Director, Aluminum Company of America
Director, American Telephone &
Telegraph, Co.
Director, CBS, Inc.
Director, Cummins Engine Company, Inc.
Director, Pepsico, Inc.
<PAGE>
Edgar S. Woolard, Director, E.I. DuPont De Nemours &
Jr. Company
Director, International Business
Machines Corp.
Director, Seagram Company, Ltd.
Item 29. Principal Underwriters.
(a) The Landmark Funds Broker-Dealer Services,
Inc. ("LFBDS"), the Portfolio's Placement Agent, is
also the placement agent for Cash Reserves Portfolio,
U.S. Treasury Reserves Portfolio, Tax Free Reserves
Portfolio, Balanced Portfolio, Equity Portfolio, Small
Cap Equity Portfolio and Government Income Portfolio.
LFBDS is also the distributor for Landmark Cash
Reserves, Premium Liquid Reserves, Premium U.S.
Treasury Reserves, Landmark Tax Free Reserves, Landmark
New York Tax Free Reserves, Landmark California Tax
Free Reserves, Landmark Connecticut Tax Free Reserves,
Landmark New York Tax Free Income Fund, Landmark
Balanced Fund, Landmark Equity Fund, Landmark Small Cap
Equity Fund, Landmark National Tax Free Income Fund,
Landmark U.S. Government Income Fund, Landmark
Intermediate Income Fund, Landmark U.S. Treasury
Reserves, Landmark Institutional Liquid Reserves,
Landmark Institutional U.S. Treasury Reserves and
Landmark VIP Funds (Landmark VIP U.S. Government
Portfolio, Landmark VIP Balanced Portfolio, Landmark
VIP Equity Portfolio and Landmark VIP International
Equity Portfolio).
(b) The information required by this Item 29 with
respect to each director and officer of LFBDS is
incorporated by reference to Schedule A of Form BD
filed by LFBDS pursuant to the Securities and Exchange
Act of 1934 (File No. 8-32417).
(c) Not applicable.
Item 30. Location of Accounts and Records.
The accounts and records of the Registrant are
located, in whole or in part, at the office of the
Registrant and the following locations:
<PAGE>
Name Address
Signature Financial Group Elizabethan Square
(Cayman), Ltd. GeorgeTown, Grand Cayman,
Cayman Islands, BWI
(administrator)
Investors Bank & Trust One Lincoln Plaza
Company (custodian) Boston, MA 02111
Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043
The Landmark Funds c/o Signature Financial Group
Broker-Dealer (Cayman) Ltd.
Services, Inc. Elizabethan Square
(placement agent) George Town, Grand Cayman
Cayman Islands BWI
Signature Financial Services, First Canadian Place
Inc. Suite 5850, P.O. Box 231
(accounting services agent) Toronto, Ontario
M5X lC8 CANADA
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
The Registrant undertakes to comply with the
provisions of Section 16(c) of the Investment Company
Act of 1940.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment
Company Act of 1940, the Registrant has duly caused
this Amendment to its Registration Statement on Form
N-1A to be signed on its behalf by the undersigned,
thereunto duly authorized, in George Town, Grand
Cayman, Cayman Islands, BWI on the 27th day of April,
1995.
THE PREMIUM PORTFOLIOS
Susan Jakuboski
By: Susan Jakuboski
Assistant Treasurer of
The Premium Portfolios
<PAGE>
EXHIBIT INDEX
11. Consent of Independent Accountants
27. Financial Data Schedule
<PAGE>
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in
Part B of this Amendment No. 1 to the registration
statement on Form N-1A (the "Registration Statement")
of The Premium Portfolios of our report dated February
3, 1995, relating to the financial statements and
financial highlights of the Equity Portfolio appearing
in the December 31, 1994 Annual Report of Landmark
International Equity Fund, which are also incorporated
by reference into Amendment No. 1 to the Registration
Statement. We also consent to the references to us
under the heading "Investment Advisory and Other
Services" in Part B.
Price Waterhouse
Chartered Accountants
Toronto, Ontario
April 26, 1995
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<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 30,085
<INVESTMENTS-AT-VALUE> 32,009
<RECEIVABLES> 381
<ASSETS-OTHER> 45
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 32,435
<PAYABLE-FOR-SECURITIES> 249
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 33
<TOTAL-LIABILITIES> 282
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,153
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,924
<NET-ASSETS> 32,153
<DIVIDEND-INCOME> 361
<INTEREST-INCOME> 36
<OTHER-INCOME> 0
<EXPENSES-NET> 267
<NET-INVESTMENT-INCOME> 130
<REALIZED-GAINS-CURRENT> (536)
<APPREC-INCREASE-CURRENT> (7)
<NET-CHANGE-FROM-OPS> (1,682)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,682)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 219
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 267
<AVERAGE-NET-ASSETS> 32,619
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 1.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
