GMO TRUST

                          SUPPLEMENT DATED MAY 10, 1996
                                       TO
                       PROSPECTUS DATED FEBRUARY 29, 1996

GMO FOREIGN FUND

     Effective  May 10,  1996,  GMO Foreign  Fund (the  "Fund")  will revise its
current  investment  policies  such that the Fund (i) will not invest in foreign
currencies  (except  that  assets of the Fund may be held in foreign  currencies
pending investment in amounts  reasonably  required for the efficient conduct of
the  Fund's  investment  program);  (ii) will not  invest in  options on foreign
currencies:  (iii) will not, in the  aggregate,  invest  greater than 10% of the
Fund's total assets in restricted  securities,  loans other than publicly issued
debt securities, repurchase agreements with maturities greater than thirty days,
and other "illiquid  assets";  (IV) may invest in securities of issuers in newly
industrialized  countries of the type  invested in by the Emerging  Markets Fund
("Emerging Market Securities"),  although the Fund does not anticipate investing
more than 20% of its assets in Emerging Market Securities, and (v) may invest in
options  on  particular  securities  without  limit  (the  Fund  was  previously
authorized to invest in options on particular securities only to the extent that
the  aggregate  value of the premiums  paid on such options did not exceed 5% of
the Fund's total net assets). The foregoing policies are not fundamental and may
therefore be changed by vote of the Trustees without shareholder consent.





                                   GMO TRUST

                          SUPPLEMENT DATED MAY 10, 1996
                                       TO
          STATEMENT OF ADDITIONAL INFORMATION DATED FEBRUARY 29, 1996


GMO FOREIGN FUND

     Effective  May 10,  1996,  GMO Foreign  Fund (the  "Fund")  will revise its
current investment  policies such that the Fund (i) will not invest in interests
of any general partnership;  (ii) will not utilize margin or other borrowings to
increase market exposure (this prohibition extends to the use of cash collateral
obtained in exchange  for loaned  securities  but does not  prohibit  the use of
margin accounts for permissible futures trading; further, the Fund may borrow an
amount  equal  to cash  receivable  from  sales  of  stocks  or  securities  the
settlement of which is deferred under standard practice in the country of sale);
(iii) will not  pledge or  otherwise  encumber  its  assets;  (iv) may invest in
warrants  without  limit  (the  Funds  was  previously  authorized  to invest in
warrants only to the extent that the aggregate  value of the warrants  (taken at
the lower of cost of market) did not exceed 5% of the Fund's  total net assets);
and (v) will not invest  more than 5% of its  assets in any one  issuer  (except
Government securities and bank certificates of deposit).  The foregoing policies
are not fundamental and may therefore be changed by vote of the Trustees without
shareholder consent.