CONSULTING GROUP CAPITAL MARKETS FUNDS (the "Trust")

The following information supplements, revises and
supersedes, as applicable, the information contained in the
Prospectuses of the Trust.

Supplement dated June 22, 2001 to the Prospectuses*

On June 15, 2001 the Trust's Board of Trustees approved the
following:

? The implementation of a new investment advisory
agreement with one of the Trust's existing investment
advisors, Parametric Portfolio Associates
("Parametric").  Parametric has served as an investment
advisor to the Large Capitalization Value Equity
Investments ("Large Cap Value Portfolio") since 1994
pursuant to investment advisory agreements dated March
10, 1995 and May 12, 2000.

Prior to June 15, 2001, Parametric was a wholly owned
subsidiary of PIMCO Advisors L.P. ("PIMCO").  On or
about June 15, 2001, PIMCO sold Parametric to PPA
Acquisition, L.L.C.  This transaction resulted in the
assignment (as that term is defined in the Investment
Company Act of 1940, as amended) and, therefore,
automatic termination of the existing investment
advisory agreement.  In light of this, the Trustees, at
the request of Smith Barney Fund Management LLC (the
"Manager"), were asked to consider new investment
advisory agreements between the Manager and Parametric
with terms that are substantially identical to the
existing investment advisory agreement, including the
same advisory fees.  The Trustees approved the new
investment advisory agreement at a meeting held on June
15, 2001, and the agreement took effect on that date.
Operationally, Parametric remains independent and will
continue to operate under its existing name.  In
addition, the same personnel who previously serviced the
Large Cap Value Portfolio, including portfolio managers
and operations, client service and compliance personnel,
continue to service the Large Cap Value Portfolio.

Shareholders of the Large Cap Value Portfolio will soon
receive an information statement regarding this change.

? Changes in the allocation of the assets of the Large
Capitalization Growth Investments ("Large Cap Growth
Portfolio"), Large Cap Value Portfolio and Small
Capitalization Growth Investments ("Small Cap Growth
Portfolio").

The Large Cap Growth Portfolio's assets will be
allocated as follows:

Barclays Global Fund Advisors: 10%-20%
TCW Investment Management Company: 35%-45%
Turner Investment Partners, Inc.: 35%-45%

The Large Cap Value Portfolio's assets will be
allocated as follows:

Barclays Global Fund Advisors: 10%-20%
The Boston Company Asset Management LLC: 35%-45%
Chartwell Investment Partners: 35%-45%
Parametric Portfolio Associates: 5%-15%


The Small Cap Growth Portfolio's assets will be
allocated as follows:

Mellon Capital Management Corporation: 0-10%
Wall Street Associates: 20%-30%
Westpeak Investment Advisors, L.P.: 20%-30%
Kern Capital Management LLC: 20%-30%
Westfield Capital Management Co., Inc.: 20%-30%

? An amendment to the Trust's investment policies to
permit the Trust's Large Cap Growth Portfolio, Large Cap
Value Portfolio, Small Capitalization Growth
Investments, Small Capitalization Value Equity
Investments, International Equity Investments, Emerging
Markets Equity Investments, S&P 500 Index Investments
and Global Sciences and Technology Investments to invest
up to 10% of their assets in securities of other
investment companies, including shares in a portfolio of
securities that seeks to track the performance of an
underlying equity index or a portion of an equity index.






_______________________
*Prospectuses dated:

Consulting Group Capital Markets Funds
December 29, 2000

Consulting Group Capital Markets Funds - S&P 500 Index
Investments
December 29, 2000

Consulting Group Capital Markets Funds - Global Sciences
and Technology Investments
	November 10, 2000












TK 2088  12/00 S5

STATEMENT OF ADDITIONAL INFORMATION

CONSULTING GROUP CAPITAL MARKETS FUNDS
December 29, 2000,
As amended June 22, 2001

222 Delaware Avenue ~ Wilmington, Delaware 19801 ~
(212) 816-8725

	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, 2000, and should be read
in conjunction with the Prospectus. The Trust is a series
company that consists of eighteen portfolios, fifteen of
which are offered by the Prospectus.  These are Government
Money Investments, Intermediate Fixed Income Investments,
Long-Term Bond Investments, Municipal Bond Investments,
Mortgage Backed Investments, High Yield Investments,
Balanced Investments, Large Capitalization Value Equity
Investments, Large Capitalization Growth Investments, Small
Capitalization Value Equity Investments, Small
Capitalization Growth Investments, International Equity
Investments, International Fixed Income Investments,
Emerging Markets Equity Investments and Multi-Sector Fixed
Income Investments (individually, a "Portfolio" and
collectively, the "Portfolios"). Three additional
portfolios, Multi-Strategy Market Neutral Investments, S &
P 500 Index Investments and Global Sciences and Technology
Investments, are offered in separate prospectuses. The
Prospectus may be obtained by contacting any Financial
Consultant of Salomon Smith Barney Inc. ("Salomon 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

Trustees and Executive Officers of the Trust
2
Investment Objectives, Management Policies and Risk Factors
of the Portfolios
5
Investment Restrictions
26
Portfolio Transactions
28
Portfolio Turnover
33
Investment Management and Other Services
34
Purchase of Shares
41
Redemption of Shares
42
Redemptions in Kind
42
Net Asset Value
42
Determination of Performance
43
Taxes
48
Distributor
53
Custodians, Transfer Agent and Sub-Transfer Agent
53
Financial Statements
54
Appendix
55


Capitalized terms used but not defined in this Statement of
Additional Information have the meanings accorded to them
in the Prospectus.

TRUSTEES AND EXECUTIVE 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
Investment Company Act of 1940 (the "1940 Act"), is
indicated by an asterisk.

Walter E. Auch, Trustee (Age 80). Consultant to companies
in the financial services industry; Director of Brinson
Partners; Nicholas-Applegate (each a registered investment
adviser); Legend Properties, a real estate management
company; Banyan Realty Trust; and Banyan Land Fund II.
Director or trustee of 2 investment companies associated
with Citigroup Inc. ("Citigroup"). His address is 6001 N.
62nd Place, Paradise Valley, Arizona 85253.

Martin Brody, Trustee (Age 79). Private Investor; Director
or trustee of 20 investment companies associated with
Citigroup. His address is c/o HMK Associates, 30 Columbia
Turnpike, Florham Park, N.J. 07932.

H. John Ellis, Trustee (Age 73). Retired. Director or
trustee of 2 investment companies associated with
Citigroup.  His address is 858 East Crystal Downs Drive,
Frankfort, Michigan 49635.

Armon E. Kamesar, Trustee (Age 73). Chairman of the Board
of TEC, an international organization of Chief Executive
Officers; Trustee, U.S. Bankruptcy Court. Director or
trustee of 2 investment companies associated with
Citigroup. His address is 7328 Country Club Drive, La
Jolla, CA 92037.

Stephen E. Kaufman, Trustee (Age 68). Attorney. Director or
trustee of 13 investment companies associated with
Citigroup. His address is 277 Park Avenue, New York, New
York 10172.

*Heath B. McLendon, Trustee and Chairman of the Board (Age
67). Managing Director of Salomon Smith Barney and Chairman
of the Board of Salomon Smith Barney Strategy Advisers Inc.
and Director and President of SSB Citi Fund Management LLC
("SSB Citi") (successor to SSBC Fund Management Inc.) and
Travelers Investment Adviser, Inc. ("TIA"); Mr. McLendon
serves on the Board of 78 investment companies associated
with Citigroup. His address is 7 World Trade Center, New
York, New York 10048.

Lewis E. Daidone, Senior Vice President and Treasurer (Age
42). Managing Director of Salomon Smith Barney; Director
and Senior Vice President of SSB Citi and TIA.  Mr. Daidone
serves as Senior Vice President and Treasurer of 61
investment companies associated with Citigroup. His address
is 125 Broad Street, New York, New York 10004.

Frank L. Campanale, Investment Officer (Age 47). President
and Chief Executive Officer of Salomon Smith Barney's
Consulting Group (the "Manager"). 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 41). First
Vice President of Salomon 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 50). Managing Director
of Salomon Smith Barney; General Counsel and Secretary of
SSB Citi and TIA.  Ms. Sydor serves as Secretary of 61
investment companies associated with Citigroup.  Her
address is 7 World Trade Center, New York New York 10048.

Irving David, Controller (Age 39). Director of Salomon
Smith Barney. Controller or Assistant Treasurer of 43
investment companies associated with Citigroup; Formerly
Assistant Treasurer of First Investment Management Company;
His address is 125 Broad Street, New York, New York 10004.

As of December 15, 2000, the Trustees and officers as a
group owned less than 1% of the outstanding common stock of
the Trust. As of December 15, 2000, 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: Patricia Davis
1690 Russell Road
Paoli, PA 19301
owned 1,330,302.030 shares (23.17%)

SBC Trust Company TTEE
Reihalt Thomas Corporation
Attn: Robert Holman
14631 N. Scottsdale Road
Scottsdale, AZ 85254
owned 600,820.419 shares (10.46%)

SBC Trust Company
Cray Inc.
Attn: Mary Anderson
411 First Avenue South, 600
Seattle, WA 98104
owned 425,596.259 shares (7.41%)

SBC Trust Company TTEE
Oasis Corporation
Attn: Tom Benua
265 N. Hamilton Road
Columbus, OH 43213
owned 311,712.727 shares (5.43%)

Multi-Sector Fixed Income Investments

SB Holdings Inc.
Attn: Barbara Brinn
125 Broad Street
10th Floor
New York, NY 10004
owned 1,333,522.106 shares (35.41%)

SBC Trust Company
Cray Inc.
Attn: Mary Anderson
411 First Avenue South, 600
Seattle, WA 98104
owned 560,023.693 shares (14.87%)

SBC Trust Company TTEE
Galey & Lord
Attn: Brenda Miller
P.O. Box 1400
Columbus, GA 31902
owned 352,140.685 shares (9.35%)

SBC Trust Company TTEE
Oasis Corporation
Attn: Tom Benua
265 N. Hamilton Road
Columbus, OH 43213
owned 312,185.538 shares (8.29%)

SBC Trust Company TTEE
The Barry-Wehmiller Company
Attn: Jim Hertel
8020 Forsyth Blvd.
Clayton, MO 63105
owned 250,746.911 shares (6.66%)

SBC Trust Company TTEE
Galey & Lord
Attn: Brenda Miller
P.O. Box 1400
Columbus, GA 31902
owned 206,821.365 shares (5.49%)

Remuneration.  No director, officer or employee of Salomon
Smith Barney, SSB Citi 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
Salomon Smith Barney, the Manager, any advisor, SSB Citi or
any of their affiliates a fee of $32,000 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, 2000, such fees and expenses totaled $21,166.

For the fiscal year ended August 31, 2000, 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 Trust 	Fund Complex*	Complex
Heath B. McLendon**	None	None	None	78
Walter Auch	$36,300	None	$ 50,600	2
Martin Brody	35,100	None	 138,000	20
H. John Ellis	37,300	None	   50,600	2
Armon E. Kamesar	37,300	None	   52,600	2
Stephen E. Kaufman	37,300	None	  110,650	13

*    For calendar year ended December 31, 1999.
** Designates "interested trustee".

INVESTMENT OBJECTIVES, MANAGEMENT POLICIES AND RISK FACTORS

Each of the Portfolios is a diversified, open-end
management investment company, except International Fixed
Income Investments, which is a non-diversified Portfolio.
The Prospectus discusses the investment objectives of the
Portfolios, separate series of 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. The Portfolios may
rely upon the independent advice of their respective
investment advisors (separately a "Subadvisor",
collectively, the "Subadvisors") to evaluate potential
investments.



Equity Securities.  The equity oriented Portfolios may
invest in all types of equity securities and High Yield
Investments may invest up to 10% of its assets in equity
securities. Common stock is an interest in a company,
limited liability company, or similar entity that entitles
the holder to a share in the profits of the company, in the
form of dividends, and the proceeds from a sale or
liquidation of the company.  The interests of common
shareholders are the most junior in a corporate structure.
This means that in the event of the bankruptcy of the
company its creditors and any holders of a preferred class
of equity securities are paid before the common
stockholders are entitled to receive anything.  However,
any assets of the company in excess of the amount owed to
creditors or preferred shareholders are shared pro-rata
among the common stockholders.  Common stockholders
normally have voting control of the company and are
entitled to vote on the election of directors and certain
fundamental corporate actions.

Preferred stocks are equity securities, but they have many
characteristics of fixed income securities.  Their
similarities to fixed income securities generally cause
preferred stocks to trade more like debt instruments than
common stocks.  Thus, the value of preferred stocks
reflects the credit risk of the company and the dividend
yield on the preferred stocks compared to prevailing
interest rates.  Preferred shares are entitled to receive
dividends before any dividend is paid to the holders of
common stock.  The dividend may be at a fixed or variable
dividend payment rate, may be payable on fixed dates or at
times determined by the company and may be payable in cash,
additional shares of preferred stock or other securities.
Many preferred stocks are redeemable at the option of the
company after a certain date.  Holders of preferred stock
are also entitled to receive a payment upon the sale or
liquidation of a company before any payment is made to the
company's common stockholders.  However, preferred stock is
an equity security and, therefore, is junior in priority of
payment to the company's creditors in the event of a
bankruptcy, including holders of the company's debt
securities.  This junior ranking to creditors makes
preferred stock riskier in some respects than fixed income
securities.

Convertible securities are preferred stocks or fixed income
securities that are convertible at the option of the
holder, or in some circumstances at the option of the
issuing company, at a stated exchange rate or formula into
the company's common stock or other equity securities.  At
the time a company sells the convertible securities, the
conversion price is normally higher than the market price
of the common stock.  A holder of convertible securities
will generally receive interest or dividends at a rate
lower than comparable debt securities, but the holder has
the potential for additional gain if the market value of
the common stock exceeds the conversion price.  When the
market price of the common stock is below the conversion
price, convertible securities tend to trade like fixed
income securities.  If the market price of the common stock
is higher than the conversion price, convertible securities
tend to trade like the common stock.  Convertible
securities rank senior to common stocks in an issuer's
capital structure and consequently may be of higher quality
and entail less risk than the issuer's common stock.

Warrants and stock purchase rights are securities
permitting, but not obligating, their holder to purchase
other securities, normally the issuer's common stock.
Stock purchase rights are frequently issued as a dividend
to a company's stockholders and represent the right to
purchase a fixed number of shares at a fixed or formula
price.  The price may reflect a discount to the market
price.  Warrants are generally sold by a company or issuer
together with fixed income securities and represent the
right to a fixed number of shares of common stock or other
securities at a fixed or formula price.  The exercise price
is normally higher than the market price at the time the
company sells the warrant.

Warrants and stock purchase rights do not carry with them
the right to receive dividends on or to vote the securities
that they entitle their holders to purchase.  They also do
not entitle the holder to share in the assets of the
company in a liquidation.  The rights to purchase common
stock or other securities conferred by a warrant or stock
purchase right can only be exercised on specific dates or
for a specific period.  Trading in these instruments is
affected both by the relationship of the exercise price to
the current market price of the common stock or other
securities and also by the period remaining until the right
or warrant expires.  An investment in warrants and stock
purchase rights may be considered more speculative than
other types of equity investments.  A warrant or stock
purchase right expires worthless if it is not exercised on
or prior to its expiration date.

Real Estate Investment Trusts ("REITs").  Each Portfolio
may invest in REITs.  REITs are pooled investment vehicles
which invest primarily in income producing real estate or
real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination
of equity and mortgage REITs. Equity REITs invest the
majority of their assets directly in real property and
derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling
properties that have appreciated in value. Mortgage REITs
invest the majority of their assets in real estate
mortgages and derive income from the collection of interest
payments. REITs are not taxed on income distributed to
shareholders provided they comply with the applicable
requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). Debt securities issued by REITs, for
the most part, are general and unsecured obligations and
are subject to risks associated with REITs.

Investing in REITs involves certain unique risks in
addition to those risks associated with investing in the
real estate industry in general. An equity REIT may be
affected by changes in the value of the underlying
properties owned by the REIT. A mortgage REIT may be
affected by changes in interest rates and the ability of
the issuers of its portfolio mortgages to repay their
obligations. REITs are dependent upon the skills of their
managers and are not diversified. REITs are generally
dependent upon maintaining cash flows to repay borrowings
and to make distributions to shareholders and are subject
to the risk of default by lessees or borrowers. REITs whose
underlying assets are concentrated in properties used by a
particular industry, such as health care, are also subject
to risks associated with such industry.

REITs (especially mortgage REITs) are also subject to
interest rate risks. When interest rates decline, the value
of a REIT's investment in fixed rate obligations can be
expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can
be expected to decline. If the REIT invests in adjustable
rate mortgage loans the interest rates on which are reset
periodically, yields on a REIT's investments in such loans
will gradually align themselves to reflect changes in
market interest rates. This causes the value of such
investments to fluctuate less dramatically in response to
interest rate fluctuations than would investments in fixed
rate obligations.

REITs may have limited financial resources, may trade less
frequently and in a limited volume and may be subject to
more abrupt or erratic price movements than larger company
securities. Historically REITs have been more volatile in
price than the larger capitalization stocks included in
Standard & Poor's 500 Stock Index (the "S&P 500").

Other Investment Companies.  The Portfolios may invest in
the securities of other investment companies to the extent
such investments are consistent with the Portfolios'
investment objectives and policies and permissible under
the Investment Company Act of 1940, as amended (the "1940
Act"). Under the 1940 Act, a Portfolio may not acquire the
securities of other domestic or foreign investment
companies if, as a result, (i) more than 10% of the
Portfolio's total assets would be invested in securities of
other investment companies, (ii) such purchase would result
in more than 3% of the total outstanding voting securities
of any one investment company being held by the Portfolio,
or (iii) more than 5% of the Portfolio's total assets would
be invested in any one investment company. These
limitations do not apply to the purchase of shares of any
investment company in connection with a merger,
consolidation, reorganization or acquisition of
substantially all the assets of another investment company.
A Portfolio will not invest in other investment companies
for which the Subadvisors or any of their affiliates act as
an investment advisor or distributor.

Large Capitalization Growth Investments, Large
Capitalization Value Equity Investments, Small
Capitalization Growth Investments, Small Capitalization
Value Equity Investments, International Equity Investments
and Emerging Markets Equity Investments may invest up to
10% of their assets in securities of other investment
companies, including shares in a portfolio of securities
that seeks to track the performance of an underlying equity
index or a portion of an equity index ("Exchange Traded
Funds").

A Portfolio, as a holder of the securities of other
investment companies, will bear its pro rata portion of the
other investment companies' expenses, including advisory
fees. These expenses are in addition to the direct expenses
of the Portfolio's own operations.

Short Sales.  Large Capitalization Growth Investments,
Large Capitalization Value Equity Investments, Small
Capitalization Growth Investments, Small Capitalization
Value Equity Investments, International Equity Investments
and Emerging Markets Equity Investments may seek to hedge
investments or realize additional gains through short
sales.  Short sales are transactions in which a Portfolio
sells a security it does not own in anticipation of a
decline in the market value of that security.  To complete
such a transaction, the Portfolio borrows the security to
make delivery to the buyer.  The Portfolio is obligated to
replace the security borrowed by purchasing it at the
market price at or prior to the time of replacement.  The
price at such time may be more or less than the price at
which the security was sold by the Portfolio.  Until the
security is replaced, the Portfolio is required to repay
the lender any dividends or interest that accrue during the
period of the loan.  To borrow the security, the Portfolio
also may be required to pay a premium, which would increase
the cost of the security sold.  A portion of the net
proceeds of the short sale may be retained by the broker
(or by the Portfolio's custodian in a special custody
account), to the extent necessary to collateralize the
broker and to meet margin requirements, until the short
position is closed out.  The Portfolio will also incur
transaction costs in effecting short sales.

A Portfolio will incur a loss as a result of the short sale
if the price of the security increases between the date of
the short sale and the date on which the Portfolio replaces
the borrowed security.  A Portfolio will realize a gain if
the security declines in price between those dates.  The
amount of any gain will be decreased, and the amount of any
loss increased, by the amount of the premiums, dividends,
interest or expenses the Portfolio may be required to pay
in connection with a short sale.  An increase in the value
of a security sold short by a Portfolio over the price at
which it was sold short will result in a loss to the
Portfolio, and there can be no assurance that the Portfolio
will be able to close out the position at any particular
time or at an acceptable price.  Thus the Portfolio's
losses on short sales are potentially unlimited.

Whenever a Portfolio engages in short sales, it maintains
cash or liquid securities in an amount that, when combined
with the amount of collateral deposited with the broker in
connection with the short sale, equals the current market
value of the security sold short.  The assets so maintained
are marked to market daily.

Management currently intends to limit a Portfolio's short
sales to shares issued by Exchange Traded Funds.  Exchange
Traded Funds hold portfolios of securities that seek to
track the performance of a specific index or basket of
stocks.  Utilizing this strategy will allow the Subadvisor
to adjust a Portfolio's exposure in a particular sector, in
a cost effective and convenient manner, without having to
sell the Portfolio's holdings of individual stocks in that
sector.


Investing in Small and Medium Capitalization Companies.
Investing in the equity securities of small and medium
capitalization companies involves additional risks compared
to investing in large capitalization companies.  Compared
to large companies, these companies may have more limited
product lines and capital resources; have less established
markets for their products; have earnings that are more
sensitive to changes in the economy, competition and
technology and be more dependent upon key members of
management.

The market value of the common stock of small and medium
capitalization companies may be more volatile, particularly
in response to company announcements or industry events;
have less active trading markets and be harder to sell at
the time and prices that a Subadvisor considers
appropriate.

Fixed Income Securities. The market value of the
obligations held by the Portfolios can be expected to vary
inversely to changes in prevailing interest rates.
Investors also should recognize that, in periods of
declining interest rates, the Portfolios' yield will tend
to be somewhat higher than prevailing market rates and, in
periods of rising interest rates, the Portfolios' yield
will tend to be somewhat lower.  Also, when interest rates
are falling, the inflow of net new money to the Portfolios
from the continuous sale of their shares will tend to be
invested in instruments producing lower yields than the
balance of their portfolios, thereby reducing the
Portfolios' current yield.  In periods of rising interest
rates, the opposite can be expected to occur.  In addition,
securities in which the Portfolios may invest may not yield
as high a level of current income as might be achieved by
investing in securities with less liquidity, less
creditworthiness or longer maturities.

The Portfolios invest in U.S. Government securities,
corporate bonds, debentures, non-convertible fixed income
preferred stocks, mortgage related securities, asset-backed
securities ("ABS"), Eurodollar certificates of deposit,
Eurodollar bonds and Yankee bonds.

Debt Securities Rating Criteria.  Investment grade debt
securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("S & P"), the equivalent rating of
other nationally recognized statistical rating
organizations ("NRSROs") or determined to be of equivalent
credit quality by the Subadvisor.  Debt securities rated
BBB are considered medium grade obligations with
speculative characteristics, and adverse economic
conditions or changing circumstances may weaken the
issuer's ability to pay interest and repay principal.

Below investment grade debt securities are those rated "BB"
and below by S & P or the equivalent rating of other
NRSROs.  Below investment grade debt securities or
comparable unrated securities are commonly referred to as
"junk bonds" and are considered predominantly speculative
and may be questionable as to principal and interest
payments. Changes in economic conditions are more likely to
lead to a weakened capacity to make principal payments and
interest payments. The amount of junk bond securities
outstanding has proliferated as an increasing number of
issuers have used junk bonds for corporate financing.  An
economic downturn could severely affect the ability of
highly leveraged issuers to service their debt obligations
or to repay their obligations upon maturity. Factors having
an adverse impact on the market value of lower quality
securities will have an adverse effect on a Portfolio's net
asset value to the extent it invests in such securities. In
addition, the Portfolios may incur additional expenses to
the extent they are required to seek recovery upon a
default in payment of principal or interest on their
portfolio holdings.

The secondary market for junk bond securities, which is
concentrated in relatively few market makers, may not be as
liquid as the secondary market for more highly rated
securities, a factor which may have an adverse effect on a
Portfolio's ability to dispose of a particular security
when necessary to meet its liquidity needs. Under adverse
market or economic conditions, the secondary market for
junk bond securities could contract further, independent of
any specific adverse changes in the condition of a
particular issuer. As a result, a Portfolio could find it
more difficult to sell these securities or may be able to
sell the securities only at prices lower than if such
securities were widely traded. Prices realized upon the
sale of such lower rated or unrated securities, under these
circumstances, may be less than the prices used in
calculating the Portfolio's net asset value.

Since investors generally perceive that there are greater
risks associated with lower quality debt securities of the
type in which a Portfolio may invest a portion of its
assets, the yields and prices of such securities may tend
to fluctuate more than those for higher rated securities.
In the lower quality segments of the debt securities
market, changes in perceptions of issuers' creditworthiness
tend to occur more frequently and in a more pronounced
manner than do changes in higher quality segments of the
debt securities market, resulting in greater yield and
price volatility.

Lower rated and comparable unrated debt securities tend to
offer higher yields than higher rated securities with the
same maturities because the historical financial condition
of the issuers of such securities may not have been as
strong as that of other issuers.  However, lower rated
securities generally involve greater risks of loss of
income and principal than higher rated securities.  The
Subadvisors will attempt to reduce these risks through
portfolio diversification and by analysis of each issuer
and its ability to make timely payments of income and
principal, as well as broad economic trends and corporate
developments.

The definitions of the ratings of debt obligations may be
found in the Appendix following this Statement of
Additional Information.

Ratings as Investment Criteria. In general, the ratings of
an NRSRO such as Moody's Investors Service, Inc.
("Moody's") and 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 Subadvisors 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.

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 that
Portfolio. Neither event will require the sale of the debt
obligation by the Portfolio, but the Portfolio's
Subadvisors will consider the event in their 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 an NRSRO, a Portfolio will attempt to use comparable
ratings as standards for its investments in accordance with
its investment objectives and policies.

Municipal Obligations.  Municipal Bond Investments invests
in municipal obligations.  These are obligations issued by
or on behalf of states, territories and possessions of the
United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities the
interest on which, in the opinion of bond counsel to the
issuer, is exempt from federal income tax. Municipal
obligations are issued to obtain funds for various public
purposes, including the construction of public facilities
such as airports, bridges, highways, housing, hospitals,
mass transportation, schools, streets, water and sewer
works, gas, and electric utilities.  They may also be
issued to refund outstanding obligations, to obtain funds
for general operating expenses, to obtain funds to loan to
other public institutions and facilities or to obtain funds
in anticipation of the receipt of revenue or the issuance
of other obligations.  Municipal obligations consist of
municipal bonds, municipal notes and municipal commercial
paper as well as variable or floating rate obligations and
participation interests.

Municipal obligations are subject to the provisions of
bankruptcy, insolvency and other laws, such as the federal
Bankruptcy Code, affecting the rights and remedies of
creditors.  In addition, Congress or state legislatures may
enact laws extending the time for payment of principal or
interest, or both, or imposing other constraints upon
enforcement of such obligations or upon the ability of
municipalities to levy taxes.  There is also the
possibility that, as a result of litigation or other
conditions, the power or ability of any issuer to pay when
due the principal of and interest on its obligations may be
materially affected.

The yields on municipal obligations are dependent on a
variety of factors, including general market conditions,
supply and demand, general conditions of the municipal
market, size of a particular offering, the maturity of the
obligation and the rating of the issue.

For purposes of applying the Portfolio's diversification,
concentration and other restrictions, the identification of
the issuer of municipal obligations depends on the terms
and conditions of the obligation.  The "issuer" of
municipal obligations is generally deemed to be the person
expected to be the source of principal and interest
payments on the obligations and may be:

? the governmental agency, authority, instrumentality or
other political subdivision that issued the security;
? the non-governmental user of a revenue bond-financed
facility, the assets and revenues of which will be used
to meet the payment obligations on the municipal
security; or
? the guarantor of payment obligations on the municipal
obligations.

Municipal bonds, which generally have maturities of more
than one year when issued, are designed to meet longer-term
capital needs.  Municipal bonds have two principal
classifications: general obligation bonds and revenue
bonds.  General obligation bonds are backed by the issuer's
pledge of its full faith and credit based on its ability to
levy taxes for the payment of principal and interest.
These levies may be constitutionally or statutorily limited
as to rate or amount.  Revenue bonds are not backed by an
issuer's taxing authority but are payable only from the
revenue derived from a particular facility or class of
facilities.  The issuer may repay these bonds from the
proceeds of a special excise tax or other specific revenue
source, but not the issuer's general taxing power.

Private activity bonds include certain types of industrial
development bonds ("IDBs") issued by public authorities to
finance various privately-operated facilities for business
and manufacturing, housing, sports, convention or trade
show facilities, airport, mass transit, port and parking
facilities, air or water pollution control facilities, and
certain facilities for water supply, gas, electricity or
sewage or solid waste disposal.  Private activity bonds
are, in most cases, revenue bonds and are generally secured
by the revenues derived from payments by the private user.
The payment of the principal and interest on private
activity bonds is dependent solely on the ability of the
user of the facilities financed by the bonds to meet its
financial obligations and the pledge, if any, of real and
personal property so financed as security for such payment.

Private activity bonds that are issued by or on behalf of
public authorities to finance privately operated facilities
are considered to be municipal obligations if the interest
paid on them qualifies as excluded from gross income (but
not necessarily from alternative minimum taxable income)
for federal income tax purposes in the opinion of bond
counsel to the issuer.  Dividends derived from interest
income on municipal obligations are a "current earnings"
adjustment for purposes of the federal corporate
alternative minimum tax.

Interest income on certain types of private activity bonds
issued after August 7, 1986 to finance non-governmental
activities is a specific tax preference item for purposes
of the federal individual and corporate alternative minimum
taxes.  Individual and corporate shareholders may be
subject to a federal alternative minimum tax to the extent
that the fund's dividends are derived from interest on
those bonds.

Municipal notes are short-term obligations of issuing
municipalities or agencies, generally having maturities of
less than three years, such as tax anticipation notes,
revenue anticipation notes and bond anticipation notes.
These instruments are sold in anticipation of the
collection of taxes, receipt of other revenues or a bond
sale.  State and local governments or governmental entities
issue these notes to provide short-term capital or to meet
cash flow needs.

Mortgage Backed Securities.  Mortgage Backed Investments,
Intermediate Fixed Income Investments, Long-Term Bond
Investments, Balanced Investments and Multi-Sector Fixed
Income Investments may invest in mortgage related
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. Government
National Mortgage Association ("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 the
Federal National Mortgage Association ("FNMA") and Federal
Home Loan Mortgage Corporation ("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
Portfolios' investment objectives and policies, will
consider making investments in those new types of
securities on behalf of the Portfolios.  A Portfolio will
not invest more than 25% of its assets in privately issued
mortgage related securities.

Mortgage Backed Investments, Intermediate Fixed Income
Investments, Long-Term Bond Investments, Multi-Sector Fixed
Income Investments and Balanced Investments may invest in
government stripped mortgage related securities,
collateralized mortgage obligations ("CMOs") collateralized
by mortgage loans or mortgage pass-through certificates and
zero coupon securities, which, because of changes in
interest rates, may be more speculative and subject to
greater fluctuations in value than securities that pay
interest currently.  CMOs are obligations fully
collateralized by a portfolio of mortgages or mortgage
related securities. Payments of principal and interest on
the mortgages are passed through to the holders of the CMOs
on the same schedule as they are received, although certain
classes of CMOs have priority over others with respect to
the receipt of prepayments on the mortgages.  Therefore,
depending on the type of CMOs in which a Portfolio invests,
the investment may be subject to a greater or lesser risk
of prepayment than other types of mortgage related
securities.

The Portfolios 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 Portfolios 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 1940 Act.

Asset-Backed Securities ("ABS").  Intermediate Fixed Income
Investments, Long-Term Bond Investments and Balanced
Investments may each invest up to 5% of their assets and
Multi-Sector Fixed Income Investments may invest up to 10%
of its assets in ABS.  ABS may enhance a Portfolio's
performance, however their use involves certain risks that
may not be found in other mutual fund investments.  The
Portfolios will only invest in ABS that have received a AAA
rating from both Moody's and S&P or an equivalent rating
from another nationally recognized statistical rating
organization.

Mortgage Dollar Roll Transactions.  In order to enhance
current income, Mortgage Backed Investments, Balanced
Investments and Multi-Sector Fixed Income Investments may
enter into mortgage dollar rolls with respect to mortgage
related securities issued by GNMA, FNMA and FHLMC.  In a
mortgage dollar roll transaction, a Portfolio sells a
mortgage related security to a financial institution, such
as a bank or a broker-dealer, and simultaneously agrees to
repurchase a similar security from the institution at a
later date at an agreed upon price.  The mortgage related
securities that are repurchased will bear the same interest
rate as those sold, but generally will be collateralized by
different pools of mortgages with different prepayment
histories than those sold.  During the period between the
sale and repurchase, a Portfolio will not be entitled to
receive interest and principal payments on the securities
sold.  Proceeds of the sale will be invested in short-term
instruments, particularly repurchase agreements, and the
income from these investments, together with any additional
fee income received on the sale, is intended to generate
income for a Portfolio exceeding the yield on the
securities sold.  Mortgage dollar roll transactions involve
the risk that the market value of the securities sold by a
Portfolio may decline below the repurchase price of those
securities.  At the time a Portfolio enters into a mortgage
dollar roll transaction, it will place in a segregated
custodial account liquid securities having a value equal to
the repurchase price (including accrued interest) and will
subsequently monitor the account to insure that the
equivalent value is maintained.  Mortgage dollar roll
transactions are considered to be borrowings by a
Portfolio.

High Yield Securities.  High Yield Investments and Multi-
Sector Fixed Income Investments may invest in medium or
lower rated securities and unrated securities of comparable
quality, sometimes referred to as "junk bonds."  Generally,
such securities offer a higher current yield than is
offered by higher rated securities, but also (i) will
likely have some quality and protective characteristics
that, in the judgment of the rating organizations, are
outweighed by large uncertainties or major risk exposures
to adverse conditions and (ii) are predominantly
speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms
of the obligations.

The market values of certain of these securities also tend
to be more sensitive to individual corporate developments
and changes in economic conditions than higher quality
bonds.  In addition, medium and lower rated securities and
comparable unrated securities generally present a higher
degree of credit risk.  The risk of loss because of default
by these issuers is significantly greater because medium
and lower rated securities generally are unsecured and
frequently subordinated to the prior payment of senior
indebtedness. In light of these risks, the Board of
Trustees has instructed the Subadvisors, in evaluating the
creditworthiness of an issue, whether rated or unrated, to
take various factors into consideration, which may include,
as applicable, the issuer's financial resources, its
sensitivity to economic conditions and trends, the
operating history of and the community support for the
facility financed by the issue, the ability of the issuer's
management and regulatory matters.

In addition, the market value of securities in lower rated
categories is more volatile than that of higher quality
securities, and the markets in which medium and lower rated
securities are traded are more limited that those in which
higher rated securities are traded.  The existence of
limited markets may make it more difficult for the
Portfolio to obtain accurate market quotations for purposes
of valuing its securities and calculating its net asset
value.  Moreover, the lack of a liquid trading market may
restrict the availability of securities for the Portfolio
to purchase and may also have the effect of limiting the
ability of the Portfolio to sell securities at their fair
value either to meet redemption requests or to respond to
changes in the economy or the financial markets.

Lower rated debt obligations also present risks based on
payment expectations.  If an issuer calls the obligation
for redemption, the Portfolio may have to replace the
security with a lower yielding security, resulting in a
decreased return for investors.  Also, the principal value
of bonds moves inversely with movements in interest rates;
in the event of rising interest rates, the value of the
securities held by the Portfolio may decline
proportionately more than a portfolio consisting of higher
rated securities.  If the Portfolio experiences unexpected
net redemptions, it may be forced to sell its higher rated
bonds, resulting in a decline in the overall credit quality
of the securities held by the Portfolio and increasing the
exposure of the Portfolio to the risks of lower rated
securities.  Investments in zero coupon bonds may be more
speculative and subject to greater fluctuations in value
because of changes in interest rates than bonds that pay
interest currently.

Subsequent to its purchase by the Portfolio, an issue of
securities may cease to be rated or its rating may be
reduced below the minimum required for purchase by the
Portfolio.  Neither event will require sale of these
securities by the Portfolio, but the Subadvisor will
consider the event in determining whether the Portfolio
should continue to hold the security.

Non-Publicly Traded Securities.  Each Portfolio may invest
in non-publicly traded securities, which may be less liquid
than publicly traded securities.  Although these securities
may be resold in privately negotiated transactions, the
prices realized from these sales could be less than those
originally paid by a Portfolio.  In addition, companies
whose securities are not publicly traded are not subject to
the disclosure and other investor protection requirements
that may be applicable if their securities were publicly
traded.

Supranational Entities.  International Fixed Income
Investments, subject to the diversification requirements of
the tax code, may invest up to 25% of its total assets in
debt securities issued by supranational organizations such
as the International Bank for Reconstruction and
Development (commonly referred to as the World Bank), which
was chartered to finance development projects in developing
member countries; the European Coal and Steel Community,
which is an economic union of various European nations'
steel and coal industries; and the Asian Development Bank,
which is an international development bank established to
lend funds, promote investment and provide technical
assistance to member nations in the Asian and Pacific
regions.  As supranational entities do not possess taxing
authority, they are dependent upon their members' continued
support in order to meet interest and principal payments.

ADRs, EDRs and GDRs.  The Portfolios may also purchase
American Depository Receipts ("ADRs"), European Depository
Receipts ("EDRs") and Global Depository Receipts ("GDRs")
or other securities representing underlying shares of
foreign companies. ADRs are publicly traded on exchanges or
over-the-counter in the United States and are issued
through "sponsored" or "unsponsored" arrangements.  In a
sponsored ADR arrangement, the foreign issuer assumes the
obligation to pay some or all of the depository's
transaction fees, whereas under an unsponsored arrangement,
the foreign issuer assumes no obligation and the
depository's transaction fees are paid by the ADR holders.
In addition, less information is available in the United
States about an unsponsored ADR than about a sponsored ADR,
and the financial information about a company may not be as
reliable for an unsponsored ADR as it is for a sponsored
ADR.  A Portfolio may invest in ADRs through both sponsored
and unsponsored arrangements.

Eurodollar Instruments and Yankee Bonds.  Intermediate
Fixed Income Investments, Long-Term Bond Investments and
Multi-Sector Fixed Income Investments may invest in
Eurodollar certificates of deposit ("ECDs"), Eurodollar
bonds and Yankee bonds.  Eurodollar instruments are bonds
of corporate and government issuers that pay interest and
principal in U.S. dollars but are issued in markets outside
the United States, primarily in Europe.  Yankee bonds are
bonds of foreign governments and their agencies and foreign
banks and corporations that pay interest in U.S. dollars
and are typically issued in the U.S.  ECDs are U.S.
dollar-denominated certificates of deposit issued by
foreign branches of domestic banks.  Long-Term Bond
Investments may invest up to 15% of its assets in Yankee
bonds.


Risks of Non-U.S. Investments.  To the extent a Portfolio
invests in the securities of non-U.S. issuers, those
investments involve considerations and risks not typically
associated with investing in the securities of issuers in
the U.S.  These risks are heightened with respect to
investments in countries with emerging markets and
economies.  The risks of investing in securities of non-
U.S. issuers or issuers with significant exposure to non-
U.S. markets may be related, among other things, to (i)
differences in size, liquidity and volatility of, and the
degree and manner of regulation of, the securities markets
of certain non-U.S. markets compared to the securities
markets in the U.S.; (ii) economic, political and social
factors; and (iii) foreign exchange matters, such as
restrictions on the repatriation of capital, fluctuations
in exchange rates between the U.S. dollar and the
currencies in which a Portfolio's portfolio securities are
quoted or denominated, exchange control regulations and
costs associated with currency exchange. The political and
economic structures in certain non-U.S. countries,
particularly emerging markets, are expected to undergo
significant evolution and rapid development, and such
countries may lack the social, political and economic
stability characteristic of more developed countries.
Unanticipated political or social developments may affect
the values of a Portfolio's investments in such countries.
The economies and securities and currency markets of many
emerging markets have experienced significant disruption
and declines. There can be no assurances that these
economic and market disruptions will not continue.

Foreign Securities Markets and Regulations.  There may be
less publicly available information about non-U.S. markets
and issuers than is available with respect to U.S.
securities and issuers. Non-U.S. companies generally are
not subject to accounting, auditing and financial reporting
standards, practices and requirements comparable to those
applicable to U.S. companies. The trading markets for most
non-U.S. securities are generally less liquid and subject
to greater price volatility than the markets for comparable
securities in the U.S. The markets for securities in
certain emerging markets are in the earliest stages of
their development. Even the markets for relatively widely
traded securities in certain non-U.S. markets, including
emerging countries, may not be able to absorb, without
price disruptions, a significant increase in trading volume
or trades of a size customarily undertaken by institutional
investors in the U.S. Additionally, market making and
arbitrage activities are generally less extensive in such
markets, which may contribute to increased volatility and
reduced liquidity. The less liquid a market, the more
difficult it may be for a Portfolio to accurately price its
portfolio securities or to dispose of such securities at
the times determined by the Subadvisor to be appropriate.
The risks associated with reduced liquidity may be
particularly acute in situations in which a Portfolio's
operations require cash, such as in order to meet
redemptions and to pay its expenses.

Economic, Political and Social Factors.  Certain non-U.S.
countries, including emerging markets, may be subject to a
greater degree of economic, political and social
instability than is the case in the U.S. and Western
European countries. Such instability may result from, among
other things: (i) authoritarian governments or military
involvement in political and economic decision making;
(ii) popular unrest associated with demands for improved
economic, political and social conditions; (iii) internal
insurgencies; (iv) hostile relations with neighboring
countries; and (v) ethnic, religious and racial
disaffection and conflict. Such economic, political and
social instability could significantly disrupt the
financial markets in such countries and the ability of the
issuers in such countries to repay their obligations.
Investing in emerging countries also involves the risk of
expropriation, nationalization, confiscation of assets and
property or the imposition of restrictions on foreign
investments and on repatriation of capital invested. In the
event of such expropriation, nationalization or other
confiscation in any emerging country, a Portfolio could
lose its entire investment in that country.

Certain emerging market countries restrict or control
foreign investment in their securities markets to varying
degrees.  These restrictions may limit a Portfolio's
investment in those markets and may increase the expenses
of the Portfolio.  In addition, the repatriation of both
investment income and capital from certain markets in the
region is subject to restrictions such as the need for
certain governmental consents.  Even where there is no
outright restriction on repatriation of capital, the
mechanics of repatriation may affect certain aspects of a
Portfolio's operation.

Economies in individual non-U.S. countries may differ
favorably or unfavorably from the U.S. economy in such
respects as growth of gross domestic product, rates of
inflation, currency valuation, capital reinvestment,
resource self-sufficiency and balance of payments
positions. Many non-U.S. countries have experienced
substantial, and in some cases extremely high, rates of
inflation for many years. Inflation and rapid fluctuations
in inflation rates have had, and may continue to have, very
negative effects on the economies and securities markets of
certain emerging countries.

Economies in emerging countries generally are dependent
heavily upon international trade and, accordingly, have
been and may continue to be affected adversely by trade
barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures
imposed or negotiated by the countries with which they
trade. These economies also have been, and may continue to
be, affected adversely by economic conditions in the
countries with which they trade.

Currency Risks.  The value of the securities quoted or
denominated in international currencies may be adversely
affected by fluctuations in the relative currency exchange
rates and by exchange control regulations. A Portfolio's
investment performance may be negatively affected by a
devaluation of a currency in which the Portfolio's
investments are quoted or denominated. Further, a
Portfolio's investment performance may be significantly
affected, either positively or negatively, by currency
exchange rates because the U.S. dollar value of securities
quoted or denominated in another currency will increase or
decrease in response to changes in the value of such
currency in relation to the U.S. dollar.

Custodian Services and Related Investment Costs.  Custodian
services and other costs relating to investment in
international securities markets generally are more
expensive than in the U.S. Such markets have settlement and
clearance procedures that differ from those in the U.S. In
certain markets there have been times when settlements have
been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such
transactions.  The inability of a Portfolio to make
intended securities purchases because of settlement
problems could cause the Portfolio to miss attractive
investment opportunities. Inability to dispose of a
portfolio security caused by settlement problems could
result either in losses to the Portfolio because of a
subsequent decline in value of the portfolio security or
could result in possible liability to the Portfolio. In
addition, security settlement and clearance procedures in
some emerging countries may not fully protect a Portfolio
against loss or theft of its assets.

Withholding and Other Taxes.  The Portfolios will be
subject to taxes, including withholding taxes, on income
(possibly including, in some cases, capital gains) that are
or may be imposed by certain non-U.S. countries with
respect to a Portfolio's investments in such countries.
These taxes will reduce the return achieved by a Portfolio.
Treaties between the U.S. and such countries may not be
available to reduce the otherwise applicable tax rates.

Currency Exchange Rates.  A Portfolio's share value may
change significantly when the currencies, other than the
U.S. dollar, in which that Portfolio's investments are
quoted or denominated, strengthen or weaken against the
U.S. dollar.  Currency exchange rates generally are
determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of
investments in different countries as seen from an
international perspective.  Currency exchange rates can
also be affected unpredictably by intervention by U.S. or
foreign governments or central banks or by currency
controls or political developments in the United States or
abroad.

Forward Currency Contracts.  The Portfolios may invest in
securities quoted or denominated in foreign currencies, may
hold currencies to meet settlement requirements for foreign
securities and may engage in currency exchange transactions
in order to protect against uncertainty in the level of
future exchange rates between a particular foreign currency
and the U.S. dollar or between foreign currencies in which
a Portfolio's securities are or may be quoted or
denominated. Forward currency contracts are agreements to
exchange one currency for another, for example, to exchange
a certain amount of U.S. dollars for a certain amount of
French francs at a future date.  The date (which may be any
agreed upon fixed number of days in the future), the amount
of currency to be exchanged and the price at which the
exchange will take place will be negotiated with a currency
trader and fixed for the term of the contract at the time a
Portfolio enters into the contract.  To assure that a
Portfolio's forward currency contracts are not used to
achieve investment leverage, the Portfolio will segregate
cash or high grade securities with its custodian in an
amount at all times equal to or exceeding the Portfolio's
commitment with respect to these 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. The Portfolios,
however, may enter into forward currency contracts
containing either or both deposit requirements and
commissions.

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 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.

In hedging specific portfolio positions, a Portfolio may
enter into a forward contract with respect to either the
currency in which the positions are denominated or another
currency deemed appropriate by the Portfolio's Subadvisor.
The amount the Portfolio may invest in forward currency
contracts is limited to the amount of the Portfolio's
aggregate investments in foreign currencies.  Risks
associated with entering into forward currency contracts
include the possibility that the market for forward
currency contracts may be limited with respect to certain
currencies and, upon a contract's maturity, the inability
of a Portfolio to negotiate with the dealer to enter into
an offsetting transaction.  Forward currency contracts may
be closed out only by the parties entering into an
offsetting contract.  In addition, the correlation between
movements in the prices of those contracts and movements in
the price of the currency hedged or used for cover will not
be perfect.  There is no assurance an active forward
currency contract market will always exist.  These factors
will restrict a Portfolio's ability to hedge against the
risk of devaluation of currencies in which the Portfolio
holds a substantial quantity of securities and are
unrelated to the qualitative rating that may be assigned to
any particular security.  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, a 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 Subadvisor 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 adverse market
movements could continue with respect to those contracts to
an unlimited extent over a period of time.

Options on Securities and Securities Indices.  Each
Portfolio, except Government Money Investments, may
purchase put and call options on any security in which it
may invest or options on any securities index based on
securities in which it may invest. A Portfolio would also
be able to enter into closing sale transactions in order to
realize gains or minimize losses on options it has
purchased.

Writing Covered Call and Put Options on Securities Indices.
Each Portfolio, except Government Money Investments, may
also write (sell) covered call and put options on any
securities index composed of securities in which it may
invest. Options on securities indices are similar to
options on securities, except that the exercise of
securities index options requires cash payments and does
not involve the actual purchase or sale of securities. In
addition, securities index options are designed to reflect
price fluctuations in a group of securities or segments of
the securities market rather than price fluctuations in a
single security.

A Portfolio may cover call options on a securities index by
owning securities whose price changes are expected to be
similar to those of the underlying index, or by having an
absolute and immediate right to acquire such securities
without additional cash consideration (or for additional
consideration if cash in such amount is segregated) upon
conversion or exchange of other securities in its
portfolio. A Portfolio may cover call and put options on a
securities index by segregating assets with a value equal
to the exercise price.

Purchasing Call and Put Options.  The Portfolios, except
Government Money Investments, will normally purchase call
options in anticipation of an increase in the market value
of securities of the type in which they may invest. The
purchase of a call option will entitle a Portfolio, in
return for the premium paid, to purchase specified
securities at a specified price during the option period. A
Portfolio will ordinarily realize a gain if, during the
option period, the value of such securities exceeded the
sum of the exercise price, the premium paid and transaction
costs; otherwise the Portfolio will realize either no gain
or a loss on the purchase of the call option.

A Portfolio will normally purchase put options in
anticipation of a decline in the market value of securities
in its portfolio ("protective puts") or in securities in
which it may invest. The purchase of a put option will
entitle the Portfolio, in exchange for the premium paid, to
sell specified securities at a specified price during the
option period. The purchase of protective puts is designed
to offset or hedge against a decline in the market value of
the Portfolio's securities. Put options may also be
purchased by a Portfolio for the purpose of affirmatively
benefiting from a decline in the price of securities which
it does not own. The Portfolio will ordinarily realize a
gain if, during the option period, the value of the
underlying securities decreased below the exercise price
sufficiently to more than cover the premium and transaction
costs; otherwise the Portfolio will realize either no gain
or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend
to be offset by countervailing changes in the value of the
underlying portfolio securities.

Risks of Trading Options.  There is no assurance that a
liquid secondary market on an options exchange will exist
for any particular exchange-traded option, or at any
particular time. If a Portfolio is unable to effect a
closing purchase transaction with respect to covered
options it has written, the Portfolio will not be able to
sell the underlying securities or dispose of its segregated
assets until the options expire or are exercised.
Similarly, if a Portfolio is unable to effect a closing
sale transaction with respect to options it has purchased,
it will have to exercise the options in order to realize
any profit and will incur transaction costs upon the
purchase or sale of underlying securities.

Reasons for the absence of a liquid secondary market on an
exchange include the following: (i) there may be
insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening
or closing transactions or both; (iii) trading halts,
suspensions or other restrictions may be imposed with
respect to particular classes or series of options; (iv)
unusual or unforeseen circumstances may interrupt normal
operations on an exchange; (v) the facilities of an
exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading
volume; or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future
date to discontinue the trading of options (or a particular
class or series of options), in which event the secondary
market on that exchange (or in that class or series of
options) would cease to exist, although outstanding options
on that exchange, if any, that had been issued by the OCC
as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.

A Portfolio may terminate its obligations under an
exchange-traded call or put option by purchasing an option
identical to the one it has written.  Obligations under
over-the-counter options may be terminated only by entering
into an offsetting transaction with the counterparty to
such option.  Such purchases are referred to as "closing
purchase transactions."

A Portfolio may purchase and sell both options that are
traded on U.S. and foreign exchanges and options traded
over the counter with broker-dealers who make markets in
these options. The ability to terminate over-the-counter
options is more limited than with exchange-traded options
and may involve the risk that broker-dealers participating
in such transactions will not fulfill their obligations.
Until such time as the staff of the Securities and Exchange
Commission (the "SEC") changes its position, a Portfolio
will treat purchased over-the-counter options and all
assets used to cover written over-the-counter options as
illiquid securities, except that with respect to options
written with primary dealers in U.S. Government securities
pursuant to an agreement requiring a closing purchase
transaction at a formula price, the amount of illiquid
securities may be calculated with reference to the formula.

Transactions by a Portfolio in options on securities and
indices will be subject to limitations established by each
of the exchanges, boards of trade or other trading
facilities governing the maximum number of options in each
class which may be written or purchased by a single
investor or group of investors acting in concert. Thus, the
number of options that a Portfolio may write or purchase
may be affected by options written or purchased by other
investment advisory clients. An exchange, board of trade or
other trading facility may order the liquidations of
positions found to be in excess of these limits, and it may
impose certain other sanctions.

The writing and purchase of options is a highly specialized
activity which involves investment techniques and risks
different from those associated with ordinary portfolio
securities transactions. The successful use of protective
puts for hedging purposes depends in part on a Subadvisor's
ability to predict future price fluctuations and the degree
of correlation between the options and securities markets.

The hours of trading for options may not conform to the
hours during which the underlying securities are traded. To
the extent the options markets close before the markets for
the underlying securities, significant price movements can
take place in the underlying markets that cannot be
reflected in the options markets.

In addition to the risks of imperfect correlation between a
Portfolio's portfolio and the index underlying the option,
the purchase of securities index options involves the risk
that the premium and transaction costs paid by the
Portfolio in purchasing an option will be lost. This could
occur as a result of unanticipated movements in the price
of the securities comprising the securities index on which
the option is based.

Futures Contracts and Related Options. Each Portfolio,
except Government Money Investments, may enter into futures
contracts and purchase and write (sell) options on these
contracts, including but not limited to interest rate,
securities index and foreign currency futures contracts and
put and call options on these futures contracts.  These
contracts will be entered into only upon the concurrence of
the Subadvisor that such contracts are necessary or
appropriate in the management of a Portfolio's assets.
These contracts will be entered into on exchanges
designated by the Commodity Futures Trading Commission
("CFTC") or, consistent with CFTC regulations, on foreign
exchanges.  These transactions may be entered into for bona
fide hedging and other permissible risk management purposes
including protecting against anticipated changes in the
value of securities a Portfolio intends to purchase.

A Portfolio will not enter into futures contracts and
related options for which the aggregate initial margin and
premiums exceed 5% of the fair market value of that
Portfolio's assets after taking into account unrealized
profits and unrealized losses on any contracts it has
entered into.  All futures and options on futures positions
will be covered by owning the underlying security or
segregation of assets.  With respect to long positions in a
futures contract or option (e.g., futures contracts to
purchase the underlying instrument and call options
purchased or put options written on these futures contracts
or instruments), the underlying value of the futures
contract at all times will not exceed the sum of cash,
short-term U.S. debt obligations or other high quality
obligations set aside for this purpose.

A Portfolio may lose the expected benefit of these futures
or options transactions and may incur losses if the prices
of the underlying securities or commodities move in an
unanticipated manner.  In addition, changes in the value of
a Portfolio's futures and options positions may not prove
to be perfectly or even highly correlated with changes in
the value of its portfolio securities.  Successful use of
futures and related options is subject to a Subadvisor's
ability to predict correctly movements in the direction of
the securities markets generally, which ability may require
different skills and techniques than predicting changes in
the prices of individual securities.  Moreover, futures and
options contracts may only be closed out by entering into
offsetting transactions on the exchange where the position
was entered into (or a linked exchange), and as a result of
daily price fluctuation limits there can be no assurance
that an offsetting transaction could be entered into at an
advantageous price at any particular time.  Consequently, a
Portfolio may realize a loss on a futures contract or
option that is not offset by an increase in the value of
its portfolio securities that are being hedged or the
Portfolio may not be able to close a futures or options
position without incurring a loss in the event of adverse
price movements.

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 a 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 a Portfolio.

Swaps.  Emerging Markets Equity Investments, with respect
to 15% of the total assets allocated to State Street Global
Advisors, may enter into index swaps. Index swaps involve
the exchange by the Portfolio with another party of the
respective amounts payable with respect to a notional
principal amount related to one or more indices.  The
Portfolio may enter into these transactions to preserve a
return or spread on a particular investment or portion of
its assets, as a duration management technique or to
protect against any increase in the price of securities the
Portfolio anticipates purchasing at a later date.  The
Portfolio may also use these transactions for speculative
purposes, such as to obtain the price performance of a
security without actually purchasing the security in
circumstances where, for example, the subject security is
illiquid, is unavailable for direct investment or available
only on less attractive terms.  Swaps have risks associated
with them, including possible default by the counterparty
to the transaction, illiquidity and, where swaps are used
as hedges, the risk that the use of a swap could result in
losses greater that if the swap had not been employed.

The Portfolio will usually enter into swaps on a net basis,
i.e., the two payment streams are netted out in a cash
settlement on the payment date or dates specified in the
agreement, with the Portfolio receiving or paying, as the
case may be, only the net amount of the two payments.
Swaps do not involve the delivery of securities, other
underlying assets or principal.  Accordingly, the risk of
loss with respect to swaps is limited to the net amount of
payments that the Portfolio is contractually obligated to
make.  If the counterparty to a swap defaults, the
Portfolio's risk of loss consists of the net amount of
payments that the Portfolio is contractually entitled to
receive.  Where swaps are entered into for good faith
hedging purposes, the Portfolio believes such obligations
do not constitute senior securities under the 1940 Act and,
accordingly, will not treat them as being subject to the
Portfolio's borrowing restrictions.  Where swaps are
entered into for other than hedging purposes, the Portfolio
will segregate an amount of cash or liquid securities
having a value equal to the accrued excess of its
obligations over its entitlements with respect to each swap
on a daily basis.

U.S. Government Securities.  The 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).  Some U.S. Government Securities, such as U.S.
Treasury bills, Treasury notes and Treasury bonds, which
differ only in their interest rates, maturities and times
of issuance, are supported by the full faith and credit of
the United States.  Others are supported by: (i) the right
of the issuer to borrow from the U.S. Treasury, such as
securities of the Federal Home Loan Banks; (ii) the
discretionary authority of the U.S. Government to purchase
the agency's obligations, such as securities of the FNMA;
or (iii) only the credit of the issuer, such as securities
of the Student Loan Marketing Association.  No assurance
can be given that the U.S. Government will provide
financial support in the future to U.S. Government
agencies, authorities or instrumentalities that are not
supported by the full faith and credit of the United
States.  Securities guaranteed as to principal and interest
by the U.S. Government, its agencies, authorities or
instrumentalities include: (i) securities for which the
payment of principal and interest is backed by an
irrevocable letter of credit issued by the U.S. Government
or any of its agencies, authorities or instrumentalities;
and (ii) participations in loans made to foreign
governments or other entities that are so guaranteed.  The
secondary market for certain of these participations is
limited and, therefore, may be regarded as illiquid.

U.S. Government Securities may include zero coupon
securities that may be purchased when yields are attractive
and/or to enhance portfolio liquidity.  Zero coupon U.S.
Government Securities are debt obligations that are issued
or purchased at a significant discount from face value.
The discount approximates the total amount of interest the
security will accrue and compound over the period until
maturity or the particular interest payment date at a rate
of interest reflecting the market rate of the security at
the time of issuance.  Zero coupon U.S. Government
Securities do not require the periodic payment of interest.
These investments benefit the issuer by mitigating its need
for cash to meet debt service, but also require a higher
rate of return to attract investors who are willing to
defer receipt of cash.  These investments may experience
greater volatility in market value than U.S. Government
Securities that make regular payments of interest.  A
Portfolio accrues income on these investments for tax and
accounting purposes, which is distributable to shareholders
and which, because no cash is received at the time of
accrual, may require the liquidation of other portfolio
securities to satisfy the Portfolio's distribution
obligations, in which case the Portfolio will forego the
purchase of additional income producing assets with these
funds.  Zero coupon U.S. Government Securities include
STRIPS and CUBES, which are issued by the U.S. Treasury as
component parts of U.S. Treasury bonds and represent
scheduled interest and principal payments on the bonds.

Exchange Rate-Related U.S. Government Securities.  Each
Portfolio, except Government Money Investments, may invest
up to 5% of its 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
Subadvisor 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 because of 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.

Custodial Receipts.  Each Portfolio other than Government
Money Investments may acquire custodial receipts or
certificates, such as CATS, TIGRs and FICO Strips,
underwritten by securities dealers or banks that evidence
ownership of future interest payments, principal payments
or both on certain notes or bonds issued by the U.S.
Government, its agencies, authorities or instrumentalities.
The underwriters of these certificates or receipts purchase
a U.S. Government Security and deposit the security in an
irrevocable trust or custodial account with a custodian
bank, which then issues receipts or certificates that
evidence ownership of the periodic unmatured coupon
payments and the final principal payments on the U.S.
Government Security.  Custodial receipts evidencing
specific coupon or principal payments have the same general
attributes as zero coupon U.S. Government Securities,
described above.  Although typically under the terms of a
custodial receipt a Portfolio is authorized to assert its
rights directly against the issuer of the underlying
obligation, the Portfolio may be required to assert through
the custodian bank such rights as may exist against the
underlying issuer.  Thus, in the event the underlying
issuer fails to pay principal and/or interest when due, a
Portfolio may be subject to delays, expenses and risks that
are greater than those that would have been involved if the
Portfolio had purchased a direct obligation of the issuer.
In addition, if the trust or custodial account in which the
underlying security has been deposited is determined to be
an association taxable as a corporation, instead of a non-
taxable entity, the yield on the underlying security would
be reduced in respect of any taxes paid.

When-Issued and Delayed Delivery Securities.  Each
Portfolio may purchase securities, including U.S.
government securities, on a when-issued basis or may
purchase or sell securities for delayed delivery. In such
transactions, delivery of the securities occurs beyond the
normal settlement period, but no payment or delivery is
made by a Portfolio prior to the actual delivery or payment
by the other party to the transaction. The purchase of
securities on a when-issued or delayed delivery basis
involves the risk that the value of the securities
purchased will decline prior to the settlement date. The
sale of securities for delayed delivery involves the risk
that the prices available in the market on the delivery
date may be greater than those obtained in the sale
transaction. When-issued and delayed delivery transactions
will be fully collateralized by segregated liquid assets.

Repurchase Agreements.  Each Portfolio may enter into
repurchase agreements.  Under the terms of a typical
repurchase agreement, a Portfolio would acquire an
underlying debt obligation for a relatively short period
(usually not more than one week) subject to an obligation
of the seller to repurchase, and the Portfolio to resell,
the obligation at an agreed upon price and time, thereby
determining the yield during the Portfolio's holding
period.  This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the
Portfolio's holding period.  A Portfolio may enter into
repurchase agreements with respect to U.S. Government
Securities with member banks of the Federal Reserve System
and certain non-bank dealers approved by the board of
trustees.  Under each repurchase agreement, the selling
institution is required to maintain the value of the
securities subject to the repurchase agreement at not less
than their repurchase price.  A Portfolio's Subadvisor,
acting under the supervision of the Board of Trustees,
reviews on an ongoing basis the value of the collateral and
the creditworthiness of those non-bank dealers with whom
the Portfolio enters into repurchase agreements.  A
Portfolio will not invest in a repurchase agreement
maturing in more than seven days if the investment,
together with illiquid securities held by that Portfolio,
exceeds 10% of the Portfolio's total assets (or 15% of the
assets of Multi-Sector Fixed Income Investments ).  In
entering into a repurchase agreement, a Portfolio bears a
risk of loss in the event the other party to the
transaction defaults on its obligations and the Portfolio
is delayed or prevented from exercising its rights to
dispose of the underlying securities, including the risk of
a possible decline in the value of the underlying
securities during the period in which the Portfolio seeks
to assert its rights to them, the risk of incurring
expenses associated with asserting those rights and the
risk of losing all or a part of the income from the
agreement.

Reverse Repurchase Agreements.  Emerging Markets Equity
Investments may enter into reverse repurchase agreements
with the financial institutions with which it may enter
into repurchase agreements.  Under a reverse repurchase
agreement, a Portfolio sells securities to a financial
institution and agrees to repurchase them at a mutually
agreed upon date, price and rate of interest.  During the
period between the sale and repurchase, the Portfolio would
not be entitled to principal and interest paid on the
securities sold by the Portfolio.  The Portfolio, however,
would seek to achieve gains derived from the difference
between the current sales price and the forward price for
the future purchase as well as the interest earned on the
proceeds on the initial sale.  Reverse repurchase
agreements will be viewed as borrowings by a Portfolio for
the purpose of calculating the Portfolio's indebtedness and
will have the effect of leveraging the Portfolio's assets.

Borrowing.  Leverage increases investment risk as well as
investment opportunity.  If the income and investment gains
on securities purchased with borrowed money exceed the
interest paid on the borrowing, the net asset value of a
Portfolio's shares will rise faster than would otherwise be
the case.  On the other hand, if the income and investment
gains fail to cover the cost, including interest, of the
borrowings, or if there are losses, the net asset value of
a Portfolio's shares will decrease faster than otherwise
would be the case.

Lending Portfolio Securities.  Consistent with applicable
regulatory requirements, each Portfolio other than
Municipal Bond Investments, may lend portfolio securities
to brokers, dealers and other financial organizations. A
Portfolio will not lend securities to Salomon Smith Barney
unless the Portfolio has applied for and received specific
authority to do so from the SEC. A Portfolio's loan of
securities will be collateralized by cash, letters of
credit or U.S. Government Securities. A Portfolio will
maintain the collateral 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.

Short Sales "Against the Box".  Each Portfolio, except
Government Money Investments, may from time to time make
short sales against the box.  In a short sale, a Portfolio
borrows from a broker or bank securities identical to those
being sold and delivers the borrowed securities to the
buying party.  The Portfolio is said to have a short
position in the securities sold until it replaces the
borrowed securities, at which time it receives the proceeds
of the sale.  A short sale is ''against the box'' if the
Portfolio owns or has the right to acquire at no added cost
securities identical to those sold short.

Illiquid Securities.  Each Portfolio will not invest more
than 10% of its net assets (except that Multi-Sector Fixed
Income Investments will not invest more than 15% of its net
assets) in illiquid and other securities that are not
readily marketable. Repurchase agreements maturing in more
than seven days will be included for purposes of the
foregoing limit. Securities subject to restrictions on
resale under the Securities Act of 1933, as amended (the
"1933 Act") are considered illiquid unless they are
eligible for resale pursuant to Rule 144A or another
exemption from the registration requirements of the
1933 Act and are determined to be liquid by the Subadvisor.
The Subadvisors determine the liquidity of Rule 144A and
other restricted securities according to procedures adopted
by the Board of Trustees. The Board of Trustees monitors
the Subadvisors' application of these guidelines and
procedures. The inability of a Portfolio to dispose of
illiquid investments readily or at reasonable prices could
impair the Portfolio's ability to raise cash for
redemptions or other purposes.

Temporary Investments.  For temporary defensive purposes,
during periods when a Subadvisor of a Portfolio, in
consultation with the Manager, believes that pursuing a
Portfolio's basic investment strategy may be inconsistent
with the best interests of its shareholders, that Portfolio
may invest its assets in the following money market
instruments: U.S. Government Securities (including those
purchased in the form of custodial receipts), repurchase
agreements, certificates of deposit and bankers'
acceptances issued by U.S. banks or savings and loan
associations having assets of at least $500 million as of
the end of their most recent fiscal year and high quality
commercial paper.  A Portfolio's U.S. dollar-denominated
temporary investments are managed by SSB Citi.  A Portfolio
also may hold a portion of its assets in money market
instruments or cash in amounts designed to pay expenses, to
meet anticipated redemptions or pending investment in
accordance with its objectives and policies.  Any temporary
investments may be purchased on a when-issued basis.  A
Portfolio's investment in any other short-term debt
instruments would be subject to the Portfolio's investment
objectives and policies, and to approval by the Trust's
Board of Trustees.

For the same purposes, Emerging Markets Equity Investments,
International Fixed Income Investments and International
Equity Investments may invest in obligations issued or
guaranteed by foreign governments or by any of their
political subdivisions, authorities, agencies or
instrumentalities that are rated at least "AA" by an NRSRO,
or if unrated, are determined by the Subadvisor to be of
equivalent quality.  Emerging Markets Equity Investments
may also invest in obligations of foreign banks, but will
limit its investments in such obligations to U.S. dollar-
denominated obligations of foreign banks which at the time
of investment (i) have assets with a value of more than $10
billion; (ii) are among the 75 largest foreign banks in the
world, based on the amount of assets; (iii) have branches
in the United States; and (iv) are of comparable quality to
obligations issued by United States banks in which the
Portfolio may invest in the opinion of the Portfolio's
Subadvisor.

INVESTMENT RESTRICTIONS

The investment restrictions numbered 1 through 8 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 9 through 12 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.	A 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.	A 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.	A Portfolio will not issue "senior securities" as
defined in the 1940 Act, and the rules, regulations and
orders thereunder, except as permitted under the 1940 Act
and the rules, regulations and orders thereunder.

	4.	A Portfolio will not borrow money, except that (a)
a 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) 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.

	5.	A 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.

	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.	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.

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

   	10.	A 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, except that Large Capitalization Growth
Investments, Large Capitalization Value Equity Investments,
Small Capitalization Growth Investments, Small
Capitalization Value Equity Investments, International
Equity Investments and Emerging Markets Equity Investments
may engage in short sales on shares issued by Exchange
Traded Funds, and provided that transactions in futures
contracts and options are not deemed to constitute selling
securities short.
	11.	A Portfolio will not make investments for the
purpose of exercising control or management.

	12.	A 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 more than 3% of any registered
investment company's outstanding voting stock; or more than
5% of the value of the Portfolio's total assets would be
invested in securities of any one registered investment
company or more than 10% of the Portfolio's total assets
would be invested in registered investment companies in
general.

The percentage limitations contained in the restrictions
listed above (other than with respect to Number 4 above)
apply at the time of purchase of securities.

Department of Labor ("DOL") Exemption. The Trust may offer
shares of its Portfolios to certain employee benefit plans,
individual retirement accounts ("IRAs"), or retirement
plans for a self-employed individual ("Keogh Plans").
Because the Trust may offer shares of its Portfolios to
these plans, it is subject to regulation by the DOL and the
provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").  Salomon Smith Barney has received a DOL
exemption covering certain transactions in shares of the
Portfolios. The full text of the DOL exemption may be found
in Annex B of the Prospectus.  The DOL exemption includes,
among other things, a limitation on investments in the
securities of affiliates of Salomon Smith Barney, including
Citigroup, of one percent of a Portfolio's net assets.
However, this percentage limitation may be exceeded where
the amount held by the subadvisor is used to replicate an
established third party index such as the S&P 500 Index.

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for a Portfolio are
made by the Subadvisor(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 a Subadvisor,
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 a Subadvisor 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 Subadvisor 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 Subadvisor seeks
the best overall terms available. In assessing the best
overall terms available for any transaction, the Subadvisor
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 Subadvisor authorizes the
Subadvisor, 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 Subadvisor
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
Subadvisor receiving brokerage and research services. The
Board of Trustees 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
Salomon Smith Barney and other affiliated broker-dealers
if, in the judgment of its Subadvisor, 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 Obligations, during the
existence of any underwriting or selling group relating
thereto of which Salomon Smith Barney is a member, except
to the extent permitted by the SEC.

The Portfolios may use Salomon 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 Subadvisor,
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. Salomon Smith Barney has agreed to
charge the Portfolios commodity commissions at rates
comparable to those charged by Salomon Smith Barney to its
most favored clients for comparable trades in comparable
accounts.


BROKERAGE COMMISSIONS PAID TO SALOMON SMITH BARNEY

The following table sets forth certain information
regarding each Portfolio's payment
of brokerage commissions for the fiscal year ended August
31, 2000:






Portfolio




Total
Brokerage
Commissions



Commissions
paid to
Salomon
Smith
Barney and
Affiliates

% of Total
Brokerage
Commissions
paid to
Salomon
Smith
Barney and
Affiliates
% of Total
Dollar
Amount of
Transaction
s Involving
Commissions
Paid to
Salomon
Smith
Barney and
Affiliates

Balanced Investments
$48,616
$2,550
5.25%
1.05%
Large Capitalization
Value Equity
Investments
2,619,944
58,133
2.22
1.88
Large Capitalization
Growth Investments
1,547,137
3,240
0.21
0.15
Small Capitalization
Value Equity
Investments
736,866
5,964
0.81
0.42
Small Capitalization
Growth Investments
1,959,457
12,474*
0.64
0.17
International Equity
Investments
3,990,924
24,707
0.62
0.94
Emerging Markets
Equity Investments
1,861,903
  13,190**
0.71
0.18
 *Includes $4,488 for execution, research and statistical
services.
 *Includes $377 for execution, research and statistical
services.

Government Money Investments, Intermediate Fixed Income
Investments, Long-Term Bond Investments, Municipal Bond
Investments, Mortgage Backed Investments, International
Fixed Income Investments, Multi-Sector Fixed Income
Investments and High Yield Investments did not pay
brokerage commissions during the year ended August 31,
2000.


The following table sets forth certain information
regarding each Portfolio's payment
of brokerage commissions for the fiscal year ended August
31, 1999:






Portfolio




Total
Brokerage
Commissions



Commissions
paid to
Salomon
Smith
Barney

% of Total
Brokerage
Commissions
paid to
Salomon
Smith
Barney
% of Total
Dollar
Amount of
Transaction
s Involving
Commissions
Paid to
Salomon
Smith
Barney

Balanced Investments
$144,938
$3,636
  2.51%
0.45%
Large Capitalization
Value Equity
Investments
2,358,891
91,291*
3.87

4.36
Large Capitalization
Growth Investments
930,284
0
0.00

0.00
Small Capitalization
Value Equity
Investments
1,604,130
17,682
1.10

0.51
Small Capitalization
Growth Investments
1,633,318
0
0.00

0.00
International Equity
Investments
2,541,653
9,755
0.38

0.64
Emerging Markets
Equity Investments
1,585,052
1,261
0.08

0.08
 *Includes $8,906 for execution, research and statistical
services.

Government Money Investments, Intermediate Fixed Income
Investments, Long-Term Bond Investments, Municipal Bond
Investments, Mortgage Backed Investments, International
Fixed Income Investments and High Yield Investments did not
pay brokerage commissions during the year ended August 31,
1999.  There is no information present for Multi-Sector
Fixed Income Investments because it commenced operations on
October 1, 1999.


The following table sets forth certain information
regarding each Portfolio's payment of brokerage commissions
for the fiscal year ended August 31, 1998:






Portfolio




Total
Brokerage
Commissions



Commissions
paid to
Salomon
Smith
Barney

% of Total
Brokerage
Commissions
paid to
Salomon
Smith
Barney
% of Total
Dollar
Amount of
Transaction
s Involving
Commissions
Paid to
Salomon
Smith
Barney

Balanced Investments
$108, 343
$27,565
25.44%
14.34%
Large Capitalization
Value Equity
Investments
2,783,192
152,635
5.48
4.44
Large Capitalization
Growth Investments
737,579
9
0.001
0.00
Small Capitalization
Value Equity
Investments
1,470,232
24,868
1.69
0.78
Small Capitalization
Growth Investments
1,550,679
6,218
0.40
0.14
International Equity
Investments
3,180,676
70,525
2.22
0.43
Emerging Markets
Equity Investments
2,550,496
0
0.00
0.00

Government Money Investments, Intermediate Fixed Income
Investments, Long-Term Bond Investments, Municipal Bond
Investments, Mortgage Backed Investments, International
Fixed Income Investments and High Yield Investments did not
pay brokerage commissions during the year ended August 31,
1998.



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. Municipal Bond Investments, Mortgage Backed
Investments, International Fixed Income and Emerging
Markets Equity Investments may engage in active short-term
trading to benefit from yield disparities among different
issues of securities, to seek short-term profits during
periods of fluctuating interest rates or for other reasons.
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. Because the Portfolios are authorized
to engage in transactions in options, they may experience
increased portfolio turnover under certain market
conditions as a result of their investment strategies. For
instance, the exercise of a substantial number of options
written by a Portfolio (because of 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.

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 a Subadvisor
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 a Portfolio to
receive favorable tax treatment.


The Portfolios' portfolio turnover rates for the last two
fiscal years were as follows:



Portfolio
Year Ended
August 31,
2000
Year Ended
August 31,
1999
Government Money Investments
N/A
N/A
Intermediate Fixed Income
Investments
195%
207%
Long-Term Bond Investments
 358%*
30%
Municipal Bond Investments
37%+
142%
Mortgage Backed Investments
28%
87%
High Yield Investments
129%
122%
Balanced Investments
303%
332%
Large Capitalization Value Equity
Investments
78%
54%
Large Capitalization Growth
Investments
59%
34%
Small Capitalization Value Equity
Investments
72%
53%
Small Capitalization Growth
Investments
110%
108%
International Equity Investments
75%
45%
International Fixed Income
Investments
225%
204%
Emerging Markets Equity Investments
110%
135%
Multi-Sector Fixed Income
Investments
249%
N/A
*Long-Term Bond Investments had increased its portfolio
turnover on account
 of the subadvisor reacting to fixed income market
conditions which initiated
 increased investments in U.S. Treasury securities and
short term fixed income
 securities in order to adjust the duration and maturity of
the Portfolio.

+Municipal  Bond Investments had decreased its portfolio
turnover because its subadvisor
  was satisfied with its positions held in the Portfolio
and did not believe it was necessary
   to significantly change the composition of the
Portfolio.

INVESTMENT MANAGEMENT AND OTHER SERVICES

Manager; Subadvisors; Administrator.  The Manager serves as
investment manager to the Trust pursuant to an investment
management agreement ("Management Agreement"). Each
Subadvisor serves as investment advisor to a Portfolio
pursuant to separate written agreements with the Portfolios
("Advisory Agreements"). SSB Citi serves as administrator
to the Portfolio pursuant to a written agreement
("Administration Agreement").

The Portfolios bear their own expenses, which generally
include all costs not specifically borne by the Manager,
the Subadvisors, and SSB Citi.  Included among the
Portfolios' expenses are costs incurred in connection with
a Portfolio's organization; investment management and
administration fees; fees for necessary professional and
brokerage services; fees for any pricing service; the costs
of regulatory compliance; and costs associated with
maintaining the Trust's legal existence and shareholder
relations.  As administrator, SSB Citi generally oversees
all aspects of the Trust's administration and operations
including furnishing 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.
Under the Management Agreement, each Portfolio pays SSB
Citi a fee, calculated daily and paid monthly, based on the
rates applied to the value of each Portfolio's average
daily net assets. In addition, SSB Citi pays each
Subadvisor, based on the rates applied to each respective
Portfolio's average daily net assets on a monthly basis.
The Subadvisor for each Portfolio, as well as the  maximum
allowable annual management fee and advisory fee paid by
SSB Citi to each Subadvisor are indicated below:
										Maximum

	Allowable
A
n
n
u
a
l
Subadvisor
	Management
Portfolio
	Subadvisors		Fee 		Fee

 Government Money Investments
Standish, Ayer & Wood, Inc.
                                            on the first
$100 million 		0.15%     	0.15%
                                            on the amount
over $100 million	0.10         	0.15

 High Yield Investments
Alliance Capital Management L.P.   	0.45
		0.70


 Intermediate Fixed Income Investments
Metropolitan West Asset Management Co.
0.20		0.40

                                       Pacific Investment
Management Co. 	     0.25		0.40

			BlackRock Financial Management, Inc.
 		 	     on the first $500 million
0.20      	0.40
                                            on the amount
over $500 million	     0.15		0.40


 Long-Term Bond Investments
Western Asset Management Co.		0.20
	0.40

 Municipal Bond Investments
Smith Affiliated Capital Corp.
	0.20		0.40

 Mortgage Backed Investments
Utendahl Capital Management CFI	0.25
	0.50

 Balanced Investments
Laurel Capital Advisors, LLP		0.30
	0.60

                                        Seix Investment
Advisors, Inc. 		0.25		0.60




A
n
n
u
a
l
Subadvisor
	Management
Portfolio
	Subadvisors		Fee 		Fee

 Large Capitalization Value Equity Investments
Barclays Global Fund Advisors		0.02%
		0.32%

                                       The Boston Co. Asset
Management, Inc.:
                                                   on the
first $350 million 		0.30		0.60
                                                   on the
amount over $350 million 	0.25		0.60

                                       Parametric Portfolio
Associates:
                                              	on the
first $300 million		 0.20		0.50
                                               	on the
amount over $300 million 0.15		0.45

Chartwell Investment Partners		0.30
	0.60

 Large Capitalization Growth Investments
Turner Investment Partners, Inc.:
                                             	on the
first $300 million		  0.35		0.60
                                               	on the
amount over $300 million  0.30 		0.60

                                       Barclays Global Fund
Advisors		  0.02		0.32

 TCW Investment Management Co.:
                                             	on the
first $500 million		  0.40		0.60
                                               	on the
amount over $500 million  0.35 		0.60


 Small Capitalization Value Equity Investments

NFJ Investment Group
                                                    on the
first $450 million		  0.50		0.80
                                               	on the
amount over $450 million  0.45		0.75

                                       Rutabaga Capital
Management LLC          0.50		0.80

                                       Mellon Capital
Management Corp. 	  0.06		0.36

 Small Capitalization Growth Investments
Wall Street Associates			0.50
	0.80
                                       Mellon Capital
Management Corp.	0.06		0.36
                                       Westpeak Investment
Advisors, L.P.	0.50		0.80
                                       Kern Capital
Management  LLC 	0.50		0.80
Westfield Capital Management Co., Inc.
	0.50		0.80




A
n
n
u
a
l
Subadvisor
	Management
Portfolio
	Subadvisors		Fee 		Fee

International Equity Investments
             Oechsle International    Advisors,
LLC	  0.40%		0.70%

                                       Scudder Kemper
Investments, Inc.
	on the first $300 million
0.45		0.70
                                               	on the
amount over $300 million  0.40 		0.70

                                       State Street Global
Advisors 		   0.06		0.36

 International Fixed Income Investments
Julius Baer Investments Management Inc.
0.25		0.50

 Emerging Markets Equity Investments
          Foreign & Colonial Emerging Markets
Ltd.  0.60		0.90
                                    State Street Global
Advisors		   0.60		0.90
                                    Baring Asset
Management, Inc.		   0.60		0.90

Multi-Sector Fixed Income Investments
 			Metropolitan West Asset Management
Co.0.20      	0.45
 			Western Asset Management Co.
0.20		0.45
Alliance Capital Management L.P.
0.45      	0.45
Utendahl Capital Management CFI
0.25		0.45


For the year ended August 31, 2000, the Portfolios
accrued investment management and administration
fees as follows:

Portfolio
Management Fee
Administration
Fee
Government Money Investments
$353,955
$542,112
High Yield Investments
797,658
227,902
Intermediate Fixed Income
Investments
2,652,133
1,280,232
Long-Term Bond Investments
356,034
178,017
Municipal Bond Investments
225,438
112,719
Mortgage Backed Investments
550,030
220,012
Balanced Investments
400,180
137,760
Large Capitalization Value Equity
Investments
8,722,993
3,753,593
Large Capitalization Growth
Investments
10,060,076
5,084,520
Small Capitalization Value Equity
Investments
4,199,206
1,513,068
Small Capitalization Growth
Investments
8,804,328
2,862,089
International Equity Investments
9,305,764
3,299,702
International Fixed Income
Investments
1,219,508
485,469
Emerging Markets Equity Investments
2,491,540
553,676
Multi-Sector Fixed Income
Investments
98,644
50,248

For the fiscal year ended August 31, 2000, management,
administration and custody fees, in the aggregate, were
waived as follows: Government Money Investments - $413,632;
Multi-Sector Fixed Income Investments - $94,359; Mortgage
Backed Investments - $179,068; and Balanced Investments -
$106,924.

For the fiscal years ended August 31, 1999 and 1998 the
Portfolios accrued investment management and administration
fees as follows:



1999
1998
Portfolio
Management
Fee
Administrati
on Fee
Management
Fee
Administrati
on Fee

Government Money Investments

$497,007

$662,677
$624,357
$832,477
High Yield Investments
923,581
263,880
47,537
13,582
Intermediate Fixed Income
Investments
2,448,152
1,224,478
1,862,860
934,088
Long-Term Bond Investments
559,894
279,947
703,985
351,993
Municipal Bond Investments
284,311
142,156
255,992
127,996
Mortgage Backed Investments
732,616
293,046
766,937
306,775
Balanced Investments
436,950
148,790
506,736
168,912
Large Capitalization Value
Equity Investments
9,718,618
3,901,989
9,677,020
3,922,176
Large Capitalization Growth
Investments
8,640,613
4,546,476
8,517,286
3,867,159
Small Capitalization Value
Equity Investments
4,638,188
1,530,784
4,705,182
1,721,750
Small Capitalization Growth
Investments
6,456,592
2,077,503
6,308,016
2,167,276
International Equity
Investments
6,938,953
2,706,824
7,088,985
2,704,967
International Fixed Income
Investments
1,165,291
475,963
718,551
287,421
Emerging Markets Equity
Investments
2,444,974
536,702
2,430,735
540,163
Multi-Sector Fixed Income
Investments
N/A
N/A
N/A
N/A

For the fiscal year ended August 31, 1999, management,
administration and custody fees, in the aggregate, were
waived as follows: Government Money Investments - $364,437
and Mortgage Backed Investments - $163,318.

For the fiscal year ended August 31, 1998, management,
administration and custody fees, in the aggregate, were
waived as follows: Government Money Investments - $250,798;
Mortgage Backed Investments - $185,737; and High Yield
Investments - $85,979.

The Manager has agreed to waive a portion of the fees
otherwise payable to it by certain of the Trust's
Portfolios 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.

SSB Citi, through its predecessors, was incorporated on
March 12, 1968 under the laws of Delaware and is a
registered investment adviser. SSB Citi renders investment
advice to investment companies that had aggregate assets
under management as of October 31, 2000 in excess of $140
billion.  The Consulting Group, a division of SSB Citi, 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 annually
conducts over 300 on-sight evaluation visits to advisors.
As of August 31, 2000, the Consulting Group provided
services with respect to over $226 billion in client assets
representing more than 588,000 separate accounts under a
variety of programs designed for individual and
institutional investors.


The Manager and the Subadvisors each pay the salaries of
all officers and employees who are employed by them and the
Trust, and the Manager maintains office facilities for the
Trust. The Manager and the Subadvisors 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 Subadvisor manages the securities held by
the Portfolio it serves in accordance with that 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.

Subject to the supervision and direction of the Board of
Trustees, the Manager provides to the Trust investment
management evaluation services principally by performing
initial due diligence on prospective Subadvisors for the
Portfolios and thereafter monitoring each Subadvisor's
performance through quantitative and qualitative analysis
as well as periodic in-person, telephonic and written
consultations with Subadvisors.  In evaluating prospective
Subadvisors, the Manager considers, among other factors,
each Subadvisor's level of expertise; relative performance
and consistency of performance over a minimum period of
five years; level of adherence to investment discipline or
philosophy, personnel, facilities, financial strength and
quality of service and client communications.  The Manager
has responsibility for communicating performance
expectations and evaluations to Subadvisors and ultimately
recommending to the Board of Trustees whether Subadvisors'
contracts should be renewed, modified or terminated. The
Manager provides written reports to the Board of Trustees
regarding the results of its evaluations and monitoring
functions.  The Manager is also responsible for conducting
all operations of the Trust except those operations
contracted to the Subadvisor, custodian, transfer agent or
administrator.

Investors should be aware that the Manager may be subject
to a conflict of interest when making decisions regarding
the retention and compensation of particular Subadvisors.
However, the Manager's decisions, including the identity of
a Subadvisor and the specific amount of the Manager's
compensation to be paid to a Subadvisor, are subject to
review and approval by a majority of the Board of Trustees
and separately by a majority of the Trustees who are not
affiliated with the Manager or any of its affiliates.

Investors should also be aware that through Smith Barney
Advisory Services, the Consulting Group serves as
investment adviser to each participant in such service and
receives a fee from each participant that does not vary
based on the Portfolios of the Trust recommended for the
participant's investments.  At the same time, the
Consulting Group serves as the Trust's Manager with
responsibility for identifying, retaining, supervising and
compensating each Portfolio's Subadvisor and receives a fee
from each Portfolio of the Trust.  The portion of such fee
that is retained by the Manager varies based on the
Portfolio involved.  Consequently, the Consulting Group,
when making asset allocation recommendations for
participants in Smith Barney Advisory Services, may be
presented with a conflict of interest as to the specific
Portfolios of the trust recommended for investment.  The
Consulting Group, however, is subject to and intends to
comply fully with standards of fiduciary duty that require
that it act solely in the best interest of the participant
when making investment recommendations.

The Trust has received an exemption (the "Exemption") from
certain provisions of the 1940 Act which would otherwise
require the Manager to obtain formal shareholder approval
prior to engaging and entering into investment advisory
agreements with Subadvisors.  The Exemption is based on
among other things:  (1) the Manager will select, monitor,
evaluate and allocate assets to the Subadvisors and ensure
that the Subadvisors comply with a Portfolio's investment
objective, policies and restrictions; (2) shares of a
Portfolio relying on the Exemption will not be subject to
any sales loads or redemption fees or other charges for
redeeming shares; (3) the Trust will provide to
shareholders certain information about a new Subadvisor and
its investment advisory contract within 90 days of the
engagement of new Subadvisor; (4) the Trust will disclose
in its prospectus the terms of the Exemption; and (5) the
Trustees, including a majority of the "non-interested"
Trustees, must approve each investment advisory contract in
the manner required under the 1940 Act. Any changes to the
Management Agreement between the Trust and the Manager
still require shareholder approval.

Code of Ethics

Pursuant to Rule 17j-1 of the 1940 Act, each of, the Trust,
its investment adviser and principal underwriter has
adopted a code of ethics that permits personnel to invest
in securities for their own accounts, including securities
that may be purchased or held by a Portfolio of the Trust.
All personnel must place the interests of clients first and
avoid activities, interests and relationships that might
interfere with the duty to make decisions in the best
interests of the clients.  All personal securities
transactions by employees must adhere to the requirements
of the code and must be conducted in such a manner as to
avoid any actual or potential conflict of interest, the
appearance of such a conflict, or the abuse of an
employee's position of trust and responsibility.

A copy of the Trust's code of ethics is on file with the
Securities and Exchange Commission.

Auditors

KPMG LLP, 757 Third Avenue, New York, New York 10017,
currently serves 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 SHARES

Purchases of shares of a Portfolio through an Advisory
Service must be made through a brokerage account maintained
with Salomon Smith Barney.  Payment for Portfolio shares
must be made by check directly to Salomon Smith Barney or
to a broker that clears securities transactions through
Salomon 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 certain asset based
fee programs 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 Trust's 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(r) Personalized Investment Advisory Service ("TRAK")
sponsored by Salomon 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 a Portfolio normally utilizes is
restricted, or an emergency, as defined by the rules and
regulations of the SEC, exists making disposal of a
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 a 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

Each Portfolio's net asset value per share is calculated by
SSB Citi on each day, Monday through Friday, except days on
which the NYSE is closed.  The NYSE is currently scheduled
to be closed on New Year's Day, Martin Luther King Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas, and on the
preceding Friday when one of those holidays falls on a
Saturday or on the subsequent Monday when one of those
holidays falls on a Sunday.  On those days, securities held
by a Portfolio may nevertheless be actively traded and the
value of that Portfolio's shares could be significantly
affected.

Net asset value per share is determined as of the close of
trading on the NYSE and is computed by dividing the value
of a Portfolio's net assets by the total number of its
shares outstanding. Securities that are primarily traded on
foreign exchanges are generally valued for purposes of
calculating a Portfolio's net asset value at the preceding
closing values of the securities on their respective
exchanges, except that, when an occurrence subsequent to
the time a value was so established is likely to have
changed that value, the fair market value of those
securities will be determined by consideration of other
factors by or under the direction of the Board of Trustees.
A security that is primarily traded on a domestic or
foreign stock exchange is valued at the last sale price on
that exchange as reported to a Portfolio or, if no sales
occurred during the day, these investments are quoted at
the mean between the current bid and ask prices.  A
security that is listed or traded on more than one exchange
is valued for purposes of calculating a Portfolio's net
asset value at the quotation on the exchange determined to
be the primary market for the security. Debt securities of
U.S. issuers (other than U.S. Government Securities and
short-term investments) are valued by SSB Citi after
consultation with an independent pricing service. When, in
the judgment of the pricing service, quoted bid prices are
available and are representative of the bid side of the
market, these investments are valued at the mean between
the quoted bid and ask 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.  An option
written by a Portfolio is generally valued at the last sale
price or, in the absence of the last sale price, the last
offer price.  An option purchased by a Portfolio is
generally valued at the last sale price or, in the absence
of the last sale price, the last bid price.  The value of a
futures contract is equal to the unrealized gain or loss on
the contract determined by marking the contract to the
current settlement price for a like contract on the
valuation date of the futures contract.  A settlement price
may not be used if the market makes a limit move with
respect to a particular futures contract or if the
securities underlying the futures contract experience
significant price fluctuations after the determination of
the settlement price.  When a settlement price cannot be
used, futures contracts will be valued at their fair market
value as determined by or under the direction of the Board
of Trustees.

All assets and liabilities initially expressed in foreign
currency values will be converted into U.S. dollar values
at the mean between the bid and offered quotations of the
currencies against U.S. dollars as last quoted by a
recognized dealer.  If the bid and offered quotations are
not available, the rate of exchange will be determined in
good faith by the Board of Trustees.  In carrying out the
Board's valuation policies, SSB Citi may consult with an
independent pricing service retained by the Trust.

The valuation of the securities held by a Portfolio in U.S.
dollar-denominated securities with less than 60 days to
maturity are 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 the Portfolio would receive
if it sold the instrument.

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 a 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 the 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 Municipal Bond Investments for the 30-day
period ended August 31, 2000 was 4.99%.  The equivalent
taxable yield for that same period was 7.80%, assuming the
payment of Federal income taxes at a rate of 36%.

The yields for the thirty-day period ended August 31, 2000
for the following funds were:

Portfolio



Long-Term Bond Investments
  6.12%
Intermediate Fixed Income
Investments
  6.22
International Fixed Income
Investments
  3.66
Mortgage-Backed Investments
  6.24
High Yield Investments
13.10

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, 2000, the yield
for the Government Money Investments portfolio was 5.96%
(the effective yield was 6.14%) with an average dollar-
weighted portfolio maturity of 33 days.

Average Annual Total Return

From time to time, the Trust may advertise a Portfolio's
"average annual total return" over various periods of time.
This total return figure shows the average percentage
change in value of an investment in that Portfolio from the
beginning date of the measuring period to the ending date
of the measuring period and is reduced by the maximum
Salomon Smith Barney Advisory Service fee during the
measuring period.  The figure reflects changes in the price
of a Portfolio's shares and assumes that any income,
dividends and/or capital gains distributions made by a
Portfolio during the period are reinvested in shares of
that Portfolio.  Figures will be given for recent one-,
five- and ten-year periods (if applicable) and may be given
for other periods as well (such as from commencement of the
Portfolios' operations or on a year-by-year basis).
Aggregate total returns also may be shown by means of
schedules, charts or graphs, and may indicate subtotals of
the various components of total return (that is, the change
in value of initial investment, income dividends and
capital gains distributions).

In reports or other communications to shareholders or in
advertising material, a Portfolio may quote total return
figures that do not reflect Salomon Smith Barney Advisory
Service fees (provided that these figures are accompanied
by standardized total return figures calculated as
described above), as well as compare its performance with
that of other mutual funds as listed in the rankings
prepared by Lipper Analytical Services, Inc. or similar
independent services that monitor the performance of mutual
funds or with other appropriate indices of investment
securities.  The performance information also may include
evaluations of a Portfolio published by nationally
recognized ranking services and by financial publications
that are nationally recognized, such as Barron's, Business
Week, CDA Investment Technologies, Inc., Changing Times,
Forbes, Fortune, Institutional Investor, Investor's Daily,
Kiplinger's Personal Finance Magazine, Money, Morningstar
Mutual Fund Values, The New York Times, USA Today and The
Wall Street Journal.


A Portfolio's average annual total return figures 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.  Consequently, the given performance quotations
should not be considered as representative of a Portfolio's
performance for any specified period in the future.

A Portfolio's net investment income changes in response to
fluctuations in interest rates and the expenses of the
Portfolio. 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 a 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.


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, 1999
through
August 31,
2000
From
September
1, 1995
through
August 31,
2000
From
Inception**
** through
August 31,
2000
Government Money Investments
5.44%

5.01%
4.42%
High Yield Investments*
(9.37)%

N/A
(3.50)%
Intermediate Fixed Income
Investments
5.73%

5.39%
5.95%
Long-Term Bond Investments
9.50%
6.39%
6.43%
Municipal Bond Investments
6.79%
5.07%
5.54%
Mortgage Backed Investments
7.58%
6.22%
6.24%
Multi-Sector Fixed Income
Investments+
N/A
N/A
6.47%
Balanced Investments**
14.45%
13.59%
12.12%
Large Capitalization Value Equity
Investments
4.00%
15.96%
13.21%
Large Capitalization Growth
Investments
34.31%
26.87%
20.17%
Small Capitalization Value Equity
Investments
5.09%
10.76%
9.81%
Small Capitalization Growth
Investments
50.57%
18.34%
20.33%
International Equity Investments
19.17%
11.81%
10.70%
International Fixed Income
Investments
(6.13)%
3.15%
6.35%
Emerging Markets Equity
Investments***
9.62%
0.50%
0.50%

*	High Yield Investments commenced operations on July
13, 1998.
**		Balanced Investments commenced operations on February
16, 1993.
***	Emerging Market Equity Investments commenced
operations on April 21, 1994.
****	The remaining Portfolios commenced operations on
November 18, 1991.
+	Multi-Sector Fixed Income Investments commenced
operations on October 1, 1999.


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,
1999 through
August 31,
2000
From
September
1, 1995
through
August 31,
2000
From
Inception**
** through
August 31,
2000
Government Money Investments
3.88%
3.45%
2.87%
High Yield Investments*
(10.71)%
N/A
(4.93)%
Intermediate Fixed Income
Investments
4.16%
3.82%
4.38%
Long-Term Bond Investments
7.88%
4.81%
4.85%
Municipal Bond Investments
5.21%
3.51%
3.98%
Mortgage Backed Investments
5.98%
4.64%
4.66%
Multi-Sector Fixed Income
Investments+
N/A
N/A
5.02%
Balanced Investments**
12.76%
11.91%
10.46%
Large Capitalization Value Equity
Investments
2.47%
14.24%
11.53%
Large Capitalization Growth
Investments
32.32%
24.99%
18.38%
Small Capitalization Value Equity
Investments
3.53%

9.12%
8.18%
Small Capitalization Growth
Investments
48.34%
16.59%
18.54%
International Equity Investments
17.41%
10.15%
9.06%
International Fixed Income
Investments
(7.53)%
1.62%
4.77%
Emerging Markets Equity
Investments***
7.99%
(1.00)%
(1.00)%
_________________
*		High Yield Investments commenced operations on July
13, 1998.
**		Balanced Investments commenced operations on February
16, 1993.
***	Emerging Market Equity Investments commenced
operations on April 21, 1994.
****	The remaining Portfolios commenced operations on
November 18, 1991.
+	Multi-Sector Fixed Income Investments commenced
operations on October 1, 1999.


TAXES

The following is a summary of certain federal income tax
considerations that may affect the Portfolios and their
shareholders.  In addition to the considerations described
below, there may be other federal, state, local or foreign
tax applications to consider.  The summary does not address
all of the potential federal income tax consequences that
may be applicable to a Portfolio or to all categories of
investors, some of which may be subject to special tax
rules.  The summary is not intended as a substitute for
individual tax advice and investors are urged to consult
their own tax advisors as to the tax consequences of an
investment in a Portfolio.  The summary is based on the
laws in effect on the date of this SAI, which are subject
to change.

Each Portfolio intends to continue to qualify in each year
as a separate "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"), by
complying with certain requirements regarding the sources
and distribution of its income and the diversification of
its assets.  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, any excess of its net short-
term capital gain over its net long-term capital loss) for
a taxable year and 90% of its tax-exempt interest income
(reduced by certain expenses for that year), 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 in compliance with the Code's timing and other
requirements.

If, in any taxable year, a Portfolio fails to qualify as a
regulated investment company under the Code or fails to
meet the distribution requirement, it would be taxed in the
same manner as an ordinary corporation and distributions to
its shareholders would not be deductible by the Portfolio
in computing its taxable income.  In addition, in the event
of a failure to qualify, a Portfolio's distributions, to
the extent derived from its current or accumulated earnings
and profits would constitute dividends (eligible for the
corporate dividends-received deduction) which are taxable
to shareholders as ordinary income, even though those
distributions might otherwise (at least in part) have been
treated in the shareholders' hands as a long-term capital
gain or as tax-exempt interest.  If a Portfolio fails to
qualify as a regulated investment company in any year, it
must pay out its earnings and profits accumulated in that
year in order to qualify again as a regulated investment
company. In addition, if a Portfolio failed to qualify as a
regulated investment company for a period greater than one
taxable year, the Portfolio may be required to recognize
any net built-in gains with respect to certain of its
assets (the excess of the aggregate gains, including items
of income, over aggregate losses that would have been
realized if it had been liquidated) in order to qualify as
a regulated investment company in a subsequent year.

In order to avoid the application of a 4% nondeductible
excise tax on certain undistributed amounts of ordinary
income and capital gains, a Portfolio may make an
additional distribution shortly before or shortly after
December 31 in each year of any undistributed ordinary
income or capital gains.  Each Portfolio generally will
seek to pay any additional dividends and distributions
necessary to avoid the application of this tax.

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 the 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, a Portfolio may invest in certain types
of warrants, foreign currencies, forward contracts, options
and futures contracts. The 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 that Portfolio (i.e., may affect whether gains
or losses are ordinary or capital and, if capital, the
extent to which they are long-term or short-term),
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 positions in
its portfolio (i.e., treat them as if they were closed
out), and (ii) may cause the 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 referred to above.  Each Portfolio will
monitor its transactions, will make the appropriate tax
elections, if any, 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 seek to 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. Gains
or losses on the sale of debt securities denominated in a
foreign currency may be recharacterized as ordinary income
or losses, as described below.

The Portfolios, other than Government Money Investments,
Intermediate Fixed Income Investments, Municipal Bond
Investments, Mortgage Backed Investments and Multi-Sector
Fixed Income 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.

Dividends or other income (including, in some cases,
capital gains) received by a Portfolio from investments in
foreign securities may be subject to withholding and other
taxes imposed by such countries.  Tax conventions between
certain countries and the United States may reduce or
eliminate such taxes in some cases.  A Portfolio will not
be eligible to elect to treat any foreign taxes paid by it
as paid by its shareholders, who therefore will not be
entitled to deductions or credits for such taxes on their
own tax returns.

A Portfolio may be required to treat amounts as taxable
income or gain, subject to the distribution requirements
referred to above, even though no corresponding amounts of
cash are received concurrently, as a result of (1) mark to
market, constructive sale or other rules applicable to
passive foreign investment companies or partnerships or
trusts in which the Portfolio invests or to certain
options, futures or forward contracts, or "appreciated
financial positions" or (2) the inability to obtain cash
distributions or other amounts due to currency controls or
restrictions on repatriation imposed by a foreign country
with respect to a Portfolio's investments (including
through depositary receipts) in issuers in such country or
(3) tax rules applicable to debt obligations acquired with
"original issue discount," including zero-coupon or
deferred payment bonds and pay-in-kind debt obligations, or
to market discount if an election is made with respect to
such market discount.  A Portfolio may therefore be
required to obtain cash to be used to satisfy these
distribution requirements by selling securities at times
that it might not otherwise be desirable to do so or
borrowing the necessary cash, thereby incurring interest
expenses.

Under Section 988 of the Code, gains or losses attributable
to fluctuations in exchange rates between the time a
Portfolio accrues income or receivables or expenses or
other liabilities denominated in a foreign currency and the
time the Portfolio actually collects such income or pays
such liabilities are generally treated as ordinary income
or ordinary loss.  Similarly, gains or losses on foreign
currency, foreign currency forward contracts, certain
foreign currency options or futures contracts and the
disposition of debt securities denominated in foreign
currency, to the extent attributable to fluctuations in
exchange rates between the acquisition and disposition
dates, are also treated as ordinary income or loss.

A Portfolio is permitted to carry forward any unused
capital losses to be utilized to offset its capital gains
realized during the eight-year period following the year in
which the losses arose, which will reduce the net realized
capital gains (if any) required to be distributed to
shareholders for those years.

On August 31, 2000, the unused capital loss carryovers, by
Portfolio, were approximately as follows:  Government Money
Investments, $30,000, Intermediate Fixed Income
Investments, $13,922,000, Long-Term Bond Investments,
$780,000, Municipal Bonds Investments, $733,000, Mortgage-
Backed Investments, $589,000, High Yield Investments,
$4,320,000, Multi-Sector Fixed Income Investments, $13,000,
International Fixed Income Investments, $1,461,000 and
Emerging Markets Equity Investments, $83,792,000. For
federal income tax purposes, these amounts are available to
be applied against future capital gains of the Portfolio
that has the carryovers, if any, that are realized prior to
the expiration of the applicable carryover.  The carryovers
expire as follows:

PORTFOLIO
August
31,





(in thousands)
2003
2004
2005
2006
2007
2008
Government Money
$12

$8
--
--
--
    $10
Intermediate Fixed
Income
387
$1,46
2
$773
--
--
11,300
Long-Term Bond
--
--
--
--
--

780
Municipal Bonds
--
--
--
--
--

733
Mortgage Backed
--
--
--
--
--

589
High Yield
--
--
--
--
--

4,320
Multi-Sector Fixed
Income
--
--
--
--
--

13
International Fixed
Income
--
--
--
--
--

1,461
Emerging Markets
Equity
--
--
--
--
$83,792
--

Dividends and Distributions

For federal income tax purposes, dividends declared by a
Portfolio in October, November or December as of a record
date in such a month and which are actually paid in January
of the following year will be taxable to shareholders as if
they were paid on December 31 of the year in which they are
declared rather than in the year in which shareholders
actually receive the dividends.

As a general rule, a shareholder's gain or loss on a
redemption or other disposition of Portfolio shares that is
treated as a sale under the Code 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.

A Portfolio may realize net long-term capital gains.
Distributions of the excess of net long-term capital gain
over net short-term capital loss ("capital gain dividends"
if any) will be taxable to shareholders as long-term
capital gains, regardless of whether received in cash or
reinvested in additional shares and how long a shareholder
has held Portfolio shares. If a shareholder receives a
capital gain dividend with respect to any share and
redeems, sells or otherwise disposes of the share before it
has been held for more than six months, then any loss, to
the extent of the capital gain dividend, will be treated as
a long-term capital loss. Additionally, any loss realized
on a redemption, exchange or other disposition of Portfolio
shares generally will be disallowed to the extent the
shares disposed of are replaced, including replacement
through the reinvesting of dividends and capital gains
distributions in the Portfolio, within a 61-day period
beginning 30 days before and ending 30 days after the
disposition of the shares.

Dividends paid from net investment income and distributions
of any excess of net short-term capital gain over net long-
term capital loss are taxable to shareholders as ordinary
income, regardless of how long shareholders have held their
Portfolio shares and whether such dividends and
distributions are received in cash or reinvested in
additional Portfolio shares.  Dividends paid by a Portfolio
that are declared from net investment income and are
attributable to qualifying dividends received by the
Portfolio from domestic corporations may qualify for the
federal dividends-received deduction for corporations.

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.  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 the 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 and the possible
availability of an exemption for dividends paid by a
Portfolio attributable to interest the Portfolio earns from
U.S. Government obligations.

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 will 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 even if the
net asset value of the Portfolio's shares is reduced below
the investor's cost as a result of the distribution, the
amount of the forthcoming dividend or distribution payment
will be a taxable dividend or distribution payment even
though it may represent a return of invested capital.

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) 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 federal income tax liability. Distributions to
nonresident aliens and foreign entities may be subject to
different tax rules, including other possible withholding
taxes.

The foregoing is only a summary of certain tax
considerations generally affecting the Portfolios and their
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 their state and local tax
liabilities.

DISTRIBUTOR

Effective June 5, 2000, Salomon Smith Barney, located at
388 Greenwich Street, New York, New York 10013 replaced
CFBDS, Inc. as the Portfolio's distributor. Prior to June
5, 2000, CFBDS, Inc., located at 20 Milk Street, Boston,
Massachusetts 02109-5408 served as the Portfolio's
distributor. Salomon Smith Barney serves as the Portfolio's
distributor on a best efforts basis pursuant to a written
agreement, which was approved by the Trustees of the Trust.

CUSTODIANS, TRANSFER AGENT AND SUB-TRANSFER AGENT

PFPC Trust Company (successor as assigned by PNC bank,
National Association) is located at 8800 Tinicum Blvd.,
Philadelphia, Pennsylvania 19153 and The Chase Manhattan
Bank ("Chase") located at Chase MetroTech Center, Brooklyn,
NY 11245, serve as the custodians for the Trust. Under
their respective custodian agreements with the respective
funds, each custodian is authorized to establish separate
accounts for foreign securities owned by the appropriate
fund to be held with foreign branches of other U.S. banks
as well as with certain foreign banks and securities
depositories. For its custody services to the Trust, each
custodian receives monthly fees based upon the month-end
aggregate net asset value of the appropriate Portfolio,
plus certain charges for securities transactions including
out-of-pocket expenses, and costs of any foreign and
domestic sub-custodians. The assets of the Trust are held
under bank custodianship in compliance with the 1940 Act.

Citi Fiduciary Trust Company, located at 125 Broad Street,
New York, New York 10004, serves as each Portfolio's
transfer and dividend-paying agent.  Under the transfer
agency agreement, the transfer agent maintains the
shareholder account records for each Portfolio, handles
certain communications between shareholders and a
Portfolio, distributes dividends and distributions payable
by a Portfolio and produces statements with respect to
account activity for a Portfolio and its shareholders.  For
these services, the transfer agent receives fees from each
Portfolio computed on the basis of the number of
shareholder accounts that the transfer agent maintains for
each Portfolio during the month and is reimbursed for out-
of-pocket expenses.

PFPC Global Fund Services, located at P.O. Box 9699,
Providence, RI 02940-9699, serves as each Portfolio's sub-
transfer agent.  Under the transfer agency agreement, the
sub-transfer agent maintains the shareholder account records
for the Portfolio, handles certain communications between
shareholders and the Portfolio and distributes dividends and
distributions payable by the Portfolio.  For these services,
the sub-transfer agent receives a monthly fee computed on
the basis of the number of shareholder accounts it maintains
for the Portfolio during the month, and is reimbursed for
out-of-pocket expenses.




FINANCIAL STATEMENTS

The Trust's Annual Reports for the fiscal year ended August
31, 2000 is incorporated herein by reference in their
entirety. The Annual Reports were filed on November 9,
2000, Accession Number 950130-00-5889.





APPENDIX - RATINGS OF DEBT OBLIGATIONS

BOND AND NOTE RATINGS

Moody's Investors Services, Inc.

Aaa - Bonds that are rated "Aaa" are judged to be of the
best quality.  They carry the smallest degree of investment
risk and are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure.  While the various
protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa - Bonds that are rated "Aa" are judged to be of high
quality by all standards.  Together with the "Aaa" group
they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or
fluctuation of protective elements may be of greater
amplitude or there may be other elements present that make
the long term risks appear somewhat larger than in "Aaa"
securities.

A - Bonds that are rated "A" possess many favorable
investment attributes and are to be considered as upper
medium grade obligations.  Factors giving security to
principal and interest are considered
adequate but elements may be present that suggest a
susceptibility to impairment sometime in the future.

Baa - Bonds that are rated "Baa" are considered as medium
grade obligations, i.e., they are neither highly protected
nor poorly secured.  Interest payments and principal
security appear adequate for the present but certain
protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.

Ba - Bonds which are rated "Ba" are judged to have
speculative elements; their future cannot be considered as
well assured.  Often the protection of interest and
principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B - Bonds which are rated "B" generally lack characteristics
of the desirable investment.  Assurance of interest and
principal payments or of maintenance of other terms of the
contract over any long period of time may be small.

Caa - Bonds which are rated "Caa" are of poor standing.
Such issues may be in default or there may be present
elements of danger with respect to principal or interest

Ca - Bonds which are rated "Ca" represent obligations which
are speculative in a high degree.  Such issues are often in
default or have other marked shortcomings.

C - Bonds which are rated "C" are the lowest class of bonds
and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.

Con (..)- Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition
are rated conditionally.  These are bonds secured by (a)
earnings of projects under construction, (b) earnings of
projects unseasoned in operating experience, (c) rentals
which begin when facilities are completed, or (d) payments
to which some other limiting condition attaches.
Parenthetical rating denotes probable credit stature upon
completion of construction or elimination of basis of
condition.

Note:  The modifier 1 indicates that the security ranks in
the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its
generic rating category.

Standard & Poor's Ratings Group

AAA - Debt rated "AAA" has the highest rating assigned by
Standard & Poor's Ratings Group ("S&P").  Capacity to pay
interest and repay principal is extremely strong.

AA - Debt rated "AA" has a very strong capacity to pay
interest and repay principal and differs from the highest
rated issues only in small degree.

A - Debt rated "A" has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.

BBB - Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal.  Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher
rated categories.

BB, B, CCC, CC, C - Debt rated "BB", "B", "CCC", "CC" and
"C" is regarded, on balance, as predominantly speculative
with respect to capacity to pay interest and repay principal
in accordance with the terms of the obligation.  "BB"
indicates the lowest degree of speculation and "C" the
highest degree of speculation.  While such debt will likely
have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to
adverse conditions.

Plus (+) or Minus (-): The ratings from "AA" to "B" may be
modified by the addition of a plus or minus to show relative
standing within the major rating categories.

Provisional Ratings: The letter "p" indicates that the
rating is provisional.  A provisional rating assumes the
successful completion of the project being financed by the
debt being rated and indicates that payment of debt service
requirements is largely or entirely dependent upon the
successful and timely completion of the project.  This
rating, however, while addressing credit quality subsequent
to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of, such
completion.  The investor should exercise judgment with
respect to such likelihood and risk.

L - The letter "L" indicates that the rating pertains to the
principal amount of those bonds where the underlying deposit
collateral is fully insured by the Federal Savings & Loan
Insurance Corp. or the Federal Deposit Insurance Corp.

+ Continuance of the rating is contingent upon S&P's receipt
of closing documentation confirming investments and cash
flow.

* Continuance of the rating is contingent upon S&P's receipt
of an executed copy of the escrow agreement.

NR- Indicates no rating has been requested, that there is
insufficient information on which to base a rating, or that
S&P does not rate a particular type of obligation as a
matter of policy.


COMMERCIAL PAPER RATINGS

Moody's Investors Service, Inc.

Issuers rated "Prime-l" (or related supporting institutions)
have a superior capacity for repayment of short-term
promissory obligations.  Prime-1 repayment will normally be
evidenced by the following characteristics: leading market
positions in well-established industries; high rates of
return on funds employed; conservative capitalization
structures with moderate reliance on debt and ample asset
protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; well-
established access to a range of financial markets and
assured sources of alternate liquidity.

Issuers rated "Prime-2" (or related supporting institutions)
have strong capacity for repayment of short-term promissory
obligations.  This will normally be evidenced by many of the
characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be
more subject to variation.  Capitalization characteristics,
while still appropriate, may be more affected by external
conditions.  Ample alternate liquidity is maintained.

Standard & Poor's Ratings Group

A-1 - This designation indicates that the degree of safety
regarding timely payment is either overwhelming or very
strong.  Those issuers determined to possess overwhelming
safety characteristics will be noted with a plus (+) sign
designation.

A-2 - Capacity for timely payment on issues with this
designation is strong.  However, the relative degree of
safety is not as high as for issues designated A-1.






STATEMENT OF ADDITIONAL INFORMATION

CONSULTING GROUP CAPITAL MARKETS FUNDS
S&P 500 INDEX INVESTMENTS
DECEMBER 29, 2000,
As Amended June 22, 2001

222 Delaware Avenue ~ Wilmington, Delaware 19801 ~
(212) 816-8725

This Statement of Additional Information supplements the
information contained in the current Prospectus (the
"Prospectus") of S&P 500 Index Investments (the
"Portfolio"), a separate series of Consulting Group Capital
Markets Funds (the "Trust"), dated December 29, 2000, and
should be read in conjunction with the Prospectus. The
Trust is a series company that consists of the Portfolio
and seventeen other portfolios offered in separate
prospectuses. The Prospectus for the Portfolio may be
obtained by contacting any Financial Consultant of Salomon
Smith Barney Inc. ("Salomon 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

Trustees and Executive Officers of the Trust
1
Investment Objectives, Management Policies and Risk Factors
3
Investment Restrictions
7
Portfolio Transactions
9
Portfolio Turnover
10
Investment Management and Other Services
10
Purchase of Shares
14
Redemption of Shares
14
Redemptions in Kind
15
Net Asset Value
15
Determination of Performance
15
Taxes
17
Distributor
21
Custodians, Transfer Agent and Sub-Transfer Agent
21
Financial Statements
21
Capitalized terms used but not defined in this Statement of
Additional Information have the meanings accorded to them
in the Prospectus.

TRUSTEES AND EXECUTIVE 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
Investment Company Act of 1940, as amended (the "1940
Act"), is indicated by an asterisk.

	Walter E. Auch, Trustee (Age 80). 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; and
Banyan Land Fund II. Director or trustee of 2 investment
companies associated with Citigroup Inc. ("Citigroup"). His
address is 6001 N. 62nd Place, Paradise Valley, Arizona
85253.

	Martin Brody, Trustee (Age 79). Private Investor;
Director or trustee of 20 investment companies associated
with Citigroup. His address is c/o HMK Associates, 30
Columbia Turnpike, Florham Park, N.J. 07932.

	H. John Ellis, Trustee (Age 73). Retired. Director or
trustee of 2 investment companies associated with
Citigroup.  His address is 858 East Crystal Downs Drive,
Frankfort, Michigan 49635.

	Armon E. Kamesar, Trustee (Age 73). Chairman of the
Board of TEC, an international organization of Chief
Executive Officers; Trustee, U.S. Bankruptcy Court.
Director or trustee of 2 investment companies associated
with Citigroup. His address is 7328 Country Club Drive, La
Jolla, CA 92037.

	Stephen E. Kaufman, Trustee (Age 68). Attorney.
Director or trustee of 13 investment companies associated
with Citigroup. His address is 277 Park Avenue, New York,
New York 10172.

	*Heath B. McLendon, Trustee and Chairman of the Board
(Age 67). Managing Director of Salomon Smith Barney and
Chairman of the Board of Salomon Smith Barney Strategy
Advisers Inc. and Director and President of SSB Citi Fund
Management LLC ("SSB Citi" or the "Manager") and Travelers
Investment Adviser, Inc. ("TIA"); Mr. McLendon serves on
the Board of 78 investment companies associated with
Citigroup. His address is 7 World Trade Center, New York,
New York 10048.

	Lewis E. Daidone, Senior Vice President and Treasurer
(Age 42). Managing Director of Salomon Smith Barney;
Director and Senior Vice President of SSB Citi and TIA.
Mr. Daidone serves as Senior Vice President and Treasurer
of 61 investment companies associated with Citigroup. His
address is 125 Broad Street, New York, New York 10004.

	Frank L. Campanale, Investment Officer (Age 47).
President and Chief Executive Officer of Salomon 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 41).
First Vice President of Salomon 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 50). Managing
Director of Salomon Smith Barney; General Counsel and
Secretary of SSB Citi and TIA.  Ms. Sydor serves as
Secretary of 61 investment companies associated with
Citigroup.  Her address is 7 World Trade Center, New York,
New York 10048.

Irving David, Controller (Age 39). Director of
Salomon Smith Barney. Controller or Assistant Treasurer of
43 investment companies associated with Citigroup; Formerly
Assistant Treasurer of First Investment Management Company.
His address is 125 Broad Street, New York, New York 10004.

As of December 15, 2000, the Trustees and officers as a
group owned less than 1% of the outstanding common stock of
the Trust. As of December 15, 2000, the following
shareholders own of record or beneficially 5% or more of
shares of the Portfolio:

SBC Trust Company
Cray Inc.
Attn: Mary Anderson
411 First Avenue South, 600
Seattle, WA 98104
owned 1,273,923.378 shares (15.59%)


Remuneration.  No director, officer or employee of Salomon
Smith Barney, SSB Citi 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
Salomon Smith Barney, the Manager, any advisor, SSB Citi or
any of their affiliates a fee of $32,000 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,
2000, such fees and expenses totaled $21,166.

For the fiscal year ended August 31, 2000, the Trustees of
the Trust were paid the following compensation:
			Total
		Pension or	Total	Number
	Aggregate		Retirement Benefits
	Compensation	of Funds
	Compensation	Aggregate	Accrued as Expense	From	Served in
	Name	From Portfolio	Compensation	of Trust 	Fund
Complex+	Complex
Heath B. McLendon*	None	None	None	None	78
Walter Auch	$283		$36,300	None	$50,600	2
Martin Brody	212	35,100	None	138,000	20
H. John Ellis	342	37,300	None	50,600	2
Armon E. Kamesar	342	 37,300	None	52,600	2
Stephen E. Kaufman	336	 37,300	None	110,650	13

*     Designates "interested trustee".
+     For the calendar year ended December 31, 1999.

INVESTMENT OBJECTIVES, MANAGEMENT POLICIES AND RISK FACTORS

The Portfolio is a diversified, open-end management
investment company. The Prospectus discusses the investment
objectives of the Portfolio, a separate series of 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 Portfolio may invest, the investment policies and
strategies the Portfolio may utilize and certain risks
attendant to those investments, policies and strategies.

The Portfolio seeks to achieve its objective by investing,
under normal circumstances, at least 80% of its total
assets in common stocks included in the S&P 500 Index in
approximately the same weightings as the S&P 500 Index. The
Portfolio intends to invest in substantially all of the
stocks that comprise the S&P 500 Index.  The Portfolio
operates as a "pure" index fund and will not be actively
managed; as such, adverse performance of a security will
ordinarily not result in the elimination of the security
from its portfolio. The Portfolio will be reviewed daily
and adjusted, when necessary, to maintain security
weightings as close to those of the S&P 500 Index as
possible, given the amount of assets in the Portfolio at
that time.

Other Investment Companies.  The Portfolio may invest in
the securities of other investment companies to the extent
such investments are consistent with the Portfolio's
investment objectives and policies and permissible under
the Investment Company Act of 1940, as amended (the "1940
Act"). Under the 1940 Act, a Portfolio may not acquire the
securities of other domestic or foreign investment
companies if, as a result, (i) more than 10% of the
Portfolio's total assets would be invested in securities of
other investment companies, (ii) such purchase would result
in more than 3% of the total outstanding voting securities
of any one investment company being held by the Portfolio,
or (iii) more than 5% of the Portfolio's total assets would
be invested in any one investment company.  These
limitations do not apply to the purchase of shares of any
investment company in connection with a merger,
consolidation, reorganization or acquisition of
substantially all the assets of another investment company.
The Portfolio will not invest in other investment companies
for which the Subadvisor or any of its affiliates act as an
investment advisor or distributor.

The Portfolio may invest up to 10% of its assets in
securities of other investment companies, including shares
in a portfolio of securities that seeks to track the
performance of an underlying equity index or a portion of
an equity index ("Exchange Traded Funds").

The Portfolio, as a holder of the securities of other
investment companies, will bear its pro rata portion of the
other investment companies' expenses, including advisory
fees. These expenses are in addition to the direct expenses
of the Portfolio's own operations.

Short Sales.  The Portfolio may seek to hedge investments
or realize additional gains through short sales.  Short
sales are transactions in which the Portfolio sells a
security it does not own in anticipation of a decline in
the market value of that security.  To complete such a
transaction, the Portfolio borrows the security to make
delivery to the buyer.  The Portfolio is obligated to
replace the security borrowed by purchasing it at the
market price at or prior to the time of replacement.  The
price at such time may be more or less than the price at
which the security was sold by the Portfolio.  Until the
security is replaced, the Portfolio is required to repay
the lender any dividends or interest that accrue during the
period of the loan.  To borrow the security, the Portfolio
also may be required to pay a premium, which would increase
the cost of the security sold.  A portion of the net
proceeds of the short sale may be retained by the broker
(or by the Portfolio's custodian in a special custody
account), to the extent necessary to collateralize the
broker and to meet margin requirements, until the short
position is closed out.  The Portfolio will also incur
transaction costs in effecting short sales.

The Portfolio will incur a loss as a result of the short
sale if the price of the security increases between the
date of the short sale and the date on which the Portfolio
replaces the borrowed security.  The Portfolio will realize
a gain if the security declines in price between those
dates.  The amount of any gain will be decreased, and the
amount of any loss increased, by the amount of the
premiums, dividends, interest or expenses the Portfolio may
be required to pay in connection with a short sale.  An
increase in the value of a security sold short by the
Portfolio over the price at which it was sold short will
result in a loss to the Portfolio, and there can be no
assurance that the Portfolio will be able to close out the
position at any particular time or at an acceptable price.
Thus the Portfolio's losses on short sales are potentially
unlimited.

Whenever the Portfolio engages in short sales, it maintains
cash or liquid securities in an amount that, when combined
with the amount of collateral deposited with the broker in
connection with the short sale, equals the current market
value of the security sold short.  The assets so maintained
are marked to market daily.

Management currently intends to limit the Portfolio's short
sales to shares issued by Exchange Traded Funds.  Exchange
Traded Funds hold portfolios of securities that seek to
track the performance of a specific index or basket of
stocks.  Utilizing this strategy will allow the Subadvisor
to adjust the Portfolio's exposure in a particular sector,
in a cost effective and convenient manner, without having
to sell the Portfolio's holdings of individual stocks in
that sector.



Foreign Securities.  The Portfolio may purchase common
stocks of foreign corporations represented in the S&P 500
Index (such securities are publicly traded on securities
exchanges or over-the-counter in the United States).  The
Portfolio's investment in common stock of foreign
corporations represented in the S&P 500 Index may also be
in the form of American Depository Receipts (ADRs). ADRs
are receipts typically issued by a United States bank or
trust company evidencing ownership of the underlying
securities and are designated for use in the U.S.
Securities markets.

Investing in the securities of foreign companies involves
special risks and considerations not typically associated
with investing in U.S. companies.  These include
differences in accounting, auditing and financial reporting
standards, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control
regulations, political instability which could affect U.S.
investments in foreign countries, and potential
restrictions on the flow of international capital.
Investments in foreign securities may be affected by
changes in governmental administration or economic policy
(in the United Stated and abroad) or changed circumstances
in dealings between nations.  Foreign companies may be
subject to less governmental regulation than U.S.
companies.  Securities of foreign companies may be more
volatile than securities of U.S. companies.  Moreover,
individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as
growth of gross domestic product, rate of inflation,
capital reinvestment, resource self-sufficiency and balance
of payment positions.

Futures Contracts and Related Options. The Portfolio may
enter into futures contracts and purchase and write (sell)
options on these contracts. These contracts will be used
for the following reasons: to simulate full investment in
the S&P 500 Index while retaining a cash balance for fund
management purposes, to facilitate trading, to reduce
transactions costs or to seek higher investment returns
when a futures contract is priced more attractively than
stocks comprising the S&P 500 Index.  These contracts will
be entered into on exchanges designated by the Commodity
Futures Trading Commission ("CFTC") or, consistent with
CFTC regulations, on foreign exchanges.  These transactions
may be entered into for bona fide hedging and other
permissible risk management purposes including protecting
against anticipated changes in the value of securities the
Portfolio intends to purchase.  The Portfolio will not use
futures for speculative purposes.

The Portfolio will not enter into futures contracts and
related options for which the aggregate initial margin and
premiums exceed 5% of the fair market value of the
Portfolio's assets after taking into account unrealized
profits and unrealized losses on any contracts it has
entered into.  All futures and options on futures positions
will be covered by owning the underlying security or
segregation of assets.  With respect to long positions in a
futures contract or option (e.g., futures contracts to
purchase the underlying instrument and call options
purchased or put options written on these futures contracts
or instruments), the underlying value of the futures
contract at all times will not exceed the sum of cash,
short-term U.S. debt obligations or other high quality
obligations set aside for this purpose.

The Portfolio may lose the expected benefit of these
futures or options transactions and may incur losses if the
prices of the underlying commodities move in an
unanticipated manner.  In addition, changes in the value of
the Portfolio's futures and options positions may not prove
to be perfectly or even highly correlated with changes in
the value of its portfolio securities.  Successful use of
futures and related options is subject to the Subadviser's
ability to predict correctly movements in the direction of
the securities markets generally, which ability may require
different skills and techniques than predicting changes in
the prices of individual securities.  Moreover, futures and
options contracts may only be closed out by entering into
offsetting transactions on the exchange where the position
was entered into (or a linked exchange), and as a result of
daily price fluctuation limits there can be no assurance
that an offsetting transaction could be entered into at an
advantageous price at any particular time.  Consequently,
the Portfolio may realize a loss on a futures contract or
option that is not offset by an increase in the value of
its portfolio securities that are being hedged or the
Portfolio may not be able to close a futures or options
position without incurring a loss in the event of adverse
price movements.

The 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 Indices.  The Portfolio may purchase
put and call options on the S&P 500 Index. The Portfolio
may also enter into closing sale transactions in order to
realize gains or minimize losses on options it has
purchased.  The Portfolio will not use options for
speculative purposes. The Portfolio may terminate its
obligations under an exchange-traded call or put option by
purchasing an option identical to the one it has written.

Transactions by the Portfolio in options on securities
indices will be subject to limitations established by each
of the exchanges, boards of trade or other trading
facilities governing the maximum number of options in each
class which may be written or purchased by a single
investor or group of investors acting in concert. Thus, the
number of options which the Portfolio may write or purchase
may be affected by options written or purchased by other
investment advisory clients. An exchange, board of trade or
other trading facility may order the liquidation of
positions found to be in excess of these limits, and it may
impose certain other sanctions.

The hours of trading for options may not conform to the
hours during which the underlying securities are traded. To
the extent the options markets close before the markets for
the underlying securities, significant price movements can
take place in the underlying markets that cannot be
reflected in the options markets.

In addition to the risks of imperfect correlation between
the Portfolio's holdings and the index underlying the
option, the purchase of securities index options involves
the risk that the premium and transaction costs paid by the
Portfolio in purchasing an option will be lost. This could
occur as a result of unanticipated movements in the price
of the securities comprising the securities index on which
the option is based.

Money Market Instruments. The Portfolio may invest up to
10% of its assets in corporate and government bonds and
notes and money market instruments.  Money market
instruments include: obligations issued or guaranteed by
the United States government, its agencies or
instrumentalities ("U.S. government securities");
certificates of deposit, time deposits and bankers'
acceptances issued by domestic banks (including their
branches located outside the United States and subsidiaries
located in Canada), domestic branches of foreign banks,
savings and loan associations and similar institutions;
high grade commercial paper; and repurchase agreements with
respect to the foregoing types of instruments.
Certificates of deposit ("CDs") are short-term, negotiable
obligations of commercial banks.  Time deposits ("TDs") are
non-negotiable deposits maintained in banking institutions
for specified periods of time at stated interest rates.
Bankers' acceptances are time drafts drawn on commercial
banks by borrowers, usually in connection with
international transactions.

Repurchase Agreements.  The Portfolio may enter into
repurchase agreements.  Under the terms of a typical
repurchase agreement, the Portfolio would acquire an
underlying debt obligation for a relatively short period
(usually not more than one week) subject to an obligation
of the seller to repurchase, and the Portfolio to resell,
the obligation at an agreed upon price and time, thereby
determining the yield during the Portfolio's holding
period.  This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the
Portfolio's holding period.  The Portfolio may enter into
repurchase agreements with respect to U.S. Government
Securities with member banks of the Federal Reserve System
and certain non-bank dealers approved by the board of
trustees.  Under each repurchase agreement, the selling
institution is required to maintain the value of the
securities subject to the repurchase agreement at not less
than their repurchase price.  The Portfolio's Subadviser,
acting under the supervision of the board of trustees,
reviews on an ongoing basis the value of the collateral and
the creditworthiness of those non-bank dealers with whom
the Portfolio enters into repurchase agreements.  The
Portfolio will not invest in a repurchase agreement
maturing in more than seven days if the investment,
together with illiquid securities held by the Portfolio,
exceeds 15% of the Portfolio's total assets.  In entering
into a repurchase agreement, the Portfolio bears a risk of
loss if the other party to the transaction defaults on its
obligations and the Portfolio is delayed or prevented from
exercising its rights to dispose of the underlying
securities, including the risk of a possible decline in the
value of the underlying securities during the period in
which the Portfolio seeks to assert its rights to them, the
risk of incurring expenses associated with asserting those
rights and the risk of losing all or a part of the income
from the agreement.

Borrowing.  Leverage increases investment risk as well as
investment opportunity.  If the income and investment gains
on securities purchased with borrowed money exceed the
interest paid on the borrowing, the net asset value of the
Portfolio's shares will rise faster than would otherwise be
the case.  On the other hand, if the income and investment
gains fail to cover the cost, including interest, of the
borrowings, or if there are losses, the net asset value of
the Portfolio's shares will decrease faster than otherwise
would be the case.

Lending Portfolio Securities.  Consistent with applicable
regulatory requirements, the Portfolio may lend portfolio
securities to brokers, dealers and other financial
organizations. The Portfolio will not lend securities to
Salomon Smith Barney unless the Portfolio has applied for
and received specific authority to do so from the
Securities and Exchange Commission (the "SEC"). The
Portfolio's loan of securities will be collateralized by
cash, letters of credit or U.S. Government Securities. The
Portfolio will maintain the collateral in an amount at
least equal to the current market value of the loaned
securities. From time to time, the 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." The 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.

Temporary Investments.  For temporary defensive purposes,
during periods when the Subadviser of the Portfolio, in
consultation with the Manager, believes that pursuing the
Portfolio's basic investment strategy may be inconsistent
with the best interests of its shareholders, the Portfolio
may invest its assets in the following money market
instruments: U.S. Government Securities (including those
purchased in the form of custodial receipts), repurchase
agreements, certificates of deposit and bankers'
acceptances issued by U.S. banks or savings and loan
associations having assets of at least $500 million as of
the end of their most recent fiscal year and high quality
commercial paper.  The Portfolio's U.S. dollar-denominated
temporary investments are managed by SSB Citi.  The
Portfolio also may hold a portion of its assets in money
market instruments or cash in amounts designed to pay
expenses, to meet anticipated redemptions or pending
investment in accordance with its objectives and policies.
Any temporary investments may be purchased on a when-issued
basis.  The Portfolio's investment in any other short-term
debt instruments would be subject to the Portfolio's
investment objectives and policies, and to approval by the
Trust's Board of Trustees.

Department of Labor ("DOL") Exemption. The Trust may offer
shares of its portfolios to certain employee benefit plans,
individual retirement accounts ("IRAs"), or retirement
plans for a self-employed individual ("Keogh Plans").
Because the Trust may offer shares of its portfolios to
these plans, it is subject to regulation by the DOL and the
provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").  Salomon Smith Barney has received a DOL
exemption covering certain transactions in shares of the
Portfolio. The full text of the DOL exemption may be found
in Exhibit A of the Prospectus.  The DOL exemption
includes, among other things, a limitation on investments
in the securities of affiliates of Salomon Smith Barney,
including Citigroup, of one percent of the Portfolio's net
assets.  Since the Portfolio will be managed to comply with
this limitation, this may result in differences in
performance between the Portfolio and other funds that
fully replicate the S&P 500 Index.

INVESTMENT RESTRICTIONS

The investment restrictions numbered 1 through 8 below have
been adopted by the Trust as fundamental policies of the
Portfolio. 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 9 through 12 may be changed by a vote of a
majority of the Board of Trustees at any time.


Under the investment restrictions adopted by the Portfolio:

	1.	The Portfolio will not deviate from the definition
of a "diversified company" as defined in the 1940 Act and
rules thereunder.

	2.	The Portfolio 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.	Issue "senior securities" as defined in the 1940
Act, and the rules, regulations and orders thereunder,
except as permitted under the 1940 Act and the rules,
regulations and orders thereunder.

	4.	The 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) 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.

	5.	The 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.

	6.	The 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.

	7.	The 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.

	8.	The 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.

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

   	10.	The 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, except that the Portfolio may engage in short
sales on shares issued by Exchange Traded Funds, and
provided that transactions in futures contracts and options
are not deemed to constitute selling securities short.

11. The Portfolio will not make investments for the
purpose of exercising control of management.

	12.	Purchase or otherwise acquire any security if,
as a result, more than 15% of its net assets would be
invested in securities that are illiquid.

The percentage limitations contained in the restrictions
listed above (other than with respect to Number 4 above)
apply at the time of purchase of securities.

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the Portfolio are
made by the Subadviser, subject to the overall review of
the manager and the Board of Trustees. Although investment
decisions for the Portfolio are made independently from
those of the other accounts managed by the Subadviser,
investments of the type that the Portfolio may make also
may be made by those other accounts. When the Portfolio and
one or more other accounts managed by the Subadviser 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 Subadviser to
be equitable to each. In some cases, this procedure may
adversely affect the price paid or received by the
Portfolio or the size of the position obtained or disposed
of by the 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 the Portfolio, its Subadviser
seeks the best overall terms available. In assessing the
best overall terms available for any transaction, the
Subadviser 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, the
Advisory Agreement between the Trust and the Subadviser
authorizes the Subadviser, 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
Subadviser or its affiliates exercise investment
discretion. The fees under the Management Agreement and the
Advisory Agreement, respectively, are not reduced by reason
of the Portfolio's Subadviser receiving brokerage and
research services. The Board of Trustees of the Trust will
periodically review the commissions paid by the 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 the 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 the Portfolio may be executed through
Salomon Smith Barney and other affiliated broker-dealers
if, in the judgment of the Subadviser, 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 Portfolio will not purchase any security, including
U.S. Government Securities or Obligations, during the
existence of any underwriting or selling group relating
thereto of which Salomon Smith Barney is a member, except
to the extent permitted by the SEC.

The Portfolio may use Salomon 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 Subadviser,
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. Salomon Smith Barney has agreed to
charge the Portfolio commodity commissions at rates
comparable to those charged by Salomon Smith Barney to its
most favored clients for comparable trades in comparable
accounts.

Brokerage Commissions Paid To Salomon Smith Barney

The following table sets forth certain information
regarding the Portfolio's payment
of brokerage commissions for the fiscal year ended August
31, 2000:






Portfolio




Total
Brokerage
Commissions



Commissions
paid to
Salomon
Smith
Barney

% of Total
Brokerage
Commissions
paid to
Salomon
Smith
Barney
% of Total
Dollar
Amount of
Transaction
s Involving
Commissions
Paid to
Salomon
Smith
Barney

S&P 500 Index
Investments
$31,840
$0
0%
0%


PORTFOLIO TURNOVER

Although the Portfolio generally seeks to invest for the
long term, it retains the right to sell securities
irrespective of how long they have been held.  However,
because of the "passive" investment management approach of
the Portfolio, the turnover rate is expected to be under
50%, a generally lower turnover rate than for most other
investment companies.  A portfolio turnover rate of 50%
would occur if one-half of the Portfolio's securities were
sold within one year. Ordinarily, securities will be sold
from the Portfolio only to reflect certain administrative
changes in the S&P 500 Index (including mergers or changes
in the composition of the Index) or to accommodate cash
flows into and out of the Portfolio while maintaining the
similarity of the Portfolio to the index.

The Portfolio's portfolio turnover rate for the fiscal
period ended August 31, 2000 was 54%.

INVESTMENT MANAGEMENT AND OTHER SERVICES

Manager; Subadvisers; Administrator.  The Manager serves as
investment manager to the Trust pursuant to an investment
management agreement ("Management Agreement"). The
Subadviser serves as investment advisor to the Portfolio
pursuant to a separate written agreement with the SSB Citi
("Advisory Agreement"), SSB Citi serves as administrator to
the Portfolio pursuant to a written agreement
("Administration Agreement").

The Portfolio bears its own expenses, which generally
include all costs not specifically borne by the Manager,
the Subadvisers, and SSB Citi.  Included among the
Portfolio's expenses are costs incurred in connection with
the Portfolio's organization; investment management and
administration fees; fees for necessary professional and
brokerage services; fees for any pricing service; the costs
of regulatory compliance; and costs associated with
maintaining the Trust's legal existence and shareholder
relations.  As administrator, SSB Citi generally oversees
all aspects of the Trust's administration and operations
including furnishing 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. The Portfolio pays SSB Citi a fee for
these services that is computed daily and paid monthly at
the annual rate of 0.10% of the value of the Portfolio's
average daily net assets. For the fiscal period ended
August 31, 2000, the Portfolio accrued and waived
administration fees of $26,570.

SSB Citi, through its predecessors, was incorporated on
March 12, 1968 under the laws of Delaware and is a
registered investment adviser. SSB Citi renders investment
advice to investment companies that had aggregate assets
under management as of October 31, 2000 in excess of $140
billion. The Consulting Group, a division of SSB Citi, 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. They screen more
than 3,000 registered investment advisory firms and track
the performance of more than 700 firms on the Manager's
comprehensive database. In addition, the Manager conducts
over 300 on-sight evaluations of advisors annually. As of
August 31, 2000, the Consulting Group provided services
with respect to over $226 billion in client assets
representing more than 588,000 separate accounts under a
variety of programs designed for individual and
institutional investors.

Under the Management Agreement, the Portfolio pays SSB Citi
a fee, calculated daily and paid monthly, based on the rate
applied to the value of the Portfolio's average daily net
assets. In addition, SSB Citi pays the Subadviser, based on
the rates applied to the Portfolio's average daily net
assets on a monthly basis. The applicable management fee,
advisory fee paid by
SSB Citi to each Subadviser, and the Subadviser for the
Portfolio is indicated below:

A
n
n
u
a
l
Subadviser
	Management
Portfolio
	Subadvisers		Fee 		Fee

 S&P 500 Index Investments
Barclays Global Fund Advisors		0.02%
		0.02%

For the fiscal year ended August 31, 2000, the Portfolio
accrued investment management fees of $5,314.


The Manager and the Subadviser pay 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 Subadviser bear all expenses in
connection with the performance of their respective
services under the Management Agreement, the Advisory
Agreement, and the Administration Agreement.

As noted in the Prospectus, subject to the supervision and
direction of the Manager and, ultimately, the Board of
Trustees, the Subadviser manages the securities held by the
Portfolio 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.

Subject to the supervision and direction of the Board of
Trustees, the Manager provides to the Trust investment
management evaluation services principally by performing
initial due diligence on prospective Subadvisers for the
Portfolio and thereafter monitoring the Subadviser's
performance through quantitative and qualitative analysis
as well as periodic in-person, telephonic and written
consultations with Subadvisers.  In evaluating prospective
Subadvisers, the Manager considers, among other factors,
each Subadviser's level of expertise; relative performance
and consistency of performance over a minimum period of
five years; level of adherence to investment discipline or
philosophy, personnel, facilities, financial strength and
quality of service and client communications.  The Manager
has responsibility for communicating performance
expectations and evaluations to the Subadviser and
ultimately recommending to the Board of Trustees whether
the Subadviser's contract should be renewed, modified or
terminated.  The Manager provides written reports to the
Board of Trustees regarding the results of its evaluations
and monitoring functions.  The Manager is also responsible
for conducting all operations of the Trust except those
operations contracted to the Subadviser, custodian,
transfer agent or administrator.

Investors should be aware that the Manager may be subject
to a conflict of interest when making decisions regarding
the retention and compensation of particular Subadvisers.
However, the Manager's decisions, including the identity of
the Subadviser and the specific amount of the Manager's
compensation to be paid to the Subadviser, are subject to
review and approval by a majority of the Board of Trustees
and separately by a majority of the Trustees who are not
affiliated with the manager or any of its affiliates.

Investors should also be aware that through Smith Barney
Advisory Services, the Consulting Group serves as
investment adviser to each participant in such service and
receives a fee from each participant that does not vary
based on the Portfolios of the Trust recommended for the
participant's investments.  At the same time, the
Consulting Group serves as the Trust's manager with
responsibility for identifying, retaining, supervising and
compensating each Portfolio's Subadviser and receives a fee
from each Portfolio of the Trust.  The portion of such fee
that is retained by the Manager varies based on the
Portfolio involved.  Consequently, the Consulting Group,
when making asset allocation recommendations for
participants in Smith Barney Advisory Services, may be
presented with a conflict of interest as to the specific
portfolios of the trust recommended for investment.  The
Consulting Group, however, is subject to and intends to
comply fully with standards of fiduciary duty that require
that it act solely in the best interest of the participant
when making investment recommendations.

The Trust has received an exemption (the "Exemption") from
certain provisions of the 1940 Act which would otherwise
require the Manager to obtain formal shareholder approval
prior to engaging and entering into investment advisory
agreements with Subadvisers.  The Exemption is based on
among other things:  (1) the Manager will select, monitor,
evaluate and allocate assets to, the Subadvisers and ensure
that the Subadvisers comply with a Portfolio's investment
objective, policies and restrictions; (2) shares of a
Portfolio relying on the Exemption will not be subject to
any sales loads or redemption fees or other charges for
redeeming shares; (3) the Trust will provide to
shareholders certain information about a new Subadviser and
its investment advisory contract within 90 days of the
engagement of a new Subadviser; (4) the Trust will disclose
in its prospectus the terms of the Exemption; and (5) the
Trustees, including a majority of the "non-interested"
Trustees, must approve each investment advisory contract in
the manner required under the 1940 Act. Any changes to the
Management Agreement between the Trust and the Manager
still require shareholder approval.

Code of Ethics

Pursuant to Rule 17j-1 of the 1940 Act, each of, the Trust,
its investment adviser and principal underwriter has
adopted a code of ethics that permits personnel to invest
in securities for their own accounts, including securities
that may be purchased or held by the Portfolio of the
Trust.  All personnel must place the interests of clients
first and avoid activities, interests and relationships
that might interfere with the duty to make decisions in the
best interests of the clients.  All personal securities
transactions by employees must adhere to the requirements
of the code of ethics and must be conducted in such a
manner as to avoid any actual or potential conflict of
interest, the appearance of such a conflict, or the abuse
of an employee's position of trust and responsibility.

A copy of the Trust's code of ethics is on file with the
Securities and Exchange Commission.

Auditors

KPMG LLP, 757 Third Avenue, New York, New York 10017,
currently serves 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.
PFPC Trust Company (successor by assignment from 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 Agreement, 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 SHARES

Purchases of shares of the Portfolio through an Advisory
Service must be made through a brokerage account maintained
with Salomon Smith Barney.  Payment for Portfolio shares
must be made by check directly to Salomon Smith Barney or
to a broker that clears securities transactions through
Salomon 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 Portfolio 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 Trust's 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(r) Personalized Investment Advisory Service ("TRAK")
sponsored by Salomon 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. If 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, such
investors 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 the
Portfolio is included in the Prospectus. The right of
redemption of shares of the 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

The Portfolio's net asset value per share is calculated by
SSB Citi on each day, Monday through Friday, except days on
which the NYSE is closed.  The NYSE is currently scheduled
to be closed on New Year's Day, Martin Luther King Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas, and on the
preceding Friday when one of those holidays falls on a
Saturday or on the subsequent Monday when one of those
holidays falls on a Sunday.  On those days, securities held
by the Portfolio may nevertheless be actively traded and
the value of the Portfolio's shares could be significantly
affected.

Securities listed on a national securities exchange will be
valued on the basis of the last sale on the date on which
the valuation is made or, in the absence of sales, at the
mean between the closing bid and asked prices.  Over-the-
counter securities will be valued at the mean between the
closing bid and asked prices on each day, or, if market
quotations for those securities are not readily available,
at fair value, as determined in good faith by the
Portfolio's Board of Trustees. Short-term obligations with
maturities of 60 days or less are valued at amortized cost,
which constitutes fair value as determined by the
Portfolio's Board of Trustees.  Amortized cost involves
valuing an instrument at its original cost to the Portfolio
and thereafter assuming a constant amortization to maturity
of any discount or premium, regardless of the effect of
fluctuating interest rates on the market value of the
instrument.  All other securities and other assets of the
Portfolio will be valued at fair value as determined in
good faith by the Portfolio's Board of Trustees.

DETERMINATION OF PERFORMANCE

Average Annual Total Return

From time to time, the Trust may advertise the Portfolio's
"average annual total return" over various periods of time.
This total return figure shows the average percentage
change in value of an investment in the Portfolio from the
beginning date of the measuring period to the ending date
of the measuring period and is reduced by the maximum
Salomon Smith Barney Advisory Service fee during the
measuring period.  The figure reflects changes in the price
of the Portfolio's shares and assumes that any income,
dividends and/or capital gains distributions made by the
Portfolio during the period are reinvested in shares of the
Portfolio.  Figures will be given for recent one-, five-
and ten-year periods (if applicable) and may be given for
other periods as well (such as from commencement of the
Portfolio's operations or on a year-by-year basis).
Aggregate total returns also may be shown by means of
schedules, charts or graphs, and may indicate subtotals of
the various components of total return (that is, the change
in value of initial investment, income dividends and
capital gains distributions).

In reports or other communications to shareholders or in
advertising material, the Portfolio may quote total return
figures that do not reflect Salomon Smith Barney Advisory
Service fees (provided that these figures are accompanied
by standardized total return figures calculated as
described above), as well as compare its performance with
that of other mutual funds as listed in the rankings
prepared by Lipper Analytical Services, Inc. or similar
independent services that monitor the performance of mutual
funds or with other appropriate indices of investment
securities.  The performance information also may include
evaluations of the Portfolio published by nationally
recognized ranking services and by financial publications
that are nationally recognized, such as Barron's, Business
Week, CDA Investment Technologies, Inc., Changing Times,
Forbes, Fortune, Institutional Investor, Investor's Daily,
Kiplinger's Personal Finance Magazine, Money, Morningstar
Mutual Fund Values, The New York Times, USA Today and The
Wall Street Journal.

The Portfolio's average annual total return figures 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. 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.


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

From
October 1
1999
through
August 31,
2000
18.24%


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

From
October 1,
1999
through
August 31,
2000
16.62%

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 and other industry
publications.

TAXES

The following is a summary of certain federal income tax
considerations that may affect the Portfolio and its
shareholders.  In addition to the considerations described
below, there may be other federal, state, local or foreign
tax applications to consider.  The summary does not address
all of the potential federal income tax consequences that
may be applicable to the Portfolio or to all categories of
investors, some of which may be subject to special tax
rules.  The summary is not intended as a substitute for
individual tax advice and investors are urged to consult
their own tax advisors as to the tax consequences of an
investment in the Portfolio. The summary is based on the
laws in effect on the date of this SAI, which are subject
to change.

The Portfolio intends to qualify in each year as a separate
"regulated investment company" under the Internal Revenue
Code of 1986, as amended (the "Code"), by complying with
certain requirements regarding the sources and distribution
of its income and the diversification of its assets.
Provided that the 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, any excess of its net short-term capital gain
over its net long-term capital loss) for a taxable year and
90% of its tax-exempt interest income (reduced by certain
expenses for that year), 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
in compliance with the Code's timing and other
requirements.

If, in any taxable year, the Portfolio fails to qualify as
a regulated investment company under the Code or fails to
meet the distribution requirement, it would be taxed in the
same manner as an ordinary corporation and distributions to
its shareholders would not be deductible by the Portfolio
in computing its taxable income.  In addition, in the event
of a failure to qualify, the Portfolio's distributions, to
the extent derived from the Portfolio's current or
accumulated earnings and profits, would constitute
dividends (eligible for the corporate dividends-received
deduction) which are taxable to shareholders as ordinary
income, even though those distributions would otherwise (at
least in part) be treated as long-term capital gains.  If
the Portfolio fails to qualify as a regulated investment
company in any year, it must pay out its earnings and
profits accumulated in that year in order to qualify again
as a regulated investment company. In addition, if the
Portfolio failed to qualify as a regulated investment
company for a period greater than one taxable year, the
Portfolio may be required to recognize any net built-in
gains with respect to certain of its assets (the excess of
the aggregate gains, including items of income, over
aggregate losses that would have been realized if it had
been liquidated) in order to qualify as a regulated
investment company in a subsequent year.

In order to avoid the application of a 4% nondeductible
excise tax on certain undistributed amounts of ordinary
income and capital gains, the Portfolio may make an
additional distribution shortly before or shortly after
December 31 in each year of any undistributed ordinary
income or capital gains.  The Portfolio generally will seek
to pay any additional dividends and distributions necessary
to avoid the application of this tax.

The 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 and, if capital, the
extent to which they are long-term or short-term),
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 the
Portfolio to mark-to-market certain types of positions in
its portfolio (i.e., treat them as if they were closed
out), and (ii) may cause the 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 referred to above.  The Portfolio will
monitor its transactions, will make the appropriate tax
elections, if any, 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 seek to prevent disqualification of the Portfolio
as a regulated investment company.

As a general rule, the 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.
Gains or losses on the sale of debt securities denominated
in a foreign currency may be recharacterized as ordinary
income or losses, as described below.

Dividends or other income (including, in some cases,
capital gains) received by the Portfolio from investments
in foreign securities may be subject to withholding and
other taxes imposed by such countries.  Tax conventions
between certain countries and the United States may reduce
or eliminate such taxes in some cases.  The Portfolio will
not be eligible to elect to treat any foreign taxes paid by
it as paid by its shareholders, who therefore will not be
entitled to deductions or credits for such taxes on their
own tax returns.

The Portfolio may be required to treat amounts as taxable
income or gain, subject to the distribution requirements
referred to above, even though no corresponding amounts of
cash are received concurrently, as a result of (1) mark to
market, constructive sale or other rules applicable to
passive foreign investment companies or partnerships or
trusts in which the Portfolio invests or to certain
options, futures or forward contracts, or "appreciated
financial positions" or (2) the inability to obtain cash
distributions or other amounts due to currency controls or
restrictions on repatriation imposed by a foreign country
with respect to the Portfolio's investments (including
through depositary receipts) in issuers in such country or
(3) tax rules applicable to debt obligations acquired with
"original issue discount," including zero-coupon or
deferred payment bonds and pay-in-kind debt obligations, or
to market discount if an election is made with respect to
such market discount.  The Portfolio may therefore be
required to obtain cash to be used to satisfy these
distribution requirements by selling securities at times
that it might not otherwise be desirable to do so or
borrowing the necessary cash, thereby incurring interest
expenses.

Under Section 988 of the Code, gains or losses attributable
to fluctuations in exchange rates between the time the
Portfolio accrues income or receivables or expenses or
other liabilities denominated in a foreign currency and the
time the Portfolio actually collects such income or pays
such liabilities are generally treated as ordinary income
or ordinary loss.  Similarly, gains or losses on foreign
currency, foreign currency forward contracts, certain
foreign currency options or futures contracts and the
disposition of debt securities denominated in foreign
currency, to the extent attributable to fluctuations in
exchange rates between the acquisition and disposition
dates, are also treated as ordinary income or loss.

The Portfolio is permitted to carry forward any unused
capital losses to be utilized to offset its capital gains
realized during the eight-year period following the year in
which the losses arose, which will reduce the net realized
capital gains (if any) required to be distributed to
shareholders for those years.

Dividends and Distributions

For federal income tax purposes, dividends declared by the
Portfolio in October, November or December as of a record
date in such a month and which are actually paid in January
of the following year will be taxable to shareholders as if
they were paid on December 31 of the year in which they are
declared rather than in the year in which shareholders
actually receive the dividends.

As a general rule, a shareholder's gain or loss on a
redemption or other disposition of Portfolio shares that is
treated as a sale under the Code 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.

The Portfolio may realize net long-term capital gains.
Distributions of the excess, if any, of net long-term
capital gain over net short-term capital loss ("capital
gain dividends") will be taxable to shareholders as long-
term capital gains, regardless of whether received in cash
or reinvested in additional shares and how long a
shareholder has held Portfolio shares. If a shareholder
receives a capital gain dividend with respect to any share
and redeems, sells or otherwise disposes of the share
before it has been held for more than six months, then any
loss, to the extent of the capital gain dividend, will be
treated as a long-term capital loss. Additionally, any loss
realized on a redemption, exchange or other disposition of
Portfolio shares generally will be disallowed to the extent
the shares disposed of are replaced, including replacement
through the reinvesting of dividends and capital gains
distributions in the Portfolio, within a 61-day period
beginning 30 days before and ending 30 days after the
disposition of the shares.

Dividends paid from net investment income and distributions
of any excess of net short-term capital gain over net long-
term capital loss are taxable to shareholders as ordinary
income, regardless of how long shareholders have held their
Portfolio shares and whether such dividends and
distributions are received in cash or reinvested in
additional Portfolio shares.  Dividends paid by the
Portfolio that are declared from net investment income and
are attributable to qualifying dividends received by the
Portfolio from domestic corporations may qualify for the
federal dividends-received deduction for corporations.

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.  Each shareholder will also
receive, if appropriate, various written notices after the
close of the Portfolio's prior taxable year as to the
federal income tax status of the 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 and the possible
availability of an exemption for dividends paid by a
Portfolio attributable to interest the Portfolio earns from
U.S. Government obligations.

If the Portfolio is the holder of record of any stock on
the record date for any dividends payable with respect to
the stock, these dividends will 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, the 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 the Portfolio on or
just prior to the record date for a taxable dividend or
capital gain distribution should be aware that even if the
net asset value of the Portfolio's shares is reduced below
the investor's cost as a result of the distribution, the
amount of the forthcoming dividend or distribution payment
will be a taxable dividend or distribution payment even
though it may represent a return of invested capital.

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) 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 federal income tax liability. Distributions to
nonresident aliens and foreign entities may be subject to
different tax rules, including other possible withholding
taxes.

The foregoing is only a summary of certain tax
considerations generally affecting the 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 their state and local tax
liabilities.

DISTRIBUTOR

Effective June 5, 2000, Salomon Smith Barney, located at
388 Greenwich Street, New York, New York 10013 replaced
CFBDS, Inc. as the Portfolio's distributor. Prior to June
5, 2000, CFBDS, Inc., located at 20 Milk Street, Boston,
Massachusetts 02109-5408 served as the Portfolio's
distributor. Salomon Smith Barney serves as the Portfolio's
distributor on a best efforts basis pursuant to a written
agreement, which was approved by the Trustees of the Trust.


CUSTODIANS, TRANSFER AGENT AND SUB-TRANSFER AGENT

PFPC Trust Company (successor as assigned by PNC Bank,
National Association) is located at 8800 Tinicum Blvd.,
Philadelphia, Pennsylvania 19153 and The Chase Manhattan
Bank ("Chase") located at Chase MetroTech Center, Brooklyn,
NY 11245, serve as the custodians for the Trust. Under
their respective custodian agreements with the respective
funds, each custodian is authorized to establish separate
accounts for foreign securities owned by the appropriate
fund to be held with foreign branches of other U.S. banks
as well as with certain foreign banks and securities
depositories. For its custody services to the Trust, each
custodian receives monthly fees based upon the month-end
aggregate net asset value of the appropriate Portfolio,
plus certain charges for securities transactions including
out-of-pocket expenses, and costs of any foreign and
domestic sub-custodians. The assets of the Trust are held
under bank custodianship in compliance with the 1940 Act.

Citi Fiduciary Trust Company, located at 125 Broad Street,
New York, New York 10004, serves as the Portfolio's
transfer and dividend-paying agent.  Under the transfer
agency agreement, the transfer agent maintains the
shareholder account records for the Portfolio, handles
certain communications between shareholders and the
Portfolio, distributes dividends and distributions payable
by the Portfolio and produces statements with respect to
account activity for the Portfolio and its shareholders.
For these services, the transfer agent receives fees from
the Portfolio computed on the basis of the number of
shareholder accounts that the transfer agent maintains for
the Portfolio during the month and is reimbursed for out-
of-pocket expenses.

PFPC Global Fund Services, located at P.O. Box 9699,
Providence, RI 02940-9699, serves as the Portfolio's sub-
transfer agent.  Under the transfer agency agreement, the
sub-transfer agent maintains the shareholder account records
for the Portfolio, handles certain communications between
shareholders and the Portfolio and distributes dividends and
distributions payable by the Portfolio.  For these services,
the sub-transfer agent receives a monthly fee computed on
the basis of the number of shareholder accounts it maintains
for the Portfolio during the month, and is reimbursed for
out-of-pocket expenses.


FINANCIAL STATEMENTS

The Portfolio's Annual Report for the fiscal year ended
August 31, 2000 is incorporated herein by reference in its
entirety.  The Annual Report was filed on November 9, 2000,
Accession Number 950130-00-5889.



"S&P 500(r)" is a trademark of The McGraw-Hill Companies, Inc.
and has been licensed for use by SSB Citi Fund Management
LLC.  The Portfolio is not sponsored, endorsed, sold or
promoted by Standard & Poor's (S&P), a division of The
McGraw-Hill Companies, Inc.  S&P makes no representation or
warranty, express or implied, to the shareholders of the
Portfolio or any member of the public regarding the
advisability of investing in securities generally or in the
Portfolio particularly or the ability of the S&P 500 Index
to track general stock market performance.  S&P's only
relationship to SSB Citi Fund Management LLC. is the
licensing of certain trademarks and trade names of S&P and
the S&P 500 Index which is determined, composed and
calculated by S&P without regard to SSB Citi Fund
Management LLC or the Portfolio.  S&P has no obligation to
take the needs of SSB Citi Fund Management LLC or the
shareholders of the Portfolio into consideration in
determining, composing or calculating the S&P 500 Index.
S&P is not responsible for and has not participated in the
determination of the prices and amount of the Portfolio's
shares or the timing of the issuance or sale of the
Portfolio's shares or in the determination or calculation
of the equation by which Portfolio shares are to be
converted into cash.  S&P has no obligation or liability in
connection with the administration, marketing or trading of
Portfolio shares.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.  S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE
PORTFOLIO, OWNERS OF THE PORTFOLIO, OR ANY OTHER PERSON OR ENTITY
FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN.  S&P
MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY
LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.



STATEMENT OF ADDITIONAL INFORMATION

CONSULTING GROUP CAPITAL MARKETS FUNDS
GLOBAL SCIENCES AND TECHNOLOGY INVESTMENTS
NOVEMBER 10, 2000,
As Amended June 22, 2001

222 Delaware Avenue ~ Wilmington, Delaware 19801 ~
(212) 816-8725

This Statement of Additional Information supplements the
information contained in the current Prospectus (the
"Prospectus") of Global Sciences and Technology Investments
(the "Portfolio"), a separate series of Consulting Group
Capital Markets Funds (the "Trust"), dated November 10,
2000, and should be read in conjunction with the
Prospectus. The Trust is a series company that consists of
the Portfolio and seventeen other portfolios offered in
separate prospectuses. The Prospectus for the Portfolio may
be obtained by contacting any Financial Consultant of
Salomon Smith Barney Inc. ("Salomon 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

Trustees and Executive Officers of the Trust
1
Investment Objectives, Management Policies and Risk Factors
3
Investment Restrictions
20
Portfolio Transactions
21
Portfolio Turnover
22
Investment Management and Other Services
23
Distributor
26
Purchase of Shares
26
Redemption of Shares
27
Redemptions in Kind
27
Net Asset Value
27
Determination of Performance
28
Taxes
30
Appendix
34

Capitalized terms used but not defined in this Statement of
Additional Information have the meanings accorded to them
in the Prospectus.

TRUSTEES AND EXECUTIVE 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.

	Walter E. Auch, Director (Age 80).  Consultant to
companies in the financial services industry; Director of
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. Director or trustee of 2 investment
companies associated with Citigroup Inc.("Citigroup"). His
address is 6001 N. 62nd Place, Paradise Valley, Arizona
85253.

	Martin Brody, Director (Age 79).  Consultant, HMK
Associates; Retired Vice Chairman of the Board of
Restaurant Associates Industries, Inc. Director or trustee
of 21 investment companies associated with Citigroup. His
address is c/o HMK Associates, 30 Columbia Turnpike,
Florham Park, New Jersey 07932.

	H. John Ellis, Jr., Director (Age 73).  Retired.
Director or trustee of 2 investment companies associated
with Citigroup.  His address is 858 East Crystal Downs
Drive, Frankfort, Michigan 49635.
Stephen E. Kaufman, Director (Age 68).  Attorney.
Director or trustee of 13 investment companies associated
with Citigroup. His address is 277 Park Avenue, New York,
New York 10172.

Armon E. Kamesar, Director (Age 73).  Chairman of
TEC, an international organization of Chief Executive
Officers; Trustee, U.S. Bankruptcy Court. Director or
trustee of 2 investment companies associated with
Citigroup.  His address is 7328 Country Club Drive, La
Jolla, California 92037.

*Heath B. McLendon, Chairman of the Board (Age 67).
Managing Director of Salomon Smith Barney, President of SSB
Citi Fund Management LLC ("SSB Citi") and Travelers
Investment Adviser, Inc. ("TIA").  Mr. McLendon also serves
as Chairman, Co-Chairman or Director of 71 investment
companies associated with Citigroup.  His address is 7 World
Trade Center, New York, New York 10048.

Lewis E. Daidone, Senior Vice President and Treasurer
(Age 42).  Managing Director of Salomon Smith Barney;
Director and Senior Vice President of SSB Citi and TIA.  Mr.
Daidone also serves as Senior Vice President or Executive
Vice President and Treasurer of 61 investment companies
associated with Citigroup.  His address is 125 Broad Street,
New York, New York 10004.

Frank L. Campanale, Investment Officer (Age 46).
President and Chief Executive Officer of Salomon 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 40).
First Vice President of Salomon 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 50).  Managing
Director of Salomon Smith Barney; General Counsel and
Secretary of SSB Citi and TIA.  Ms. Sydor also serves as
Secretary of 61 investment companies associated with
Citigroup. Her address is 388 Greenwich Street, New York,
New York 10013.

Irving David, Controller (Age 39). Director of
Salomon Smith Barney. Controller or Assistant Treasurer of
43 investment companies associated with Citigroup.  His
address is 125 Broad Street, New York, New York 10004.

Remuneration.  No director, officer or employee of Salomon
Smith Barney, SSB Citi 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
Salomon Smith Barney, the Manager, any advisor, SSB Citi or
any of their affiliates a fee of $32,000 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 calendar year ended December
31, 1999, such fees and expenses totaled $25,287.00.

For the calendar year ended December 31, 1999, the Trustees
of the Trust were paid the following compensation:
			Total
		Pension or	Total	Number
	Aggregate		Retirement Benefits
	Compensation	of Funds
	Compensation	Aggregate	Accrued as Expense	From	Served in
	Name	From Portfolio	Compensation	of Trust 	Fund
Complex	Complex
Heath B. McLendon*	None	None	None	None	71
Walter Auch	None	$36,200.00	None	$50,600.00	2
Martin Brody	None	34,200.00	None	138,600.00	21
H. John Ellis	None	36,200.00	None	50,600.00	2
Armon E. Kamesar	None	37,100.00	None	52,600.00	2
Stephen E. Kaufman	None	37,200.00	None	110,650.00	13

* Designates "interested trustee".

INVESTMENT OBJECTIVES, MANAGEMENT POLICIES AND RISK FACTORS

The Portfolio is a non-diversified, open-end management
investment company. The Prospectus discusses the investment
objectives of the Portfolio, a separate series of 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 Portfolio may invest, the investment policies and
strategies the Portfolio may utilize and certain risks
attendant to those investments, policies and strategies.

The Portfolio seeks to achieve its objective by investing
primarily in equity securities of both domestic and foreign
companies.

Sector Investing. The Portfolio normally invests in the
securities of companies principally engaged in the
technology, telecommunications and healthcare sectors.  The
broad industry categories in which these companies may be
found include, but are not limited to, computer software
and hardware; network and capital broadcasting; internet
and internet-related businesses; the ownership, operation,
development, production, sale, and distribution of goods or
services used in the broadcast and media industries;
communications services or equipment; the design,
manufacture, or sale of electric components; defense and
data storage and retrieval; pharmaceuticals; medical
diagnostic, biochemical or other healthcare research and
development; healthcare facilities, healthcare products and
services and biotechnology.  The relative size of the
Portfolio's investments within these industries will vary
from time to time, and at times, some of these industries
may not be represented in the Portfolio's holdings.

The subadvisers believe that because of rapid advances in
each sector, an investment in companies with business
operations in these areas may offer substantial
opportunities for long-term capital appreciation.  Of
course, prices of common stocks of even the best managed,
most profitable corporations are subject to market risk,
which means their stock prices can decline. In addition,
swings in investor psychology or significant trading by
investors can result in price fluctuations. Industries
likely to be owned by the Portfolio include computers,
networking and internetworking software, computer aided
design, telecommunications, media and information services,
medical devices and biotechnology.  The Portfolio may also
invest in the stocks of companies that may benefit from the
commercialization of technological advances, although they
may not be directly involved in research and development.

The sectors have exhibited and may continue to exhibit
rapid growth, both through increasing demand for existing
products and services and the broadening of the sector. In
general, the stocks of large capitalized companies that are
well established in the sector and can be expected to grow
with the market will frequently be found among the
Portfolio's holdings. The expansion of each sector and its
related industries, however, also provides a favorable
environment for investment in small to medium capitalized
companies. The Portfolio's investment policy is not limited
to any minimum capitalization requirement and the Portfolio
may hold securities without regard to the capitalization of
the issuer. The subadvisers' overall stock selection for
the Portfolio is not based on the capitalization or size of
the company but rather on an assessment of the company's
fundamental prospects.

Companies in each sector face special risks. For example,
their products or services may not prove commercially
successful or may become obsolete quickly. The value of the
Portfolio's shares may be susceptible to factors affecting
the technology and science areas and to greater risk and
market fluctuation than an investment in a fund that
invests in a broader range of portfolio securities not
concentrated in any particular industry. As such, the
Portfolio is not an appropriate investment for individuals
who are not long-term investors and who, as their primary
objective, require safety of principal or stable income
from their investments.  Each sector may be subject to
greater governmental regulation than many other areas and
changes in governmental policies and the need for
regulatory approvals may have a material adverse effect on
these areas. Additionally, companies in each sector may be
subject to risks of developing technologies, competitive
pressures and other factors and are dependent upon consumer
and business acceptance as new technologies evolve.

Further, the market may value companies according to size,
or market capitalization, rather than on financial
performance. The companies in each sector may be developing
or changing.  They may be subject to greater business risks
and more sensitive to changes in economic conditions than
larger, more established companies.  Company earnings in
these sectors may fluctuate more than those of other
companies because of short product cycles and competitive
pricing.  Investors' enthusiasm for these stocks can also
change dramatically, causing stock prices to rise and fall
sharply.

Technology Securities.  Many technological products and
services are subject to rapid obsolescence, which may lower
the market value of the securities of the companies in this
sector.  Also, the Portfolio holds faster-growing, more
volatile technology companies the subadvisers believe to be
emerging leaders in their fields.  The market prices of
these companies tend to rise and fall more rapidly than
those of larger, more established companies.

Telecommunications Securities.  Companies in the media and
telecommunications sector are subject to the risks of rapid
obsolescence, lack of investor or consumer acceptance, lack
of standardization or compatibility with existing
technologies, an unfavorable regulatory environment,
intense competition, and a dependency on patent and
copyright protection.  The media sector can be
significantly (and adversely) affected by the federal
deregulation of cable and broadcasting, competitive
pressures, and government regulation, including regulation
of the concentration of investment in AM, FM, or TV
stations. The telecommunications industry, particularly
telephone operating companies, is subject to both federal
and state government regulations of rates of return and
services that may be offered. Many telecommunications
companies fiercely compete for market share.

Certain of the companies in which the Portfolio invests may
allocate greater than usual financial resources to research
and product development. The securities of such companies
may experience above-average price movements associated
with the perceived prospects of success of the research and
development programs.  In addition, companies in which the
Portfolio invests may be adversely affected by lack of
commercial acceptance of a new product or process or by
technological change and obsolescence.

Healthcare and Biotechnology Securities.  Many faster-
growing healthcare companies have limited operating
histories and their potential profitability may be
dependent on regulatory approval of their products, which
increases the volatility of these companies' security
prices. Many of these activities are funded or subsidized
by governments.  The withdrawal or curtailment of this
support could lower the profitability and market prices of
such companies.  Changes in government regulation could
also have an adverse impact.  Continuing technological
advances may mean rapid obsolescence of products and
services.  Patent considerations, intense competition,
rapid technological change and obsolescence, and government
regulation can significantly (and adversely) affect the
biotechnology sector. Biotechnology companies can have
persistent losses during a new product's transition from
development to production, and revenue patterns can be
erratic.

Equity Securities.  The Portfolio may invest in all types
of equity securities, including, but not limited to,
exchange-traded and over-the-counter common and preferred
stocks, warrants, rights, depository receipts and shares,
trust certificates, limited partnership interests, shares
of other investment companies, real estate investment
trusts and equity participations.  Common stock is an
interest in a company, limited liability company, or
similar entity that entitles the holder to a share in the
profits of the company, in the form of dividends, and the
proceeds from a sale or liquidation of the company.  The
interests of common shareholders are the most junior in a
corporate structure.  This means that in the event of the
bankruptcy of the company its creditors and any holders of
a preferred class of equity securities are paid before the
common stockholders are entitled to receive anything.
However, any assets of the company in excess of the amount
owed to creditors or preferred shareholders are shared pro-
rata among the common stockholders.  Common stockholders
normally have voting control of the company and are
entitled to vote on the election of directors and certain
fundamental corporate actions.

Preferred stocks are equity securities, but they have many
characteristics of fixed income securities.  Their
similarities to fixed income securities generally cause
preferred stocks to trade more like debt instruments than
common stocks.  Thus, the value of preferred stocks
reflects the credit risk of the company and the dividend
yield on the preferred stocks compared to prevailing
interest rates.  Preferred shares are entitled to receive
dividends before any dividend is paid to the holders of
common stock.  The dividend may be at a fixed or variable
dividend payment rate, may be payable on fixed dates or at
times determined by the company and may be payable in cash,
additional shares of preferred stock or other securities.
Many preferred stocks are redeemable at the option of the
company after a certain date.  Holders of preferred stock
are also entitled to receive a payment upon the sale or
liquidation of a company before any payment is made to the
company's common stockholders.  However, preferred stock is
an equity security and, therefore, is junior in priority of
payment to the company's creditors in the event of a
bankruptcy, including holders of the company's debt
securities.  This junior ranking to creditors makes
preferred stock riskier in some respects than fixed income
securities.

Convertible securities are preferred stocks or fixed income
securities that are convertible at the option of the
holder, or in some circumstances at the option of the
issuing company, at a stated exchange rate or formula into
the company's common stock or other equity securities.  At
the time a company sells the convertible securities, the
conversion price is normally higher than the market price
of the common stock.  A holder of convertible securities
will generally receive interest or dividends at a rate
lower than comparable debt securities, but the holder has
the potential for additional gain if the market value of
the common stock exceeds the conversion price.  When the
market price of the common stock is below the conversion
price, convertible securities tend to trade like fixed
income securities.  If the market price of the common stock
is higher than the conversion price, convertible securities
tend to trade like the common stock.  Convertible
securities rank senior to common stocks in an issuer's
capital structure and consequently may be of higher quality
and entail less risk than the issuer's common stock.

Warrants and stock purchase rights are securities
permitting, but not obligating, their holder to purchase
other securities, normally the issuer's common stock.
Stock purchase rights are frequently issued as a dividend
to a company's stockholders and represent the right to
purchase a fixed number of shares at a fixed or formula
price.  The price may reflect a discount to the market
price.  Warrants are generally sold by a company or issuer
together with fixed income securities and represent the
right to a fixed number of shares of common stock or other
securities at a fixed or formula price.  The exercise price
is normally higher than the market price at the time the
company sells the warrant.

Warrants and stock purchase rights do not carry with them
the right to receive dividends on or to vote the securities
that they entitle their holders to purchase.  They also do
not entitle the holder to share in the assets of the
company in a liquidation.  The rights to purchase common
stock or other securities conferred by a warrant or stock
purchase right can only be exercised on specific dates or
for a specific period.  Trading in these instruments is
affected both by the relationship of the exercise price to
the current market price of the common stock or other
securities and also by the period remaining until the right
or warrant expires.  An investment in warrants and stock
purchase rights may be considered more speculative than
other types of equity investments.  A warrant or stock
purchase right expires worthless if it is not exercised on
or prior to its expiration date.

ADRs, EDRs and GDRs.  The Portfolio may also purchase
American Depository Receipts ("ADRs"), European Depository
Receipts ("EDRs") and Global Depository Receipts ("GDRs")
or other securities representing underlying shares of
foreign companies. ADRs are publicly traded on exchanges or
over-the-counter in the United States and are issued
through "sponsored" or "unsponsored" arrangements.  In a
sponsored ADR arrangement, the foreign issuer assumes the
obligation to pay some or all of the depository's
transaction fees, whereas under an unsponsored arrangement,
the foreign issuer assumes no obligation and the
depository's transaction fees are paid by the ADR holders.
In addition, less information is available in the United
States about an unsponsored ADR than about a sponsored ADR,
and the financial information about a company may not be as
reliable for an unsponsored ADR as it is for a sponsored
ADR.  The Portfolio may invest in ADRs through both
sponsored and unsponsored arrangements.

Real Estate Investment Trusts ("REITs").  The Portfolio may
invest in REITs.  REITs are pooled investment vehicles
which invest primarily in income producing real estate or
real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination
of equity and mortgage REITs. Equity REITs invest the
majority of their assets directly in real property and
derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling
properties that have appreciated in value. Mortgage REITs
invest the majority of their assets in real estate
mortgages and derive income from the collection of interest
payments. REITs are not taxed on income distributed to
shareholders provided they comply with the applicable
requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). Debt securities issued by REITs, for
the most part, are general and unsecured obligations and
are subject to risks associated with REITs.

Investing in REITs involves certain unique risks in
addition to those risks associated with investing in the
real estate industry in general. An equity REIT may be
affected by changes in the value of the underlying
properties owned by the REIT. A mortgage REIT may be
affected by changes in interest rates and the ability of
the issuers of its portfolio mortgages to repay their
obligations. REITs are dependent upon the skills of their
managers and are not diversified. REITs are generally
dependent upon maintaining cash flows to repay borrowings
and to make distributions to shareholders and are subject
to the risk of default by lessees or borrowers. REITs whose
underlying assets are concentrated in properties used by a
particular industry, such as health care, are also subject
to risks associated with such industry.

REITs (especially mortgage REITs) are also subject to
interest rate risks. When interest rates decline, the value
of a REIT's investment in fixed rate obligations can be
expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can
be expected to decline. If the REIT invests in adjustable
rate mortgage loans the interest rates on which are reset
periodically, yields on a REIT's investments in such loans
will gradually align themselves to reflect changes in
market interest rates. This causes the value of such
investments to fluctuate less dramatically in response to
interest rate fluctuations than would investments in fixed
rate obligations.

REITs may have limited financial resources, may trade less
frequently and in a limited volume and may be subject to
more abrupt or erratic price movements than larger company
securities. Historically REITs have been more volatile in
price than the larger capitalization stocks included in
Standard & Poor's 500 Stock Index (the "S&P 500").

Other Investment Companies.  The Portfolio may invest in
the securities of other investment companies to the extent
such investments are consistent with the Portfolio's
investment objectives and policies and permissible under
the Investment Company Act of 1940, as amended (the "1940
Act"). Under the 1940 Act, the Portfolio may not acquire
the securities of other domestic or foreign investment
companies if, as a result, (i) more than 10% of the
Portfolio's total assets would be invested in securities of
other investment companies, (ii) such purchase would result
in more than 3% of the total outstanding voting securities
of any one investment company being held by the Portfolio,
or (iii) more than 5% of the Portfolio's total assets would
be invested in any one investment company. These
limitations do not apply to the purchase of shares of any
investment company in connection with a merger,
consolidation, reorganization or acquisition of
substantially all the assets of another investment company.
The Portfolio will not invest in other investment companies
for which the subadvisers or any of their affiliates act as
an investment advisor or distributor.

The Portfolio may invest up to 10% of its assets in
securities of other investment companies, including shares
in a portfolio of securities that seeks to track the
performance of an underlying equity index or a portion of
an equity index ("exchange traded funds").

The Portfolio, as a holder of the securities of other
investment companies, will bear its pro rata portion of the
other investment companies' expenses, including advisory
fees. These expenses are in addition to the direct expenses
of the Portfolio's own operations.

Short Sales.  The Portfolio may seek to hedge investments
or realize additional gains through short sales.  Short
sales are transactions in which the Portfolio sells a
security it does not own in anticipation of a decline in
the market value of that security.  To complete such a
transaction, the Portfolio borrows the security to make
delivery to the buyer.  The Portfolio is obligated to
replace the security borrowed by purchasing it at the
market price at or prior to the time of replacement.  The
price at such time may be more or less than the price at
which the security was sold by the Portfolio.  Until the
security is replaced, the Portfolio is required to repay
the lender any dividends or interest that accrue during the
period of the loan.  To borrow the security, the Portfolio
also may be required to pay a premium, which would increase
the cost of the security sold.  A portion of the net
proceeds of the short sale may be retained by the broker
(or by the Portfolio's custodian in a special custody
account), to the extent necessary to collateralize the
broker and to meet margin requirements, until the short
position is closed out.  The Portfolio will also incur
transaction costs in effecting short sales.

The Portfolio will incur a loss as a result of the short
sale if the price of the security increases between the
date of the short sale and the date on which the Portfolio
replaces the borrowed security.  The Portfolio will realize
a gain if the security declines in price between those
dates.  The amount of any gain will be decreased, and the
amount of any loss increased, by the amount of the
premiums, dividends, interest or expenses the Portfolio may
be required to pay in connection with a short sale.  An
increase in the value of a security sold short by the
Portfolio over the price at which it was sold short will
result in a loss to the Portfolio, and there can be no
assurance that the Portfolio will be able to close out the
position at any particular time or at an acceptable price.
Thus the Portfolio's losses on short sales are potentially
unlimited.

Whenever the Portfolio engages in short sales, it maintains
cash or liquid securities in an amount that, when combined
with the amount of collateral deposited with the broker in
connection with the short sale, equals the current market
value of the security sold short.  The assets so maintained
are marked to market daily.

Management currently intends to limit the Portfolio's short
sales to shares issued by exchange traded funds.  Exchange
traded funds hold portfolios of securities that seek to
track the performance of a specific index or basket of
stocks.  Utilizing this strategy will allow the Subadvisor
to adjust the Portfolio's exposure in a particular sector,
in a cost effective and convenient manner, without having
to sell the Portfolio's holdings of individual stocks in
that sector.

Investing in Small and Medium Capitalization Companies.
The Portfolio may invest in securities of all market
capitalizations.  Investing in the equity securities of
small and medium capitalization companies involves
additional risks compared to investing in large
capitalization companies.  Compared to large companies,
these companies may have more limited product lines and
capital resources; have less established markets for their
products; have earnings that are more sensitive to changes
in the economy, competition and technology and be more
dependent upon key members of management.

The market value of the common stock of small and medium
capitalization companies may be more volatile, particularly
in response to company announcements or industry events;
have less active trading markets and be harder to sell at
the time and prices that a subadviser considers
appropriate.

Fixed Income Securities. The Portfolio may invest a portion
of its assets in fixed income (or "debt") securities.  The
market value of the obligations held by the Portfolio can
be expected to vary inversely to changes in prevailing
interest rates.  Investors also should recognize that, in
periods of declining interest rates, the Portfolio's yield
will tend to be somewhat higher than prevailing market
rates and, in periods of rising interest rates, the
Portfolio's yield will tend to be somewhat lower.  Also,
when interest rates are falling, the inflow of net new
money to the Portfolio from the continuous sale of its
shares will tend to be invested in instruments producing
lower yields than the balance of its portfolio, thereby
reducing the Portfolio's current yield.  In periods of
rising interest rates, the opposite can be expected to
occur.  In addition, securities in which the Portfolio may
invest may not yield as high a level of current income as
might be achieved by investing in securities with less
liquidity, less creditworthiness or longer maturities.

The Portfolio may also invest in U.S. Government
securities, corporate bonds, debentures, non-convertible
fixed income preferred stocks and Eurodollar and Yankee
instruments.

Eurodollar Instruments and Yankee Bonds.  The Portfolio may
invest in Eurodollar certificates of deposit ("ECDs"),
Eurodollar bonds and Yankee bonds.  Eurodollar instruments
are bonds of corporate and government issuers that pay
interest and principal in U.S. dollars but are issued in
markets outside the United States, primarily in Europe.
Yankee bonds are bonds of foreign governments and their
agencies and foreign banks and corporations that pay
interest in U.S. dollars and are typically issued in the
U.S.  ECDs are U.S. dollar-denominated certificates of
deposit issued by foreign branches of domestic banks.

High Yield Securities.  The Portfolio may invest in medium
or lower rated securities and unrated securities of
comparable quality, sometimes referred to as "junk bonds."
Generally, such securities offer a higher current yield
than is offered by higher rated securities, but also (i)
will likely have some quality and protective
characteristics that, in the judgment of the rating
organizations, are outweighed by large uncertainties or
major risk exposures to adverse conditions and (ii) are
predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance
with the terms of the obligations.

The market values of certain of these securities also tend
to be more sensitive to individual corporate developments
and changes in economic conditions than higher quality
bonds.  In addition, medium and lower rated securities and
comparable unrated securities generally present a higher
degree of credit risk.  The risk of loss because of default
by these issuers is significantly greater because medium
and lower rated securities generally are unsecured and
frequently subordinated to the prior payment of senior
indebtedness. In light of these risks, the Board of
Trustees has instructed the subadvisers, in evaluating the
creditworthiness of an issue, whether rated or unrated, to
take various factors into consideration, which may include,
as applicable, the issuer's financial resources, its
sensitivity to economic conditions and trends, the
operating history of and the community support for the
facility financed by the issue, the ability of the issuer's
management and regulatory matters.

In addition, the market value of securities in lower rated
categories is more volatile than that of higher quality
securities, and the markets in which medium and lower rated
securities are traded are more limited than those in which
higher rated securities are traded.  The existence of
limited markets may make it more difficult for the
Portfolio to obtain accurate market quotations for purposes
of valuing its securities and calculating its net asset
value.  Moreover, the lack of a liquid trading market may
restrict the availability of securities for the Portfolio
to purchase and may also have the effect of limiting the
ability of the Portfolio to sell securities at their fair
value either to meet redemption requests or to respond to
changes in the economy or the financial markets.

Lower rated debt obligations also present risks based on
payment expectations.  If an issuer calls the obligation
for redemption, the Portfolio may have to replace the
security with a lower yielding security, resulting in a
decreased return for investors.  Also, the principal value
of bonds moves inversely with movements in interest rates;
in the event of rising interest rates, the value of the
securities held by the Portfolio may decline
proportionately more than a portfolio consisting of higher
rated securities.  If the Portfolio experiences unexpected
net redemptions, it may be forced to sell its higher rated
bonds, resulting in a decline in the overall credit quality
of the securities held by the Portfolio and increasing the
exposure of the Portfolio to the risks of lower rated
securities.  Investments in zero coupon bonds may be more
speculative and subject to greater fluctuations in value
because of changes in interest rates than bonds that pay
interest currently.

Subsequent to its purchase by the Portfolio, an issue of
securities may cease to be rated or its rating may be
reduced below the minimum required for purchase by the
Portfolio.  Neither event will require sale of these
securities by the Portfolio, but the subadviser will
consider the event in determining whether the Portfolio
should continue to hold the security. See "Debt Securities
Rating Criteria" below for additional information regarding
high yield securities.

HOLDRS. HOLDRS are depository receipts issued by the HOLDRS
Trust representing individual and undivided ownership
interests in the common stock of companies involved in a
specific segment of a particular industry. Holding Company
Depository Receipts ("HOLDRS") are a service mark of
Merrill Lynch and are traded on the American Stock
Exchange.

Debt Securities Rating Criteria.  Investment grade debt
securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("S & P"), the equivalent rating of
other nationally recognized statistical rating
organizations ("NRSROs") or determined to be of equivalent
credit quality by the subadviser.  Debt securities rated
BBB are considered medium grade obligations with
speculative characteristics, and adverse economic
conditions or changing circumstances may weaken the
issuer's ability to pay interest and repay principal.

Below investment grade debt securities are those rated "BB"
and below by S & P or the equivalent rating of other
NRSROs.  Below investment grade debt securities or
comparable unrated securities are commonly referred to as
"junk bonds" and are considered predominantly speculative
and may be questionable as to principal and interest
payments. Changes in economic conditions are more likely to
lead to a weakened capacity to make principal payments and
interest payments. The amount of junk bond securities
outstanding has proliferated as an increasing number of
issuers have used junk bonds for corporate financing.  An
economic downturn could severely affect the ability of
highly leveraged issuers to service their debt obligations
or to repay their obligations upon maturity.  Factors
having an adverse impact on the market value of lower
quality securities will have an adverse effect on the
Portfolio's net asset value to the extent it invests in
such securities.  In addition, the Portfolio may incur
additional expenses to the extent it is required to seek
recovery upon a default in payment of principal or interest
on its portfolio holdings.

The secondary market for junk bond securities, which is
concentrated in relatively few market makers, may not be as
liquid as the secondary market for more highly rated
securities, a factor which may have an adverse effect on
the Portfolio's ability to dispose of a particular security
when necessary to meet its liquidity needs.  Under adverse
market or economic conditions, the secondary market for
junk bond securities could contract further, independent of
any specific adverse changes in the condition of a
particular issuer. As a result, the Portfolio could find it
more difficult to sell these securities or may be able to
sell the securities only at prices lower than if such
securities were widely traded.  Prices realized upon the
sale of such lower rated or unrated securities, under these
circumstances, may be less than the prices used in
calculating the Portfolio's net asset value.

Since investors generally perceive that there are greater
risks associated with lower quality debt securities of the
type in which the Portfolio may invest a portion of its
assets, the yields and prices of such securities may tend
to fluctuate more than those for higher rated securities.
In the lower quality segments of the debt securities
market, changes in perceptions of issuers' creditworthiness
tend to occur more frequently and in a more pronounced
manner than do changes in higher quality segments of the
debt securities market, resulting in greater yield and
price volatility.

Lower rated and comparable unrated debt securities tend to
offer higher yields than higher rated securities with the
same maturities because the historical financial condition
of the issuers of such securities may not have been as
strong as that of other issuers.  However, lower rated
securities generally involve greater risks of loss of
income and principal than higher rated securities.  The
subadvisers will attempt to reduce these risks through
portfolio diversification and by analysis of each issuer
and its ability to make timely payments of income and
principal, as well as broad economic trends and corporate
developments.

The definitions of the ratings of debt obligations may be
found in the Appendix following this Statement of
Additional Information.

Ratings as Investment Criteria. In general, the ratings of
an NRSRO such as Moody's Investors Service, Inc.
("Moody's") and 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 Portfolio as initial
criteria for the selection of portfolio securities, but the
Portfolio will also rely upon the independent advice of
their respective investment advisers (separately a
subadviser, collectively, the subadvisers) 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.

Subsequent to its purchase by the 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
subadvisers will consider the event in their 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 an NRSRO, the Portfolio will attempt to use comparable
ratings as standards for its investments in accordance with
its investment objectives and policies.

Risks of Non-U.S. Investments.  To the extent the Portfolio
invests in the securities of non-U.S. issuers, those
investments involve considerations and risks not typically
associated with investing in the securities of issuers in
the U.S.  These risks are heightened with respect to
investments in countries with emerging markets and
economies.  The risks of investing in securities of non-
U.S. issuers or issuers with significant exposure to non-
U.S. markets may be related, among other things, to (i)
differences in size, liquidity and volatility of, and the
degree and manner of regulation of, the securities markets
of certain non-U.S. markets compared to the securities
markets in the U.S.; (ii) economic, political and social
factors; and (iii) foreign exchange matters, such as
restrictions on the repatriation of capital, fluctuations
in exchange rates between the U.S. dollar and the
currencies in which the Portfolio's securities holdings are
quoted or denominated, exchange control regulations and
costs associated with currency exchange. The political and
economic structures in certain non-U.S. countries,
particularly emerging markets, are expected to undergo
significant evolution and rapid development, and such
countries may lack the social, political and economic
stability characteristic of more developed countries.
Unanticipated political or social developments may affect
the values of the Portfolio's investments in such
countries. The economies and securities and currency
markets of many emerging markets have experienced
significant disruption and declines. There can be no
assurances that these economic and market disruptions will
not continue.

Foreign Securities Markets and Regulations.  There may be
less publicly available information about non-U.S. markets
and issuers than is available with respect to U.S.
securities and issuers. Non-U.S. companies generally are
not subject to accounting, auditing and financial reporting
standards, practices and requirements comparable to those
applicable to U.S. companies. The trading markets for most
non-U.S. securities are generally less liquid and subject
to greater price volatility than the markets for comparable
securities in the U.S. The markets for securities in
certain emerging markets are in the earliest stages of
their development. Even the markets for relatively widely
traded securities in certain non-U.S. markets, including
emerging countries, may not be able to absorb, without
price disruptions, a significant increase in trading volume
or trades of a size customarily undertaken by institutional
investors in the U.S. Additionally, market making and
arbitrage activities are generally less extensive in such
markets, which may contribute to increased volatility and
reduced liquidity. The less liquid a market, the more
difficult it may be for the Portfolio to accurately price
its securities holdings or to dispose of such securities at
the times determined by the subadviser to be appropriate.
The risks associated with reduced liquidity may be
particularly acute in situations in which the Portfolio's
operations require cash, such as in order to meet
redemptions and to pay its expenses.

Economic, Political and Social Factors.  Certain non-U.S.
countries, including emerging markets, may be subject to a
greater degree of economic, political and social
instability than is the case in the U.S. and Western
European countries. Such instability may result from, among
other things: (i) authoritarian governments or military
involvement in political and economic decision making;
(ii) popular unrest associated with demands for improved
economic, political and social conditions; (iii) internal
insurgencies; (iv) hostile relations with neighboring
countries; and (v) ethnic, religious and racial
disaffection and conflict. Such economic, political and
social instability could significantly disrupt the
financial markets in such countries and the ability of the
issuers in such countries to repay their obligations.
Investing in emerging countries also involves the risk of
expropriation, nationalization, confiscation of assets and
property or the imposition of restrictions on foreign
investments and on repatriation of capital invested. In the
event of such expropriation, nationalization or other
confiscation in any emerging country, the Portfolio could
lose its entire investment in that country.

Certain emerging market countries restrict or control
foreign investment in their securities markets to varying
degrees.  These restrictions may limit the Portfolio's
investment in those markets and may increase the expenses
of the Portfolio.  In addition, the repatriation of both
investment income and capital from certain markets in the
region is subject to restrictions such as the need for
certain governmental consents.  Even where this is no
outright restriction on repatriation of capital, the
mechanics of repatriation may affect certain aspects of the
Portfolio's operation.

Economies in individual non-U.S. countries may differ
favorably or unfavorably from the U.S. economy in such
respects as growth of gross domestic product, rates of
inflation, currency valuation, capital reinvestment,
resource self-sufficiency and balance of payments
positions. Many non-U.S. countries have experienced
substantial, and in some cases extremely high, rates of
inflation for many years. Inflation and rapid fluctuations
in inflation rates have had, and may continue to have, very
negative effects on the economies and securities markets of
certain emerging countries.

Economies in emerging countries generally are dependent
heavily upon international trade and, accordingly, have
been and may continue to be affected adversely by trade
barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures
imposed or negotiated by the countries with which they
trade. These economies also have been, and may continue to
be, affected adversely by economic conditions in the
countries with which they trade.

Currency Risks.  The value of the securities quoted or
denominated in international currencies may be adversely
affected by fluctuations in the relative currency exchange
rates and by exchange control regulations. The Portfolio's
investment performance may be negatively affected by a
devaluation of a currency in which the Portfolio's
investments are quoted or denominated. Further, the
Portfolio's investment performance may be significantly
affected, either positively or negatively, by currency
exchange rates because the U.S. dollar value of securities
quoted or denominated in another currency will increase or
decrease in response to changes in the value of such
currency in relation to the U.S. dollar.

Custodian Services and Related Investment Costs.  Custodian
services and other costs relating to investment in
international securities markets generally are more
expensive than in the U.S. Such markets have settlement and
clearance procedures that differ from those in the U.S. In
certain markets there have been times when settlements have
been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such
transactions.  The inability of the Portfolio to make
intended securities purchases because of settlement
problems could cause the Portfolio to miss attractive
investment opportunities. Inability to dispose of a
portfolio security caused by settlement problems could
result either in losses to the Portfolio because of a
subsequent decline in value of the portfolio security or
could result in possible liability to the Portfolio. In
addition, security settlement and clearance procedures in
some emerging countries may not fully protect the Portfolio
against loss or theft of its assets.

Withholding and Other Taxes.  The Portfolio will be subject
to taxes, including withholding taxes, on income (possibly
including, in some cases, capital gains) that are or may be
imposed by certain non-U.S. countries with respect to the
Portfolio's investments in such countries. These taxes will
reduce the return achieved by the Portfolio.  Treaties
between the U.S. and such countries may not be available to
reduce the otherwise applicable tax rates.

Currency Exchange Rates.  The Portfolio's share value may
change significantly when the currencies, other than the
U.S. dollar, in which the Portfolio's investments are
quoted or denominated, strengthen or weaken against the
U.S. dollar.  Currency exchange rates generally are
determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of
investments in different countries as seen from an
international perspective.  Currency exchange rates can
also be affected unpredictably by intervention by U.S. or
foreign governments or central banks or by currency
controls or political developments in the United States or
abroad.

Emerging Markets Countries.  A developing or emerging
markets country generally is considered to be a country
that is in the initial stages of its industrialization
cycle. Investing in the equity markets of developing
countries involves exposure to economic structures that are
generally less diverse and mature, and to political systems
that can be expected to have less stability, than those of
developed countries.  Historical experience indicates that
the markets of developing countries have been more volatile
than the markets of the more mature economies of developed
countries; however, such markets often have provided higher
rates of return to investors.

One or more of the risks discussed above could adversely
affect the economy of a developing market or the
Portfolio's investments in such a market.  The claims of
many property owners against those of governments may
remain unsettled.  There can be no assurance that any
investments the Portfolio might make in such emerging
markets would be expropriated, nationalized or otherwise
confiscated at some time in the future.  In such an event,
the Portfolio could lose its entire investment in the
market involved.  Moreover, changes in the leadership or
policies of such markets could halt the expansion or
reverse the liberalization of foreign investment policies
now occurring in certain of these markets and adversely
affect existing investment opportunities.

Economic Monetary Union ("EMU").  On January 1, 1999, 11
European countries adopted a single currency - the Euro.
The conversion to the Euro is being phased in over a three-
year period.  For participating countries, EMU will mean
sharing a single currency and single official interest rate
and adhering to agreed-upon limits on government borrowing.
Budgetary decisions will remain in the hands of each
participating country, but will be subject to each
country's commitment to avoid "excessive deficits" and
other more specific budgetary criteria.  A European Central
Bank is responsible for setting the official interest rate
to maintain price stability within the Euro zone.

EMU is driven by the expectation of a number of economic
benefits, including lower transaction costs, reduced
exchange risk, greater competition, and a broadening and
deepening of European financial markets.  However, there
are a number of significant risks associated with EMU.
Monetary and economic union on this scale has never been
attempted before.  There is a significant degree of
uncertainty as to whether participating countries will
remain committed to EMU in the face of changing economic
conditions.  This uncertainty may increase the volatility
of European markets.

Forward Currency Contracts.  The Portfolio may invest in
securities quoted or denominated in foreign currencies, may
hold currencies to meet settlement requirements for foreign
securities and may engage in currency exchange transactions
in order to protect against uncertainty in the level of
future exchange rates between a particular foreign currency
and the U.S. dollar or between foreign currencies in which
the Portfolio's securities are or may be quoted or
denominated. Forward currency contracts are agreements to
exchange one currency for another, for example, to exchange
a certain amount of U.S. dollars for a certain amount of
French francs at a future date.  The date (which may be any
agreed upon fixed number of days in the future), the amount
of currency to be exchanged and the price at which the
exchange will take place will be negotiated with a currency
trader and fixed for the term of the contract at the time
the Portfolio enters into the contract.  To assure that the
Portfolio's forward currency contracts are not used to
achieve investment leverage, the Portfolio will segregate
cash or high grade securities with its custodian in an
amount at all times equal to or exceeding the Portfolio's
commitment with respect to these 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. The Portfolio, however,
may enter into forward currency contracts containing either
or both deposit requirements and commissions.

At or before the maturity of a forward currency contract,
the 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 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.

In hedging specific portfolio positions, the Portfolio may
enter into a forward contract with respect to either the
currency in which the positions are denominated or another
currency deemed appropriate by the Portfolio's subadviser.
The amount the Portfolio may invest in forward currency
contracts is limited to the amount of the Portfolio's
aggregate investments in foreign currencies.  Risks
associated with entering into forward currency contracts
include the possibility that the market for forward
currency contracts may be limited with respect to certain
currencies and, upon a contract's maturity, the inability
of the Portfolio to negotiate with the dealer to enter into
an offsetting transaction.  Forward currency contracts may
be closed out only by the parties entering into an
offsetting contract.  In addition, the correlation between
movements in the prices of those contracts and movements in
the price of the currency hedged or used for cover will not
be perfect.  There is no assurance an active forward
currency contract market will always exist. These factors
will restrict the Portfolio's ability to hedge against the
risk of devaluation of currencies in which the Portfolio
holds a substantial quantity of securities and are
unrelated to the qualitative rating that may be assigned to
any particular security.  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 subadviser 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 adverse market
movements could continue with respect to those contracts to
an unlimited extent over a period of time.

Options on Securities and Securities Indices.  The
Portfolio may purchase put and call options on any security
in which it may invest or options on any securities index
based on securities in which it may invest.  The Portfolio
would also be able to enter into closing sale transactions
in order to realize gains or minimize losses on options it
has purchased.

Writing Covered Call and Put Options on Securities Indices.
The Portfolio may also write (sell) covered call and put
options on any securities index composed of securities in
which it may invest.  Options on securities indices are
similar to options on securities, except that the exercise
of securities index options requires cash payments and does
not involve the actual purchase or sale of securities. In
addition, securities index options are designed to reflect
price fluctuations in a group of securities or segments of
the securities market rather than price fluctuations in a
single security.

The Portfolio may cover call options on a securities index
by owning securities whose price changes are expected to be
similar to those of the underlying index, or by having an
absolute and immediate right to acquire such securities
without additional cash consideration (or for additional
consideration if cash in such amount is segregated) upon
conversion or exchange of other securities in its
portfolio.  The Portfolio may cover call and put options on
a securities index by segregating assets with a value equal
to the exercise price.

Purchasing Call and Put Options.  The Portfolio will
normally purchase call options in anticipation of an
increase in the market value of securities of the type in
which they may invest. The purchase of a call option will
entitle the Portfolio, in return for the premium paid, to
purchase specified securities at a specified price during
the option period.  The Portfolio will ordinarily realize a
gain if, during the option period, the value of such
securities exceeded the sum of the exercise price, the
premium paid and transaction costs; otherwise the Portfolio
will realize either no gain or a loss on the purchase of
the call option.

The Portfolio will normally purchase put options in
anticipation of a decline in the market value of securities
in its portfolio ("protective puts") or in securities in
which it may invest. The purchase of a put option will
entitle the Portfolio, in exchange for the premium paid, to
sell specified securities at a specified price during the
option period. The purchase of protective puts is designed
to offset or hedge against a decline in the market value of
the Portfolio's securities. Put options may also be
purchased by the Portfolio for the purpose of affirmatively
benefiting from a decline in the price of securities which
it does not own. The Portfolio will ordinarily realize a
gain if, during the option period, the value of the
underlying securities decreased below the exercise price
sufficiently to more than cover the premium and transaction
costs; otherwise the Portfolio will realize either no gain
or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend
to be offset by countervailing changes in the value of the
underlying portfolio securities.

Risks of Trading Options.  There is no assurance that a
liquid secondary market on an options exchange will exist
for any particular exchange-traded option, or at any
particular time. If the Portfolio is unable to effect a
closing purchase transaction with respect to covered
options it has written, the Portfolio will not be able to
sell the underlying securities or dispose of its segregated
assets until the options expire or are exercised.
Similarly, if the Portfolio is unable to effect a closing
sale transaction with respect to options it has purchased,
it will have to exercise the options in order to realize
any profit and will incur transaction costs upon the
purchase or sale of underlying securities.

Reasons for the absence of a liquid secondary market on an
exchange include the following: (i) there may be
insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening
or closing transactions or both; (iii) trading halts,
suspensions or other restrictions may be imposed with
respect to particular classes or series of options; (iv)
unusual or unforeseen circumstances may interrupt normal
operations on an exchange; (v) the facilities of an
exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading
volume; or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future
date to discontinue the trading of options (or a particular
class or series of options), in which event the secondary
market on that exchange (or in that class or series of
options) would cease to exist, although outstanding options
on that exchange, if any, that had been issued by the OCC
as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.

The Portfolio may terminate its obligations under an
exchange-traded call or put option by purchasing an option
identical to the one it has written.  Obligations under
over-the-counter options may be terminated only by entering
into an offsetting transaction with the counterparty to
such option.  Such purchases are referred to as "closing
purchase transactions."

The Portfolio may purchase and sell both options that are
traded on U.S. and foreign exchanges and options traded
over the counter with broker-dealers who make markets in
these options. The ability to terminate over-the-counter
options is more limited than with exchange-traded options
and may involve the risk that broker-dealers participating
in such transactions will not fulfill their obligations.
Until such time as the staff of the Securities and Exchange
Commission (the "SEC") changes its position, the Portfolio
will treat purchased over-the-counter options and all
assets used to cover written over-the-counter options as
illiquid securities, except that with respect to options
written with primary dealers in U.S. Government securities
pursuant to an agreement requiring a closing purchase
transaction at a formula price, the amount of illiquid
securities may be calculated with reference to the formula.

Transactions by the Portfolio in options on securities and
indices will be subject to limitations established by each
of the exchanges, boards of trade or other trading
facilities governing the maximum number of options in each
class which may be written or purchased by a single
investor or group of investors acting in concert. Thus, the
number of options that the Portfolio may write or purchase
may be affected by options written or purchased by other
investment advisory clients. An exchange, board of trade or
other trading facility may order the liquidations of
positions found to be in excess of these limits, and it may
impose certain other sanctions.

The writing and purchase of options is a highly specialized
activity which involves investment techniques and risks
different from those associated with ordinary portfolio
securities transactions.  The successful use of protective
puts for hedging purposes depends in part on a subadviser's
ability to predict future price fluctuations and the degree
of correlation between the options and securities markets.

The hours of trading for options may not conform to the
hours during which the underlying securities are traded. To
the extent the options markets close before the markets for
the underlying securities, significant price movements can
take place in the underlying markets that cannot be
reflected in the options markets.

In addition to the risks of imperfect correlation between
the Portfolio's holdings and the index underlying the
option, the purchase of securities index options involves
the risk that the premium and transaction costs paid by the
Portfolio in purchasing an option will be lost.  This could
occur as a result of unanticipated movements in the price
of the securities comprising the securities index on which
the option is based.

Futures Contracts and Related Options. The Portfolio may
enter into futures contracts and purchase and write (sell)
options on these contracts, including but not limited to
interest rate, securities index and foreign currency
futures contracts and put and call options on these futures
contracts.  These contracts will be entered into only upon
the concurrence of the subadviser that such contracts are
necessary or appropriate in the management of the
Portfolio's assets.  These contracts will be entered into
on exchanges designated by the Commodity Futures Trading
Commission ("CFTC") or, consistent with CFTC regulations,
on foreign exchanges.  These transactions may be entered
into for bona fide hedging and other permissible risk
management purposes including protecting against
anticipated changes in the value of securities the
Portfolio intends to purchase.

The Portfolio will not enter into futures contracts and
related options for which the aggregate initial margin and
premiums exceed 5% of the fair market value of the
Portfolio's assets after taking into account unrealized
profits and unrealized losses on any contracts it has
entered into. All futures and options on futures positions
will be covered by owning the underlying security or
segregation of assets.  With respect to long positions in a
futures contract or option (e.g., futures contracts to
purchase the underlying instrument and call options
purchased or put options written on these futures contracts
or instruments), the underlying value of the futures
contract at all times will not exceed the sum of cash,
short-term U.S. debt obligations or other high quality
obligations set aside for this purpose.

The Portfolio may lose the expected benefit of these
futures or options transactions and may incur losses if the
prices of the underlying securities or commodities move in
an unanticipated manner.  In addition, changes in the value
of the Portfolio's futures and options positions may not
prove to be perfectly or even highly correlated with
changes in the value of its portfolio securities.
Successful use of futures and related options is subject to
a subadviser's ability to predict correctly movements in
the direction of the securities markets generally, which
ability may require different skills and techniques than
predicting changes in the prices of individual securities.
Moreover, futures and options contracts may only be closed
out by entering into offsetting transactions on the
exchange where the position was entered into (or a linked
exchange), and as a result of daily price fluctuation
limits there can be no assurance that an offsetting
transaction could be entered into at an advantageous price
at any particular time.  Consequently, the Portfolio may
realize a loss on a futures contract or option that is not
offset by an increase in the value of its portfolio
securities that are being hedged or the Portfolio may not
be able to close a futures or options position without
incurring a loss in the event of adverse price movements.

The 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.

When-Issued and Delayed Delivery Securities.  The Portfolio
may purchase securities, including U.S. government
securities, on a when-issued basis or may purchase or sell
securities for delayed delivery. In such transactions,
delivery of the securities occurs beyond the normal
settlement period, but no payment or delivery is made by
the Portfolio prior to the actual delivery or payment by
the other party to the transaction. The purchase of
securities on a when-issued or delayed delivery basis
involves the risk that the value of the securities
purchased will decline prior to the settlement date. The
sale of securities for delayed delivery involves the risk
that the prices available in the market on the delivery
date may be greater than those obtained in the sale
transaction. When-issued and delayed delivery transactions
will be fully collateralized by segregated liquid assets.

Repurchase Agreements.  The Portfolio may enter into
repurchase agreements.  Under the terms of a typical
repurchase agreement, the Portfolio would acquire an
underlying debt obligation for a relatively short period
(usually not more than one week) subject to an obligation
of the seller to repurchase, and the Portfolio to resell,
the obligation at an agreed upon price and time, thereby
determining the yield during the Portfolio's holding
period.  This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the
Portfolio's holding period.  The Portfolio may enter into
repurchase agreements with respect to U.S. Government
Securities with member banks of the Federal Reserve System
and certain non-bank dealers approved by the board of
trustees.  Under each repurchase agreement, the selling
institution is required to maintain the value of the
securities subject to the repurchase agreement at not less
than their repurchase price.  The Portfolio's subadvisers,
acting under the supervision of the Board of Trustees,
review on an ongoing basis the value of the collateral and
the creditworthiness of those non-bank dealers with whom
the Portfolio enters into repurchase agreements.  The
Portfolio will not invest in a repurchase agreement
maturing in more than seven days if the investment,
together with illiquid securities held by the Portfolio,
exceeds 15% of the Portfolio's net assets.  In entering
into a repurchase agreement, the Portfolio bears a risk of
loss if the other party to the transaction defaults on its
obligations and the Portfolio is delayed or prevented from
exercising its rights to dispose of the underlying
securities, including the risk of a possible decline in the
value of the underlying securities during the period in
which the Portfolio seeks to assert its rights to them, the
risk of incurring expenses associated with asserting those
rights and the risk of losing all or a part of the income
from the agreement.

Borrowing.  Leverage increases investment risk as well as
investment opportunity.  If the income and investment gains
on securities purchased with borrowed money exceed the
interest paid on the borrowing, the net asset value of the
Portfolio's shares will rise faster than would otherwise be
the case.  On the other hand, if the income and investment
gains fail to cover the cost, including interest, of the
borrowings, or if there are losses, the net asset value of
the Portfolio's shares will decrease faster than otherwise
would be the case.

Lending Portfolio Securities.  Consistent with applicable
regulatory requirements, the Portfolio may lend portfolio
securities to brokers, dealers and other financial
organizations. The Portfolio will not lend securities to
Salomon Smith Barney unless the Portfolio has applied for
and received specific authority to do so from the SEC.  The
Portfolio's loan of securities will be collateralized by
cash, letters of credit or U.S. Government Securities. The
Portfolio will maintain the collateral in an amount at
least equal to the current market value of the loaned
securities. From time to time, the 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."  The 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.

Illiquid Securities. The Portfolio will not invest more
than 15% of its net assets in illiquid and other securities
that are not readily marketable.  Repurchase agreements
maturing in more than seven days will be included for
purposes of the foregoing limit.  Securities subject to
restrictions on resale under the Securities Act of 1933, as
amended (the "1933 Act") are considered illiquid unless
they are eligible for resale pursuant to Rule 144A or
another exemption from the registration requirements of the
1933 Act and are determined to be liquid by the
subadvisers.  The subadvisers determine the liquidity of
Rule 144A and other restricted securities according to
procedures adopted by the Board of Trustees. The Board of
Trustees monitors the subadvisers' application of these
guidelines and procedures. The inability of a Portfolio to
dispose of illiquid investments readily or at reasonable
prices could impair the Portfolio's ability to raise cash
for redemptions or other purposes.

Temporary Investments.  For temporary defensive purposes,
during periods when the subadvisers of the Portfolio, in
consultation with the Manager, believe that pursuing the
Portfolio's basic investment strategy may be inconsistent
with the best interests of its shareholders, the Portfolio
may invest its assets in the following money market
instruments: U.S. Government Securities (including those
purchased in the form of custodial receipts), repurchase
agreements, certificates of deposit and bankers'
acceptances issued by U.S. banks or savings and loan
associations having assets of at least $500 million as of
the end of their most recent fiscal year and high quality
commercial paper.  The Portfolio's U.S. dollar-denominated
temporary investments are managed by SSB Citi.  The
Portfolio also may hold a portion of its assets in money
market instruments or cash in amounts designed to pay
expenses, to meet anticipated redemptions or pending
investment in accordance with its objectives and policies.
Any temporary investments may be purchased on a when-issued
basis.  The Portfolio's investment in any other short-term
debt instruments would be subject to the Portfolio's
investment objectives and policies, and to approval by the
Trust's Board of Trustees.

Non-Diversified Classification.  The Portfolio is
classified as a non-diversified fund under the 1940 Act
which means the Portfolio is not limited in the proportion
of its assets it may invest in the obligations of a single
issuer.  As a result, the Portfolio may be subject to
greater volatility with respect to its securities holdings
than funds that are more broadly diversified.  The
Portfolio intends to conduct its operations, however, so as
to qualify as a "regulated investment company" for purposes
of the Internal Revenue Code of 1986, as amended (the
"Code"), which will relieve the Portfolio of any liability
for Federal income tax to the extent its earnings are
distributed to shareholders.  To qualify as a regulated
investment company, the Portfolio will, among other things,
limit its investments so that, at the close of each quarter
of the taxable year (a) not more than 25% of the market
value of the Portfolio's total assets will be invested in
the securities of a single issuer and (b) with respect to
50% of the market value of its total assets, not more than
5% of the market value of its total assets will be invested
in the securities of a single issuer and the Portfolio will
not own more than 10% of the outstanding voting securities
of a single issuer.

INVESTMENT RESTRICTIONS

The investment restrictions numbered 1 through 6 below have
been adopted by the Trust as fundamental policies of the
Portfolio. Under the 1940 Act, a fundamental policy may not
be changed without the vote of a majority of the
outstanding voting securities of the 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 7 through 11 may be changed by a vote of a
majority of the Board of Trustees at any time.

Under the investment restrictions adopted by the Portfolio:

	1.	Issue "senior securities" as defined in the 1940
Act, and the rules, regulations and orders thereunder,
except as permitted under the 1940 Act and the rules,
regulations and orders thereunder.

	2.	The 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) 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.

	3.	The 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.

	4.	The 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.

	5.	The 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.

	6.	The 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.

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

   	8.	The 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, except that the Portfolio may engage in short
sales on shares issued by exchange traded funds, and
provided that transactions in futures contracts and options
are not deemed to constitute selling securities short.

9. The Portfolio will not make investments for the
purpose of exercising control or management.

	10.	Purchase or otherwise acquire any security if,
as a result, more than 15% of its net assets would be
invested in securities that are illiquid.

	11.	The 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 more than 3% of any registered
investment company's outstanding voting stock; or more than
5% of the value of the Portfolio's total assets would be
invested in securities of any one registered investment
company or more than 10% of the Portfolio's total assets
would be invested in registered investment companies in
general.

The percentage limitations contained in the restrictions
listed above (other than with respect to Number 2 above)
apply at the time of purchase of securities.

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the Portfolio are
made by the subadvisers, subject to the overall review of
the manager and the Board of Trustees. Although investment
decisions for the Portfolio are made independently from
those of the other accounts managed by the subadvisers
investments of the type that the Portfolio may make also
may be made by those other accounts. When the Portfolio and
one or more other accounts managed by the subadvisers 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 subadvisers
to be equitable to each. In some cases, this procedure may
adversely affect the price paid or received by the
Portfolio or the size of the position obtained or disposed
of by the 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 the Portfolio, its subadvisers
seeks the best overall terms available. In assessing the
best overall terms available for any transaction, the
subadvisers 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, the
Advisory Agreement between the Trust and the subadvisers
authorize the subadvisers, 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
subadvisers or their affiliates exercise investment
discretion. The fees under the Management Agreement and the
Advisory Agreement, respectively, are not reduced by reason
of the Portfolio's subadvisers receiving brokerage and
research services. The Board of Trustees of the Trust will
periodically review the commissions paid by the 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 the 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 the Portfolio may be executed through
Salomon Smith Barney and other affiliated broker-dealers
if, in the judgment of the subadvisers, 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 Portfolio will not purchase any security, including
U.S. Government Securities or Obligations, during the
existence of any underwriting or selling group relating
thereto of which Salomon Smith Barney is a member, except
to the extent permitted by the SEC.

The Portfolio may use Salomon 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
subadvisers, 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. Salomon
Smith Barney has agreed to charge the Portfolio commodity
commissions at rates comparable to those charged by Salomon
Smith Barney to its most favored clients for comparable
trades in comparable accounts.

PORTFOLIO TURNOVER

The Portfolio does not intend to seek profits through
short-term trading. Nevertheless, the Portfolio will not
consider portfolio turnover rate a limiting factor in
making investment decisions.

The 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. Because the Portfolio is authorized
to engage in transactions in options, it may experience
increased portfolio turnover under certain market
conditions as a result of its investment strategies. For
instance, the exercise of a substantial number of options
written by the Portfolio (because of 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 the
Portfolio's securities that are included in the computation
of turnover were replaced once during a period of one year.

Certain practices that may be employed by the 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 a subadviser
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 the Portfolio's shares
as well as by requirements that enable the Portfolio to
receive favorable tax treatment.

INVESTMENT MANAGEMENT AND OTHER SERVICES

Manager; Subadvisers; Administrator.  The manager serves as
investment manager to the Trust pursuant to an investment
management agreement ("Management Agreement"). The
subadvisers serve as investment advisers to the Portfolio
pursuant to separate written agreements with the manager
("Advisory Agreement").  SSB Citi serves as administrator
to the Portfolio pursuant to a written agreement
("Administration Agreement").

The Portfolio bears its own expenses, which generally
include all costs not specifically borne by the manager,
the subadvisers, and SSB Citi.  Included among the
Portfolio's expenses are costs incurred in connection with
the Portfolio's organization; investment management and
administration fees; fees for necessary professional and
brokerage services; fees for any pricing service; the costs
of regulatory compliance; and costs associated with
maintaining the Trust's legal existence and shareholder
relations.  As administrator, SSB Citi generally oversees
all aspects of the Trust's administration and operations
including furnishing 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. The Portfolio pays SSB Citi a fee for
these services that is computed daily and paid monthly at
the annual rate of 0.20% of the value of the Portfolio's
average daily net assets.

SSB Citi, through its predecessors, was incorporated on
March 12, 1968 under the laws of Delaware and is a
registered investment adviser.  SSB Citi renders investment
advice to investment companies that had aggregate assets
under management as of August 31, 2000 in excess of $140
billion.  The Consulting Group, a division of SSB Citi, has
extensive experience in providing investment adviser
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. They screen more
than 3,000 registered investment advisory firms and track
the performance of more than 700 firms on the manager's
comprehensive database. In addition, the manager conducts
over 300 on-site evaluations of advisors annually. As of
August 31, 2000, the Consulting Group provided services
with respect to over $226 billion in client assets
representing more than 588,007 separate accounts under a
variety of programs designed for individual and
institutional investors.

The manager and the subadvisers pay the salaries of all
officers and employees who are employed by them and the
Trust, and the manager maintains office facilities for the
Trust.  The manager and the subadvisers bear all expenses
in connection with the performance of their respective
services under the Management Agreement, the Advisory
Agreement, and the Administration Agreement.

As noted in the Prospectus, subject to the supervision and
direction of the manager and, ultimately, the Board of
Trustees, the subadvisers manage the securities held by the
Portfolio in accordance with the Portfolio's stated
investment objectives and policies, make investment
decisions for the Portfolio and place orders to purchase
and sell securities on behalf of the Portfolio.

Subject to the supervision and direction of the Board of
Trustees, the manager provides to the Trust investment
management evaluation services principally by performing
initial due diligence on prospective subadvisers for the
Portfolio and thereafter monitoring the subadvisers'
performance through quantitative and qualitative analysis
as well as periodic in-person, telephonic and written
consultations with subadvisers.  In evaluating prospective
subadvisers, the manager considers, among other factors,
each subadviser's level of expertise; relative performance
and consistency of performance over a minimum period of
five years; level of adherence to investment discipline or
philosophy, personnel, facilities, financial strength and
quality of service and client communications.  The manager
has responsibility for communicating performance
expectations and evaluations to the subadvisers and
ultimately recommending to the Board of Trustees whether a
subadviser's contract should be renewed, modified or
terminated.  The manager provides written reports to the
Board of Trustees regarding the results of its evaluations
and monitoring functions.  The manager is also responsible
for conducting all operations of the Trust except those
operations contracted to a subadviser, custodian, transfer
agent, sub-transfer agent or administrator.

Investors should be aware that the manager may be subject
to a conflict of interest when making decisions regarding
the retention and compensation of particular subadvisers.
However, the manager's decisions, including the identity of
the subadviser and the specific amount of the manager's
compensation to be paid to the subadviser, are subject to
review and approval by a majority of the Board of Trustees
and separately by a majority of the Trustees who are not
affiliated with the manager or any of its affiliates.

Investors should also be aware that through Smith Barney
Advisory Services, the Consulting Group serves as
investment adviser to each participant in such service and
receives a fee from each participant that does not vary
based on the portfolios of the Trust recommended for the
participant's investments.  At the same time, the
Consulting Group serves as the Trust's manager with
responsibility for identifying, retaining, supervising and
compensating each portfolio's subadviser and receives a fee
from each portfolio of the Trust.  The portion of such fee
that is retained by the manager varies based on the
portfolio involved.  Consequently, the Consulting Group,
when making asset allocation recommendations for
participants in Smith Barney Advisory Services, may be
presented with a conflict of interest as to the specific
portfolios of the trust recommended for investment.  The
Consulting Group, however, is subject to and intends to
comply fully with standards of fiduciary duty that require
that it act solely in the best interest of the participant
when making investment recommendations.

The Trust has received an exemption (the "Exemption") from
certain provisions of the 1940 Act which would otherwise
require the manager to obtain formal shareholder approval
prior to engaging and entering into investment advisory
agreements with subadvisers.  The Exemption is based on
among other things:  (1) the manager will select, monitor,
evaluate and allocate assets to, the subadvisers and ensure
that the subadvisers comply with a portfolio's investment
objective, policies and restrictions; (2) shares of a
portfolio relying on the Exemption will not be subject to
any sales loads or redemption fees or other charges for
redeeming shares; (3) the Trust will provide to
shareholders certain information about a new subadviser and
its investment advisory contract within 90 days of the
engagement of a new subadviser; (4) the Trust will disclose
in its prospectus the terms of the Exemption; and (5) the
Trustees, including a majority of the "non-interested"
Trustees, must approve each investment advisory contract in
the manner required under the 1940 Act.  Any changes to the
Management Agreement between the Trust and the manager
still require shareholder approval.

Code of Ethics.  Pursuant to Rule 17j-1 of the 1940 Act,
the Portfolio, its manager, subadvisers and principal
underwriter have adopted codes of ethics that permit
personnel to invest in securities for their own accounts,
including securities that may be purchased or held by the
Portfolio.  All personnel must place the interests of
clients first and avoid activities, interests and
relationships that might interfere with the duty to make
decisions in the best interests of the clients.  All
personal securities transactions by employees must adhere
to the requirements of the codes and must be conducted in
such a manner as to avoid any actual or potential conflict
of interest, the appearance of such a conflict, or the
abuse of an employee's position of trust and
responsibility.

A copy of each of these Codes of Ethics is on file with the
SEC.

Organization of the Trust.   The Trust is 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 Agreement, 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.

Auditors.  KPMG LLP, 757 Third Avenue, New York, New York
10017, currently serves as the independent auditors of the
Trust and rendered an opinion on the Trust's most recent
financial statements and financial highlights.


Distributor.  Salomon Smith Barney, 388 Greenwich Street,
New York, NY  10013 serves as the Portfolio's distributor
on a best efforts basis pursuant to a written agreement,
which was approved by the Trustees of the Trust.

Custodians.  PFPC Trust Company ("PFPC") 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, PFPC and Chase are
authorized to establish separate accounts for foreign
securities owned by the Portfolio 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 Portfolio. For its custody services, PFPC and Chase
receive monthly fees charged to the Portfolio based upon
the month-end, aggregate net asset value of the Portfolio
plus certain charges for securities transactions. PFPC and
Chase are also reimbursed by the Portfolio for out-of-
pocket expenses including the costs of any foreign and
domestic sub-custodians.

Transfer Agent.  Citi Fiduciary Trust Company, located at
388 Greenwich Street, New York, New York 10013, serves as
the Portfolio's transfer and dividend-paying agent.  Under
the transfer agency agreement, the transfer agent maintains
the shareholder account records for the Portfolio, handles
certain communications between shareholders and the
Portfolio, distributes dividends and distributions payable
by the Portfolio and produces statements with respect to
account activity for the Portfolio and its shareholders.
For these services, the transfer agent receives fees from
the Portfolio computed on the basis of the number of
shareholder accounts that the transfer agent maintains for
the Portfolio during the month and is reimbursed for out-
of-pocket expenses.

Sub-Transfer Agent.  PFPC Global Fund Services, located at
P.O. Box 9699, Providence, RI 02940-9699, serves as the
Portfolio's sub-transfer agent.  Under the transfer agency
agreement, the sub-transfer agent maintains the shareholder
account records for the Portfolio, handles certain
communications between shareholders and the Portfolio and
distributes dividends and distributions payable by the
Portfolio.  For these services, the sub-transfer agent
receives a monthly fee computed on the basis of the number
of shareholder accounts it maintains for the Portfolio
during the month, and is reimbursed for out-of-pocket
expenses.

PURCHASE OF SHARES

Purchases of shares of the Portfolio through an Advisory
Service must be made through a brokerage account maintained
with Salomon Smith Barney.  Payment for Portfolio shares
must be made by check directly to Salomon Smith Barney or
to a broker that clears securities transactions through
Salomon 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 Portfolio 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 Trust's 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(r) Personalized Investment Advisory Service ("TRAK")
sponsored by Salomon 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
Portfolio based on an evaluation of an investor's
investment objective and risk tolerances.  Shares of the
Portfolio are offered for purchase and redemption at its
respective net asset value next determined, without
imposition of any initial or contingent deferred sales
charge. If the Consulting Group is paid directly by the
investors purchasing Portfolio shares based on the
recommendation of investment advisers other than the
Consulting Group, or who contract with the Consulting Group
for services other than those described above, such
investors 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 the
Portfolio is included in the Prospectus. The right of
redemption of shares of the 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 the 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

The Portfolio's net asset value per share is calculated by
SSB Citi on each day, Monday through Friday, except days on
which the NYSE is closed.  The NYSE is currently scheduled
to be closed on New Year's Day, Martin Luther King Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas, and on the
preceding Friday when one of those holidays falls on a
Saturday or on the subsequent Monday when one of those
holidays falls on a Sunday.  On those days, securities held
by the Portfolio may nevertheless be actively traded and
the value of the Portfolio's shares could be significantly
affected.

Securities listed on a national securities exchange will be
valued on the basis of the last sale on the date on which
the valuation is made or, in the absence of sales, at the
mean between the closing bid and asked prices.  Over-the-
counter securities will be valued at the mean between the
closing bid and asked prices on each day, or, if market
quotations for those securities are not readily available,
at fair value, as determined in good faith by the
Portfolio's Board of Trustees. Short-term obligations with
maturities of 60 days or less are valued at amortized cost,
which constitutes fair value as determined by the
Portfolio's Board of Trustees.  Amortized cost involves
valuing an instrument at its original cost to the Portfolio
and thereafter assuming a constant amortization to maturity
of any discount or premium, regardless of the effect of
fluctuating interest rates on the market value of the
instrument.  All other securities and other assets of the
Portfolio will be valued at fair value as determined in
good faith by the Portfolio's Board of Trustees.

DETERMINATION OF PERFORMANCE

Average Annual Total Return

From time to time, the Trust may advertise the Portfolio's
"average annual total return" over various periods of time.
This total return figure shows the average percentage
change in value of an investment in the Portfolio from the
beginning date of the measuring period to the ending date
of the measuring period and is reduced by the maximum
Salomon Smith Barney Advisory Service fee during the
measuring period.  The figure reflects changes in the price
of the Portfolio's shares and assumes that any income,
dividends and/or capital gains distributions made by the
Portfolio during the period are reinvested in shares of the
Portfolio.  Figures will be given for recent one-, five-
and ten-year periods (if applicable) and may be given for
other periods as well (such as from commencement of the
Portfolio's operations or on a year-by-year basis).
Aggregate total returns also may be shown by means of
schedules, charts or graphs, and may indicate subtotals of
the various components of total return (that is, the change
in value of initial investment, income dividends and
capital gains distributions).

In reports or other communications to shareholders or in
advertising material, the Portfolio may quote total return
figures that do not reflect Salomon Smith Barney Advisory
Service fees (provided that these figures are accompanied
by standardized total return figures calculated as
described above), as well as compare its performance with
that of other mutual funds as listed in the rankings
prepared by Lipper Analytical Services, Inc. or similar
independent services that monitor the performance of mutual
funds or with other appropriate indices of investment
securities.  The performance information also may include
evaluations of the Portfolio published by nationally
recognized ranking services and by financial publications
that are nationally recognized, such as Barron's, Business
Week, CDA Investment Technologies, Inc., Changing Times,
Forbes, Fortune, Institutional Investor, Investor's Daily,
Kiplinger's Personal Finance Magazine, Money, Morningstar
Mutual Fund Values, The New York Times, USA Today and The
Wall Street Journal.

The Portfolio's average annual total return figures 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.  The
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.

The 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 the 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 the 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 Portfolio's shares, including
data from Lipper Analytical Services, Inc., Standard &
Poor's 500 Composite Stock Price Index and other industry
publications.


Yield and Equivalent Taxable Yield

From time to time, the Trust may also quote the Portfolio's
yield in advertisements or in reports and other
communications to shareholders.  The 30-day yield figure 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.

The Portfolio's equivalent taxable 30-day yield is computed
by dividing the 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.

Investors should recognize that in periods of declining
interest rates, the 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 the 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.

TAXES

The following is a summary of certain federal income tax
considerations that may affect the Portfolio and its
shareholders.  In addition to the considerations described
below, there may be other federal, state, local or foreign
tax applications to consider.  The summary does not address
all of the potential federal income tax consequences that
may be applicable to the Portfolio or to all categories of
investors, some of which may be subject to special tax
rules.  The summary is not intended as a substitute for
individual tax advice and investors are urged to consult
their own tax advisors as to the tax consequences of an
investment in the Portfolio. The summary is based on the
laws in effect on the date of this SAI, which are subject
to change.

The Portfolio intends to qualify in each year as a separate
"regulated investment company" under the Internal Revenue
Code of 1986, as amended (the "Code"), by complying with
certain requirements regarding the sources and distribution
of its income and the diversification of its assets.
Provided that the 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, any excess of its net short-term capital gain
over its net long-term capital loss) for a taxable year and
90% of its tax-exempt interest income (reduced by certain
expenses for that year), 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
in compliance with the Code's timing and other
requirements.

If, in any taxable year, the Portfolio fails to qualify as
a regulated investment company under the Code or fails to
meet the distribution requirement, it would be taxed in the
same manner as an ordinary corporation and distributions to
its shareholders would not be deductible by the Portfolio
in computing its taxable income.  In addition, in the event
of a failure to qualify, the Portfolio's distributions, to
the extent derived from the Portfolio's current or
accumulated earnings and profits, would constitute
dividends (eligible for the corporate dividends-received
deduction) which are taxable to shareholders as ordinary
income, even though those distributions would otherwise (at
least in part) be treated as long-term capital gains.  If
the Portfolio fails to qualify as a regulated investment
company in any year, it must pay out its earnings and
profits accumulated in that year in order to qualify again
as a regulated investment company. In addition, if the
Portfolio failed to qualify as a regulated investment
company for a period greater than one taxable year, the
Portfolio may be required to recognize any net built-in
gains with respect to certain of its assets (the excess of
the aggregate gains, including items of income, over
aggregate losses that would have been realized if it had
been liquidated) in order to qualify as a regulated
investment company in a subsequent year.

In order to avoid the application of a 4% nondeductible
excise tax on certain undistributed amounts of ordinary
income and capital gains, the Portfolio may make an
additional distribution shortly before or shortly after
December 31 in each year of any undistributed ordinary
income or capital gains.  The Portfolio generally will seek
to pay any additional dividends and distributions necessary
to avoid the application of this tax.

As described above, the Portfolio may invest in certain
types of warrants, foreign currencies, forward contracts,
options and futures contracts. The Portfolio anticipates
that these investment activities will not prevent it from
qualifying as a regulated investment company.

The 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 and, if capital, the
extent to which they are long-term or short-term),
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 the
Portfolio to mark-to-market certain types of positions in
its portfolio (i.e., treat them as if they were closed
out), and (ii) may cause the 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 referred to above.  The Portfolio will
monitor its transactions, will make the appropriate tax
elections, if any, 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 seek to prevent disqualification of the Portfolio
as a regulated investment company.

As a general rule, the 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.
Gains or losses on the sale of debt securities denominated
in a foreign currency may be recharacterized as ordinary
income or losses, as described below.

The Portfolio expects 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 on the sale or
exchange of the share, to the extent of the capital gain
dividend, will be treated as a long-term capital loss.

Dividends or other income (including, in some cases,
capital gains) received by the Portfolio from investments
in foreign securities may be subject to withholding and
other taxes imposed by such countries.  Tax conventions
between certain countries and the United States may reduce
or eliminate such taxes in some cases.  The Portfolio will
not be eligible to elect to treat any foreign taxes paid by
it as paid by its shareholders, who therefore will not be
entitled to deductions or credits for such taxes on their
own tax returns.

The Portfolio may be required to treat amounts as taxable
income or gain, subject to the distribution requirements
referred to above, even though no corresponding amounts of
cash are received concurrently, as a result of (1) mark to
market, constructive sale or other rules applicable to
passive foreign investment companies or partnerships or
trusts in which the Portfolio invests or to certain
options, futures or forward contracts, or "appreciated
financial positions" or (2) the inability to obtain cash
distributions or other amounts due to currency controls or
restrictions on repatriation imposed by a foreign country
with respect to the Portfolio's investments (including
through depositary receipts) in issuers in such country or
(3) tax rules applicable to debt obligations acquired with
"original issue discount," including zero-coupon or
deferred payment bonds and pay-in-kind debt obligations, or
to market discount if an election is made with respect to
such market discount.  The Portfolio may therefore be
required to obtain cash to be used to satisfy these
distribution requirements by selling securities at times
that it might not otherwise be desirable to do so or
borrowing the necessary cash, thereby incurring interest
expenses.

Under Section 988 of the Code, gains or losses attributable
to fluctuations in exchange rates between the time the
Portfolio accrues income or receivables or expenses or
other liabilities denominated in a foreign currency and the
time the Portfolio actually collects such income or pays
such liabilities are generally treated as ordinary income
or ordinary loss.  Similarly, gains or losses on foreign
currency, foreign currency forward contracts, certain
foreign currency options or futures contracts and the
disposition of debt securities denominated in foreign
currency, to the extent attributable to fluctuations in
exchange rates between the acquisition and disposition
dates, are also treated as ordinary income or loss.

The Portfolio is permitted to carry forward any unused
capital losses to be utilized to offset its capital gains
realized during the eight-year period following the year in
which the losses arose, which will reduce the net realized
capital gains (if any) required to be distributed to
shareholders for those years.

Dividends and Distributions

For federal income tax purposes, dividends declared by the
Portfolio in October, November or December as of a record
date in such a month and which are actually paid in January
of the following year will be taxable to shareholders as if
they were paid on December 31 of the year in which they are
declared rather than in the year in which shareholders
actually receive the dividends.

As a general rule, a shareholder's gain or loss on a
redemption or other disposition of Portfolio shares that is
treated as a sale under the Code 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.

The Portfolio may realize net long-term capital gains.
Distributions of any excess of net long-term capital gain
over net short-term capital loss ("capital gain dividends")
will be taxable to shareholders as long-term capital gains,
regardless of whether received in cash or reinvested in
additional shares and how long a shareholder has held
Portfolio shares. If a shareholder receives a capital gain
dividend with respect to any share and redeems, sells or
otherwise disposes of the share before it has been held for
more than six months, then any loss, to the extent of the
capital gain dividend, will be treated as a long-term
capital loss. Additionally, any loss realized on a
redemption, exchange or other disposition of Portfolio
shares generally will be disallowed to the extent the
shares disposed of are replaced, including replacement
through the reinvesting of dividends and capital gains
distributions in the Portfolio, within a 61-day period
beginning 30 days before and ending 30 days after the
disposition of the shares.

Dividends paid from net investment income and distributions
of any excess of net short-term capital gain over net long-
term capital loss are taxable to shareholders as ordinary
income, regardless of how long shareholders have held their
Portfolio shares and whether such dividends and
distributions are received in cash or reinvested in
additional Portfolio shares.  Dividends paid by the
Portfolio that are declared from net investment income and
are attributable to qualifying dividends received by the
Portfolio from domestic corporations may qualify for the
federal dividends-received deduction for corporations.

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. Each shareholder will also
receive, if appropriate, various written notices after the
close of the Portfolio's prior taxable year as to the
federal income tax status of the 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 and the possible
availability of an exemption from such state or local taxes
for dividends paid by the Portfolio attributable to
interest the Portfolio earns from U.S. Government
obligations.

If the Portfolio is the holder of record of any stock on
the record date for any dividends payable with respect to
the stock, these dividends will 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, the 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 the Portfolio on or
just prior to the record date for a taxable dividend or
capital gain distribution should be aware that even if the
net asset value of the Portfolio's shares is reduced below
the investor's cost as a result of the distribution, the
amount of the forthcoming dividend or distribution payment
will be a taxable dividend or distribution payment even
though it may represent a return of invested capital.

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) 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 federal income tax liability. Distributions to
nonresident aliens and foreign entities may be subject to
different tax rules, including other possible withholding
taxes.

The foregoing is only a summary of certain tax
considerations generally affecting the 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 their state and local tax
liabilities.






APPENDIX - RATINGS OF DEBT OBLIGATIONS

BOND AND NOTE RATINGS

Moody's Investors Services, Inc.

Aaa - Bonds that are rated "Aaa" are judged to be of the
best quality.  They carry the smallest degree of investment
risk and are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure.  While the various
protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa - Bonds that are rated "Aa" are judged to be of high
quality by all standards.  Together with the "Aaa" group
they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or
fluctuation of protective elements may be of greater
amplitude or there may be other elements present that make
the long term risks appear somewhat larger than in "Aaa"
securities.

A - Bonds that are rated "A" possess many favorable
investment attributes and are to be considered as upper
medium grade obligations.  Factors giving security to
principal and interest are considered
adequate but elements may be present that suggest a
susceptibility to impairment sometime in the future.

Baa - Bonds that are rated "Baa" are considered as medium
grade obligations, i.e., they are neither highly protected
nor poorly secured.  Interest payments and principal
security appear adequate for the present but certain
protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.

Ba - Bonds which are rated "Ba" are judged to have
speculative elements; their future cannot be considered as
well assured.  Often the protection of interest and
principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B - Bonds which are rated "B" generally lack characteristics
of the desirable investment.  Assurance of interest and
principal payments or of maintenance of other terms of the
contract over any long period of time may be small.

Caa - Bonds which are rated "Caa" are of poor standing.
Such issues may be in default or there may be present
elements of danger with respect to principal or interest

Ca - Bonds which are rated "Ca" represent obligations which
are speculative in a high degree.  Such issues are often in
default or have other marked shortcomings.

C - Bonds which are rated "C" are the lowest class of bonds
and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.

Con (..)- Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition
are rated conditionally.  These are bonds secured by (a)
earnings of projects under construction, (b) earnings of
projects unseasoned in operating experience, (c) rentals
which begin when facilities are completed, or (d) payments
to which some other limiting condition attaches.
Parenthetical rating denotes probable credit stature upon
completion of construction or elimination of basis of
condition.

Note:  The modifier 1 indicates that the security ranks in
the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its
generic rating category.

Standard & Poor's Ratings Group

AAA - Debt rated "AAA" has the highest rating assigned by
Standard & Poor's Ratings Group ("S&P").  Capacity to pay
interest and repay principal is extremely strong.

AA - Debt rated "AA" has a very strong capacity to pay
interest and repay principal and differs from the highest
rated issues only in small degree.

A - Debt rated "A" has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.

BBB - Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal.  Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher
rated categories.

BB, B, CCC, CC, C - Debt rated "BB", "B", "CCC", "CC" and
"C" is regarded, on balance, as predominantly speculative
with respect to capacity to pay interest and repay principal
in accordance with the terms of the obligation.  "BB"
indicates the lowest degree of speculation and "C" the
highest degree of speculation.  While such debt will likely
have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to
adverse conditions.

Plus (+) or Minus (-): The ratings from "AA" to "B" may be
modified by the addition of a plus or minus to show relative
standing within the major rating categories.

Provisional Ratings: The letter "p" indicates that the
rating is provisional.  A provisional rating assumes the
successful completion of the project being financed by the
debt being rated and indicates that payment of debt service
requirements is largely or entirely dependent upon the
successful and timely completion of the project.  This
rating, however, while addressing credit quality subsequent
to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of, such
completion.  The investor should exercise judgment with
respect to such likelihood and risk.

L - The letter "L" indicates that the rating pertains to the
principal amount of those bonds where the underlying deposit
collateral is fully insured by the Federal Savings & Loan
Insurance Corp. or the Federal Deposit Insurance Corp.

+ Continuance of the rating is contingent upon S&P's receipt
of closing documentation confirming investments and cash
flow.

* Continuance of the rating is contingent upon S&P's receipt
of an executed copy of the escrow agreement.

NR- Indicates no rating has been requested, that there is
insufficient information on which to base a rating, or that
S&P does not rate a particular type of obligation as a
matter of policy.


COMMERCIAL PAPER RATINGS

Moody's Investors Service, Inc.

Issuers rated "Prime-l" (or related supporting institutions)
have a superior capacity for repayment of short-term
promissory obligations.  Prime-1 repayment will normally be
evidenced by the following characteristics: leading market
positions in well-established industries; high rates of
return on funds employed; conservative capitalization
structures with moderate reliance on debt and ample asset
protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; well-
established access to a range of financial markets and
assured sources of alternate liquidity.

Issuers rated "Prime-2" (or related supporting institutions)
have strong capacity for repayment of short-term promissory
obligations.  This will normally be evidenced by many of the
characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be
more subject to variation.  Capitalization characteristics,
while still appropriate, may be more affected by external
conditions.  Ample alternate liquidity is maintained.

Standard & Poor's Ratings Group

A-1 - This designation indicates that the degree of safety
regarding timely payment is either overwhelming or very
strong.  Those issuers determined to possess overwhelming
safety characteristics will be noted with a plus (+) sign
designation.

A-2 - Capacity for timely payment on issues with this
designation is strong.  However, the relative degree of
safety is not as high as for issues designated A-1.