GMO TRUST

                                  SUPPLEMENT TO
                  GMO TRUST PROSPECTUS DATED JUNE 30, 2004 AND
        GMO TRUST STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 30, 2004

GMO ASIA FUND

The Board of Trustees of GMO Trust has approved changes to the investment
objective and strategies of GMO Asia Fund. All changes are subject to review by
the staff of the Securities and Exchange Commission, and will be implemented no
earlier than 60 days from the date of this supplement. Until the proposed
changes are implemented, the Fund is closed to any additional investments from
existing investors and any new investors.

If the proposed changes are implemented the Fund's name will change to "GMO
Emerging Markets Quality Fund," and the description of the Fund appearing on
page 42 of the Prospectus will be as follows:

         INVESTMENT OBJECTIVE

         Broad exposure to the higher quality companies in the benchmark.

         PRINCIPAL INVESTMENT STRATEGIES

         The Fund typically makes equity investments in companies whose stocks
         are traded in the securities markets of emerging countries in Asia,
         Latin America, the Middle East, Africa, and Europe. The Manager uses
         proprietary quality models to evaluate an issuer's quality score based
         on several factors, which may include, but are not limited to, expected
         earnings volatility (actual historical volatility and current
         volatility as measured by the disparity among analysts' current
         estimates), profits (return on equity), and operational and financial
         leverage (amount of fixed operating costs together with total
         outstanding debt in relation to equity). The Manager typically selects
         issuers from among the top third of companies ranked by quality scores
         in each country in the benchmark. The Manager will screen out companies
         it believes are of the poorest quality. The Manager typically will make
         minor country bets. The factors considered by the Manager and the
         models used may change over time.

         The Fund's portfolio is constructed so as typically to have more
         liquidity than the portfolio of the GMO Emerging Markets Fund, and the
         Fund has a quality bias relative to many other traditional emerging
         market funds. The Fund typically will be less "actively" managed than,
         for example, GMO Emerging Markets Fund (another series of GMO Trust,
         which is offered through a separate prospectus). The Manager seeks to
         manage the Fund with low portfolio turnover and low tracking error
         relative to the benchmark.

         Under normal circumstances, the Fund invests at least 80% of its net
         assets plus any borrowings made for investment purposes in investments
         tied economically to emerging markets. The Fund will not change this
         policy without providing its shareholders with at least 60 days' prior
         written notice. The Manager defines "emerging markets" as those
         countries in Asia, Latin America, the Middle East, Africa, and Europe
         that are not included in the MSCI EAFE Index, a developed markets
         index. For purposes of this Prospectus, an investment is "tied
         economically" to an emerging market country if: (i) it is an investment
         in an issuer that is organized under the laws of such country or in an
         issuer that maintains its principal place of business in such country;
         (ii) it is traded principally in such country; or (iii) it is an
         investment in an issuer that derived at least 50% of its revenues or
         profits from goods produced or sold, investments made, or services
         performed in such country, or has at least 50% of its assets in such
         country. When used in this Prospectus, the term "investments" includes
         both direct investments and indirect

         investments (e.g., derivatives and synthetic instruments with economic
         characteristics similar to the underlying assets). The Fund may achieve
         exposure to emerging markets through direct investments or indirect
         investments.

         The Fund intends to be fully invested, and generally will not take
         temporary defensive positions through investment in cash and high
         quality money market instruments. In pursuing its investment strategy,
         the Fund may (but is not obligated to) use a wide variety of
         exchange-traded and over-the-counter derivative instruments, including
         options, futures, warrants, and swap contracts to (i) hedge equity
         exposure; (ii) replace direct investing (e.g., creating equity exposure
         through the use of futures contracts or other derivative instruments);
         (iii) manage risk by implementing shifts in investment exposure; and
         (iv) adjust its foreign currency exposure. The Fund will not use
         derivative instruments to expose on a net basis more than 100% of its
         net assets to equity securities or markets, or to hold net aggregate
         foreign currency exposure in excess of the net assets of the Fund.

         BENCHMARK

         The Fund's benchmark is the S&P/IFCI (Investable) Composite Index,
         which is independently maintained and published by Standard & Poor's
         and is a market capitalization weighted index of the performance of
         securities traded on stock exchanges of 22 different emerging markets,
         calculated on a total return basis.

         PRINCIPAL RISKS OF INVESTING IN THE FUND

         The value of an investment in the Fund changes with the value of the
         Fund's investments. Many factors can affect this value, and an investor
         may lose money by investing in the Fund. Following is a brief summary
         of the principal risks of an investment in the Fund; for a more
         complete discussion of these risks, see "Description of Principal
         Risks."

         -        MARKET RISK - EQUITY SECURITIES - Equity securities may
                  decline in value due to factors affecting the issuing
                  companies, their industries, or the economy and equity markets
                  generally. The Fund does not attempt to time the market. As a
                  result, the possibility that stock market prices in general
                  will decline over short or extended periods subjects the Fund
                  to unpredictable declines in the value of its investments, as
                  well as periods of poor performance.

         -        FOREIGN INVESTMENT RISK - The value of foreign securities may
                  change more rapidly and extremely than the value of U.S.
                  securities. Foreign markets may be less stable, smaller, less
                  liquid, less regulated, and the cost of trading in those
                  markets may be higher than in U.S. markets. Changes in
                  investment or exchange control regulations may adversely
                  affect the Fund's foreign investments. These and other risks
                  are greater for the Fund's emerging markets investments.

         -        LIQUIDITY RISK - The Fund's ability to sell securities may be
                  adversely affected by market size or legal restrictions. Such
                  risks are particularly pronounced for the Fund because it
                  primarily makes emerging market investments, which are not
                  widely traded and which may be subject to purchase and sale
                  restrictions.

         -        CURRENCY RISK - Fluctuations in exchange rates may adversely
                  affect the U.S. dollar value of the Fund's foreign currency
                  holdings and investments in securities denominated in foreign
                  currencies or related derivative instruments. To the extent
                  the Fund hedges currency exposure, it is exposed to the risk
                  that the U.S. dollar will decline relative to the hedged
                  currency.

         Other principal risks of an investment in the Fund include Market Risk
         - Value Securities (e.g., risk that the market may not recognize the
         values of securities purchased by the Fund, causing their prices to
         decline or fail to approach the values that the Manager anticipates),
         Derivatives Risk (e.g, use of derivatives by the Fund may involve risks
         different from, or


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         potentially greater than, risks associated with direct investments in
         securities and other investments by the Fund), Credit and Counterparty
         Risk (e.g., risk of default of an issuer of a portfolio security or
         derivatives counterparty), Focused Investment Risk (e.g., increased
         risk from the Fund's focus on investments in emerging markets), and
         Management Risk (e.g., risk that the strategies and techniques of the
         Manager will fail to produce the desired results).

In order to implement the Fund's new investment strategy, the Fund's investment
manager anticipates that up to approximately 85% of the Fund's portfolio will be
sold, resulting in transaction costs of approximately 0.64% of the Fund's
average daily net assets that will be borne by the Fund. The portfolio turnover
will result in net income, short-term capital gains and/or long-term capital
gains that will be distributed to shareholders of the Fund. Any such
distributions will be subject to federal U.S. taxation. Net income and
short-term capital gain distributions are generally taxable to shareholders as
ordinary income. Please consult with your tax advisor about the precise tax
consequences for your particular situation, including state, local, and other
applicable tax laws.


Supplement Date:  July 15, 2004



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