STATEMENT OF ADDITIONAL INFORMATION

CONSULTING GROUP CAPITAL MARKETS FUNDS
December 29, 1997
As Amended February 2, 1998

222 Delaware Avenue ~ Wilmington, Delaware 19801 ~ 
(212) 816-TRAK

	This Statement of Additional Information supplements the 
information contained in the current Prospectus (the "Prospectus") of 
Consulting Group Capital Markets Funds (the "Trust"), dated December 
29, 1997, and should be read in conjunction with the Prospectus. The 
Prospectus may be obtained by contacting any Financial Consultant of 
Smith Barney Inc. ("Smith Barney"), or by writing or calling the Trust 
at the address or telephone number listed above. This Statement of 
Additional Information, although not in itself a prospectus, is 
incorporated by reference into the Prospectus in its entirety.

CONTENTS

Objectives and Policies of the 
Portfolios
1

Management of the Trust
18

Purchase of Shares
25

Redemption of Shares
26

Net Asset Value
26

Determination of Performance (See in 
the Prospectus "Performance of the 
Portfolios")
28

Taxes (See in the Prospectus 
"Dividends, Distributions and 
Taxes")
31

Custodian and Transfer Agent
34


For ease of reference, the section headings used in this Statement of 
Additional Information are identical to those used in the Prospectus 
except where noted. Capitalized terms used but not defined in this 
Statement of Additional Information have the meanings accorded to them 
in the Prospectus.

OBJECTIVES AND POLICIES OF THE PORTFOLIOS

	The Prospectus discusses the investment objectives of the 
investment portfolios (the "Portfolios") comprising the Trust and the 
policies to be employed to achieve those objectives.  Supplemental 
information is set out below concerning the types of securities and 
other instruments in which the Portfolios may invest, the investment 
policies and strategies that the Portfolios may utilize and certain 
risks attendant to those investments, policies and strategies.




Ratings as Investment Criteria

	In general, the ratings of Moody's Investors Service, Inc. 
("Moody's") and Standard & Poor's Ratings Group ("S&P") represent the 
opinions of those agencies as to the quality of debt obligations that 
they rate. It should be emphasized, however, that these ratings are 
relative and subjective, are not absolute standards of quality and do 
not evaluate the market risk of securities. These ratings will be used 
by the Portfolios as initial criteria for the selection of portfolio 
securities, but the Portfolios also will rely upon the independent 
advice of their respective investment advisors (collectively, the 
"Advisors") to evaluate potential investments. Among the factors that 
will be considered are the long term ability of the issuer to pay 
principal and interest and general economic trends. The Appendix to 
this Statement of Additional Information contains further information 
concerning the ratings of Moody's and S&P and their significance.

	Subsequent to its purchase by a Portfolio, an issue of debt 
obligations may cease to be rated or its rating may be reduced below 
the minimum required for purchase by the Portfolio. Neither event will 
require the sale of the debt obligation by the Portfolio, but the 
Portfolio's Advisor will consider the event in its determination of 
whether the Portfolio should continue to hold the obligation. In 
addition, to the extent that the ratings change as a result of changes 
in rating organizations or their rating systems or owing to a corporate 
restructuring of Moody's or S&P, the Portfolio will attempt to use 
comparable ratings as standards for its investments in accordance with 
its investment objectives and policies.

U.S. Government Securities

	Securities issued or guaranteed by the U.S. government or one of 
its agencies, authorities or instrumentalities ("U.S. Government 
Securities") in which the Portfolios may invest include debt 
obligations of varying maturities issued by the U.S. Treasury or issued 
or guaranteed by an agency or instrumentality of the U.S. government, 
including the Federal Housing Administration, Federal Financing Bank, 
Farmers Home Administration, Export-Import Bank of the U.S., Small 
Business Administration, Government National Mortgage Association 
("GNMA"), General Services Administration, Central Bank for 
Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks, 
Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National 
Mortgage Association ("FNMA"), Maritime Administration, Tennessee 
Valley Authority, District of Columbia Armory Board, Student Loan 
Marketing Association, Resolution Trust Corporation and various 
institutions that previously were or currently are part of the Farm 
Credit System (which has been undergoing reorganization since 1987). 
Direct obligations of the U.S. Treasury include a variety of securities 
that differ in their interest rates, maturities and dates of issuance. 
Because the U.S. government is not obligated by law to provide support 
to an instrumentality that it sponsors, a Portfolio will invest in 
obligations issued by an instrumentality of the U.S. government only if 
the Advisor determines that the instrumentality's credit risk does not 
make its securities unsuitable for investment by the Portfolio.



Emerging Markets Countries

	AIB Govett Asset Management Limited ("Govett") believes the 
performance of emerging markets mutual funds is largely determined by 
country allocation. Empirical studies suggest that between 70% and 90% 
of emerging market fund investment performance is explained by country 
allocation. Govett is firmly committed to the notion that 
diversification is essential to coping with an array of volatile 
markets and it follows a rigorous country allocation scheme which 
prevents excessive exposure to any single country. Once this "top-down" 
country allocation is complete, Govett follows a fundamentally-grounded 
security selection process.

	Emerging Markets Equity Investments may invest in the securities 
of companies domiciled in, and in markets of, so-called "emerging 
markets countries." These investments may be subject to potentially 
higher risks than investments in developed countries. These risks 
include:

	(1) Unfavorable and unstable political and economic conditions. 
The economies of countries in which the Portfolio may invest may differ 
favorably or unfavorably from the U.S. economy in such respects as the 
rate of growth of gross domestic product, the rate of inflation, 
capital reinvestment, resource self-sufficiency and balance of payments 
position. Some of the countries in which the Portfolio may invest have 
experienced over the past decade, and may continue to experience, 
significant economic problems. The areas of concern may include: budget 
deficits; high, and in some cases unmanageable, interest payments on 
foreign debt; lack of investment in plant and machinery; hyper-
inflation due to rapid expansion of the local money supply; and 
political instability, which may result in the failure to adopt 
economic adjustment policies.

	(2) The small size and volatility of the markets and the low 
volume of trading in such markets. The securities and debt markets of 
some of the countries in which the Portfolio may invest are 
substantially smaller and less liquid than the major securities and 
debt markets in the United States and as a result, in periods of rising 
market prices, the Portfolio may be unable to participate in price 
increases fully to the extent that it is unable to acquire desired 
securities positions quickly; the Portfolio's inability to dispose 
fully and promptly of positions in declining markets may conversely 
cause its net asset value to decline as the value of unsold positions 
is marked to lower prices. A high proportion of the shares of many 
companies traded in emerging market countries may be held by a small 
number of persons, which may restrict the number of shares available 
for investment by the Portfolio.

	(3) The existence of national policies which may restrict the 
Portfolio's investment opportunities. Foreign investment in some 
countries in which the Portfolio may invest is restricted or controlled 
to varying degrees. Although the Portfolio's Advisor, in its asset 
allocation procedure, will seek to identify countries that exhibit 
certain improved credentials, these restrictions or controls may at 
times limit or preclude foreign investment in certain issuers and 
increase the costs and expenses of the Portfolio.

	(4) Governmental regulation of the relevant securities markets. 
The governments of some emerging markets countries have exercised and 
continue to exercise substantial influence over many aspects of the 
private sector, including, for example, imposing wage and price 
controls to control inflation. In some cases, the government owns or 
controls many companies, including some of the largest in the country. 
Governments of some countries have in the past participated, and may 
continue in the future to participate, directly in the securities 
markets of their countries, which participation may affect the 
availability, prices and liquidity of securities traded in those 
markets. Similar government actions in the future could have an effect 
on economic conditions in such countries, and in turn affect private 
sector companies, market conditions, prices and yields of securities 
held by the Portfolio. The extent of government supervision and 
regulations of securities exchanges, underwriters, brokers, dealers and 
issuers in emerging markets countries, however, may be less than in 
other countries.

	(5) The lack of adequate financial and other reporting standards 
and the absence of information regarding issuers in emerging markets 
countries. Accounting, auditing, financial and other reporting 
standards in countries in which the Portfolio may invest may differ, in 
some cases significantly, from standards in other countries, including 
the United States. In particular, the assets and profits appearing on 
the financial statements of an issuer in certain emerging markets 
countries may not reflect its financial position or results of 
operations in the manner in which such information would have been 
reflected in financial statements prepared in accordance with U.S. 
generally accepted accounting principles. In addition, companies in 
certain emerging markets countries must restate certain assets and 
liabilities on their financial statements to reflect the effect of 
inflation on those assets. As a result, financial statements and 
reported earnings may differ from those of companies in other 
countries, such as the United States. Although a principal objective of 
the securities laws of the countries in which the Portfolio may invest 
is to promote full and fair disclosure of all material corporate 
information, substantially less information may be publicly available 
about the issuers of securities in the markets of those countries than 
is regularly published by issuers in other countries, and disclosure of 
certain material information may not be made. Moreover, even when 
public information about such companies and governments is available, 
it may be less reliable than information concerning the U.S. government 
and U.S. companies. In addition, the extent of government supervision 
and regulation of securities exchanges, underwriters, brokers, dealers 
and issuers may be less in countries in which the Portfolio may invest 
than in other countries.

	(6) Differences in the value of the U.S. dollar and the 
currencies of other countries. To the extent the Portfolio invests in 
securities denominated in the currencies of countries other than the 
United States, a change in the value of any of those currencies 
relative to the dollar will result in a corresponding change in the 
dollar value of the Portfolio's investments denominated in the 
currency. In addition, although some of the Portfolio's income may be 
received in the currency of a country other than the United States, the 
Portfolio will measure distributions, including those made in 
connection with the redemption of shares, from its income in U.S. 
dollars. Therefore, if the value of a particular currency falls 
relative to the U.S. dollar between accrual of the income and the 
making of a distribution, the amount of the currency to be converted 
into U.S. dollars by the Portfolio to pay the distribution will 
increase and the Portfolio could be required to liquidate portfolio 
investments to make the distribution.

Exchange Rate-Related U.S. Government Securities

	Each Portfolio, except Government Money Investments, may invest 
up to 5% of its net assets in U.S. Government Securities for which the 
principal repayment at maturity, while paid in U.S. dollars, is 
determined by reference to the exchange rate between the U.S. dollar 
and the currency of one or more foreign countries ("Exchange Rate-
Related Securities"). The interest payable on these securities is 
denominated in U.S. dollars and is not subject to foreign currency risk 
and, in most cases, is paid at rates higher than most other U.S. 
Government Securities in recognition of the foreign currency risk 
component of Exchange Rate-Related Securities.

	Exchange Rate-Related Securities are issued in a variety of 
forms, depending on the structure of the principal repayment formula. 
The principal repayment formula may be structured so that the security 
holder will benefit if a particular foreign currency to which the 
security is linked is stable or appreciates against the U.S. dollar. In 
the alternative, the principal repayment formula may be structured so 
that the securityholder benefits if the U.S. dollar is stable or 
appreciates against the linked foreign currency. Finally, the principal 
repayment formula can be a function of more than one currency and, 
therefore, be designed as a combination of those forms.

	Investments in Exchange Rate-Related Securities entail special 
risks. There is the possibility of significant changes in rates of 
exchange between the U.S. dollar and any foreign currency to which an 
Exchange Rate-Related Security is linked. If currency exchange rates do 
not move in the direction or to the extent anticipated by the Advisor 
at the time of purchase of the security, the amount of principal repaid 
at maturity might be significantly below the par value of the security, 
which might not be offset by the interest earned by the Portfolios over 
the term of the security. The rate of exchange between the U.S. dollar 
and other currencies is determined by the forces of supply and demand 
in the foreign exchange markets. These forces are affected by the 
international balance of payments and other economic and financial 
conditions, government intervention, speculation and other factors. The 
imposition or modification of foreign exchange controls by the U.S. or 
foreign governments or intervention by central banks could also affect 
exchange rates. Finally, there is no assurance that sufficient trading 
interest to create a liquid secondary market will exist for a 
particular Exchange Rate-Related Security due to conditions in the debt 
and foreign currency markets. Illiquidity in the forward foreign 
exchange market and the high volatility of the foreign exchange market 
may from time to time combine to make it difficult to sell an Exchange 
Rate-Related Security prior to maturity without incurring a significant 
price loss.

Mortgage Backed Securities

The average maturity of pass-through pools of mortgage backed 
securities varies with the maturities of the underlying mortgage 
instruments. In addition, a pool's stated maturity may be shortened by 
unscheduled payments on the underlying mortgages. Factors affecting 
mortgage prepayments include the level of interest rates, general 
economic and social conditions, the location of the mortgaged property 
and age of the mortgage. Because prepayment rates of individual pools 
vary widely, it is not possible to accurately predict the average life 
of a particular pool. Common practice is to assume that prepayments 
will result in an average life ranging from two to ten years for pools 
of fixed rate 30-year mortgages. Pools of mortgages with other 
maturities of different characteristics will have varying average life 
assumptions.

	Mortgage backed securities may be classified as private, 
governmental or government related, depending on the issuer or 
guarantor. Private mortgage backed securities represent pass-through 
pools consisting principally of conventional residential mortgage loans 
created by non-governmental issuers, such as commercial banks, savings 
and loan associations and private mortgage insurance companies. 
Governmental mortgage backed securities are backed by the full faith 
and credit of the United States. GNMA, the principal U.S. guarantor of 
such securities, is a wholly owned U.S. Governmental Corporation within 
the Department of Housing and Urban Development. Government related 
mortgage backed securities are not backed by the full faith and credit 
of the United States. Issuers of these securities include FNMA and 
FHLMC. FNMA is a government sponsored corporation owned entirely by 
private stockholders that is subject to general regulation by the 
Secretary of Housing and Urban Development. Pass-through securities 
issued by FNMA are guaranteed as to timely payment of principal and 
interest by FNMA. FHLMC is a corporate instrumentality of the United 
States, the stock of which is owned by the Federal Home Loan Banks. 
Participation certificates representing interests in mortgages from 
FHLMC's national portfolio are guaranteed as to the timely payment of 
interest and ultimate collection of principal by FHLMC.

	The Trust expects that private and governmental entities may 
create mortgage loan pools offering pass-through investments in 
addition to those described above. The mortgages underlying these 
securities may be alternative mortgage instruments, that is, mortgage 
instruments whose principal or interest payments may vary or whose 
terms to maturity may be shorter than previously customary. As new 
types of mortgage backed securities are developed and offered to 
investors, the Trust, consistent with the Portfolio's investment 
objectives and policies, will consider making investments in those new 
types of securities on behalf of that Portfolio.

	The Portfolio also may invest in pass-through securities backed 
by adjustable rate mortgages that have been introduced by GNMA, FNMA 
and FHLMC. These securities bear interest at a rate that is adjusted 
monthly, quarterly or annually. The prepayment experience of the 
mortgages underlying these securities may vary from that for fixed rate 
mortgages. The Portfolio will only purchase mortgage related securities 
issued by persons that are governmental agencies or instrumentalities 
or fall outside, or are excluded from, the definition of investment 
company under the Investment Company Act of 1940, as amended (the "1940 
Act").

Forward Currency Contracts

	Forward currency contracts (i) are traded in an interbank market 
conducted directly between currency traders (typically commercial banks 
or other financial institutions) and their customers, (ii) generally 
have no deposit requirements and (iii) are typically consummated 
without payment of any commissions. Certain Portfolios, however, may 
enter into forward currency contracts containing either or both deposit 
requirements and commissions.

	The cost to a Portfolio of engaging in forward currency 
transactions varies with factors such as the currency involved, the 
length of the contract period and market conditions then prevailing.  
Because transactions in currency exchange contracts are usually 
conducted on a principal basis, no fees or commissions are involved. 
Hedging transactions may be made from any foreign currency into U.S. 
dollars or into other appropriate currencies.  As noted in the 
Prospectus, if a Portfolio enters into a position hedging transaction, 
cash or liquid high grade debt securities will be placed in a 
segregated account with the Portfolio's custodian in an amount equal to 
the value of the Portfolio's total assets committed to the consummation 
of the forward currency contract. If the value of the securities placed 
in the segregated account declines, additional cash or securities will 
be placed in the account so that the value of the account will equal 
the amount of the Portfolio's commitment with respect to the contract.

	At or before the maturity of a forward currency contract, a 
Portfolio may either sell a portfolio security and make delivery of the 
currency, or retain the security and offset its contractual obligation 
to deliver the currency by purchasing a second contract pursuant to 
which the Portfolio will obtain, on the same maturity date, the same 
amount of the currency that it is obligated to deliver. If the 
Portfolio retains the portfolio security and engages in an offsetting 
transaction, the Portfolio, at the time of execution of the offsetting 
transaction, will incur a gain or a loss to the extent that movement 
has occurred in forward currency contract prices. Should forward prices 
decline during the period between the Portfolio's entering into a 
forward currency contract for the sale of a currency and the date it 
enters into an offsetting contract for the purchase of the currency, 
the Portfolio will realize a gain to the extent the price of the 
currency it has agreed to sell exceeds the price of the currency it has 
agreed to purchase. Should forward prices increase, the Portfolio will 
suffer a loss to the extent the price of the currency it has agreed to 
purchase exceeds the price of the currency it has agreed to sell.

	The use of forward currency contracts does not eliminate 
fluctuations in the underlying prices of the securities, but it does 
establish a rate of exchange that can be achieved in the future. In 
addition, although forward currency contracts limit the risk of loss 
owing to a decline in the value of the hedged currency, at the same 
time, they limit any potential gain that might result should the value 
of the currency increase. If a devaluation is generally anticipated, 
the Portfolio may not be able to contract to sell currency at a price 
above the devaluation level it anticipates.  The successful use of 
forward currency contracts as a hedging technique draws upon special 
skills and experience with respect to these instruments and usually 
depends on the ability of the Portfolio's Advisor to forecast interest 
rate and currency exchange rate movements correctly. Should interest or 
exchange rates move in an unexpected manner, the Portfolio may not 
achieve the anticipated benefits of forward currency contracts or may 
realize losses and thus be in a worse position than if those strategies 
had not been used. Many forward currency contracts are subject to no 
daily price fluctuation limits so that adverse market movements could 
continue with respect to those contracts to an unlimited extent over a 
period of time.

Futures Contracts and Related Options

	Futures contracts and options thereon may be undertaken for 
hedging and other risk management purposes in an effort to reduce the 
impact of several kinds of anticipated price fluctuation risks on the 
securities held by a Portfolio. For example, futures contracts for the 
sale of foreign currency might be entered into to protect against 
declines in the value of currencies in which portfolio securities are 
denominated; and put options on interest rate futures might be 
purchased to protect against declines in the market values of debt 
securities occasioned by higher interest rates. If these transactions 
are successful, the futures or options positions taken by the Portfolio 
will rise in value by an amount which approximately offsets the decline 
in value of the portion of the securities held by a Portfolio that is 
being hedged.

	On other occasions, a Portfolio may enter into contracts to 
purchase the underlying instrument. For example, futures contracts for 
the purchase of debt securities might be entered into to protect 
against an anticipated increase in the price of debt securities to be 
purchased in the future resulting from decreased interest rates.

	A Portfolio will incur brokerage costs whether or not its hedging 
is successful and will be required to post and maintain "margin" as a 
good-faith deposit against performance of its obligations under futures 
contracts and under options written by the Portfolio. Futures and 
options positions are marked to the market daily and the Portfolio may 
be required to make subsequent "variation" margin payments depending 
upon whether its positions increase or decrease in value. In this 
context margin payments involve no borrowing on the part of the 
Portfolio.

Options on Securities

	The Portfolios may purchase put and call options on securities 
owned by the Portfolio and on securities which the Portfolio may 
acquire in the future. The exercise price of the options may be below, 
equal to or above the market values of the underlying securities at the 
times the options are written.

	An option position may be closed out only where there exists a 
secondary market for an option of the same series on a recognized 
securities exchange or in the over-the-counter market.  In light of 
this fact and current trading conditions, the Portfolios expect to 
purchase not only call or put options issued by the Clearing 
Corporation, but also options in the domestic and foreign over-the-
counter markets.  When a Portfolio has purchased an option and engages 
in a closing sale transaction, whether the Portfolio realizes a profit 
or loss will depend upon whether the amount received in the closing 
sale transaction is more or less than the premium that the Portfolio 
initially paid for the original option plus the related transaction 
costs.

	Although a Portfolio generally will purchase only those options 
for which its Advisor believes there is an active secondary market so 
as to facilitate closing transactions, there is no assurance that 
sufficient trading interest to create a liquid secondary market on a 
securities exchange will exist for any particular option or at any 
particular time, and for some options no such secondary market may 
exist.  A liquid secondary market in an option may cease to exist for a 
variety of reasons.  In the past, for example, higher than anticipated 
trading activity or order flow or other unforeseen events have at times 
rendered inadequate certain of the facilities of the Clearing 
Corporation and securities exchanges and resulted in the institution of 
special procedures, such as trading rotations, restrictions on certain 
types of orders or trading halts or suspensions in one or more options.  
There can be no assurance that similar events, or events that may 
otherwise interfere with the timely execution of customers' orders, 
will not recur.  In such event, it might not be possible to effect 
closing transactions in particular options.

	Securities exchanges generally have established limitations 
governing the maximum number of calls and puts of each class which may 
be held or exercised within certain time periods, by an investor or 
group of investors acting in concert (regardless of whether the options 
are written on the same or different securities exchanges or are held, 
written or exercised in one or more accounts or through one or more 
brokers).  It is possible that the Portfolios and other clients of 
their respective Advisors and certain of their affiliates may be 
considered to be such a group.  A securities exchange may order the 
liquidation of positions found to be in violation of these limits and 
it may impose certain other sanctions.

Stock Index Options 

	The Portfolios may purchase and write put and call options on 
domestic and foreign stock indexes for the purpose of hedging their 
portfolios.  A stock index fluctuates with changes in the market values 
of the stocks included in the index.  Stock index options may be based 
on a broad market index such as the New York Stock Exchange Composite 
Index or a narrower market index such as the Standard & Poor's Daily 
Price Index of 500 Common Stocks ("S&P 500").  Indexes also may be 
based on an industry or market segment.

	Options on stock indexes are generally similar to options on 
stock except that the delivery requirements are different.  Instead of 
giving the right to take or make delivery of stock at a specified 
price, an option on a stock index gives the holder the right to receive 
a cash "exercise settlement amount" equal to (a) the amount, if any, by 
which the fixed exercise price of the option exceeds (in the case of a 
put) or is less than (in the case of a call) the closing value of the 
underlying index on the date of exercise, multiplied by (b) a fixed 
"index multiplier." Receipt of this cash amount will depend upon the 
closing level of the stock index upon which the option is based being 
greater than, in the case of a call, or less than, in the case of a 
put, the exercise price of the option.  The amount of cash received 
will be equal to such difference between the closing price of the index 
and the exercise price of the option, expressed in dollars, times a 
specified multiple.  The writer of the option is obligated, in return 
for the premium received, to make delivery of this amount.  The writer 
may offset its position in stock index options prior to expiration by 
entering into a closing transaction on an exchange, or it may let the 
option expire unexercised.

	The effectiveness of purchasing stock index options as a hedging 
technique will depend upon the extent to which price movements in the 
portion of a securities portfolio being hedged correlate with price 
movements of the stock index selected.  Because the value of an index 
option depends upon movements in the level of the index rather than the 
price of a particular stock, whether the Portfolio will realize a gain 
or loss from the purchase or writing of options on an index depends 
upon movements in the level of stock prices in the stock market 
generally or, in the case of certain indexes, in an industry or market 
segment, rather than movements in the price of a particular stock. 
Accordingly, successful use by the Portfolio of options on stock 
indexes will be subject to its Advisor's ability to predict correctly 
movements in the direction of the stock market generally or of a 
particular industry.  This requires different skills and techniques 
than predicting changes in the price of individual stocks. 

	A Portfolio will engage in stock index options transactions only 
when determined by its Advisor to be consistent with the Portfolio's 
efforts to control risk.  There can be no assurance that such judgment 
will be accurate or that the use of these portfolio strategies will be 
successful. 

Lending Portfolio Securities

	Each Portfolio other than Municipal Bond Investments may lend 
portfolio securities to brokers, dealers and other financial 
organizations. These loans, if and when made, may not exceed 30% of the 
value of a Portfolio's total assets. A Portfolio will not lend 
securities to Smith Barney, the Trust's distributor, unless the 
Portfolio has applied for and received specific authority to do so from 
the Securities and Exchange Commission (the "SEC"). A Portfolio's loans 
of securities will be collateralized by cash, letters of credit or U.S. 
Government Securities. The cash or instruments collateralizing a 
Portfolio's loans of securities will be maintained at all times in a 
segregated account with the Portfolio's custodian or with a designated 
sub-custodian in an amount at least equal to the current market value 
of the loaned securities. From time to time, a Portfolio may pay a part 
of the interest earned from the investment of collateral received for 
securities loaned to the borrower and/or a third party that is 
unaffiliated with the Portfolio and is acting as a "finder." A 
Portfolio will comply with the following conditions whenever it loans 
securities: (i) the Portfolio must receive at least 100% cash 
collateral or equivalent securities from the borrower; (ii) the 
borrower must increase the collateral whenever the market value of the 
securities loaned rises above the level of the collateral; (iii) the 
Portfolio must be able to terminate the loan at any time; (iv) the 
Portfolio must receive reasonable interest on the loan, as well as any 
dividends, interest or other distributions on the loaned securities and 
any increase in market value; (v) the Portfolio may pay only reasonable 
custodian fees in connection with the loan; and (vi) voting rights on 
the loaned securities may pass to the borrower except that, if a 
material event adversely affecting the investment in the loaned 
securities occurs, the Trust's Board of Trustees must terminate the 
loan and regain the right to vote the securities. 



When-Issued and Delayed-Delivery Securities

	When a Portfolio engages in when-issued or delayed-delivery 
securities transactions, it relies on the other party to consummate the 
trade. Failure of the seller to do so may result in the Portfolio's 
incurring a loss or missing an opportunity to obtain a price considered 
to be advantageous.

Rule 144A Securities

	A Portfolio may purchase securities that are not registered under 
the Securities Act of 1933, as amended (the "1933 Act"), but that can 
be sold to "qualified institutional buyers" in accordance with Rule 
144A under the 1933 Act ("Rule 144A Securities"). Particular Rule 144A 
Securities will be considered illiquid and therefore subject to the 
Portfolio's 10% limitation on the purchase of illiquid securities, 
unless the Trust's Board of Trustees determines on an ongoing basis 
that an adequate trading market exists for the Rule 144A Securities. 
This investment practice could have the effect of increasing the level 
of illiquidity in a Portfolio to the extent that qualified 
institutional buyers become uninterested for a time in purchasing Rule 
144A Securities. The Board of Trustees has instructed the Portfolios' 
Advisors to determine and monitor on a daily basis the liquidity of 
Rule 144A Securities, although the Board of Trustees will retain 
responsibility for any determination regarding liquidity.

American Depository Receipt

	A Portfolio may purchase American Depository Receipts ("ADRs"), 
which are dollar denominated receipts issued generally by domestic 
banks and represent the deposit with the bank of a security of a 
foreign issuer. ADRs are publicly traded on exchanges or over-the-
counter in the United States.

Investment Restrictions
   
	The investment restrictions numbered 1 through 7 below have been 
adopted by the Trust as fundamental policies of the Portfolios. Under 
the 1940 Act, a fundamental policy may not be changed without the vote 
of a majority of the outstanding voting securities of a Portfolio, 
which is defined in the 1940 Act as the lesser of (i) 67% or more of 
the shares present at a Portfolio meeting, if the holders of more than 
50% of the outstanding shares of the Portfolio are present or 
represented by proxy, or (ii) more than 50% of the outstanding shares 
of the Portfolio. Investment restrictions 8 through 14 may be changed 
by a vote of a majority of the Board of Trustees at any time.

Under the investment restrictions adopted by the Portfolios:

	1.	Portfolio, other than International Fixed Income Investments, 
will not deviate from the definition of a "diversified company" as 
defined in the 1940 Act and rules thereunder.



	2.	Portfolio, except Municipal Bond Investments, will not invest 
more than 25% of its total assets in securities, the issuers of which 
conduct their principal business activities in the same industry. For 
purposes of this limitation, U.S. government securities and securities 
of state or municipal governments and their political subdivisions are 
not considered to be issued by members of any industry.

	3.	Portfolio will not borrow money, except that (a) the Portfolio 
may borrow from banks for temporary or emergency (not leveraging) 
purposes, including the meeting of redemption requests which might 
otherwise require the untimely disposition of securities, in an amount 
not exceeding 33 1/3% of the value of the Portfolio's total assets 
(including the amount borrowed) valued at the lesser of cost or market, 
less liabilities (not including the amount borrowed) valued at the time 
the borrowing is made and (b) a Portfolio may, to the extent consistent 
with its investment policies, enter into reverse repurchase agreements, 
forward roll transactions and similar investment strategies and 
techniques.

	4.	Portfolio will not make loans. This restriction does not apply 
to: (a) the purchase of debt obligations in which a Portfolio may 
invest consistent with its investment objectives and policies 
(including participation interests in such obligations); (b) repurchase 
agreements; and (c) loans of its portfolio securities.

	5.	A Portfolio will not purchase any securities on margin (except 
for such short-term credits as are necessary for the clearance of 
purchases and sales of Portfolio securities). For purposes of this 
restriction, the deposit or payment by a Portfolio of underlying 
securities and other assets in escrow and collateral agreements with 
respect to initial or maintenance margin in connection with futures 
contracts and related options and options on securities, indexes or 
similar items is not considered to be the purchase of a security on 
margin.

	6.	A Portfolio will not purchase or sell real estate, real estate 
mortgages, commodities or commodity contracts, but this restriction 
shall not prevent a Portfolio from (a) investing in and selling 
securities of issuers engaged in the real estate business and 
securities which are secured by real estate or interests therein; (b) 
holding or selling real estate received in connection with securities 
it holds; (c) trading in futures contracts and options on futures 
contracts or (d) investing in or purchasing real estate investment 
trust securities.

	7.	A Portfolio will not engage in the business of underwriting 
securities issued by other persons, except to the extent that a 
Portfolio may technically be deemed to be an underwriter under the 
Securities Act of 1933, as amended, in disposing of Portfolio 
securities.

	8.	Portfolio will not invest in oil, gas or other mineral leases 
or exploration or development programs.

	9.	Each Portfolio will not make short sales of securities, unless 
it owns or has the right to obtain securities equivalent in kind and 
amount to the securities sold short and provided that transactions in 
futures contracts and options are not deemed to constitute selling 
securities short.

	10.	A Portfolio will not make investments for the purpose of 
exercising control of management.

	11.	Portfolio will not purchase any security if as a result 
(unless the security is acquired pursuant to a plan of reorganization 
or an offer of exchange) the Portfolio would own any securities of a 
registered open-end investment company or more than 3% of the total 
outstanding voting stock of any registered closed-end investment 
company or more than 5% of the value of the Portfolio's total assets 
would be invested in securities of any one or more registered closed-
end investment companies.

	12.	Portfolio will not purchase any security if as a result the 
Portfolio would then have more than 5% of its total assets invested in 
securities of companies (including predecessors) that have been in 
continuous operation for fewer than three years.

	13.	Portfolio will not purchase or retain securities of any 
company if, to the knowledge of the Trust, any of the Trust's officers 
or Trustees, or any officer or director of the Consulting Group (the 
"Manager" or the "Consulting Group") or the Advisor(s) individually 
owns more than 1/2 of 1% of the outstanding securities of the company 
and together they own beneficially more than 5% of the securities.

	14.	Portfolio will not invest in excess of 5% of the value of 
its net assets in warrants, valued at the lower of cost or market 
value. Included within this amount, but not to exceed 2% of the value 
of the Portfolio's net assets, may be warrants that are not listed on 
the New York or American Stock Exchanges. Warrants acquired by the 
Portfolio in units or attached to securities may be deemed to be 
without value.

The Trust may make commitments more restrictive than the restrictions 
listed above so as to permit the sale of shares of a Portfolio in 
certain states. Should the Trust determine that a commitment is no 
longer in the best interests of the Portfolio and its shareholders, the 
Trust will revoke the commitment by terminating the sale of shares of 
the Portfolio in the state involved. The percentage limitations 
contained in the restrictions listed above apply at the time of 
purchase of securities.
    
Portfolio Transactions

	Decisions to buy and sell securities for a Portfolio are made by 
the Advisor(s), subject to the overall review of the Manager and the 
Board of Trustees. Although investment decisions for the Portfolios are 
made independently from those of the other accounts managed by an 
Advisor, investments of the type that the Portfolios may make also may 
be made by those other accounts. When a Portfolio and one or more other 
accounts managed by an Advisor are prepared to invest in, or desire to 
dispose of, the same security, available investments or opportunities 
for sales will be allocated in a manner believed by the Advisor to be 
equitable to each. In some cases, this procedure may adversely affect 
the price paid or received by a Portfolio or the size of the position 
obtained or disposed of by a Portfolio.

	Transactions on U.S. stock exchanges and some foreign stock 
exchanges involve the payment of negotiated brokerage commissions. On 
exchanges on which commissions are negotiated, the cost of transactions 
may vary among different brokers. On most foreign exchanges, 
commissions are generally fixed. No stated commission is generally 
applicable to securities traded in U.S. over-the-counter markets, but 
the underwriters include an underwriting commission or concession and 
the prices at which securities are purchased from and sold to dealers 
include a dealer's mark-up or mark-down. U.S. Government Securities 
generally are purchased from underwriters or dealers, although certain 
newly issued U.S. Government Securities may be purchased directly from 
the U.S. Treasury or from the issuing agency or instrumentality.

	In selecting brokers or dealers to execute securities 
transactions on behalf of a Portfolio, its Advisor seeks the best 
overall terms available. In assessing the best overall terms available 
for any transaction, the Advisor will consider the factors it deems 
relevant, including the breadth of the market in the security, the 
price of the security, the financial condition and execution capability 
of the broker or dealer and the reasonableness of the commission, if 
any, for the specific transaction and on a continuing basis. In 
addition, each Advisory Agreement between the Trust and the Advisor 
authorizes the Advisor, in selecting brokers or dealers to execute a 
particular transaction, and in evaluating the best overall terms 
available, to consider the brokerage and research services (as those 
terms are defined in Section 28(e) of the Securities Exchange Act of 
1934) provided to the Portfolio and/or other accounts over which the 
Advisor or its affiliates exercise investment discretion. The fees 
under the Management Agreement and the Advisory Agreements, 
respectively, are not reduced by reason of a Portfolio's Advisor 
receiving brokerage and research services. The Board of Trustees of the 
Trust will periodically review the commissions paid by a Portfolio to 
determine if the commissions paid over representative periods of time 
were reasonable in relation to the benefits inuring to the Portfolio. 
Over-the-counter purchases and sales by a Portfolio are transacted 
directly with principal market makers except in those cases in which 
better prices and executions may be obtained elsewhere.

	To the extent consistent with applicable provisions of the 1940 
Act and the rules and exemptions adopted by the SEC under the 1940 Act, 
the Board of Trustees has determined that transactions for a Portfolio 
may be executed through Smith Barney and other affiliated broker-
dealers if, in the judgment of the Advisor, the use of an affiliated 
broker-dealer is likely to result in price and execution at least as 
favorable as those of other qualified broker-dealers, and if, in the 
transaction, the affiliated broker-dealer charges the Portfolio a fair 
and reasonable rate.

	The Portfolios will not purchase any security, including U.S. 
Government Securities or Municipal Obligations, during the existence of 
any underwriting or selling group relating thereto of which Smith 
Barney is a member, except to the extent permitted by the SEC.

	The Portfolios may use Smith Barney and other affiliated broker-
dealers as a commodities broker in connection with entering into 
futures contracts and options on futures contracts if, in the judgment 
of the Advisor, the use of an affiliated broker-dealer is likely to 
result in price and execution at least as favorable as those of other 
qualified broker-dealers, and if, in the transaction, the affiliated 
broker-dealer charges the Portfolio a fair and reasonable rate. Smith 
Barney has agreed to charge the Portfolios commodity commissions at 
rates comparable to those charged by Smith Barney to its most favored 
clients for comparable trades in comparable accounts.

 BROKERAGE COMMISSIONS PAID TO SMITH BARNEY 

The following table sets forth certain information regarding each 
Portfolio's payment 
of brokerage commissions for the fiscal year ended August 31, 1997:






Portfolio




Total 
Brokerage 
Commissions



Commissions 
paid to 
Smith 
Barney

% of Total 
Brokerage 
Commissions 
paid to 
Smith 
Barney
% of Total 
Transactio
ns 
involving 
Commission
s Paid to 
Smith 
Barney

Balanced Investments
$102,303
$16,253
15.89%
10.28%

Large Capitalization 
Value Investments 
1,952,663
$132,015
4.47%
5.01%

Large Capitalization 
Growth Investments 
1,401,805
4,770
0.34%
0

Small Capitalization 
Value Investments 
761,002
27,534
3.62%
1.76%

Small Capitalization 
Growth Investments 
732,557
17,568
2.40%
0.46%

International Equity 
Investments
1,890,342
0
0
0

Emerging Markets 
Investments
1,973,521
0
0
0




	Government Money Investments, Intermediate Fixed Income 
Investments, Long-Term Bond Income Investments, Municipal Bond 
Investments, Mortgage Backed Investments and International Fixed Income 
Investments did not pay brokerage commissions during the year ended 
August 31, 1997.


	The following table sets forth certain information regarding each 
Portfolio's payment of brokerage commissions for the fiscal year ended 
August 31, 1996:






Portfolio



Total 
Brokerage 
Commissions



Commissions 
paid to 
Smith 
Barney

% of Total 
Brokerage 
Commissions 
paid to 
Smith 
Barney
% of Total 
Transactio
ns 
involving 
Commission 
Paid to 
Smith 
Barney

Balanced Investments
$     
48,129
$   8,430
17.51%
18.1%

Large Capitalization 
Value Investments 
1,320,797
52,448
3.97
4.5

Large Capitalization 
Growth Investments 
997,456
0
0
0

Small Capitalization 
Value Investments 
587,395
38,857
6.62
5.14

Small Capitalization 
Growth Investments 
515,880
4,098
0.79
0.38

Emerging Markets 
Equity Investments
819,616
0
0
0

International Equity 
Investments
2,471,727
0
0
0


Government Money Investments, Intermediate Fixed Income Investments, 
Long-Term Bond Income Investments, Municipal Bond Investments, Mortgage 
Backed Investments and International Fixed Income Investments did not 
pay brokerage commissions during the year ended August 31, 1996.



The following table sets forth certain information regarding each 
Portfolio's payment of brokerage commissions for the fiscal year ended 
August 31, 1995:






Portfolio




Total 
Brokerage 
Commissions



Commissions 
paid to 
Smith 
Barney

% of Total 
Brokerage 
Commissions 
paid to 
Smith 
Barney
% of Total 
Transactio
ns 
involving 
Commission
s Paid to 
Smith 
Barney

Balanced Investments
$36,073
N/A
N/A
N/A

Large Capitalization 
Value Investments 
819,528
$35,134
4.39%
0.25%

Large Capitalization 
Growth Investments 
743,269
2,448
0.33
0.02

Small Capitalization 
Value Investments 
1,272,329
23,322
1.83
0.12

Small Capitalization 
Growth Investments 
519,901
7,587
1.46
N/A

Emerging Markets 
Equity Investments
391,066
N/A
N/A
N/A

International Equity 
Investments
330,680
N/A
N/A
N/A


Government Money Investments, Intermediate Fixed Income Investments, 
Long-Term Bond Income Investments, Municipal Bond Investments, Mortgage 
Backed Investments and International Fixed Income Investments did not 
pay brokerage commissions during the year ended August 31, 1995.


Portfolio Turnover

	Government Money Investments may attempt to increase yields by 
trading to take advantage of short-term market variations, which 
results in high portfolio turnover. Because purchases and sales of 
money market instruments are usually effected as principal 
transactions, this policy does not result in high brokerage commissions 
to the Portfolio. The other Portfolios do not intend to seek profits 
through short-term trading. Nevertheless, the Portfolios will not 
consider portfolio turnover rate a limiting factor in making investment 
decisions.

	A Portfolio's turnover rate is calculated by dividing the lesser 
of purchases or sales of its portfolio securities for the year by the 
monthly average value of the portfolio securities. Securities or 
options with remaining maturities of one year or less on the date of 
acquisition are excluded from the calculation. Under certain market 
conditions, a Portfolio authorized to engage in transactions in options 
may experience increased portfolio turnover as a result of its 
investment strategies. For instance, the exercise of a substantial 
number of options written by a Portfolio (due to appreciation of the 
underlying security in the case of call options or depreciation of the 
underlying security in the case of put options) could result in a 
turnover rate in excess of 100%. A portfolio turnover rate of 100% 
would occur if all of a Portfolio's securities that are included in the 
computation of turnover were replaced once during a period of one year.

The Portfolios' portfolio turnover rates were as follows:



Portfolio
Year Ended 
August 31, 
1997
Year Ended 
August 31, 
1996

Government Money Investments
N/A
N/A

Intermediate Fixed Income 
Investments
98%
98%

Long-Term Bond Investments
34
125

Municipal Bond Investments
31
29

Mortgage Backed Investments
94
23

Balanced Investments
67
47

Large Capitalization Value Equity 
Investments
70
24

Large Capitalization Growth 
Investments
65
40

Small Capitalization Value Equity 
Investments
53
39

Small Capitalization Growth 
Investments
81
83

International Equity Investments
32
50

International Fixed Income 
Investments
251
211

Emerging Markets Equity 
Investments
105
106


	Certain practices that may be employed by a Portfolio could 
result in high portfolio turnover. For example, portfolio securities 
may be sold in anticipation of a rise in interest rates (market 
decline) or purchased in anticipation of a decline in interest rates 
(market rise) and later sold. In addition, a security may be sold and 
another of comparable quality purchased at approximately the same time 
to take advantage of what an Advisor believes to be a temporary 
disparity in the normal yield relationship between the two securities. 
These yield disparities may occur for reasons not directly related to 
the investment quality of particular issues or the general movement of 
interest rates, such as changes in the overall demand for, or supply 
of, various types of securities. Portfolio turnover rates may vary 
greatly from year to year as well as within a particular year and may 
be affected by cash requirements for redemptions of a Portfolio's 
shares as well as by requirements that enable the Portfolio to receive 
favorable tax treatment.

MANAGEMENT OF THE TRUST

Trustees and Officers of the Trust

	The Trustees and executive officers of the Trust, together with 
information as to their principal business occupations, are set forth 
below. The executive officers of the Trust are employees of 
organizations that provide services to the Portfolios. Each Trustee who 
is an "interested person" of the Trust, as defined in the 1940 Act, is 
indicated by an asterisk. As of the date of this Statement of 
Additional Information and the Prospectus, the Trustees and officers of 
the Trust as a group did not own any of the outstanding shares of the 
Portfolios. 


	*Walter E. Auch, Trustee (Age 76). Consultant to companies in the 
financial services industry; Director of Pimco Advisers L.P.; Brinson 
Partners; Nicholas-Applegate (each a registered investment adviser); 
Legend Properties, a real estate management company; Banyan Realty 
Trust; Banyan Land Fund II; Geotek Communications Inc., an 
international wireless communications company. His address is 6001 N. 
62nd Place, Paradise Valley, Arizona 85253.

	Martin Brody, Trustee (Age 76). Private Investor; His address is 
c/o HMK Associates, 30 Columbia Turnpike, Florham Park, N.J. 07932.

	Armon E. Kamesar, Trustee (Age 70). Chairman of the Board of TEC, 
an international organization of Chief Executive Officers; Trustee, 
U.S. Bankruptcy Court. His address is 7328 Country Club Drive, La 
Jolla, CA 92037.

	Stephen E. Kaufman, Trustee (Age 64). Attorney. His address is 
277 Park Avenue, New York, New York 10172.

	*Heath B. McLendon, Trustee and Chairman (Age 64). Managing 
Director of Smith Barney and Chairman of the Board of Smith Barney 
Strategy Advisers Inc. and Director and President of Smith Barney 
Mutual Funds Management Inc. ("SBMFM") and Travelers Investment 
Adviser, Inc. ("TIA"); prior to July 1993, Senior Executive Vice 
President of Shearson Lehman Brothers Inc.; Vice Chairman of Shearson 
Asset Management,; and a Director of PanAgora Asset Management, Inc. 
and PanAgora Asset Management Limited. Mr. McLendon serves on the Board 
of 41 Smith Barney Mutual Funds. His address is 388 Greenwich Street, 
New York, New York 10013.

	Lewis E. Daidone, Senior Vice President and Treasurer (Age 40). 
Managing Director of Smith Barney; Director and Senior Vice President 
of Smith Barney Mutual Funds Management Inc. ("SBMFM") and TIA.  Mr. 
Daidone serves as Treasurer of 41 Smith Barney Mutual Funds. His 
address is 388 Greenwich Street, New York, New York 10013. 

	Frank L. Campanale, Investment Officer (Age 45). President and 
Chief Executive Officer of Smith Barney's Consulting Group. Prior to 
1996, National Sales Director for Consulting Group. His address is 222 
Delaware Avenue, Wilmington, Delaware, 19801.

	LeRoy T. Pease, CFA, Investment Officer (Age 39). Vice President 
of Smith Barney Consulting Group. Prior to 1996, Chief Investment 
Officer of EMT Group and Manager for Investment Strategy for Bell 
Atlantic, Philadelphia, Pennsylvania. His address is 222 Delaware 
Avenue, Wilmington, Delaware, 19801. 

	Christina T. Sydor, Secretary (Age 46) Managing Director of Smith 
Barney; General Counsel and Secretary of SBMFM and TIA.  Ms. Sydor 
serves as Secretary of 41 Smith Barney Mutual Funds.  Her address is 
388 Greenwich Street, New York New York 10013.



	Irving David, Controller (Age 37) Director of Smith Barney and 
Controller of other investment companies associated with Smith Barney. 
Prior to March, 1994, Assistant Treasurer of First Investment 
Management Company. His address is 388 Greenwich Street, New York New 
York 10013.

	Thomas M. Reynolds, Controller (Age 37) Director of Smith Barney 
and Controller of the Fund and other investment companies associated 
with Smith Barney. His address is 388 Greenwich Street, New York New 
York 10013.

	As of December 5, 1997, the Trustees and officers as a group 
owned less than 1% of the outstanding common stock of the Trust.  As of 
December 5, 1997, the following shareholders own of record or 
beneficially 5% or more of shares of a Portfolio of the Trust :

Balanced Investments

SB Corp. Trust
Custodian
Synthes (USA)
Attn: Lisa Snyder
201 North Walnut Street
9th Floor
Wilmington, DE 19801
owned 889,217.396 (13.27%) shares

SBC Trust Company
TST Inc.
Attn. Jody Tourant
20232 E. 220th Street
Long Beach, CA 98010-1644 
owned 615,067.484 (9.177%) shares

SBC Trust Company TTEE
Marketing Specialist Sales Co.
Attn. Lisa Snyder
201 North Walnut Street
9th Floor
Wilmington, DE 19801
owned 529,862.251 (7.91%) shares

SBC Trust Company TTEE
EBCO Manufacturing Company
401 (k) Profit Sharing Plan
Attn. Lisa Snyder
201 North Walnut Street
9th Floor
Wilmington, DE 19801
owned 398,427.229 (5.95%) shares


International Fixed Income Investments

Boatmens Trust Company
FAD Maritz Inc. Retirement Plan
Acct. #011007037375/Julius Baer
Attn. Mutual Funds
PO Box 14737
St. Louis, MO 63178-4737
owned 984,159.177 (5.95%) shares

Remuneration

	No director, officer or employee of Smith Barney, the Manager, 
SBMFM, or any of their affiliates will receive any compensation from 
the Trust for serving as an officer or Trustee of the Trust. The Trust 
pays each Trustee who is not a director, officer or employee of Smith 
Barney, the Manager, any advisor, SBMFM or any of their affiliates a 
fee of $22,000 per annum plus $1,000 per meeting attended. The Trust 
reimburses the Trustees for travel and out-of-pocket expenses to attend 
meetings of the Board.  For the fiscal year ended August 31, 1997, such 
fees and expenses totaled $160,141.

	For the fiscal year ended August 31, 1997, the Trustees of the 
Trust were paid the following compensation:
									Total
				Pension or		Total		Number
				Retirement Benefits	Compensation	of Funds
		Aggregate	Accrued as Expense	From		Served in
Name		Compensation	of  the Trust		Fund Complex	Complex
Heath B. McLendon*	None	None			None		41
Walter Auch		$  25,400			None		$ 35,814	2
Martin Brody		26,300	None			120,314		19
Armon E. Kamesar	26,400	None			37,414		2
Stephen E. Kaufman	26,400	None			84,214		13

* Designates "interested trustee".


Manager; Advisors; Administrator

	The Manager serves as investment manager to the Trust pursuant to 
an investment management agreement ("Management Agreement"). Each 
Advisor serves as investment advisor to a Portfolio pursuant to 
separate written agreements with each Portfolio ("Advisory 
Agreements"), SBMFM serves as administrator to each Portfolio pursuant 
to a written agreement ("Administration Agreement"). The Management 
Agreement was most recently approved by the Board of Trustees, 
including a majority of the Trustees who are not "interested persons" 
of the Trust, the Manager, or the Advisors, on June 5, 1997 and by the 
shareholders of the Trust on June 1, 1993. The Administration Agreement 
was most recently approved by The Trust's Board of Trustees, including 
a majority of the disinterested Trustees, on June 5, 1997. Certain of 
the services provided and the fees paid by the Trust under the 
Management Agreement, the Advisory Agreements and the Administration 
Agreement are described in the Prospectus. In addition to the services 
described in the Prospectus, as administrator, SBMFM furnishes the 
Trust with statistical and research data, clerical help, accounting, 
data processing, bookkeeping, internal auditing and legal services and 
certain other services required by the Trust, prepares reports to the 
Trust's shareholders and prepares tax returns, reports to and filings 
with the SEC and state blue sky authorities.

	For the fiscal year ended August 31, 1997 the Portfolios accrued 
investment management and administration fees as follows: 

Portfolio
Management 
Fee
Administration Fee


Government Money Investments

$490,756

$654,342

Intermediate Fixed Income 
Investments
1,325,387
662,693

Long-Term Bond Investments
672,437
336,219

Municipal Bond Investments
190,705
95,353

Mortgage Backed Investments
642,610
257,044

Balanced Investments
400,541
133,514

Large Capitalization Value Equity 
Investments
8,514,670
3,452,366

Large Capitalization Growth 
Investments
6,413,997
3,126,348

Small Capitalization Value Equity 
Investments
2,721,377
1,039,277

Small Capitalization Growth 
Investments
3,060,297
1,217,818

International Equity Investments
5,372,446
1,986,030

International Fixed Income 
Investments
641,164
256,466

Emerging Markets Equity 
Investments
1,690,749
375,723


	Of the fees incurred by the following Portfolios, management, 
administration and custody fees, in the aggregate, were waived as 
follows: Government Money Investments - $124,703; Municipal Bond 
Investments - $12,330; Mortgage Backed Investments - $172,962; and 
Balanced Investments - $15,022.

	Effective March 21, 1994, the Manager has agreed to waive a 
portion of the fees otherwise payable to it by each of Large 
Capitalization Value Equity Investments and Large Capitalization Growth 
Investments so that the Manager would retain, as its annual management 
fee, no more than 0.30% of each such Portfolio's average daily net 
assets. Absent such waivers, the Manager would retain, as its annual 
management fee, between 0.40% and 0.45% of the assets of Large 
Capitalization Value Equity Investments and Large Capitalization Growth 
Investments managed by Parametric Portfolio Associates, Inc. and 
PanAgora, respectively.


	For the year ended August 31, 1996, the Portfolios 
accrued investment management and administration fees as 
follows: 

Portfolio
Management Fee
Administration Fee

Government Money Investments
$381,354
$508,472

Intermediate Fixed Income 
Investments
1,102,332
551,166

Long-Term Bond Investments
604,542
302,271

Municipal Bond Investments
195,025
97,512

Mortgage Backed Investments
570,243
228,097

Balanced Investments
243,698
81,199

Large Capitalization Value Equity 
Investments
6,468,340
2,660,110

Large Capitalization Growth 
Investments
5,143,03
1
2,085,238

Small Capitalization Value Equity 
Investments
2,188,471
823,189

Small Capitalization Growth 
Investments
2,217,550
828,378

International Equity Investments
4,205,662
1,509,451

International Fixed Income 
Investments
605,151
242,060

Emerging Markets Equity Investments
697,117
154,915


	For the year ended August 31, 1995, the Portfolios 
accrued investment management and administration fees as 
follows: 

Portfolio
Management Fee
Administration Fee

Government Money Investments
$332,386
$443,181

Intermediate Fixed Income 
Investments
881,208
440,604

Long-Term Bond Investments
525,476
262,738

Municipal Bond Investments
189,270
94,635

Mortgage Backed Investments
526,392
210,557

Balanced Investments
114,764
38,254

Large Capitalization Value Equity 
Investments
5,293,946
1,764,649

Large Capitalization Growth 
Investments
3,720,760
1,240,253

Small Capitalization Value Equity 
Investments
1,754,756
584,919

Small Capitalization Growth 
Investments
1,405,674
468,558

International Equity Investments
4,163,115
1,189,461

International Fixed Income 
Investments
536,934
214,773

Emerging Markets Equity Investments
445,779
99,062



	SBMFM was incorporated on March 12, 1968 under the laws of 
Delaware and is a registered investment adviser. SBMFM renders 
investment advice to investment companies that had aggregate assets 
under management as of November 30, 1997 in excess of $85 billion.  The 
Consulting Group, a division of SBMFM, has extensive experience in 
providing investment advisor selection services. The Consulting Group, 
through its predecessors, was established in 1973 with the primary 
objective of matching the investment needs of institutional and 
individual clients with appropriate and qualified money management 
organizations throughout the nation. In 1989, the Consulting Services 
Division was restructured and its research and investment advisory 
evaluation services functions were segregated and named the Consulting 
Group. The Consulting Group's analysts, in the aggregate, have many 
years of experience performing asset manager searches for institutional 
and individual clients. These analysts rely on the Manager's 
comprehensive database of money management firms, through which the 
Manager tracks the historic and ongoing performance of over 800 of the 
more than 16,000 registered investment advisors, and over 300 on-sight 
evaluation visits annually to advisors. As of November 28, 1997, the 
Consulting Group provided services with respect to over $135 billion in 
client assets representing more than 322,000 separate accounts under a 
variety of programs designed for individual and institutional 
investors.

	The Manager and the Advisors each pays the salaries of all 
officers and employees who are employed by it and the Trust, and the 
Manager maintains office facilities for the Trust. The Manager and the 
Advisors bear all expenses in connection with the performance of their 
respective services under the Management Agreement, the Advisory 
Agreements, and the Administration Agreement.

	As noted in the Prospectus, subject to the supervision and 
direction of the Manager and, ultimately, the Board of Trustees, each 
Advisor manages the securities held by the Portfolio it serves in 
accordance with the Portfolio's stated investment objectives and 
policies, makes investment decisions for the Portfolio and places 
orders to purchase and sell securities on behalf of the Portfolio. 

	The Manager has agreed that if in any fiscal year the aggregate 
expenses of the Portfolios (including fees payable pursuant to the 
Management Agreement, but excluding interest, taxes, brokerage fees 
and, if permitted by the relevant state securities commissions, 
extraordinary expenses) exceed the expense limitation of any state 
having jurisdiction over the Portfolios, the Manager will reduce its 
fees by the amount of the excess expenses. A fee reduction, if any, 
will be reconciled monthly. As of the date of this Statement of 
Additional Information, the most restrictive state expense limitation 
applicable to the Portfolios is 2.5% of the first $30 million of each 
Portfolio's average daily net assets, 2% of the next $70 million of 
each Portfolio's average daily net assets and 1.5% of each Portfolio's 
remaining average daily net assets. No such fee reduction was required 
for the years ended August 31, 1997 and 1996.

Counsel and Auditors

	Willkie Farr & Gallagher serves as counsel to the Trust. Stroock 
& Stroock & Lavan LLP serves as counsel to the Trustees who are not 
interested persons of the Trust.

	KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 10154, 
currently serve as the independent auditors of the Trust and rendered 
an opinion on the Trust's most recent financial statements and 
financial highlights.

Organization of the Trust

	 The Trust has been organized as an unincorporated business trust 
under the laws of The Commonwealth of Massachusetts pursuant to a 
Master Trust Agreement dated April 12, 1991, as amended from time to 
time (the "Trust Agreement").

	In the interest of economy and convenience, certificates 
representing shares in the Trust are not physically issued. PNC Bank, 
N.A., the Trust's custodian, maintains a record of each shareholder's 
ownership of Trust shares. Shares do not have cumulative voting rights, 
which means that holders of more than 50% of the shares voting for the 
election of Trustees can elect all Trustees. Shares are transferable, 
but have no preemptive, conversion or subscription rights. Shareholders 
generally vote on a Trust-wide basis, except with respect to 
continuation of the Advisory Agreements, in which case shareholders 
vote by Portfolio.

	Massachusetts law provides that shareholders could, under certain 
circumstances, be held personally liable for the obligations of the 
Trust. The Trust Agreement disclaims shareholder liability for acts or 
obligations of the Trust, however, and requires that notice of the 
disclaimer be given in each agreement, obligation or instrument entered 
into or executed by the Trust or a Trustee. The Trust Agreement 
provides for indemnification from the Trust's property for all losses 
and expenses of any shareholder held personally liable for the 
obligations of the Trust. Thus, the risk of a shareholder's incurring 
financial loss on account of shareholder liability is limited to 
circumstances in which the Trust would be unable to meet its 
obligations, a possibility that the Trust's management believes is 
remote. Upon payment of any liability incurred by the Trust, the 
shareholder paying the liability will be entitled to reimbursement from 
the general assets of the Trust. The Trustees intend to conduct the 
operations of the Trust in a manner so as to avoid, as far as possible, 
ultimate liability of the shareholders for liabilities of the Trust.

PURCHASE OF SHARE

	Purchases of shares of a Portfolio through an Advisory Service 
must be made through a brokerage account maintained with Smith Barney.  
Payment for Portfolio shares must be made by check directly to Smith 
Barney or to a broker that clears securities transactions through Smith 
Barney.  No brokerage account or inactivity fee is charged in 
connection with a brokerage account through which an investor purchases 
shares of a Portfolio.

	Shares of the Portfolios are available exclusively to 
participants in Advisory Services and are generally designed to relieve 
investors of the burden of devising an asset allocation strategy to 
meet their individual needs as well as selecting individual investments 
within each asset category among the myriad choices available. Advisory 
Services generally provide investment advice in connection with 
investments among the Portfolios by identifying the investor's risk 
tolerances and investment objectives through evaluation of an 
investment questionnaire; identifying and recommending in writing an 
appropriate allocation of assets among the Portfolios that conform to 
those tolerances and objectives in a written recommendation; and 
providing on a periodic basis, a written monitoring report to the 
investor containing an analysis and evaluation of an investor's account 
and recommending any appropriate changes in the allocation of assets 
among the Portfolios.  Usually under an Advisory Service, all 
investment decisions ultimately rest with the investor and investment 
discretion is not given to the investment adviser.

	The TRAK - Personalized Investment Advisory Service ("TRAK") 
sponsored by Smith Barney is one such advisory service.  Under the TRAK 
program the Consulting Group in its capacity as investment adviser to 
participants in TRAK generally directly provides to investors asset 
allocation recommendations and related services with respect to the 
Portfolios based on an evaluation of an investor's investment objective 
and risk tolerances.  Shares of the Portfolios are offered for purchase 
and redemption at their respective net asset value next determined, 
without imposition of any initial or contingent deferred sales charge 
except that the Consulting Group is paid directly by the investors 
purchasing Portfolio shares based on the recommendation of investment 
advisors other than the Consulting Group, or who contract with the 
Consulting Group for services other than those described above, pay, in 
lieu of TRAK charges, different fees for different levels of services 
as agreed upon with their investment advisers. 

REDEMPTION OF SHARES

	Detailed information on how to redeem shares of a Portfolio is 
included in the Prospectus. The right of redemption of shares of a 
Portfolio may be suspended or the date of payment postponed (i) for any 
periods during which the New York Stock Exchange, Inc. (the "NYSE") is 
closed (other than for customary weekend and holiday closings), (ii) 
when 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 or 
(iii) for such other periods as the SEC by order may permit for the 
protection of the Portfolio's shareholders.

Redemptions in Kind

	If the Board of Trustees determines that it would be detrimental 
to the best interests of a Portfolio's shareholders to make a 
redemption payment wholly in cash, the Portfolio may pay, in accordance 
with rules adopted by the SEC, any portion of a redemption in excess of 
the lesser of $250,000 or 1% of the Portfolio's net assets by a 
distribution in kind of readily marketable portfolio securities in lieu 
of cash. Redemptions failing to meet this threshold must be made in 
cash. Shareholders receiving distributions in kind of portfolio 
securities may incur brokerage commissions when subsequently disposing 
of those securities.

NET ASSET VALUE

	As noted in the Prospectus, the Trust will not calculate the net 
asset value of the Portfolios on certain holidays. On those days, 
securities held by a Portfolio may nevertheless be actively traded and 
the value of the Portfolio's shares could be significantly affected.

	Certain of the Portfolios may invest in foreign securities. As a 
result, the calculation of a Portfolio's net asset value may not take 
place contemporaneously with the determination of the prices of certain 
of the portfolio securities used in the calculation. A security that is 
listed or traded on more than one exchange is valued for purposes of 
calculating the Portfolio's net asset value at the quotation on the 
exchange determined to be the primary market for the security.

	In carrying out the Board's valuation policies, SBMFM, as 
administrator, may consult with an independent pricing service (the 
"Pricing Service") retained by the Trust. Debt securities of U.S. 
issuers (other than U.S. Government Securities and short-term 
investments) are valued by SBMFM after consultation with the Pricing 
Service. When in the judgment of the Pricing Service quoted bid prices 
for investments are readily available and are representative of the bid 
side of the market, these investments are valued at the mean between 
the quoted bid prices and asked prices. Investments for which no 
readily obtainable market quotations are available, in the judgment of 
the Pricing Service, are carried at fair value as determined by the 
Pricing Service. The procedures of the Pricing Service are reviewed 
periodically by the officers of the Trust under the general supervision 
and responsibility of the Board of Trustees.

	The valuation of the securities held by Government Money 
Investments and U.S. dollar-denominated securities with less than 60 
days to maturity held by the other Portfolios is based upon their 
amortized cost, which does not take into account unrealized capital 
gains or losses. Amortized cost valuation involves initially valuing an 
instrument at its cost and, thereafter, assuming a constant 
amortization to maturity of any discount or premium, regardless of the 
impact of fluctuating interest rates on the market value of the 
instrument. While this method provides certainty in valuation, it may 
result in periods during which value, as determined by amortized cost, 
is higher or lower than the price that the Portfolio would receive if 
it sold the instrument.

	Government Money Investments' use of the amortized cost method of 
valuing its portfolio securities is permitted by a rule adopted by the 
SEC. Under this rule, the Portfolio must maintain a dollar-weighted 
average portfolio maturity of 90 days or less, purchase only 
instruments having remaining maturities of 397 days or less, and invest 
only in securities determined by the Advisor, under the supervision of 
the Board of Trustees of the Trust, to be of high quality with minimal 
credit risks.

	Pursuant to the rule, the Board of Trustees also has established 
procedures designed to stabilize, to the extent reasonably possible, 
Government Money Investments' price per share as computed for the 
purpose of sales and redemptions at $1.00. These procedures include 
review of the Portfolio's holdings by the Board of Trustees, at such 
intervals as it may deem appropriate, to determine whether the 
Portfolio's net asset value calculated by using available market 
quotations or market equivalents deviates from $1.00 per share based on 
amortized cost.

	The rule also provides that the extent of any deviation between 
Government Money Investments' net asset value based on available market 
quotations or market equivalents and the $1.00 per share net asset 
value based on amortized cost must be examined by the Board of 
Trustees. In the event that the Board of Trustees determines that a 
deviation exists that may result in material dilution or other unfair 
results to investors or existing shareholders, pursuant to the rule the 
Board of Trustees must cause the Portfolio to take any corrective 
action the Board of Trustees regards as necessary and appropriate, 
including: selling portfolio instruments prior to maturity to realize 
capital gains or losses or to shorten average portfolio maturity; 
withholding dividends or paying distributions from capital or capital 
gains; redeeming shares in kind; or establishing a net asset value per 
share by using available market quotations.


DETERMINATION OF PERFORMANCE

	From time to time, the Trust may quote a Portfolio's yield or 
total return in advertisements or in reports and other communications 
to shareholders.

Yield and Equivalent Taxable Yield

	For a Portfolio other than Government Money Investments, the 30-
day yield figure described in the Prospectus is calculated according to 
a formula prescribed by the SEC, expressed as follows:
	
			YIELD = 2 [ (a-b + 1)(^6) -1]
		                                cd   

Where:
	a = dividends and interest earned during the period.

	b= expenses accrued for the period (net of reimbursement), 
including a ratable portion of the maximum annual fee for participation 
in TRAK.

	c= the average daily number of shares outstanding during the 
period that were entitled to receive dividends.

	d= the maximum offering price per share on the last day of the 
period.

	For the purpose of determining the interest earned (variable "a" 
in the formula) on debt obligations that were purchased by the 
Portfolio at a discount or premium, the formula generally calls for 
amortization of the discount or premium; the amortization schedule will 
be adjusted monthly to reflect changes in the market values of the debt 
obligations.

	A Portfolio's equivalent taxable 30-day yield is computed by 
dividing that portion of the Portfolio's 30-day yield that is tax 
exempt by one minus a stated income tax rate and adding the product to 
any portion of the Portfolio's yield that is not tax exempt.

	The yield for Government Money Investments is computed by: (a) 
determining the net change, exclusive of capital changes, in the value 
of a hypothetical pre-existing account in the Portfolio having a 
balance of one share at the beginning of a seven day period for which 
yield is to be quoted; (b) subtracting a hypothetical charge reflecting 
deductions from shareholder accounts; (c) dividing the difference by 
the value of the account at the beginning of the period to obtain the 
base period return; and (d) annualizing the results (i.e., multiplying 
the base period return by 365/7). The net change in the value of the 
account reflects the value of additional shares purchased with 
dividends declared on the original share and any such additional 
shares, but does not include realized gains and losses or unrealized 
appreciation and depreciation. In addition, the Portfolio may calculate 
a compound effective annualized yield by adding one to the base period 
return (calculated as described above), raising the sum to a power 
equal to 365/7 and subtracting one. 

	Investors should recognize that in periods of declining interest 
rates, a Portfolio's yield will tend to be somewhat higher than 
prevailing market rates, and in periods of rising interest rates will 
tend to be somewhat lower. In addition, when interest rates are 
falling, the inflow of net new money to a Portfolio from the continuous 
sale of its shares will likely be invested in instruments producing 
lower yields than the balance of its portfolio of securities, thereby 
reducing the current yield of the Portfolio. In periods of rising 
interest rates the opposite can be expected to occur.

	For the seven-day period ended August 31, 1997, the yield for the 
Government Money Investments portfolio was 5.00% (the effective yield 
was 5.12%) with an average dollar-weighted portfolio maturity of 84 
days.

Average Annual Total Return

	A Portfolio's average annual total return figures described in 
the Prospectus are computed according to a formula prescribed by the 
SEC, expressed as follows:

P(1+T)n = ERV

Where:
	P= a hypothetical initial payment of $1,000
	T= average annual total return, including the effect of the 
maximum annual 
fee for participation in TRAK. 
	n= number of years
	ERV= Ending Redeemable Value of a hypothetical $1,000 investment 
made at the beginning of a 1-, 5- or 10-year period at the end of a 1-, 
5- or 10-year period (or fractional portion thereof), assuming 
reinvestment of all dividends and distributions and the effect of the 
maximum annual fee for participation in TRAK.

	The ERV assumes complete redemption of the hypothetical 
investment at the end of the measuring period. A Portfolio's net 
investment income changes in response to fluctuations in interest rates 
and the expenses of the Portfolio.



	The Portfolios' average annual total returns without the effect 
of the maximum annual fee for participation in TRAK and with the effect 
of fee waivers were as follows:



Portfolio
From 
September 1, 
1996 through 
August 31, 
1997
From 
September 
1, 1992 
through 
August 31, 
1997 
From 
Inception*
** through 
August 31, 
1997 

Intermediate Fixed Income 
Investments
8.23%
6.01%
6.50%

Long-Term Bond Investments
12.93
6.17
6.61

Municipal Bond Investments
8.88
5.95
6.37

Mortgage Backed Investments
9.69
6.03
6.52

Balanced Investments*
26.05
N/A
13.74

Large Capitalization Value Equity 
Investments
38.98
15.62
15.17

Large Capitalization Growth 
Investments
37.47
16.43
16.11

Small Capitalization Value Equity 
Investments
42.40
15.06
14.48

Small Capitalization Growth 
Investments
17.53
25.64
21.76

International Equity Investments
9.53
10.48
8.42

International Fixed Income 
Investments
(1.52)
7.34
8.73

Emerging Markets Equity 
Investments**
9.88
N/A
5.51

_________________
*  	Balanced Investments commenced operations on February 16, 1993. 
** 	Aggregate from April 21, 1994 (commencement of operations of 
Emerging Market Equity Investments) 1994 through August 31, 1994. 
***	The remaining Portfolios commenced operations on November 18, 
1991.

	The Portfolios' average annual total returns with the effect of 
the maximum annual fee for participation in TRAK and with the effect of 
fee waivers were as follows: 




Portfolio
From 
September 1, 
1996 through 
August 31, 
1997
From 
September 
1, 1992 
through 
August 31, 
1997 
From 
Inception*
** through 
August 31, 
1997 

Intermediate Fixed Income 
Investments
6.63%
4.44%
4.92%

Long-Term Bond Investments
11.26
4.59
5.03

Municipal Bond Investments
7.26
4.38
4.74

Mortgage Backed Investments
8.06
4.46
4.94

Balanced Investments*
24.17
N/A
12.05

Large Capitalization Value Equity 
Investments
36.92
13.90
13.45

Large Capitalization Growth 
Investments
35.43
14.69
14.38

Small Capitalization Value Equity 
Investments
40.24
13.35
12.78

Small Capitalization Growth 
Investments
15.79
23.77
19.96

International Equity Investments
7.91
6.81
8.84

International Fixed Income 
Investments
(2.97)
5.75
7.12

Emerging Markets Equity 
Investments**
8.24
N/A
3.94

_________________
*  	Balanced Investments commenced operations on February 16, 1993. 
** 	Aggregate from April 21, 1994 (commencement of operations of 
Emerging Market Equity Investments) 1994 through August 31, 1994. 
***	The remaining Portfolios commenced operations on November 18, 
1991.


	A Portfolio's net investment income changes in response to 
fluctuations in interest rates and the expenses of the Portfolio. 
Consequently, the given performance quotations should not be considered 
as representative of the Portfolio's performance for any specified 
period in the future.

	A Portfolio's performance will vary from time to time depending 
upon market conditions, the composition of its portfolio and its 
operating expenses. Consequently, any given performance quotation 
should not be considered representative of a Portfolio's performance 
for any specified period in the future. In addition, because 
performance will fluctuate, it may not provide a basis for comparing an 
investment in the Portfolio with certain bank deposits or other 
investments that pay a fixed yield for a stated period of time. 
Investors comparing a Portfolio's performance with that of other mutual 
funds should give consideration to the quality and maturity of the 
respective investment companies' portfolio securities.

	Comparative performance information may be used from time to time 
in advertising the Portfolios' shares, including data from Lipper 
Analytical Services, Inc., Standard & Poor's 500 Composite Stock Price 
Index, the Dow Jones Industrial Average and other industry 
publications.

TAXES

	Each Portfolio intends to continue to qualify in each year as a 
"regulated investment company" under the Internal Revenue Code of 1986, 
as amended (the "Code"). Provided that a Portfolio (i) is a regulated 
investment company and (ii) distributes to its shareholders at least 
90% of its taxable net investment income (including, for this purpose, 
its net realized short-term capital gains) and 90% of its tax exempt 
interest income (reduced by certain expenses), it will not be liable 
for federal income taxes to the extent its taxable net investment 
income and its net realized long-term and short-term capital gains, if 
any, are distributed to its shareholders.

	Interest on indebtedness incurred by a shareholder to purchase or 
carry shares of Municipal Bond Investments will not be deductible for 
federal income tax purposes. If a shareholder receives exempt-interest 
dividends with respect to any share of Municipal Bond Investments and 
if the share is held by the shareholder for six months or less, then 
any loss on the sale or exchange of the share may, to the extent of the 
exempt-interest dividends, be disallowed. In addition, the Code may 
require a shareholder that receives exempt-interest dividends to treat 
as taxable income a portion of certain otherwise non-taxable social 
security and railroad retirement benefit payments. Furthermore, that 
portion of any exempt-interest dividend paid by Municipal Bond 
Investments that represents income derived from certain revenue or AMT-
Subject Bonds held by the Portfolio may not retain its tax exempt 
status in the hands of a shareholder who is a "substantial user" of a 
facility financed by such bonds, or a "related person" thereof. 
Moreover, as noted in the Prospectus, some or all of Municipal Bond 
Investments' exempt-interest dividends may be a specific preference 
item, or a component of an adjustment item, for purposes of the federal 
individual and corporate alternative minimum taxes. In addition, the 
receipt of Municipal Bond Investments' dividends and distributions may 
affect a foreign corporate shareholder's federal "branch profits" tax 
liability and federal "excess net passive income" tax liability of a 
shareholder of a Subchapter S corporation. Shareholders should consult 
their own tax advisors as to whether they are (i) "substantial users" 
with respect to a facility or "related" to such users within the 
meaning of the Code or (ii) subject to a federal alternative minimum 
tax, the federal "branch profits" tax, or the federal "excess net 
passive income" tax.

	As described above and in the Prospectus, each Portfolio other 
than Government Money Investments, Municipal Bond Investments and 
Balanced Investments may invest in certain types of warrants, foreign 
currencies, forward contracts, options and futures contracts. These 
Portfolios anticipate that these investment activities will not prevent 
them from qualifying as regulated investment companies.

	A Portfolio's transactions in foreign currencies, forward 
contracts, options and futures contracts (including options and futures 
contracts on foreign currencies) will be subject to special provisions 
of the Code that, among other things, may affect the character of gains 
and losses realized by the Portfolio (i.e., may affect whether gains or 
losses are ordinary or capital), accelerate recognition of income to 
the Portfolio and defer Portfolio losses. These rules could therefore 
affect the character, amount and timing of distributions to 
shareholders. These provisions also (i) will require a Portfolio to 
mark-to-market certain types of the positions in its portfolio (i.e., 
treat them as if they were closed out), and (ii) may cause a Portfolio 
to recognize income without receiving cash with which to pay dividends 
or make distributions in amounts necessary to satisfy the distribution 
requirements for avoiding income and excise taxes that are described 
above and in the Prospectus. Each of the Portfolios will monitor its 
transactions, will make the appropriate tax elections and will make the 
appropriate entries in its books and records when it acquires any 
foreign currency, forward contract, option, futures contract or hedged 
investment in order to mitigate the effect of these rules and prevent 
disqualification of the Portfolio as a regulated investment company.

	As a general rule, a Portfolio's gain or loss on a sale or 
exchange of an investment will be a long-term capital gain or loss if 
the Portfolio has held the investment for more than one year and will 
be a short-term capital gain or loss if it has held the investment for 
one year or less. Furthermore, as a general rule, a shareholder's gain 
or loss on a sale or redemption of Portfolio shares will be a long-term 
capital gain or loss if the shareholder has held his or her Portfolio 
shares for more than one year and will be a short-term capital gain or 
loss if he or she has held his or her Portfolio shares for one year or 
less.  Gainson shares held for more than 18 months will be eligible for 
the reduced 20% maximum capital gains tax rate.

	The Portfolios other than Government Money Investments, 
Intermediate Fixed Income Investments, Municipal Bond Investments and 
Mortgage Backed Investments expect to realize a significant amount of 
net long-term capital gains that will be distributed as described in 
the Prospectus. Distributions of net realized long-term capital gains 
("capital gain dividends") will be taxable to shareholders as long-term 
capital gains, regardless of how long a shareholder has held Portfolio 
shares, and will be designated as capital gain dividends in a written 
notice mailed to the shareholders after the close of the Portfolio's 
prior taxable year. If a shareholder receives a capital gain dividend 
with respect to any share held for six months or less, then any loss 
(to the extent not disallowed pursuant to the other six-month rule 
described above with respect to Municipal Bond Investments) on the sale 
or exchange of the share, to the extent of the capital gain dividend, 
shall be treated as a long-term capital loss.

	Each shareholder will receive after the close of the calendar 
year an annual statement as to the federal income tax status of his or 
her dividends and distributions for the prior calendar year. These 
statements will also designate the amount of exempt-interest dividends 
that is a specific preference item for purposes of the federal 
individual and corporate alternative minimum taxes. Each shareholder 
will also receive, if appropriate, various written notices after the 
close of a Portfolio's prior taxable year as to the federal income tax 
status of his or her Portfolio during the Portfolio's prior taxable 
year. Shareholders should consult their tax advisors as to any state 
and local taxes that may apply to these dividends and distributions. 
The dollar amount of dividends paid by Municipal Bond Investments that 
are excluded from federal income taxation and the dollar amount of 
dividends paid by Municipal Bond Investments that are subject to 
federal income taxation, including the portion, if any, of long-term 
capital gains distributions eligible for the reduced 20% maximum 
capital gains tax rate, if any, will vary for each shareholder 
depending upon the size and duration of each shareholder's investment 
in a Portfolio. To the extent that Municipal Bond Investments earns 
taxable net investment income, it intends to designate as taxable 
dividends the same percentage of each day's dividend as its taxable net 
investment income bears to its total net investment income earned on 
that day. Therefore, the percentage of each day's dividend designated 
as taxable, if any, may vary from day to day.

	If a Portfolio is the holder of record of any stock on the record 
date for any dividends payable with respect to the stock, these 
dividends shall be included in the Portfolio's gross income as of the 
later of (i) the date the stock became ex-dividend with respect to the 
dividends (i.e., the date on which a buyer of the stock would not be 
entitled to receive the declared, but unpaid, dividends) or (ii) the 
date the Portfolio acquired the stock. Accordingly, in order to satisfy 
its income distribution requirements, a Portfolio may be required to 
pay dividends based on anticipated earnings, and shareholders may 
receive dividends in an earlier year than would otherwise be the case. 

	Investors considering buying shares of a Portfolio on or just 
prior to the record date for a taxable dividend or capital gain 
distribution should be aware that the amount of the forthcoming 
dividend or distribution payment will be a taxable dividend or 
distribution payment.

	If a shareholder fails to furnish a correct taxpayer 
identification number, fails to report fully dividend or interest 
income, or fails to certify that he or she has provided a correct 
taxpayer identification number and that he or she is not subject to 
"backup withholding," then the shareholder may be subject to a 31% 
"backup withholding" tax with respect to (i) taxable dividends and 
distributions and (ii) the proceeds of any redemptions of Portfolio 
shares. An individual's taxpayer identification number is his or her 
social security number. The 31% "backup withholding" tax is not an 
additional tax and may be credited against a taxpayer's regular federal 
income tax liability. 

	The foregoing is only a summary of certain tax considerations 
generally affecting a Portfolio and its shareholders, and is not 
intended as a substitute for careful tax planning. Shareholders are 
urged to consult their tax advisors with specific reference to their 
own tax situations, including the effects of the Tax Relief Act of 1997 
and their state and local tax liabilities.

CUSTODIAN AND TRANSFER AGENT
 
	PNC Bank National Association ("PNC") and The Chase Manhattan 
Bank ("Chase") serve as the custodians for the Trust. The assets of the 
Trust are held under bank custodianship in accordance with the 1940 
Act. Under their custody agreements with the Trust, PNC and Chase are 
authorized to establish separate accounts for foreign securities owned 
by the Portfolios to be held with foreign branches of U.S. banks as 
well as certain foreign banks and securities depositories as sub-
custodians of assets owned by the Portfolios. For its custody services, 
PNC and Chase receive monthly fees charged to a Portfolio based upon 
the month-end, aggregate net asset value of the Portfolio plus certain 
charges for securities transactions. PNC and Chase are also reimbursed 
by the Portfolios for out-of-pocket expenses including the costs of any 
foreign and domestic sub-custodians.

	First Data Investors Services Group Inc., ("First Data"), a 
subsidiary of First Data Corporation, serves as the Trust's transfer 
agent. For its services as transfer agent, First Data receives fees 
charged to a Portfolio at an annual rate based upon the number of 
shareholder accounts maintained during the year. First Data is also 
reimbursed by the Portfolios for out-of-pocket expenses.

FINANCIAL STATEMENTS

	The Trust's Annual Report for the year ended August 31, 1997, was 
previously sent to all shareholders and is incorporated into this 
Statement of Additional Information by reference.

 





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