Rule 497(e) File Nos. 33-6540 and 811-5033

                      SUPPLEMENT DATED NOVEMBER 1, 1998 TO
                         PROSPECTUS DATED MARCH 2, 1998


                   CITIFUNDS(SM) INTERMEDIATE INCOME PORTFOLIO


         Effective November 1, 1998, the Fund will invest in securities through
U.S. Fixed Income Portfolio, a mutual fund which has the same investment
objectives and policies as the Fund. The aggregate management fees payable by
the Fund and the Portfolio to Citibank, N.A. are equal to the management fee
that was payable by the Fund when the Fund invested directly in securities. The
Fund's Trustees believe that the aggregate per share expenses of the Fund and
the Portfolio will be less than or approximately equal to the expenses that the
Fund would incur if it were to continue investing directly in securities.


                                      Rule 497(e) File Nos. 33-6540 and 811-5033

                      SUPPLEMENT DATED NOVEMBER 1, 1998 TO
             STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 2, 1998

                   CITIFUNDS(SM) INTERMEDIATE INCOME PORTFOLIO


         The following sentences are added at the end of the first paragraph on
the first page of the statement of additional information:

         The Fund is permitted to invest all or a portion of its assets in one
         or more other investment companies. Currently, the Fund invests its
         assets in U.S. Fixed Income Portfolio, a series of The Premium
         Portfolios. The address of The Premium Portfolios is Elizabethan
         Square, George Town, Grand Cayman, British West Indies.


         The second paragraph of the section entitled "The Trust" on page 2 of
the statement of additional information is deleted and replaced with the
following:

                  The Fund is permitted to seek its investment objectives by
         investing all or a portion of its assets in one or more investment
         companies to the extent not prohibited by the Investment Company Act of
         1940, the rules and regulations thereunder and exemptive orders granted
         under such Act. Currently, the Fund invests its assets in U.S. Fixed
         Income Portfolio (the "Portfolio"). The Portfolio is a series of The
         Premium Portfolios (the "Portfolio Trust"), and is an open-end,
         diversified management investment company. The Portfolio has the same
         investment objectives and policies as the Fund. Because the Fund
         invests through the Portfolio, all references in this Statement of
         Additional Information to the Fund include the Portfolio, except as
         otherwise noted. In addition, references to the Trust include the
         Portfolio Trust, except as otherwise noted.

                  Citibank, N.A. ("Citibank" or the "Manager") is the Manager of
         the Portfolio. Citibank manages the investments of the Portfolio from
         day to day in accordance with the Portfolio's investment objectives and
         policies. The selection of investments for the Portfolio, and the way
         they are managed, depend on the conditions and trends in the economy
         and the financial marketplaces.


         The first sentence of the third paragraph of the section entitled "The
Trust" on page 2 of the statement of additional information is replaced with the
following:

         The Boards of Trustees of the Trust and the Portfolio Trust provide
         broad supervision over the affairs of the Fund and the Portfolio,
         respectively.


         The following paragraph is added at the end of the section entitled
"Investment Objectives and Policies" on page 2 of the statement of additional
information:

                  The Trust may withdraw the investment of the Fund from the
         Portfolio at any time if the Board of Trustees of the Trust determines
         that it is in the best interests of the Fund to do so. Upon any such
         withdrawal, the Fund's assets would continue to be invested in
         accordance with the investment policies described herein with respect
         to the Fund. The policies described above and those described below are
         not fundamental and may be changed without shareholder approval.


         The first paragraph of the section entitled "Investment Restrictions"
on page 10 of the statement of additional information is replaced with the
following:

                  The Trust, on behalf of the Fund, and the Portfolio Trust, on
         behalf of the Portfolio, have each adopted the following policies which
         may not be changed with respect to the Fund or Portfolio without
         approval by the holders of a majority of the outstanding voting
         securities of the Fund or Portfolio, which as used in this Statement of
         Additional Information means the vote of the lesser of (i) 67% or more
         of the outstanding voting securities of the Fund or Portfolio present
         at a meeting at which the holders of more than 50% of the outstanding
         voting securities of the Fund or Portfolio are present or represented
         by proxy, or (ii) more than 50% of the outstanding voting securities of
         the Fund or Portfolio. The term "voting securities" as used in this
         paragraph has the same meaning as in the 1940 Act.

                  The Portfolio may not:

                           (1) Borrow money, except that as a temporary measure
                  for extraordinary or emergency purposes it may borrow in an
                  amount not to exceed 1/3 of the current value of its net
                  assets, including the amount borrowed; or purchase any
                  securities at any time at which borrowings exceed 5% of the
                  total assets of the Portfolio, taken at market value. It is
                  intended that the Portfolio would borrow money only from banks
                  and only to accommodate requests for the repurchase of
                  beneficial interests in the Portfolio while effecting an
                  orderly liquidation of portfolio securities.

                           (2) Make loans to other persons except (a) through
                  the lending of its portfolio securities and provided that any
                  such loans not exceed 30% of the Portfolio's total assets
                  (taken at market value), (b) through the use of repurchase
                  agreements or fixed time deposits or the purchase of
                  short-term obligations or (c) by purchasing all or a portion
                  of an issue of debt securities of types commonly distributed
                  privately to financial institutions. The purchase of
                  short-term commercial paper or a portion of an issue of debt
                  securities which is part of an issue to the public shall not
                  be considered the making of a loan.

                           (3) Purchase securities of any issuer if such
                  purchase at the time thereof would cause with respect to 75%
                  of the total assets of the Portfolio more than 10% of the
                  voting securities of such issuer to be held by the Portfolio;
                  provided that, for purposes of this restriction, the issuer of
                  an option or futures contract shall not be deemed to be the
                  issuer of the security or securities underlying such contract;
                  and provided further that the Portfolio may invest all or any
                  portion of its assets in one or more investment companies to
                  the extent not prohibited by the 1940 Act, the rules and
                  regulations thereunder, and exemptive orders granted under
                  such Act.

                           (4) Purchase securities of any issuer if such
                  purchase at the time thereof would cause as to 75% of the
                  Portfolio's total assets more than 5% of the Portfolio's
                  assets (taken at market value) to be invested in the
                  securities of such issuer (other than securities or
                  obligations issued or guaranteed by the United States, any
                  state or political subdivision thereof, or any political
                  subdivision of any such state, or any agency or
                  instrumentality of the United States or of any state or of any
                  political subdivision of any state); provided that, for
                  purposes of this restriction, the issuer of an option or
                  futures contract shall not be deemed to be the issuer of the
                  security or securities underlying such contract; and provided
                  further that the Portfolio may invest all or any portion of
                  its assets in or more investment companies, to the extent not
                  prohibited by the 1940 Act, the rules and regulations
                  thereunder, and exemptive orders granted under such Act.

                           (5) Concentrate its investments in any particular
                  industry, but if it is deemed appropriate for the achievement
                  of the Portfolio's investment objective, up to 25% of its
                  assets, at market value at the time of each investment, may be
                  invested in any one industry, except that positions in futures
                  contracts shall not be subject to this restriction.

                           (6) Underwrite securities issued by other persons,
                  except that all or any portion of the assets of the Portfolio
                  may be invested in one or more investment companies, to the
                  extent not prohibited by the 1940 Act, the rules and
                  regulations thereunder, and exemptive orders granted under
                  such Act, and except insofar as the Portfolio may technically
                  be deemed an underwriter under the Securities Act in selling a
                  security.

                           (7) Purchase or sell real estate (including limited
                  partnership interests but excluding securities secured by real
                  estate or interests therein), interests in oil, gas or mineral
                  leases, commodities or commodity contracts in the ordinary
                  course of business (the foregoing shall not be deemed to
                  preclude the Portfolio from purchasing or selling futures
                  contracts or options thereon, and the Portfolio reserves the
                  freedom of action to hold and to sell real estate acquired as
                  a result of the ownership of securities by the Portfolio).

                           (8) Issue any senior security (as that term is
                  defined in the 1940 Act) if such issuance is specifically
                  prohibited by the 1940 Act or the rules and regulations
                  promulgated thereunder.


         The following information is added after the section entitled
"Management - Trustees of the Trust" on page 14 of the statement of additional
information:

         TRUSTEES OF THE PORTFOLIO TRUST

         ELLIOTT J. BERV; 55- Chairman and Director, Catalyst, Inc. (Management
         Consultants) (since June 1992); President, Chief Operating Officer and
         Director, Deven International, Inc. (International Consultants) (June
         1991 to June 1992); President and Director, Elliott J. Berv &
         Associates (Management Consultants) (since May 1984). His address is 15
         Stowaway Drive, Cumberland Foreside, Maine.

         PHILIP W. COOLIDGE*; 47- President of the Trust and the Portfolio
         Trust; Chief Executive Officer and President, Signature Financial
         Group, Inc. and CFBDS.

         MARK T. FINN; 55- President and Director, Delta Financial, Inc. (since
         June 1983); Chairman of the Board and Chief Executive Officer, FX 500
         Ltd. (Commodity Trading Advisory Firm) (since April 1990); Director,
         Vantage Consulting Group, Inc. (since October 1988). His address is
         3500 Pacific Avenue, P.O. Box 539, Virginia Beach, Virginia.

         C. OSCAR MORONG, JR.; 63- Managing Director, Morong Capital Management
         (since February 1993); Senior Vice President and Investment Manager,
         CREF Investments, Teachers Insurance & Annuity Association (retired,
         January 1993); Director, Indonesia Fund; Trustee, MAS Funds (since
         1993). His address is 1385 Outlook Drive, West, Mountainside, New
         Jersey.

         WALTER E. ROBB, III; 72- President, Benchmark Consulting Group, Inc.
         (since 1991); Principal, Robb Associates (Corporate Financial Advisors)
         (since 1978); President, Benchmark Advisors, Inc. (Corporate Financial
         Advisors) (since 1989); Trustee of certain registered investment
         companies in the MFS Family of Funds. His address is 35 Farm Road,
         Sherborn, Massachusetts.

         E. KIRBY WARREN; 64- Professor of Management, Graduate School of
         Business, Columbia University (since 1987). Samuel Bronfman Professor
         of Democratic Business Enterprise (1978 to 1987). His address is
         Columbia University, Graduate School of Business, 725 Uris Hall, New
         York, New York.


         The name of the section entitled "Officers of the Trust" on page 14 of
the statement of additional information is hereby changed to "Officers of the
Trust and the Portfolio Trust."


         The section entitled "Management - Manager" on pages 15 and 16 of the
statement of additional information is deleted and replaced with the following:

         MANAGER
                  Citibank serves as the manager of the Portfolio and provides
         certain administrative services to the Trust and the Portfolio Trust
         pursuant to separate management agreements (the "Management
         Agreements"). Subject to policies as the Board of Trustees of the
         Portfolio Trust may determine, Citibank manages the securities of the
         Portfolio and makes investment decisions for the Portfolio. The
         Management Agreement with the Portfolio Trust provides that Citibank
         may delegate the daily management of the securities of the Portfolio to
         one or more subadvisers. Citibank furnishes at its own expense all
         services, facilities and personnel necessary in connection with
         managing the Portfolio's investments and effecting securities
         transactions for the Portfolio. The Management Agreement with respect
         to the Portfolio will continue in effect until August 7, 2000, and
         thereafter as long as such continuance is specifically approved at
         least annually by the Board of Trustees of the Portfolio Trust or by a
         vote of a majority of the outstanding voting securities of the
         Portfolio, and, in either case, by a majority of the Trustees of the
         Portfolio Trust who are not parties to the Management Agreement or
         interested persons of any such party, at a meeting called for the
         purpose of voting on the Management Agreement. The Management Agreement
         with the Trust will respect to the Fund will continue in effect until
         August 8, 1999 and thereafter as long as such continuance is
         specifically approved at least annually by the Board of Trustees of the
         Trust or by a vote of a majority of the outstanding voting securities
         of the Fund, and, in either case, by a majority of the Trustees of the
         Trust who are not parties to the Management Agreement or interested
         persons of any such party, at a meeting called for the purpose of
         voting on the Management Agreement.

                  Citibank provides the Trust and the Portfolio Trust with
         general office facilities and supervises the overall administration of
         the Trust and the Portfolio Trust, including, among other
         responsibilities, the negotiation of contracts and fees with, and the
         monitoring of performance and billings of, the Trust's or Portfolio
         Trust's independent contractors and agents; the preparation and filing
         of all documents required for compliance by the Trust or Portfolio
         Trust with applicable laws and regulations; and arranging for the
         maintenance of books and records of the Trust or Portfolio Trust.
         Trustees, officers, and investors in the Trust or Portfolio Trust are
         or may be or may become interested in Citibank, as directors, officers,
         employees, or otherwise and directors, officers and employees of
         Citibank are or may become similarly interested in the Trust or
         Portfolio Trust.

                  Each Management Agreement provides that Citibank may render
         services to others. Each Management Agreement is terminable without
         penalty on not more than 60 days' nor less than 30 days' written notice
         by the Portfolio Trust or the Trust, as the case may be, when
         authorized either by a vote of a majority of the outstanding voting
         securities of the Portfolio or Fund or by a vote of a majority of the
         Board of Trustees of the Portfolio Trust or the Trust, or by Citibank
         on not more than 60 days' nor less than 30 days' written notice, and
         will automatically terminate in the event of its assignment. The
         Management Agreement with the Portfolio Trust provides that neither
         Citibank nor its personnel shall be liable for any error of judgment or
         mistake of law or for any loss arising out of my investment or for any
         act or omission in the execution of security transactions for the
         Portfolio, except for willful misfeasance, bad faith or gross
         negligence or reckless disregard of its or their obligations and duties
         under the Management Agreement with the Portfolio Trust. The Management
         Agreement with the Trust provides that neither Citibank nor its
         personnel shall be liable for any error of judgment or mistake of law
         or for any omission in the administration or management of the Trust or
         the performance of its duties under the Management Agreement, except
         for willful misfeasance, bad faith or gross negligence or reckless
         disregard of its or their obligations and duties under the Management
         Agreement with the Trust.

                  The Prospectus contains a description of the fees payable to
         Citibank for services under each of the Management Agreements. Citibank
         may reimburse the Fund or Portfolio or waive all or a portion of its
         management fees.

                  For the fiscal years ended December 31, 1995, 1996 and 1997,
         the fees payable from the Fund to Citibank under a prior investment
         advisory agreement with the Trust were $171,213 (of which $115,475 was
         voluntarily waived), $162,525 (of which $80,994 was voluntarily waived)
         and $137,525 (of which $82,010 was voluntarily waived), respectively.

                  For the fiscal years ended December 31, 1995, 1996 and 1997,
         the fees payable from the Fund to CFBDS under a prior administrative
         services agreement with the Trust were $97,836 (of which $38,337 was
         voluntarily waived), $116,090 (of which $72,966 was voluntarily waived)
         and $98,232 (of which $75,116 was voluntarily waived), respectively.

                  Pursuant to separate sub-administrative services agreements
         with Citibank, CFBDS and Signature Financial Group (Cayman) Ltd.
         ("SFG") perform such sub-administrative duties for the Trust and the
         Portfolio Trust, respectively, as from time to time are agreed upon by
         Citibank, CFBDS and SFG, as appropriate. For performing such
         sub-administrative services, CFBDS and SFG receive compensation as from
         time to time is agreed upon by Citibank, not in excess of the amount
         paid to Citibank for its services under the Management Agreements with
         the Trust and the Portfolio Trust, respectively. All such compensation
         is paid by Citibank.


         The following paragraph is added at the end of the section entitled
"Transfer Agent and Custodian" on page 17 of the statement of additional
information:

                  The Portfolio Trust, on behalf of the Portfolio, has entered
         into a Custodian Agreement with State Street pursuant to which State
         Street acts as custodian for the Portfolio. The Portfolio Trust, on
         behalf of the Portfolio, also has entered into a Fund Accounting
         Agreement with State Street Cayman Trust Company, Ltd. ("State Street
         Cayman") pursuant to which State Street Cayman provides fund accounting
         services for the Portfolio. State Street Cayman also provides transfer
         agency services to the Portfolio. The principal business address of
         State Street Cayman is P.O. Box 2508 GT, Grand Cayman, British West
         Indies.


         The section entitled "Auditors" on page 17 of the statement of
additional information is deleted and replaced with the following:

         AUDITORS
                  PricewaterhouseCoopers LLP are the independent accountants for
         the Trust, providing audit services and assistance and consultation
         with respect to the preparation of filings with the SEC. The address of
         PricewaterhouseCoopers LLP is 160 Federal Street, Boston, Massachusetts
         02110.

                  PricewaterhouseCoopers are the chartered accountants for the
         Portfolio Trust. The address of PricewaterhouseCoopers is Suite 3000,
         Box 82, Royal Trust Towers, Toronto Dominion Center, Toronto, Ontario,
         Canada M5K 1G8.


         The following paragraph is added at the end of the section entitled
"Description of Shares, Voting Rights and Liabilities on page 19 of the
statement of additional information:

                  The Portfolio is a series of The Premium Portfolios. The
         Portfolio Trust is organized as a trust under the laws of the state of
         New York. Each investor in the Portfolio, including the Fund, may add
         to or withdraw from its investment in the Portfolio on each Business
         Day. As of the close of regular trading on each Business Day, the value
         of each investor's beneficial interest in the Portfolio is determined
         by multiplying the net asset value of the Portfolio by the percentage,
         effective for that day, that represents that investor's share of the
         aggregate beneficial interest in the Portfolio. Any additions or
         withdrawals that are to be effected on that day are then effected. The
         investor's percentage of the aggregate beneficial interests in the
         Portfolio is then recomputed as the percentage equal to the fraction
         (i) the numerator of which is the value of such investor's investment
         in the Portfolio as of the close of regular trading on such day plus or
         minus, as the case may be, the amount of any additions to or
         withdrawals from the investor's investment in the Portfolio effected on
         such day, and (ii) the denominator of which is the aggregate net asset
         value of the Portfolio as of the close of regular trading on such day
         plus or minus, as the case may be, the amount of the net additions to
         or withdrawals from the aggregate investments in the Portfolio by all
         investors in the Portfolio. The percentage so determined is then
         applied to determine the value of the investor's interest in the
         Portfolio as of the close of regular trading on the next following
         Business Day.


         The following sentence is added at the end of the first paragraph of
the section entitled "Certain Additional Tax Matters" on page 19 of the
statement of additional information:

         The Portfolio Trust believes the Portfolio also will not be required to
         pay any U.S. federal income or excise taxes on its income.