<PAGE>
SMITH BARNEY CONCERT
ALLOCATION SERIES INC.
[PHOTO] [PHOTO]
[PHOTO]
Global Portfolio
High Growth Portfolio
Growth Portfolio
Balanced Portfolio
Conservative Portfolio
Income Portfolio
------------------
SEMI-ANNUAL REPORT
July 31, 1999
------------------
Investment Strategies for Your Life
[LOGO] Smith Barney
Mutual Funds
<PAGE>
Table of Contents
Letter to
Shareholders......................................................
...1
The Concert Allocation Series Portfolios
The Global
Portfolio.......................................................5
The High Growth
Portfolio.................................................10
The Growth
Portfolio......................................................15
The Balanced
Portfolio....................................................20
The Conservative
Portfolio................................................25
The Income
Portfolio......................................................30
Schedules of
Investments......................................................3
5
Statements of Assets and
Liabilities..........................................41
Statements of
Operations......................................................42
Statements of Changes in Net
Assets...........................................43
Notes to Financial
Statements.................................................45
Financial
Highlights........................................................
..50
Directors and
Officers........................................................69
<PAGE>
Dear Shareholder:
[PHOTO]
Heath B. McLendon
Chairman
The Concert Allocation Series
We are pleased to present the semi-annual report for the Smith
Barney Concert
Allocation Series Inc. ("Concert Allocation Series") Portfolios
("Portfolios")
for the period ended July 31, 1999. Please note that this report
has been
prepared for the information of shareholders of the Concert
Allocation Series
and is not authorized for use unless preceded or accompanied by a
current
prospectus. The prospectus includes information regarding the
Portfolios' sales
charges, expenses, objectives, policies, management, performance
and other
information. Please read it carefully before you invest or send
money.
The Concert Allocation Series Portfolios seek to deliver strong
returns over the
long term while minimizing the impact of market volatility. By
design, an
investment in a particular Portfolio is likely to be less volatile
than an
investment in a single asset type, a particular mutual fund or
specific
financial market. We are pleased to report that the Portfolios
covered in this
report delivered competitive returns during the reporting period.
As of July 31, 1999, total assets in the Portfolios were
approximately $2.5
billion as we are currently helping more than 394,000 shareholders
pursue their
financial goals. Additional Portfolio performance information can
be found
beginning on page 5. The chart below shows the performance of the
six Portfolios
Class A shares with and without sales charges for the period under
review. The
performance and current holdings of each Portfolio are discussed
in greater
detail on the following pages.
The Performance of The Concert Allocation Series Portfolios
Class A Share Total Returns for the Six Months Ended 7/31/99+
With
Without
Sales Charges*
Sales Charges**
-------------- --
- -------------
Global Portfolio 3.92%
9.41%
High Growth Portfolio 0.77
6.06
Growth Portfolio (2.90)
2.21
Balanced Portfolio (3.04)
2.05
Conservative Portfolio (3.46)
1.11
Income Portfolio (5.87)
(1.45)
Performance numbers for the other classes of shares can be found
beginning on
page 7.+ Total return is not annualized, as it may not be
representative of the
total return for the year.* These total return figures assume
reinvestment of
all dividends and reflect the deduction of the maximum front-end
sales charge
for each Portfolio's Class A shares: 5.00% for the Global, High
Growth, Growth
and Balanced Portfolios and 4.50% for the Conservative and Income
Portfolios.**
These total return figures do not reflect the deduction of a sales
charge for
each Portfolio's Class A shares. In addition, all total return
information
represents past performance, which is not indicative of future
results. The
investment return and principal value of an investment will
fluctuate so that an
investor's shares, when redeemed, may be worth more or less than
their original
cost. The shorter the time period of your investment, the greater
the
possibility of loss. Fund shares are not deposits or obligations
of, or insured
or guaranteed by, the U.S. government, and financial institution,
the Federal
Deposit Insurance Corporation, or any other agency, entity or
person.
1
<PAGE>
- ------------------------------------------------------------------
- --------------
The Benefits of Long-Term Investing
Growth of $10,000 Invested in the Standard & Poor's 500 Composite
Stock Index,
Salomon Smith Barney World Government Bond Index, Lehman
Government/Corporate
Bond Index and Morgan Stanley Capital International EAFE
Index
(July 31, 1989 - July 31, 1999)
(unaudited)
[LINE CHART]
Salomon
Lehman
S&P 500 World Gov't. MSCI EAFE
Gov't./Corp.
Index Bond Index Index Bond
Index
7/31/89 10000 10000 10000
10000
1/90 9667 10008 10049
10105
1/91 10476 10943 8276
11219
1/92 12849 12164 8330
12692
1/93 14206 13372 7502
14161
1/94 16031 14808 10817
15620
1/95 16115 14442 10364
15134
1/96 22338 16978 12072
17816
1/97 28220 18438 12340
18242
1/98 35812 20662 13629
20280
1/99 47451 23919 15616
22049
7/31/99 49587 22960 16767
21334
- ------------------------------------------------------------------
- --------------
The Standard & Poor's 500 Composite Stock Index ("S&P 500") is a
capitalization-weighted index of 500 widely held common stocks.
The Salomon
Smith Barney World Government Bond Index is a market-
capitalization-weighted
benchmark that tracks the performance of the government bond
markets of 14
countries. The Lehman Government/Corporate Bond Index is a
combination of
publicly issued intermediate- and long-term U.S. government bonds
and corporate
bonds. The Morgan Stanley Capital International EAFE Index ("MSCI
EAFE")
consists of the equity total returns for Europe, Australia and the
Far East.
These indices are unmanaged and are not subject to the same
management and
trading expenses as a mutual fund. An investor cannot invest
directly in an
index.
The U.S. Markets
The U.S. stock market set record highs during the six months ended
July 31, 1999
and returned 4.50% as measured by the S&P 500 Stock Index, a
capitalization-weighted index of 500 widely held common stocks.
These new market
highs were supported by strong corporate earnings reports, and
renewed
confidence that worldwide growth was turning upwards. Bond
investors were not as
fortunate. For the stronger economy stirred fears of inflation, as
well as the
reality of the Federal Reserve Board ("Fed") boosting interest
rates by 25 basis
points both in late June and late August. For the six months ended
July 31,
1999, the Lehman Brothers Government/Corporate Bond Index, a
combination of
publicly issued intermediate- and long-term U.S government bonds
and corporate
bonds, returned a negative 3.24%.
Climbing stock prices have been, in some sense, a continuation of
the strong
stock markets of the last several years. But in other ways, the
period under
review has been different. Over the past several years, large-
sized company
stocks have outperformed small ones, and growth stocks have
outperformed value
stocks. But in the last six months,
2
<PAGE>
small stocks and value stocks have improved their relative price
performance.
And we think it is likely that this change will persist for a
significant time
period, as relative performance often rotates between asset
classes.
The long anticipated slowdown in U.S. economic activity again
failed to happen
during the reporting period. Global stock markets continued to
rise, led by
better than expected profit growth and continued merger and
acquisition
activity. During the first seven months of 1999, U.S. economic
growth continued
at a robust pace. Furthermore, the labor market continued to be
extremely tight,
as the unemployment rate fell to a 29-year low of 4.2% in March.
Defying the expectations of many economists, inflation -- as
measured by the
Consumer Price Index ("CPI") -- was virtually absent. Productivity
gains and
sagging global demand were credited with keeping inflation under
control.
However, signs of inflation began to emerge in early spring. This,
coupled with
signs that many world economies were in the early stages of growth
and recovery,
deepened fears that inflationary pressures were reaching a
breaking point.
To counter these inflationary pressures, the Fed raised short-term
interest
rates by 0.25% in late June and late August, and subsequently
adopted a neutral
stance on monetary policy. Meanwhile, during the months of May and
June, the CPI
remained constant, generating considerable optimism that inflation
had
retreated.
International Stock Markets
Major political and economic crosscurrents influenced the
international equity
markets during the first half of the year. Despite rising interest
rate
anxieties, global equity markets delivered positive returns. While
investors
fretted about rising U.S. and Japanese bond yields, economic data
showed that
many Asian countries had begun their recoveries from the steep
recessions of the
past two years. Performance of the European markets, for dollar-
based investors,
has lagged in 1999, primarily due to weakness of the new Euro
currency versus
the U.S. dollar.
During the reporting period, Asia continued to experience a flow
of funds from
global investors attracted by falling interest rates, signs of
economic growth
in Asia and the prospects for meaningful structural change in
Japan.
International Bond Markets
The last several months of 1998 saw particularly strong
performance from the
majority of the world's major bond markets. Bond yields moved
lower, in line
with the U.S. Treasury market, as investors fled from the
uncertainties in the
lesser-developed countries. In Europe, the shift to lower yields
was
additionally supported by the advent of a single currency, the
Euro. This drove
the yields on the peripheral markets, such as Sweden and Italy,
down to levels
that more closely matched those on the core markets of Germany and
France.
However, the trend of lower interest rates reversed in the first
six months of
1999. The main concerns stemmed from the United States, where
economic activity
had been more robust than many investors had earlier anticipated.
This in turn
led many investors to question when the Fed would reverse the
lower interest
rate policy it had authorized in the fall of 1998. At that time,
the Fed's top
priority was to ensure that the financial crisis enveloping many
of the world's
emerging economies did not escalate into a major global problem.
The Fed's
actions have largely contributed to ongoing economic recovery,
providing
liquidity to overseas markets. In reaction to the Fed's interest
rate increase
on June 30, 1999, the international bond market declined. We
anticipate that the
performance of fixed income markets worldwide will continue to
mirror the
actions of the Fed.
3
<PAGE>
Looking Forward
Rising equity markets, the unwillingness of consumer spending to
slow down and a
growing global economy has caused Fed monetary policy to remain
vigilant. With
the world economic crisis abating, we cannot rule out the
possibility of another
Fed rate increase before year-end. However, in our view, the most
likely
scenario is that the Fed's monetary policy will remain neutral, at
least through
the third quarter of 1999.
In fact, as global market volatility continues and the U.S. stock
market's
performance broadens out to include more small-cap stocks, mid-cap
stocks and
value stocks, we think that the significant advantages of
diversifying across a
broad range of asset classes and investment styles that each
Concert Allocation
Series Portfolio offers++ will become even more apparent in the
months ahead.
Thank you for investing in the Smith Barney Concert Allocation
Series Inc.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
August 31, 1999
++ Please note that while the other five Concert Allocation Series
Portfolios
can serve as complete investment programs, the Global Portfolio,
which invests
in overseas equities, was designed to be an aggressive way for
investors to tap
into global opportunities. Therefore, the Global Portfolio is only
suitable for
aggressive investors who are seeking capital appreciation and who
have a
long-term investment horizon.
4
<PAGE>
THE GLOBAL PORTFOLIO
- ------------------------------------------------------------------
- --------------
Target Asset Allocation
- ------------------------------------------------------------------
- --------------
[PIE CHART]
Stock Funds 100%
The Global Portfolio seeks capital appreciation by investing 100%
of its assets
in global, international and U.S. stock funds.
- ------------------------------------------------------------------
- --------------
The Global Portfolio
The Global Portfolio is the most aggressively managed Portfolio of
the Concert
Allocation Series and has been designed for investors who are
willing to
tolerate higher short-term market fluctuations for potential long-
term gains.
Unlike the other five Portfolios in the Concert Allocation Series,
the Global
Portfolio is designed to further diversify an existing investment
portfolio and
is not intended to be a complete investment program.
- ------------------------------------------------------------------
- --------------
Index Comparison*
- ------------------------------------------------------------------
- --------------
S&P 500 4.50%
Russell 2000(R) 4.89%
MSCI EAFE 7.37%
MSCI Emerging Markets 37.85%
- ------------------------------------------------------------------
- --------------
* The chart above represents total returns for the six months
ended July 31,
1999.
- ------------------------------------------------------------------
- --------------
Portfolio Update
- ------------------------------------------------------------------
- --------------
The Concert Allocation Series Global Portfolio's ("Portfolio")
Class A shares
generated a total return of 9.41%, excluding sales charges. The
chart that
appears on page 9 compares the Portfolio's performance to broad-
based indices
that track four of the asset classes represented in the Portfolio.
The period began with concerns that a weak recovery in Asia and
recession in
Latin America would trigger a slowdown in the U.S. economy.
However, overseas
markets and economies have begun to perform well. One key theme
during the
reporting period was the increasing depth of the U.S. stock market
and the
better relative performance of small-capitalization stocks, mid-
capitalization
stocks and value stocks.
Shares of large-capitalization growth stocks generally took a back
seat to the
shares of small-capitalization stocks, which outperformed the
overall market.
Stocks from companies in Latin America and Asia posted strong
returns, evidence
of the continuing global economic recovery. Also, global value
stocks performed
well during the period under review. All of these trends
positively contributed
to the Global Portfolio's performance for the six months ended
July 31, 1999.
- ------------------------------------------------------------------
- --------------
The Target Asset Allocation set forth above represents an
approximate mix of
investments for the Global Portfolio. The allocation and
investment mix of the
Portfolio may vary depending upon market conditions, cash flows in
and out of
the Portfolio and other factors. In addition, the allocation and
investment
ranges of the Portfolio may be changed from time to time upon the
approval of
the Concert Allocation Series' Board of Directors.
5
<PAGE>
The Concert Allocation Series Global Portfolio Breakdown (as of
7/31/99)
(unaudited)
[PIE CHART]
========================
10% Smith Barney
Small Cap Blend Fund
========================
Top 5 Holdings:
Voicestream Wireless
IDEC Pharmaceuticals
Radisys Corp.
Western Wireless
Mercury Interactive
========================
========================
25% Smith Barney
Investment Funds Inc.-
Smith Barney Hansberger
Global Value Fund
========================
Top 5 Holdings:
United O/S Bank Foreign
City Development
Daiwa Securities
Hutchinson Wampoa
Marubeni Corp.
========================
========================
10% Smith Barney
Investment Funds Inc.-
Smith Barney Hansberger
Small Cap Value Fund
===========================
Top 5 Holdings:
Henry Walker Group, Ltd.
Hoening Group Inc.
Linder Holding KGAA
BT Industries AB
Clipsal Industries Holdings
=============================
=============================
5% Smith Barney
Investment Funds Inc.-
Concert Peachtree Growth Fund
=============================
Top 5 Holdings:
Microsoft Corp.
General Electric Co.
Tyco International Ltd.
Lucent Technologies
Compuware
=============================
==============================
25% Smith Barney
World Funds, Inc.-
International Equity Portfolio
==============================
Top 5 Holdings:
Nokia AB Oy K Shares
NTT Data Communications
Hays PLC
Serco Group PLC
Compass Group PLC
==============================
==========================
5% Smith Barney
World Funds, Inc.-
Emerging Markets Portfolio
==========================
Top 5 Holdings:
Malayan Banking BHD
Trigem Computer Inc.
Telefonos DE Mexico ADR
Indian Tobacco
Berjaya Sports Toto BHD
==========================
==========================
15% Smith Barney
Investment Trust-
Smith Barney Large
Capitalization Growth Fund
==========================
Top 5 Holdings:
Intel Corp.
Texas Instruments Inc.
Coca-Cola Co.
Wells Fargo Inc.
America Online, Inc.
==========================
======================
5% Smith Barney
Funds, Inc.-
Large Cap Value Fund
======================
Top 5 Holdings:
Enron Corp.
Williams Cos., Inc.
Chase Manhattan Corp.
Masco Corp.
AT&T Corp.
======================
6
<PAGE>
THE GLOBAL PORTFOLIO
Historical Performance -- Class A Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ------------------------------
Net Asset Value
------------------------------------
- - Income
Capital Gain Total
Period Ended Beginning of Period End of
Period Dividends
Distributions Returns(1)
==================================================================
==============
==============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $11.16 $12.19
$0.00
$0.02 9.41%+
- ------------------------------------------------------------------
- --------------
- ------------------------------
Inception*-1/31/99 11.40 11.16
0.04
0.01 (1.60)+
==================================================================
==============
==============================
Total
$0.04
$0.03
==================================================================
==============
==============================
</TABLE>
Historical Performance -- Class B Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ------------------------------
Net Asset Value
------------------------------------
- - Income
Capital Gain Total
Period Ended Beginning of Period End of
Period Dividends
Distributions Returns(1)
==================================================================
==============
==============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $11.15 $12.13
$0.00
$0.02 8.97%+
- ------------------------------------------------------------------
- --------------
- ------------------------------
Inception*-1/31/99 11.40 11.15
0.00
0.01 (2.16)+
==================================================================
==============
==============================
Total
$0.00
$0.03
==================================================================
==============
==============================
</TABLE>
Historical Performance -- Class L Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ------------------------------
Net Asset Value
------------------------------------
- - Income
Capital Gain Total
Period Ended Beginning of Period End of
Period Dividends
Distributions Returns(1)
==================================================================
==============
==============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $11.14 $12.13
$0.00
$0.02 9.07%+
- ------------------------------------------------------------------
- --------------
- ------------------------------
Inception*-1/31/99 11.40 11.14
0.00
0.01 (2.25)+
==================================================================
==============
==============================
Total
$0.00
$0.03
==================================================================
==============
==============================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains,
if any,
annually.
7
<PAGE>
Average Annual Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
--------------------------------
- --------------
Class A Class B
Class L
==================================================================
==============
Six Months Ended 7/31/99+ 9.41% 8.97%
9.07%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 9.98 9.21
9.21
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 5.45 4.71
4.71
==================================================================
==============
With Sales
Charges(2)
--------------------------------
- --------------
Class A Class B
Class L
==================================================================
==============
Six Months Ended 7/31/99+ 3.92% 3.97%
7.00%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 4.46 4.21
7.14
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 1.63 1.87
3.93
==================================================================
==============
Cumulative Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
==================================================================
==============
Class A (Inception* through 7/31/99) 7.66%
- ------------------------------------------------------------------
- --------------
Class B (Inception* through 7/31/99) 6.62
- ------------------------------------------------------------------
- --------------
Class L (Inception* through 7/31/99) 6.62
==================================================================
==============
(1) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value and does not reflect the deduction
of the
applicable sales charges with respect to Class A and L
shares or the
applicable contingent deferred sales charges ("CDSC") with
respect to
Class B and L shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value. In addition, Class A and L shares
reflect the
deduction of the maximum initial sales charge of 5.00% and
1.00%,
respectively; and Class B shares reflect the deduction of a
5.00% CDSC,
which applies if shares are redeemed within one year from
purchase and
declines thereafter by 1.00% per year until no CDSC is
incurred. Class L
shares also reflect the deduction of a 1.00% CDSC, which
applies if shares
are redeemed within the first year of purchase.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
* Inception date for Class A, B and L shares is March 9, 1998.
8
<PAGE>
Growth of $10,000 Invested in Class A, B and L Shares of the
Global Portfolio
vs. the Standard & Poor's 500 Composite Stock Index, Russell 2000
Index, Morgan
Stanley Capital International EAFE Index and Morgan Stanley
Capital
International Emerging Markets Index
- ------------------------------------------------------------------
- --------------
March 9, 1998 -- July 31, 1999 (unaudited)
[LINE CHART]
<TABLE>
<CAPTION>
Standard &
MSCI
Global Global Global Poor's 500
Emerging
Portfolio- Portfolio- Portfolio- Composite Russell
MSCI EAFE
Markets
Class A Class B Class L Stock Index 2000
Index Index
Index
<S> <C> <C> <C> <C> <C>
<C>
<C>
3/9/98 9500 10000 9896 10000 10000
10000
10000
4/98 9908 9921 10213 10584 10492
10389
10171
7/98 9300 9275 9565 10709 9142
10522
8154
10/98 8342 8308 8568 10541 8267
9867
6957
1/99 9348 9295 9577 12318 9362
10748
7292
4/99 10060 10104 10386 12893 9521
11373
9394
7/31/99 10228 10262 10551 12872 9820
11541
10052
</TABLE>
The chart above represents a hypothetical illustration of $10,000
invested in
Class A, B and L shares on March 9, 1998 (inception date),
assuming deduction of
the maximum 5.00% and 1.00% sales charge at the time of investment
for Class A
and L shares, respectively, the deduction of the maximum 5.00%
CDSC for Class B
shares and the deduction of the 1.00% CDSC for Class L shares. It
also assumes
reinvestment of dividends and capital gains, if any, at net asset
value through
July 31, 1999. The Standard & Poor's 500 Composite Stock Index is
an unmanaged
index composed of 500 widely held common stocks listed on the New
York Stock
Exchange, American Stock Exchange and the over-the-counter market.
The Russell
2000 Index is a capitalization weighted total return index which
is comprised of
2,000 of some of the smaller-capitalized U.S.-domiciled companies
whose common
stock is traded in the United States on the New York Stock
Exchange, American
Stock Exchange and Nasdaq. The Morgan Stanley Capital
International EAFE Index
("MSCI EAFE") consists of the equity total returns for Europe,
Australia and the
Far East. The MSCI Emerging Markets Index consists of emerging
market companies
with an average size of $800 million, the index performance of
emerging markets
in South America, South Africa, Asia and Eastern Europe. These
indices are
unmanaged and are not subject to the same management and trading
expenses as a
mutual fund. An investor cannot invest directly in an index. The
performance of
the Portfolio's other classes may be greater or less than the
shares'
performance indicated on this chart, depending on whether greater
or lesser
sales charges and fees were incurred by shareholders investing in
the other
classes.
All figures represent past performance and are not a guarantee of
future
results. Investment returns and principal value will fluctuate,
and redemption
values may be more or less than the original cost. No adjustment
has been made
for shareholder tax liability on dividends or capital gains.
9
<PAGE>
THE HIGH GROWTH PORTFOLIO
- ------------------------------------------------------------------
- --------------
Target Asset Allocation
- ------------------------------------------------------------------
- --------------
[PIE CHART]
Bond Funds 10%
Stock Funds 90%
The High Growth Portfolio seeks capital appreciation by investing
a high
percentage of its assets in aggressive equity funds.
- ------------------------------------------------------------------
- --------------
The High Growth Portfolio
The High Growth Portfolio seeks capital appreciation. Among the
Portfolios of
the Concert Allocation Series, the High Growth Portfolio invests a
large portion
of its assets in aggressive equity mutual funds that focus on
smaller, more
speculative companies as well as mid-sized (or larger) companies
with the
potential for rapid growth. Moreover, a significant portion of the
Portfolio is
invested in international or emerging markets funds in order to
achieve a
greater level of diversification.
- ------------------------------------------------------------------
- --------------
Index Comparison*
- ------------------------------------------------------------------
- --------------
S&P 500 4.50%
Russell 2000(R) 4.89%
MSCI EAFE 7.37%
Salomon Smith Barney
High Yield Market 0.49%
- ------------------------------------------------------------------
- --------------
* The chart above represents total returns for the six months
ended July 31,
1999.
- ------------------------------------------------------------------
- --------------
Portfolio Update
- ------------------------------------------------------------------
- --------------
The Concert Allocation Series High Growth Portfolio's
("Portfolio") Class A
shares generated a total return of 6.06% for the six months ended
July 31, 1999,
excluding any sales charges. The chart that appears on page 14
compares the
Portfolio's performance to broad-based indices that track four of
the asset
classes represented in the Portfolio.
During the six months ended July 31, 1999, the U.S. economy
continued to show
signs of benign inflation and productivity-driven growth. Domestic
demand growth
outstripped most estimates of the economy's long-term capacity,
and a
combination of rising productivity, a flood of goods from abroad
and more
intensive use of labor kept inflation from overheating.
During the period, the High Growth Portfolio benefited from its
exposure to
value stocks. In particular, global value stocks performed
extremely well and
posted healthy returns. Moreover, small- and mid-cap stocks, in
addition to
large cap value holdings, were key contributors to the performance
of the
Portfolio. As we noted in our main letter, the markets, return to
"normalcy"
during the past six months (after the long domination of large-cap
growth
stocks) further reinforces the importance and benefits of
maintaining broad
diversification over the long-term. (Value investing attempts to
identify stocks
that are selling at relatively low prices compared to their
earnings or book
value with the belief that the market will eventually recognize
their value,
hence, causing the price to increase. Growth stocks are generally
considered to
be company shares that have exhibited above-average earnings
growth and are
expected to continue to grow faster than other similar-sized
companies.)
- ------------------------------------------------------------------
- --------------
The Target Asset Allocation set forth above represents an
approximate mix of
investments for the High Growth Portfolio. The allocation and
investment mix of
the Portfolio may vary depending upon market conditions, cash
flows in and out
of the Portfolio and other factors. In addition, the allocation
and investment
ranges of the Portfolio may be changed from time to time upon the
approval of
the Concert Allocation Series' Board of Directors.
10
<PAGE>
The Concert Allocation Series High Growth Portfolio Breakdown (as
of 7/31/99)
(unaudited)
[PIE CHART]
======================================
12% Smith Barney
Aggressive Growth Fund Inc.
======================================
Top 5 Holdings:
Tyco International Ltd.
Intel Corp.
Amgen, Inc.
Forest Laboratories Inc.
Weatherford International Inc.
======================================
======================================
5% Smith Barney
Investment Trust-
Smith Barney Mid Cap Blend Fund
======================================
Top 5 Holdings:
Sepracor Inc.
AES Corp.
Outdoor Systems Inc.
Premier Parks Inc.
Imax Corp.
======================================
======================================
10% Smith Barney
World Funds, Inc.-
International Equity Portfolio
======================================
Top 5 Holdings:
Nokia AB Oy K Shares
NTT Data Communications
Hays PLC
Serco Group PLC
Compass Group PLC
======================================
======================================
5% Smith Barney Funds, Inc.-
Large Cap Value Fund
======================================
Top 5 Holdings:
Enron Corp.
Williams Cos., Inc.
Chase Manhattan Corp.
Masco Corp.
AT&T Corp.
======================================
======================================
10% Smith Barney
Investment Funds Inc.-
Concert Peachtree Growth Fund
======================================
Top 5 Holdings:
Microsoft Corp.
General Electric
Tyco International Ltd.
Lucent
Compuware
======================================
======================================
10% Smith Barney Investment
Trust-Smith Barney Large
Capitalization Growth Fund
======================================
Top 5 Holdings:
Intel Corp.
Texas Instruments, Inc.
Coca-Cola Co.
Wells Fargo, Inc.
America Online, Inc.
======================================
======================================
5% Smith Barney Equity Funds-
Smith Barney Large Cap Blend Fund
======================================
Top 5 Holdings:
General Electric Co.
Microsoft Corp.
Intel Corp.
International Business Machines Corp.
Ameritech Corp.
======================================
======================================
10% Smith Barney Investment
Funds Inc.- Smith Barney
Hansberger Global Value Fund
======================================
Top 5 Holdings:
United O/S Bank Foreign
City Development
Daiwa Securities
Hutchinson Whampoa
Marubeni Corp.
======================================
======================================
5% Smith Barney
Investment Funds Inc.-
Smith Barney Contrarian Fund
======================================
Top 5 Holdings:
Snyder Communications
Sonar Inc.
Kimberly Clark
Radian Group
Eastman Kodak
======================================
======================================
8% Smith Barney Income Funds-
Smith Barney High Income Fund
======================================
Top 5 Holdings:
Allied Waste North America
Unisys Corp.
United International Holdings, Inc.
United Pan-Europe Communications N.V.
ICN Pharmaceuticals, Inc.
======================================
======================================
20% Smith Barney
Small Cap Blend Fund, Inc.
======================================
Top 5 Holdings:
Voicestream Wireless
IDEC Pharmaceuticals
Radisys Corp.
Western Wireless
Mercury Interactive
======================================
11
<PAGE>
THE HIGH GROWTH PORTFOLIO
Historical Performance -- Class A Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ------------------------------
Net Asset Value
------------------------------------
- - Income
Capital Gain Total
Period Ended Beginning of Period End of
Period Dividends
Distributions Returns(1)
==================================================================
==============
==============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $14.86 $15.66
$0.00
$0.10 6.06%+
- ------------------------------------------------------------------
- --------------
- ------------------------------
1/31/99 12.97 14.86
0.08
0.48 19.15
- ------------------------------------------------------------------
- --------------
- ------------------------------
1/31/98 12.41 12.97
0.13
0.33 8.25
- ------------------------------------------------------------------
- --------------
- ------------------------------
Inception*-1/31/97 11.40 12.41
0.20
0.04 11.04+
==================================================================
==============
==============================
Total
$0.41
$0.95
==================================================================
==============
==============================
</TABLE>
Historical Performance -- Class B Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ------------------------------
Net Asset Value
------------------------------------
- - Income
Capital Gain Total
Period Ended Beginning of Period End of
Period Dividends
Distributions Returns(1)
==================================================================
==============
==============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $14.81 $15.55
$0.00
$0.10 5.68%+
- ------------------------------------------------------------------
- --------------
- ------------------------------
1/31/99 12.95 14.81
0.00
0.48 18.30
- ------------------------------------------------------------------
- --------------
- ------------------------------
1/31/98 12.41 12.95
0.05
0.33 7.44
- ------------------------------------------------------------------
- --------------
- ------------------------------
Inception*-1/31/97 11.40 12.41
0.07
0.04 9.91+
==================================================================
==============
==============================
Total
$0.12
$0.95
==================================================================
==============
==============================
</TABLE>
Historical Performance -- Class L Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ------------------------------
Net Asset Value
------------------------------------
- - Income
Capital Gain Total
Period Ended Beginning of Period End of
Period Dividends
Distributions Returns(1)
==================================================================
==============
==============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $14.81 $15.56
$0.00
$0.10 5.75%+
- ------------------------------------------------------------------
- --------------
- ------------------------------
1/31/99 12.96 14.81
0.00
0.48 18.21
- ------------------------------------------------------------------
- --------------
- ------------------------------
1/31/98 12.42 12.96
0.05
0.33 7.44
- ------------------------------------------------------------------
- --------------
- ------------------------------
Inception*-1/31/97 11.40 12.42
0.07
0.04 10.00+
==================================================================
==============
==============================
Total
$0.12
$0.95
==================================================================
==============
==============================
</TABLE>
Historical Performance -- Class Z Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ------------------------------
Net Asset Value
------------------------------------
- - Income
Capital Gain Total
Period Ended Beginning of Period End of
Period Dividends
Distributions Returns(1)
==================================================================
==============
==============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $14.86 $15.68
$0.00
$0.10 6.20%+
- ------------------------------------------------------------------
- --------------
- ------------------------------
1/31/99 12.97 14.86
0.12
0.48 19.45
- ------------------------------------------------------------------
- --------------
- ------------------------------
1/31/98 12.41 12.97
0.17
0.33 8.58
- ------------------------------------------------------------------
- --------------
- ------------------------------
Inception*-1/31/97 12.24 12.41
0.00
0.00 1.39+
==================================================================
==============
==============================
Total
$0.29
$0.91
==================================================================
==============
==============================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains,
if any,
annually.
12
<PAGE>
Average Annual Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
------------------------------
- --------------
Class A Class B Class
L Class Z
==================================================================
==============
Six Months Ended 7/31/99+ 6.06% 5.68%
5.75% 6.20%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 16.14 15.37
15.36 16.50
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 12.75 11.83
11.85 14.08
==================================================================
==============
With Sales
Charges(2)
------------------------------
- --------------
Class A Class B Class
L Class Z
==================================================================
==============
Six Months Ended 7/31/99+ 0.77% 0.68%
3.69% 6.20%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 10.37 10.37
13.21 16.50
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 11.10 11.39
11.51 14.08
==================================================================
==============
Cumulative Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
==================================================================
==============
Class A (Inception* through 7/31/99) 51.91%
- ------------------------------------------------------------------
- --------------
Class B (Inception* through 7/31/99) 47.64
- ------------------------------------------------------------------
- --------------
Class L (Inception* through 7/31/99) 47.73
- ------------------------------------------------------------------
- --------------
Class Z (Inception* through 7/31/99) 39.64
==================================================================
==============
(1) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value and does not reflect the deduction
of the
applicable sales charges with respect to Class A and L
shares or the
applicable contingent deferred sales charges ("CDSC") with
respect to
Class B and L shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value. In addition, Class A and L shares
reflect the
deduction of the maximum initial sales charge of 5.00% and
1.00%,
respectively; and Class B shares reflect the deduction of a
5.00% CDSC,
which applies if shares are redeemed within one year from
purchase and
declines thereafter by 1.00% per year until no CDSC is
incurred. Class L
shares also reflect the deduction of a 1.00% CDSC, which
applies if shares
are redeemed within the first year of purchase.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
* Inception date for Class A, B and L shares is February 5,
1996 and for
Class Z shares is January 17, 1997.
13
<PAGE>
Growth of $10,000 Invested in Class A, B and L Shares of the High
Growth
Portfolio vs. the Standard & Poor's 500 Composite Stock Index,
Russell 2000
Index, Morgan Stanley Capital International EAFE Index and Salomon
Smith Barney
High Yield Market Index
- ------------------------------------------------------------------
- --------------
February 5, 1996 -- July 31, 1999 (unaudited)
[LINE CHART]
<TABLE>
<CAPTION>
High High High Standard &
Salomon
Growth Growth Growth Poor's 500
Smith Barney
Portfolio- Portfolio- Portfolio- Composite
Russell MSCI
EAFE High Yield
Class A Class B Class L Stock Index 2000
Index
Index Market Index
<S> <C> <C> <C> <C> <C>
<C>
<C>
2/5/96 9500 10000 9896 10000
10000
10000 10000
7/96 9142 9083 9367 10175
10084
10119 10208
1/97 10549 10491 10786 12630
11897
10220 11049
7/97 11671 11716 11999 15476
13452
11968 11886
1/98 11419 11409 11695 16026
14047
11272 12693
7/98 12426 12497 12672 18462
13764
12622 13152
1/99 13607 13671 13825 21235
14099
12915 13050
7/31/99 14432 14564 14619 22191
14789
13867 13114
</TABLE>
The chart above represents a hypothetical illustration of $10,000
invested in
Class A, B and L shares on February 5, 1996 (inception date),
assuming deduction
of the maximum 5.00% and 1.00% sales charge at the time of
investment for Class
A and L shares, respectively, the deduction of the maximum 5.00%
CDSC for Class
B shares and the deduction of the 1.00% CDSC for Class L shares.
It also assumes
reinvestment of dividends and capital gains, if any, at net asset
value through
July 31, 1999. The Standard & Poor's 500 Composite Stock Index is
an unmanaged
index composed of 500 widely held common stocks listed on the New
York Stock
Exchange, American Stock Exchange and the over-the-counter market.
The Russell
2000 Index is a capitalization weighted total return index which
is comprised of
2,000 of some of the smaller-capitalized U.S.-domiciled companies
whose common
stock is traded in the United States on the New York Stock
Exchange, American
Stock Exchange and Nasdaq. The Morgan Stanley Capital
International EAFE Index
("MSCI EAFE") consists of the equity total returns for Europe,
Australia and the
Far East. The Salomon Smith Barney High Yield Market Index covers
a significant
portion of the below-investment-grade U.S. corporate bond market.
These indices
are unmanaged and are not subject to the same management and
trading expenses as
a mutual fund. An investor cannot invest directly in an index. The
performance
of the Portfolio's other classes may be greater or less than the
shares'
performance indicated on this chart, depending on whether greater
or lesser
sales charges and fees were incurred by shareholders investing in
the other
classes.
All figures represent past performance and are not a guarantee of
future
results. Investment returns and principal value will fluctuate,
and redemption
values may be more or less than the original cost. No adjustment
has been made
for shareholder tax liability on dividends or capital gains.
14
<PAGE>
THE GROWTH PORTFOLIO
- ------------------------------------------------------------------
- --------------
Target Asset Allocation
- ------------------------------------------------------------------
- --------------
[PIE CHART]
Bond Funds 30%
Stock Funds 70%
The Growth Portfolio seeks long-term growth of capital investing
primarily in
funds containing the issues of more established companies.
- ------------------------------------------------------------------
- --------------
The Growth Portfolio
The Growth Portfolio seeks long-term growth of capital. Among the
Portfolios of
the Concert Allocation Series, the Growth Portfolio invests the
highest
percentage of its assets in large-capitalization stock mutual
funds to provide
growth. The Portfolio's equity allocation also includes funds that
invest in
small- and mid-cap stocks and international securities. In
addition, a
significant portion of the Growth Portfolio is also allocated to
bonds to help
reduce potential volatility.
- ------------------------------------------------------------------
- --------------
Index Comparison*
- ------------------------------------------------------------------
- --------------
S&P 500 4.50%
Russell 2000(R) 4.89%
MSCI EAFE 7.37%
Lehman Government/
Corporate Bond (3.24)%
- ------------------------------------------------------------------
- --------------
* The chart above represents total returns for the six months
ended July 31,
1999.
- ------------------------------------------------------------------
- --------------
Portfolio Update
- ------------------------------------------------------------------
- --------------
The Concert Allocation Series Growth Portfolio's ("Portfolio")
Class A shares
generated a total return of 2.21% for the six months ended July
31, 1999
excluding sales charges. The chart that appears on page 19
compares the
Portfolio's performance to broad-based indices that track four of
the asset
classes represented in the Portfolio.
During the six months ended July 31, 1999, the U.S. economy
continued to show
signs of benign inflation and productivity-driven growth. Domestic
demand growth
outstripped most estimates of the economy's long-term capacity,
and a
combination of rising productivity, a flood of goods from abroad
and more
intensive use of labor kept inflation from overheating.
Those underlying funds in the Portfolio that emphasized value
stocks and a blend
of growth and value small-cap stocks generated competitive returns
for the six
months ended July 31, 1999. International value stocks began to
perform well as
many investors began to see opportunities from cyclical businesses
that stood to
benefit from a growing global economy. The bond funds in the
Growth Portfolio,
with their emphasis on credit quality in their respective asset
classes, also
posted competitive returns versus their indices.
- ------------------------------------------------------------------
- --------------
The Target Asset Allocation set forth above represents an
approximate mix of
investments for the Growth Portfolio. The allocation and
investment mix of the
Portfolio may vary depending upon market conditions, cash flows in
and out of
the Portfolio and other factors. In addition, the allocation and
investment
ranges of the Portfolio may be changed from time to time upon the
approval of
the Concert Allocation Series' Board of Directors.
15
<PAGE>
The Concert Allocation Series Growth Portfolio Breakdown (as of
7/31/99)
(unaudited)
[PIE CHART]
==================================
10% Smith Barney Investment Funds
Inc.-Concert Peachtree Growth Fund
==================================
Top 5 Holdings:
Microsoft Corp.
General Electric
Tyco International Ltd.
Lucent Technologies
Compuware
==================================
=============================
10% Smith Barney Funds, Inc.-
Large Cap Value Fund
=============================
Top 5 Holdings:
Enron Corp.
Williams Cos., Inc.
Chase Manhattan Corp.
Masco Corp.
AT&T Corp.
=============================
======================================
5% Smith Barney Investment Funds Inc.-
Smith Barney Contrarian Fund
======================================
Top 5 Holdings:
Snyder Communications
Sonat Inc.
Kimberly Clark
Radian Group
Eastman Kodak
======================================
===================================
10% Smith Barney World Funds, Inc.-
International Equity Portfolio
===================================
Top 5 Holdings:
Nokia AB Oy K Shares
NTT Data Communications
Hays PLC
Sesco Group PLC
Compass Group PLC
===================================
===============================
5% Smith Barney
Aggressive Growth Fund Inc.
===============================
Top 5 Holdings:
Tyco International Ltd.
Intel Corp.
Amgen, Inc.
Forest Laboratories Inc.
Weatherford International Inc.
===============================
==========================
5% Smith Barney Investment
Trust-Smith Barney
Mid Cap Blend Fund
==========================
Top 5 Holdings:
Sepracor Inc.
AES Corp.
Outdoor Systems Inc.
Premier Parks Inc.
Imax Corp.
==========================
=====================================
10% Smith Barney Equity Funds-
Smith Barney Large Cap Blend Fund
=====================================
Top 5 Holdings:
General Electric Co.
Microsoft Corp.
Intel Corp.
International Business Systems Corp.
Ameritech Corp.
=====================================
============================
5% Smith Barney Investment
Funds Inc.-Smith Barney
Hansberger Global Value Fund
============================
Top 5 Holdings:
United O/S Bank Foreign
City Development
Daiwa Securities
Hutchinson Whampoa
Marubeni Corp.
============================
=======================================
10% Smith Barney Income Funds-
Smith Barney High Income Fund
=======================================
Top 5 Holdings:
Allied Waste North America
Unisys Corp.
United International Holdings, Inc.
United Pan-Europe Communications, N.V.
ICN Pharmaceuticals, Inc.
=======================================
==================================
10% Smith Barney Investment
Funds Inc.-Smith Barney Government
Securities Fund
==================================
Sector Breakdown:
31.7% U.S. Treasuries
68.2% U.S. Government Agencies
0.1% Other
Credit Quality:
100% AAA-Rated
Average Maturity:
20.98 Years
==================================
==========================
5% Smith Barney Investment
Trust-Smith Barney Large
Capitalization Growth Fund
==========================
Top 5 Holdings:
Intel Corp.
Texas Instruments Inc.
Coca-Cola Co.
Wells Fargo, Inc.
America Online, Inc.
==========================
==========================
10% Smith Barney Investment
Funds Inc.-Smith Barney
Investment Grade Bond Fund
==========================
Top 5 Holdings:
NationsBank
Boeing Corp.
Chrysler Corp.
MCI Worldcom
Time Warner
==========================
=========================
5% Smith Barney Small Cap
Blend Fund, Inc.
=========================
Top 5 Holdings:
Voicestream Wireless
IDEC Pharmaceuticals
Radisys Corp.
Western Wireless
Mercury Interactive
=========================
16
<PAGE>
THE GROWTH PORTFOLIO
Historical Performance -- Class A Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- --------------------------------
Net Asset Value
----------------------------------
- --- Income
Capital Gain Total
Period Ended Beginning of Period End of
Period
Dividends Distributions Returns(1)
==================================================================
==============
================================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $14.43 $14.54
$0.03
$0.18 2.21%+
- ------------------------------------------------------------------
- --------------
- --------------------------------
1/31/99 12.99 14.43
0.27
0.37 16.20
- ------------------------------------------------------------------
- --------------
- --------------------------------
1/31/98 12.32 12.99
0.32
0.46 11.82
- ------------------------------------------------------------------
- --------------
- --------------------------------
Inception*-1/31/97 11.40 12.32
0.31
0.02 11.08+
==================================================================
==============
================================
Total
$0.93
$1.03
==================================================================
==============
================================
</TABLE>
Historical Performance -- Class B Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- --------------------------------
Net Asset Value
----------------------------------
- --- Income
Capital Gain Total
Period Ended Beginning of Period End of
Period
Dividends Distributions Returns(1)
==================================================================
==============
================================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $14.48 $14.56
$0.00
$0.18 1.81%+
- ------------------------------------------------------------------
- --------------
- --------------------------------
1/31/99 13.00 14.48
0.13
0.37 15.40
- ------------------------------------------------------------------
- --------------
- --------------------------------
1/31/98 12.33 13.00
0.21
0.46 10.93
- ------------------------------------------------------------------
- --------------
- --------------------------------
Inception*-1/31/97 11.40 12.33
0.22
0.02 10.32+
==================================================================
==============
================================
Total
$0.56
$1.03
==================================================================
==============
================================
</TABLE>
Historical Performance -- Class L Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- --------------------------------
Net Asset Value
----------------------------------
- --- Income
Capital Gain Total
Period Ended Beginning of Period End of
Period
Dividends Distributions Returns(1)
==================================================================
==============
================================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $14.48 $14.56
$0.00
$0.18 1.81%+
- ------------------------------------------------------------------
- --------------
- --------------------------------
1/31/99 13.00 14.48
0.13
0.37 15.40
- ------------------------------------------------------------------
- --------------
- --------------------------------
1/31/98 12.33 13.00
0.21
0.46 10.92
- ------------------------------------------------------------------
- --------------
- --------------------------------
Inception*-1/31/97 11.40 12.33
0.22
0.02 10.32+
==================================================================
==============
================================
Total
$0.56
$1.03
==================================================================
==============
================================
</TABLE>
Historical Performance -- Class Z Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- --------------------------------
Net Asset Value
----------------------------------
- --- Income
Capital Gain Total
Period Ended Beginning of Period End of
Period
Dividends Distributions Returns(1)
==================================================================
==============
================================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $14.41 $14.49
$0.08
$0.18 2.34%+
- ------------------------------------------------------------------
- --------------
- --------------------------------
1/31/99 12.99 14.41
0.32
0.37 16.47
- ------------------------------------------------------------------
- --------------
- --------------------------------
1/31/98 12.32 12.99
0.35
0.46 12.08
- ------------------------------------------------------------------
- --------------
- --------------------------------
Inception*-1/31/97 12.18 12.32
0.00
0.00 1.15+
==================================================================
==============
================================
Total
$0.75
$1.01
==================================================================
==============
================================
</TABLE>
It is the Fund's policy to distribute dividends and capital gains,
if any,
annually.
17
<PAGE>
Average Annual Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
-----------------------------------
- --------------
Class A Class B Class L
Class Z
==================================================================
==============
Six Months Ended 7/31/99+ 2.21% 1.81% 1.81%
2.34%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 10.51 9.70 9.70
10.77
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 11.80 10.98 10.98
12.62
==================================================================
==============
With Sales Charges(2)
-----------------------------------
- --------------
Class A Class B Class L
Class Z
==================================================================
==============
Six Months Ended 7/31/99+ (2.90)% (3.19)% (0.23)%
2.34%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 5.00 4.70 7.60
10.77
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 10.17 10.54 10.65
12.62
==================================================================
==============
Cumulative Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
==================================================================
==============
Class A (Inception* through 7/31/99) 47.53%
- ------------------------------------------------------------------
- --------------
Class B (Inception* through 7/31/99) 43.79
- ------------------------------------------------------------------
- --------------
Class L (Inception* through 7/31/99) 43.78
- ------------------------------------------------------------------
- --------------
Class Z (Inception* through 7/31/99) 35.13
==================================================================
==============
(1) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value and does not reflect the deduction
of the
applicable sales charges with respect to Class A and L
shares or the
applicable contingent deferred sales charges ("CDSC") with
respect to
Class B and L shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value. In addition, Class A and L shares
reflect the
deduction of the maximum initial sales charge of 5.00% and
1.00%,
respectively; and Class B shares reflect the deduction of a
5.00% CDSC,
which applies if shares are redeemed within one year from
purchase and
declines thereafter by 1.00% per year until no CDSC is
incurred. Class L
shares also reflect the deduction of a 1.00% CDSC, which
applies if shares
are redeemed within the first year of purchase.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
* Inception date for Class A, B and L shares is February 5,
1996 and for
Class Z shares is January 17, 1997.
18
<PAGE>
Growth of $10,000 Invested in Class A, B and L Shares of the
Growth Portfolio
vs. the Standard & Poor's 500 Composite Stock Index, Russell 2000
Index, Morgan
Stanley Capital International EAFE Index and Lehman
Government/Corporate Bond
Index
- ------------------------------------------------------------------
- --------------
February 5, 1996 -- July 31, 1999 (unaudited)
[LINE CHART]
<TABLE>
<CAPTION>
Standard &
Lehman
Growth Growth Growth Poor's 500
Government/
Portfolio- Portfolio- Portfolio- Composite
Russell MSCI
EAFE Corporate
Class A Class B Class L Stock Index
2000 Index
INDEX Bond Index
<S> <C> <C> <C> <C>
<C>
<C> <C>
2/5/96 9500 10000 9896 10000
10000
10000 10000
7/96 9258 9225 9513 10175
10084
10119 9473
1/97 10552 10532 10817 12630
11897
10220 9118
7/97 11700 11787 12060 15476
13452
11968 9643
1/98 11800 11738 12109 16026
14047
11272 10136
7/98 12683 12807 12969 18462
13764
12622 10421
1/99 13712 13823 13975 21235
14099
12915 11020
7/31/99 14015 14179 14228 22191
14789
13867 10663
</TABLE>
The chart above represents a hypothetical illustration of $10,000
invested in
Class A, B and L shares on February 5, 1996 (inception date),
assuming deduction
of the maximum 5.00% and 1.00% sales charge at the time of
investment for Class
A and L shares, respectively, the deduction of the maximum 5.00%
CDSC for Class
B shares and the deduction of the 1.00% CDSC for Class L shares.
It also assumes
reinvestment of dividends and capital gains, if any, at net asset
value through
July 31, 1999. The Standard & Poor's 500 Composite Stock Index is
an unmanaged
index composed of 500 widely held common stocks listed on the New
York Stock
Exchange, American Stock Exchange and the over-the-counter market.
The Russell
2000 Index is a capitalization-weighted total return index which
is comprised of
2,000 of some of the smaller-capitalized U.S.-domiciled companies
whose common
stock is traded in the United States on the New York Stock
Exchange, American
Stock Exchange and Nasdaq. The Morgan Stanley Capital
International EAFE Index
("MSCI EAFE") is a composite index that consists of equity total
returns for
Europe, Australia and the Far East. The Lehman
Government/Corporate Bond Index
is a combination of publicly issued intermediate- and long-term
U.S. government
bonds and corporate bonds. These indices are unmanaged and are not
subject to
the same management and trading expenses as a mutual fund. An
investor cannot
invest directly in an index. The performance of the Portfolio's
other classes
may be greater or less than the performance indicated on this
chart, depending
on whether greater or lesser sales charges and fees were incurred
by
shareholders investing in the other classes.
All figures represent past performance and are not a guarantee of
future
results. Investment returns and principal value will fluctuate,
and redemption
values may be more or less than the original cost. No adjustment
has been made
for shareholder tax liability on dividends or capital gains.
19
<PAGE>
THE BALANCED PORTFOLIO
- ------------------------------------------------------------------
- --------------
Target Asset Allocation
- ------------------------------------------------------------------
- --------------
[PIE CHART]
Bond Funds 50%
Stock Funds 50%
The Balanced Portfolio seeks a balance of capital growth and
income by placing
equal emphasis on funds investing in stocks and bonds.
- ------------------------------------------------------------------
- --------------
The Balanced Portfolio
The Balanced Portfolio seeks long-term growth of capital and
income, placing
equal emphasis on current income and capital appreciation. The
Balanced
Portfolio, as its name states, divides its assets roughly between
equity and
fixed-income mutual funds. The equity funds are primarily large-
capitalization,
dividend-paying stock funds. The fixed-income portion of the
Portfolio is mainly
invested in funds that invest in U.S. government and agency
securities, as well
as mortgage-backed securities.
- ------------------------------------------------------------------
- --------------
Index Comparison*
- ------------------------------------------------------------------
- --------------
S&P 500 4.50%
Lehman Government/
Corporate Bond (3.24)%
Salomon Smith Barney
One-Year Treasury Bill 2.31%
Salomon Smith Barney
World Government Bond (4.01)%
- ------------------------------------------------------------------
- --------------
* The chart above represents total returns for the six months
ended July 31,
1999.
- ------------------------------------------------------------------
- --------------
Portfolio Update
- ------------------------------------------------------------------
- --------------
The Concert Allocation Series Balanced Portfolio's ("Portfolio")
Class A shares
generated a total return of 2.05% for the six months ended July
31, 1999,
excluding sales charges. The chart that appears on page 24
compares the
Portfolio's performance to broad-based indices that track four of
the asset
classes represented in the Portfolio.
During the six months ended July 31, 1999, the U.S. economy
continued to show
signs of benign inflation and productivity-driven growth. Domestic
demand growth
outstripped estimates of the economy's long-term capacity, and a
combination of
rising productivity, a flood of goods from abroad and more
intensive use of
labor kept inflation from overheating.
The stock funds in the Balanced Portfolio that focused primarily
on large-sized
companies posted solid gains during the period. Among large
companies, many
investors demonstrated a preference for value stocks versus growth
stocks during
the period.
Although the stock market performed well during the last six
months, bond
markets worldwide did not perform as well. Bond investors,
concerned that a
strong economy would lead to an interest rate hike by the Federal
Reserve Board
("Fed"), retreated from the fixed income market. Their concerns
were well
founded as the Fed raised interest rates 25 basis points twice
this summer. The
bond funds in the Balanced Portfolio tended to emphasize strong
credit quality
and their returns consisted mostly of coupon interest offset by
price
depreciation.
- ------------------------------------------------------------------
- --------------
The Target Asset Allocation set forth above represents an
approximate mix of
investments for the Balanced Portfolio. The allocation and
investment mix of the
Portfolio may vary depending upon market conditions, cash flows in
and out of
the Portfolio and other factors. In addition, the allocation and
investment
ranges of the Portfolio may be changed from time to time upon the
approval of
the Concert Allocation Series' Board of Directors.
20
<PAGE>
The Concert Allocation Series Balanced Portfolio Breakdown (as of
7/31/99)
(unaudited)
[PIE CHART]
============================
5% Smith Barney Funds, Inc.-
Large Cap Value Fund
============================
Top 5 Holdings:
Enron Corp.
Williams Cos., Inc.
Chase Manhattan Corp.
Masco Corp.
AT&T Corp.
============================
==================================
10% Smith Barney Income
Funds-Smith Barney Premium
Total Return Fund
==================================
Top 5 Holdings:
Bristol-Myers Squibb Co.
MCI WorldCom, Inc.
SLM Holding Corp.
Loews Corp.
Federated Department Stores, Inc.
==================================
========================
10% Smith Barney
Appreciation Fund Inc.
========================
Top 5 Holdings:
Berkshire Hathaway Inc.
General Electric Co.
Tyco International Ltd.
Microsoft Corp.
Intel Corp.
========================
=====================================
11% Smith Barney Fundamental
Value Fund Inc.
=====================================
Top 5 Holdings:
Adobe Systems Inc.
AT&T Corp.
International Business Machines Corp.
Texas Instruments Inc.
Alcoa Inc.
=====================================
======================================
5% Smith Barney Equity Funds-
Smith Barney Large Cap
Blend Fund
======================================
Top 5 Holdings:
General Electric Co.
Microsoft Corp.
Intel Corp.
International Business Machines Corp.
Ameritech Corp.
======================================
=======================================
10% Smith Barney Income
Funds-Smith Barney
Convertible Fund
=======================================
Top 5 Holdings:
Alpharma Inc.
Magna International Inc.
Bell Atlantic Financial Services Corp.
Athena Neurosciences, Inc.
MascoTech, Inc.
=======================================
============================
5% Smith Barney World Funds,
Inc.-Global Government
Bond Portfolio
============================
Top 5 Country Holdings:
France OAT
U.S. Treasury Bond
Denmark
KFW International Finance
U.S. Treasury Notes
============================
==============================
10% Smith Barney Managed
Governments Fund Inc.
==============================
Sector Breakdown:
4.0% U.S. Treasuries
72.9% U.S. Agency Obligatioins
23.1% Repurchase Agreements
Credit Quality:
100% AAA-Rated
Average Maturity:
9.5 Years
==============================
==============================
10% Smith Barney Investment
Funds Inc.-Smith Barney
Government Securities Fund
==============================
Sector Breakdown:
31.7% U.S. Treasuries
68.2% U.S. Government Agencies
0.1% Other
Credit Quality:
100% AAA-Rated
Average Maturity:
20.9 Years
==============================
==================================
5% Smith Barney World Funds, Inc.-
International Equity Portfolio
==================================
Top 5 Holdings:
Nokia AB Oy K Shares
NTT Data Communications
Hays PLC
Serco Group PLC
Compass Group PLC
==================================
==========================================
4% Smith Barney Funds, Inc.-
Short-Term High Grade Bond Fund
==========================================
Sector Breakdown:
10.7% U.S. Government & Agency Obligations
12.7% Mortgage-Backed Securities
76.6% Corporate Bonds & Notes
Credit Quality:
24.6% AAA-Rated
Average Maturity:
3.0 Years
==========================================
================================
15% Smith Barney Income
Funds-Smith Barney Diversified
Strategic Income Fund
================================
Sector Breakdown:
36.9% U.S. Government Agencies
28.1% High Yield Corporate Bonds
12.4% Foreign Government Bonds
3.9% U.S. Treasuries
18.7% Other
Top 5 Holdings:
FNMA
GNMA
New Zealand Government
Queensland Treasury
Nykredit
Top 5 Country Holdings:
United States
United Kingdom
New Zealand
Denmark
Australia
Average Maturity:
5.0 Years
================================
21
<PAGE>
THE BALANCED PORTFOLIO
Historical Performance -- Class A Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
=============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $12.95 $12.68
$0.22
$0.31 2.05%+
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/99 12.62 12.95
0.45
0.37 9.33
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/98 12.14 12.62
0.54
0.36 11.59
- ------------------------------------------------------------------
- --------------
- -----------------------------
Inception*-1/31/97 11.40 12.14
0.45
0.00 10.64+
==================================================================
==============
=============================
Total
$1.66
$1.04
==================================================================
==============
=============================
</TABLE>
Historical Performance -- Class B Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
=============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $12.95 $12.67
$0.17
$0.31 1.59%+
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/99 12.61 12.95
0.35
0.37 8.62
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/98 12.14 12.61
0.45
0.36 10.67
- ------------------------------------------------------------------
- --------------
- -----------------------------
Inception*-1/31/97 11.40 12.14
0.37
0.00 9.90+
==================================================================
==============
=============================
Total
$1.34
$1.04
==================================================================
==============
=============================
</TABLE>
Historical Performance -- Class L Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
=============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $12.94 $12.67
$0.17
$0.31 1.67%+
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/99 12.61 12.94
0.35
0.37 8.53
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/98 12.14 12.61
0.45
0.36 10.67
- ------------------------------------------------------------------
- --------------
- -----------------------------
Inception*-1/31/97 11.40 12.14
0.37
0.00 9.90+
==================================================================
==============
=============================
Total
$1.34
$1.04
==================================================================
==============
=============================
</TABLE>
Historical Performance -- Class Z Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
=============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $12.95 $12.67
$0.24
$0.31 2.10%+
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/99 12.61 12.95
0.48
0.37 9.70
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/98 12.13 12.61
0.57
0.36 11.82
- ------------------------------------------------------------------
- --------------
- -----------------------------
Inception*-1/31/97 12.10 12.13
0.00
0.00 0.25+
==================================================================
==============
=============================
Total
$1.29
$1.04
==================================================================
==============
=============================
</TABLE>
It is the Fund's policy to distribute dividends quarterly and
capital gains, if
any, annually.
22
<PAGE>
Average Annual Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
---------------------------------
- --------------
Class A Class B Class
L Class Z
==================================================================
==============
Six Months Ended 7/31/99+ 2.05% 1.59% 1.67%
2.10%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 6.41 5.61 5.61
6.60
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 9.63 8.81 8.81
9.39
==================================================================
==============
With Sales
Charges(2)
---------------------------------
- --------------
Class A Class B Class
L Class Z
==================================================================
==============
Six Months Ended 7/31/99+ (3.04)% (3.30)%
(0.31)% 2.10%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 1.08 0.62 3.55
6.60
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 8.03 8.34 8.48
9.39
==================================================================
==============
Cumulative Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
==================================================================
==============
Class A (Inception* through 7/31/99) 37.76%
- ------------------------------------------------------------------
- --------------
Class B (Inception* through 7/31/99) 34.21
- ------------------------------------------------------------------
- --------------
Class L (Inception* through 7/31/99) 34.21
- ------------------------------------------------------------------
- --------------
Class Z (Inception* through 7/31/99) 25.54
==================================================================
==============
(1) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value and does not reflect the deduction
of the
applicable sales charges with respect to Class A and L
shares or the
applicable contingent deferred sales charges ("CDSC") with
respect to
Class B and L shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value. In addition, Class A and L shares
reflect the
deduction of the maximum initial sales charge of 5.00% and
1.00%,
respectively; and Class B shares reflect the deduction of a
5.00% CDSC,
which applies if shares are redeemed within one year from
purchase and
declines thereafter by 1.00% per year until no CDSC is
incurred. Class L
shares also reflect the deduction of a 1.00% CDSC, which
applies if shares
are redeemed within the first year of purchase.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
* Inception date for Class A, B and L shares is February 5,
1996 and for
Class Z shares is January 17, 1997.
23
<PAGE>
Growth of $10,000 Invested in Class A, B and L Shares of the
Balanced Portfolio
vs. the Standard & Poor's 500 Composite Stock Index, Lehman
Government/Corporate
Bond Index, Salomon Smith Barney One-Year Treasury Bill Index and
Salomon Smith
Barney World Government Bond Index
- ------------------------------------------------------------------
- --------------
February 5, 1996 -- July 31, 1999 (unaudited)
[LINE CHART]
<TABLE>
<CAPTION>
Salomon Salomon
Standard &
Lehman
Brothers Brothers
Balanced Balanced Balanced Poor's 500
Government/
One-Year World
Portfolio- Portfolio- Portfolio- Composite
Corporation
Treasury Global
Class A Class B Class L Stock Index
Bond Index
Bill Index Bond Index
<S> <C> <C> <C> <C>
<C>
<C> <C>
2/5/96 9500 10000 9896 10000
10000
10000 10000
7/96 9513 9486 9778 10175
9473
10214 10167
1/97 10511 10490 10776 12630
9118
10551 10568
7/97 11587 11664 11939 15476
9643
10892 11204
1/98 11729 11763 12036 16026
10136
11214 11842
7/98 12298 12408 12575 18462
10421
11511 12351
1/99 12824 12911 13063 21235
11020
11840 13708
7/31/99 13087 13221 13281 22191
10663
12114 13159
</TABLE>
The chart above represents a hypothetical illustration of $10,000
invested in
Class A, B and L shares on February 5, 1996 (inception date),
assuming deduction
of the maximum 5.00% and 1.00% sales charge at the time of
investment for Class
A and L shares, respectively, the deduction of the maximum 5.00%
CDSC for Class
B shares and the deduction of the 1.00% CDSC for Class L shares.
It also assumes
reinvestment of dividends and capital gains, if any, at net asset
value through
July 31, 1999. The Standard & Poor's 500 Composite Stock Index is
an unmanaged
index composed of 500 widely held common stocks listed on the New
York Stock
Exchange, American Stock Exchange and the over-the-counter market.
The Lehman
Government/Corporate Bond Index is a combination of publicly
issued
intermediate- and long-term U.S. government bonds and corporate
bonds. The
Salomon Smith Barney One-Year Treasury Bill Index consists of one
1-Year United
States Treasury bill whose return is tracked until its maturity.
The Salomon
Smith Barney World Government Bond Index is a market-
capitalization-weighted
benchmark that tracks the performance of the government bond
markets of 14
countries. These indices are unmanaged and are not subject to the
same
management and trading expenses as a mutual fund. An investor
cannot invest
directly in an index. The performance of the Portfolio's other
classes may be
greater or less than the performance indicated on this chart,
depending on
whether greater or lesser sales charges and fees were incurred by
shareholders
investing in the other classes.
All figures represent past performance and are not a guarantee of
future
results. Investment returns and principal value will fluctuate,
and redemption
values may be more or less than the original cost. No adjustment
has been made
for shareholder tax liability on dividends or capital gains.
24
<PAGE>
THE CONSERVATIVE PORTFOLIO
- ------------------------------------------------------------------
- --------------
Target Asset Allocation
- ------------------------------------------------------------------
- --------------
[PIE CHART]
Bond Funds 70%
Stock Funds 30%
The Conservative Portfolio seeks income and, secondarily, long-
term growth of
capital by investing the majority of its assets in funds that
invest in bonds.
- ------------------------------------------------------------------
- --------------
The Conservative Portfolio
The Conservative Portfolio seeks income and, secondarily, long-
term capital
growth. Among the Portfolios of the Concert Allocation Series, the
Conservative
Portfolio consists primarily of taxable fixed income funds, with a
portion
invested in stock funds that invest primarily in large-
capitalization U.S.
stocks.
- ------------------------------------------------------------------
- --------------
Index Comparison*
- ------------------------------------------------------------------
- --------------
S&P 500 4.50%
Lehman Government/
Corporate Bond (3.24)%
Salomon Smith Barney
High Yield Market 0.49%
Salomon Smith Barney
One-Year Treasury Bill 2.31%
- ------------------------------------------------------------------
- --------------
* The chart above represents total returns for the six months
ended July 31,
1999.
- ------------------------------------------------------------------
- --------------
Portfolio Update
- ------------------------------------------------------------------
- --------------
The Concert Allocation Series Conservative Portfolio's
("Portfolio") Class A
shares generated a total return of 1.11% for the six months ended
July 31, 1999,
excluding sales charges. The chart that appears on page 29
compares the
Portfolio's performance to broad-based indices that track four of
the asset
classes represented in the Portfolio.
In keeping with its investment mandate, the Conservative Portfolio
is made up
largely of bond funds with the remainder invested in stock funds.
The
Portfolio's bond holdings tend to be very high-credit quality and
involve U.S.
Government debt, as well as the bonds of other developed nations.
During the
reporting period, the returns of these bond funds consisted mostly
of coupon
interest offset by price depreciation.
The portion of the Conservative Portfolio devoted to stocks was
invested
primarily in large company value stocks that benefited from
investor
expectations that they represented good values versus growth
stocks in a growing
global economy. (Value investing attempts to identify stocks that
are selling at
relatively low prices compared to their earnings or book value
with the belief
that the market will eventually recognize their value, hence,
causing their
share price to increase. Growth stocks are generally considered to
be company
shares that have exhibited above-average earnings growth and are
expected to
continue to grow faster than other similar-sized companies.)
- ------------------------------------------------------------------
- --------------
The Target Asset Allocation set forth above represents an
approximate mix of
investments for the Conservative Portfolio. The allocation and
investment mix of
the Portfolio may vary depending upon market conditions, cash
flows in and out
of the Portfolio and other factors. In addition, the allocation
and investment
ranges of the Portfolio may be changed from time to time upon the
approval of
the Concert Allocation Series' Board of Directors.
25
<PAGE>
The Concert Allocation Series Conservative Portfolio Breakdown (as
of 7/31/99)
(unaudited)
[PIE CHART]
=============================
15% Smith Barney
Managed Governments Fund Inc.
=============================
Sector Breakdown:
4.0% U.S. Treasuries
72.9% U.S. Agency Obligations
23.1% Repurchase Agreements
Credit Quality:
100% AAA-Rated
Average Maturity:
9.5 Years
=============================
=======================================
10% Smith Barney Income Funds-
Smith Barney Convertible Fund
=======================================
Top 5 Holdings:
Alpharma Inc.
Magna International Inc.
Bell Atlantic Financial Services Corp.
Athena Neurosciences, Inc.
MascoTech, Inc.
=======================================
==================================
5% Smith Barney Income Funds-
Smith Barney Premium Total
Return Fund
==================================
Top 5 Holdings:
Bristol-Myers Squibb Co.
MCI WorldCom Inc.
SLM Holding Corp.
Loews Corp.
Federated Department Stores, Inc.
----------------------------------
================================
20% Smith Barney Income
Funds-Smith Barney Diversified
Strategic Income Fund
================================
Sector Breakdown:
36.9% U.S. Government Agencies
28.1% High Yield Corporate Bonds
12.4% Foreign Government Bonds
3.9% U.S. Treasury
18.7% Other
Top 5 Holdings:
FNMA
GNMA
New Zealand Government
Queensland Treasury
Nykredit
Top 5 Country Holdings:
United States
United Kingdom
New Zealand
Denmark
Australia
Average Maturity:
5.0 Years
================================
========================
10% Smith Barney
Appreciation Fund Inc.
========================
Top 5 Holdings:
Berkshire Hathaway Inc.
General Electric Co.
Tyco International Ltd.
Microsoft Corp.
Intel Corp.
========================
==============================
10% Smith Barney Investment
Funds Inc.-Smith Barney
Government Securities Fund
==============================
Sector Breakdown:
31.7% U.S. Treasury
68.2% U.S. Government Agencies
0.1% Other
Credit Quality:
100% AAA-Rated
Average Maturity:
20.98 Years
==============================
==============================
5% Smith Barney Investment
Funds Inc.-Smith Barney
Hansberger Global Value Fund
============================
Top 5 Holdings:
United O/S Bank Foreign
City Development
Daiwa Securities
Hutchinson Wampoa
Marubeni Corp.
==============================
======================================
5% Smith Barney Fundamental
Value Fund Inc.
======================================
Top 5 Holdings:
Adobe Systems, Inc.
AT&T Corp.
International Business Machines Corp.
Texas Instruments Inc.
Alcoa Inc.
======================================
=======================================
10% Smith Barney Income
Funds-Smith Barney
High Income Fund
=======================================
Top 5 Holdings:
Allied Waste North America
Unisys Corp.
United International Holdings Inc.
United Pan-Europe Communications, N.V.
ICN Pharmaceuticals, Inc.
=======================================
============================
5% Smith Barney World Funds,
Inc.-Global Government
Bond Portfolio
============================
Top 5 Holdings:
France OAT
U.S. Treasury Bonds
Denmark
KFW International Finance
U.S. Treasury Notes
============================
===========================================
5% Smith Barney Funds,
Inc.-Short-Term High Grade
Bond Fund
===========================================
Sector Breakdown:
10.7% U.S. Government & Agency Obligations
12.7% Mortgage-Backed Securities
76.6% Corporate Bonds & Notes
Credit Quality:
24.6% AAA-Rated
Average Maturity:
1.0 Years
===========================================
26
<PAGE>
THE CONSERVATIVE PORTFOLIO
Historical Performance -- Class A Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
=============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $12.04 $11.76
$0.24
$0.17 1.11%+
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/99 12.17 12.04
0.58
0.24 5.85
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/98 11.90 12.17
0.69
0.40 11.70
- ------------------------------------------------------------------
- --------------
- -----------------------------
Inception*-1/31/97 11.46 11.90
0.52
0.00 8.57+
==================================================================
==============
=============================
Total
$2.03
$0.81
==================================================================
==============
=============================
</TABLE>
Historical Performance -- Class B Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
=============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $12.02 $11.74
$0.21
$0.17 0.85%+
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/99 12.16 12.02
0.52
0.24 5.22
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/98 11.89 12.16
0.63
0.40 11.21
- ------------------------------------------------------------------
- --------------
- -----------------------------
Inception*-1/31/97 11.46 11.89
0.47
0.00 8.03+
==================================================================
==============
=============================
Total
$1.83
$0.81
==================================================================
==============
=============================
</TABLE>
Historical Performance -- Class L Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
=============================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $12.02 $11.74
$0.22
$0.17 0.88%+
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/99 12.16 12.02
0.53
0.24 5.29
- ------------------------------------------------------------------
- --------------
- -----------------------------
1/31/98 11.89 12.16
0.64
0.40 11.25
- ------------------------------------------------------------------
- --------------
- -----------------------------
Inception*-1/31/97 11.46 11.89
0.47
0.00 8.08+
==================================================================
==============
=============================
Total
$1.86
$0.81
==================================================================
==============
=============================
</TABLE>
It is the Fund's policy to distribute dividends quarterly and
capital gains, if
any, annually.
27
<PAGE>
Average Annual Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
-------------------
- --------------
Class A Class B
Class L
==================================================================
==============
Six Months Ended 7/31/99+ 1.11% 0.85%
0.88%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 3.94 3.41
3.47
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 7.77 7.22
7.27
==================================================================
==============
With Sales
Charges(2)
-------------------
- --------------
Class A Class B
Class L
==================================================================
==============
Six Months Ended 7/31/99+ (3.46)%
(3.54)% (1.09)%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 (0.76) (0.98)
1.48
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 6.35 6.73
6.95
==================================================================
==============
Cumulative Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
==================================================================
==============
Class A (Inception* through 7/31/99)
29.79%
- ------------------------------------------------------------------
- --------------
Class B (Inception* through 7/31/99) 27.50
- ------------------------------------------------------------------
- --------------
Class L (Inception* through 7/31/99) 27.71
==================================================================
==============
(1) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value and does not reflect the deduction
of the
applicable sales charge with respect to Class A and L shares
or the
applicable contingent deferred sales charges ("CDSC") with
respect to
Class B and L shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value. In addition, Class A and L shares
reflect the
deduction of the maximum initial sales charge of 4.50% and
1.00%,
respectively; Class B shares reflect the deduction of a
4.50% CDSC, which
applies if shares are redeemed within one year from
purchase. The CDSC
declines by 0.50% the first year after purchase and
thereafter by 1.00%
per year until no CDSC is incurred. Class L shares also
reflect the
deduction of a 1.00% CDSC, which applies if shares are
redeemed within the
first year of purchase.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
* Inception date for Class A, B and L shares is February 5,
1996.
28
<PAGE>
Growth of $10,000 Invested in Class A, B and L Shares of the
Conservative
Portfolio vs. the Standard & Poor's 500 Composite Stock Index,
Lehman
Government/Corporate Bond Index, Salomon Smith Barney High Yield
Market Index
and Salomon Smith Barney One-Year Treasury Bill Index
- ------------------------------------------------------------------
- --------------
February 5, 1996 -- July 31, 1999 (unaudited)
[LINE CHART]
<TABLE>
<CAPTION>
Salomon
Standard &
Lehman
Salomon Brothers
Conservative Conservative Conservative Poor's 500
Government/
Brothers One-Year
Portfolio- Portfolio- Portfolio- Composite
Corporation
High Yield Treasury
Class A Class B Class L Stock Index
Bond Index
Market Index Bill Index
<S> <C> <C> <C> <C>
<C>
<C> <C>
2/5/96 9550 10000 9896 10000
10000
10000 10000
7/96 9560 9542 9786 10175
9473
10208 10214
1/97 10369 10353 10596 12630
9118
11049 10551
7/97 11277 11323 11609 15476
9643
11886 10892
1/98 11581 11614 11900 16026
10136
12693 11214
7/98 11925 12029 12215 18462
10421
13152 11511
1/99 12259 12342 12529 21235
11020
13050 11840
7/31/99 12395 12550 12639 22191
10663
13114 12114
</TABLE>
The chart above represents a hypothetical illustration of $10,000
invested in
Class A, B and L shares on February 5, 1996 (inception date),
assuming deduction
of the maximum 4.50% and 1.00% sales charge at the time of
investment for Class
A and L shares, respectively, the deduction of the maximum 4.50%
CDSC for Class
B shares and the deduction of the 1.00% CDSC for Class L shares.
It also assumes
reinvestment of dividends and capital gains, if any, at net asset
value through
July 31, 1999. The Standard & Poor's 500 Composite Stock Index is
an unmanaged
index composed of 500 widely held common stocks listed on the New
York Stock
Exchange, American Stock Exchange and the over-the-counter market.
The Lehman
Government/Corporate Bond Index is a combination of publicly
issued
intermediate- and long-term U.S. government bonds and corporate
bonds. The
Salomon Smith Barney High Yield Market Index covers a significant
portion of the
below-investment-grade U.S. corporate bond market. The Salomon
Smith Barney
One-Year Treasury Bill Index consists of one 1-Year United States
Treasury bill
whose return is tracked until its maturity. These indices are
unmanaged and are
not subject to the same management and trading expenses as a
mutual fund. An
investor cannot invest directly in an index. The performance of
the Portfolio's
other classes may be greater or less than the performance
indicated on this
chart, depending on whether greater or lesser sales charges and
fees were
incurred by shareholders investing in the other classes.
All figures represent past performance and are not a guarantee of
future
results. Investment returns and principal value will fluctuate,
and redemption
values may be more or less than the original cost. No adjustment
has been made
for shareholder tax liability on dividends or capital gains.
29
<PAGE>
THE INCOME PORTFOLIO
- ------------------------------------------------------------------
- --------------
Target Asset Allocation
- ------------------------------------------------------------------
- --------------
[PIE CHART]
Stock Funds 10%
Bond Funds 90%
The Income Portfolio seeks high current income by investing
primarily in bond
funds.
- ------------------------------------------------------------------
- --------------
The Income Portfolio
The Income Portfolio seeks high current income. Among the
Portfolios of the
Concert Allocation Series, the Income Portfolio allocates most of
its assets in
taxable fixed-income funds designed to generate a high level of
income
consistent with relative stability of principal. A small portion
of the
Portfolio is invested in equity funds that invest in large-
capitalization U.S.
stocks.
- ------------------------------------------------------------------
- --------------
Index Comparison*
- ------------------------------------------------------------------
- --------------
S&P 500 4.50%
Lehman Government/
Corporate Bond (3.24)%
Salomon Smith Barney
High Yield Market 0.49%
Salomon Smith Barney
One-Year Treasury Bill 2.31%
- ------------------------------------------------------------------
- --------------
* The chart above represents total returns for the six months
ended July 31,
1999.
- ------------------------------------------------------------------
- --------------
Portfolio Update
- ------------------------------------------------------------------
- --------------
The Concert Allocation Series Income Portfolio's ("Portfolio")
Class A shares
generated a total return of a negative 1.45% for the six months
ended July 31,
1999, excluding sales charges. The chart that appears on page 34
compares the
Portfolio's performance to broad-based indices that track four of
the asset
classes represented in the Portfolio.
The majority of assets in the Income Portfolio are invested in
bond funds that
invest in the debt obligations of the U. S. Government and other
developed
nations. The six-month period ended July 31, 1999 saw the bond
market perform
poorly. Strong corporate earnings, coupled with the continuing
recovery in the
global markets, concerned bond investors who believed that
inflationary
pressures were growing. To forestall further inflationary
pressures, the Federal
Reserve Board raised interest rates by 25 basis points twice this
summer.
- ------------------------------------------------------------------
- --------------
The Target Asset Allocation set forth above represents an
approximate mix of
investments for the Income Portfolio. The allocation and
investment mix of the
Portfolio may vary depending upon market conditions, cash flows in
and out of
the Portfolio and other factors. In addition, the allocation and
investment
ranges of the Portfolio may be changed from time to time upon the
approval of
the Concert Allocation Series' Board of Directors.
30
<PAGE>
The Concert Allocation Series Income Portfolio Breakdown (as of
7/31/99)
(unaudited)
[PIE CHART]
===========================================
10% Smith Barney Funds, Inc.-
Short-Term High
Grade Bond Fund
===========================================
Sector Breakdown:
10.7% U.S. Government & Agency Obligations
12.7% Mortgage-Backed Securities
76.6% Corporate Bonds & Notes
Credit Quality:
24.6% AAA-Rated
Average Maturity:
3.0 Years
===========================================
===============================
15% Smith Barney Investment
Funds Inc.-Smith Barney
Government Securities Fund
===============================
Sector Breakdown:
31.7% U.S. Treasuries
68.2% U.S. Government Agencies
0.1% Other
Credit Quality:
100% AAA-Rated
Average Maturity:
20.9 Years
===============================
==============================
20% Smith Barney
Managed Governments Fund Inc.
==============================
Sector Breakdown:
4.0% U.S. Treasuries
72.9% U.S. Agency Obligations
23.1% Repurchase Agreements
Credit Quality:
100% AAA-Rated
Average Maturity:
9.5 Years
==============================
=================================
20% Smith Barney Income
Funds-Smith Barney Diversified
Strategic Income Fund
=================================
Sector Breakdown:
3.9% U.S. Treasuries
36.9% U.S. Government Agencies
28.1% High Yield Corporate Bonds
12.4% Foreign Government Bonds
18.7% Other
Top 5 Holdings:
FNMA
GNMA
New Zealand Government
Queensland Treasury
Nykredit
Top 5 Country Holdings:
United States
United Kingdom
New Zealand
Denmark
Australia
Average Maturity:
5 Years
=================================
========================
5% Smith Barney
Appreciation Fund Inc.
========================
Top 5 Holdings:
Berkshire Hathaway Inc.
General Electric Co.
Tyco International Ltd.
Microsoft Corp.
Intel Corp.
========================
=======================================
5% Smith Barney Income Funds-
Smith Barney Convertible Fund
=======================================
Top 5 Holdings:
Alpharma,Inc.
Magna International, Inc.
Bell Atlantic Financial Services Corp.
Athena Neurosciences Inc.
MascoTech, Inc.
=======================================
======================================
20% Smith Barney Income Funds-
Smith Barney High Income Fund
======================================
Top 5 Holdings:
Allied Waste North America
Unisys Corp.
United International Holdings, Inc.
United Pan-Europe Communications N.V.
ICN Pharmaceuticals Inc.
======================================
==================================
5% Smith Barney Income Funds-
Smith Barney Premium Total
Return Fund
==================================
Top 5 Holdings:
Bristol-Myers Squibb Co.
MCI WorldCom, Inc.
SLM Holding Corp.
Loews Corp.
Federated Department Stores, Inc.
==================================
31
<PAGE>
THE INCOME PORTFOLIO
Historical Performance -- Class A Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ---------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
===========================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $11.50 $10.95
$0.31
$0.07 (1.45)%+
- ------------------------------------------------------------------
- --------------
- ---------------------------
1/31/99 11.75 11.50
0.69
0.11 4.88
- ------------------------------------------------------------------
- --------------
- ---------------------------
1/31/98 11.53 11.75
0.77
0.29 11.44
- ------------------------------------------------------------------
- --------------
- ---------------------------
Inception*-1/31/97 11.46 11.53
0.63
0.00 6.39+
==================================================================
==============
===========================
Total
$2.40
$0.47
==================================================================
==============
===========================
</TABLE>
Historical Performance -- Class B Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ---------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
===========================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $11.50 $10.96
$0.28
$0.07 (1.62)%+
- ------------------------------------------------------------------
- --------------
- ---------------------------
1/31/99 11.76 11.50
0.63
0.11 4.25
- ------------------------------------------------------------------
- --------------
- ---------------------------
1/31/98 11.53 11.76
0.70
0.29 10.93
- ------------------------------------------------------------------
- --------------
- ---------------------------
Inception*-1/31/97 11.46 11.53
0.58
0.00 5.89+
==================================================================
==============
===========================
Total
$2.19
$0.47
==================================================================
==============
===========================
</TABLE>
Historical Performance -- Class L Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
- --------------
- ---------------------------
Net Asset Value
-------------------------------------
Income
Capital Gain Total
Period Ended Beginning of Period End of Period
Dividends
Distributions Returns(1)
==================================================================
==============
===========================
<S> <C> <C>
<C>
<C> <C>
7/31/99 $11.50 $10.96
$0.28
$0.07 (1.59)%+
- ------------------------------------------------------------------
- --------------
- ---------------------------
1/31/99 11.76 11.50
0.64
0.11 4.31
- ------------------------------------------------------------------
- --------------
- ---------------------------
1/31/98 11.53 11.76
0.71
0.29 10.98
- ------------------------------------------------------------------
- --------------
- ---------------------------
Inception*-1/31/97 11.46 11.53
0.59
0.00 5.94+
==================================================================
==============
===========================
Total
$2.22
$0.47
==================================================================
==============
===========================
</TABLE>
It is the Fund's policy to distribute dividends monthly and
capital gains, if
any, annually.
32
<PAGE>
Average Annual Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
-------------------
- --------------
Class A Class
B Class L
==================================================================
==============
Six Months Ended 7/31/99+ (1.45)%
(1.62)% (1.59)%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 0.50 (0.02)
0.12
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 6.00 5.49
5.54
==================================================================
==============
With Sales
Charges(2)
-------------------
- --------------
Class A Class
B Class L
==================================================================
==============
Six Months Ended 7/31/99+ (5.87)%
(5.91)% (3.55)%
- ------------------------------------------------------------------
- --------------
Year Ended 7/31/99 (4.04) (4.25)
(1.83)
- ------------------------------------------------------------------
- --------------
Inception* through 7/31/99 4.61 5.01
5.23
==================================================================
==============
Cumulative Total Returns
- ------------------------------------------------------------------
- --------------
Without Sales
Charges(1)
==================================================================
==============
Class A (Inception* through 7/31/99) 22.53%
- ------------------------------------------------------------------
- --------------
Class B (Inception* through 7/31/99) 20.48
- ------------------------------------------------------------------
- --------------
Class L (Inception* through 7/31/99) 20.69
==================================================================
==============
(1) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value and does not reflect the deduction
of the
applicable sales charges with respect to Class A and L
shares or the
applicable contingent deferred sales charges ("CDSC") with
respect to
Class B and L shares.
(2) Assumes reinvestment of all dividends and capital gain
distributions, if
any, at net asset value. In addition, Class A and L shares
reflect the
deduction of the maximum initial sales charge of 4.50% and
1.00%,
respectively; and Class B shares reflect the deduction of a
4.50% CDSC,
which applies if shares are redeemed less than one year from
purchase.
This CDSC declines by 0.50% the first year after purchase
and thereafter
by 1.00% per year until no CDSC is incurred. Class L shares
also reflect
the deduction of a 1.00% CDSC, which applies if shares are
redeemed within
the first year of purchase.
+ Total return is not annualized, as it may not be
representative of the
total return for the year.
* Inception date for Class A, B and L shares is February 5,
1996.
33
<PAGE>
Growth of $10,000 Invested in Class A, B and L Shares of the
Income Portfolio
vs. Standard & Poor's 500 Composite Stock Index, Lehman
Government/Corporate
Bond Index, Salomon Smith Barney High Yield Market Index and
Salomon Smith
Barney One-Year Treasury Bill Index
- ------------------------------------------------------------------
- --------------
February 5, 1996 -- July 31, 1999 (unaudited)
[LINE CHART]
<TABLE>
<CAPTION>
Salomon
Standard &
Lehman
Salomon Brothers
Income Income Income Poor's 500
Government/
Brothers One-Year
Portfolio- Portfolio- Portfolio- Composite
Corporate
High Yield Treasury
Class A Class B Class L Stock Index
Bond Index
Market Index Bill Index
<S> <C> <C> <C> <C>
<C>
<C> <C>
2/5/96 9550 10000 9896 10000
10000
10000 10000
7/96 9482 9472 9711 10175
9473
10208 10214
1/97 10160 10139 10385 12630
9118
11049 10551
7/97 10939 10973 11263 15476
9643
11886 10892
1/98 11322 11297 11636 16026
10136
12693 11214
7/98 11644 11750 11929 18462
10421
13152 11511
1/99 11875 11946 12137 21235
11020
13050 11840
7/31/99 11702 11856 11943 22191
10663
13114 12114
</TABLE>
The chart above represents a hypothetical illustration of $10,000
invested in
Class A, B and L shares on February 5, 1996 (inception date),
assuming deduction
of the maximum 4.50% and 1.00% sales charge at the time of
investment for Class
A and L shares, respectively, the deduction of the maximum 4.50%
CDSC for Class
B shares and the deduction of the 1.00% CDSC for Class L shares.
It also assumes
reinvestment of dividends and capital gains, if any, at net asset
value through
July 31, 1999. The Standard & Poor's 500 Composite Stock Index is
an unmanaged
index composed of 500 widely held common stocks listed on the New
York Stock
Exchange, American Stock Exchange and the over-the-counter market.
The Lehman
Government/Corporate Bond Index is a combination of publicly
issued
intermediate- and long-term U.S. government bonds and corporate
bonds. The
Salomon Smith Barney High Yield Market Index covers a significant
portion of the
below-investment-grade U.S. corporate bond market. The Salomon
Smith Barney
One-Year Treasury Bill Index consists of one 1-Year United States
Treasury bill
whose return is tracked until its maturity. These indices are
unmanaged and are
not subject to the same management and trading expenses as a
mutual fund. An
investor cannot invest directly in an index. The performance of
the Portfolio's
other classes may be greater or less than the performance
indicated on this
chart, depending on whether greater or lesser sales charges and
fees were
incurred by shareholders investing in the other classes.
All figures represent past performance and are not a guarantee of
future
results. Investment returns and principal value will fluctuate,
and redemption
values may be more or less than the original cost. No adjustment
has been made
for shareholder tax liability on dividends or capital gains.
34
<PAGE>
THE GLOBAL PORTFOLIO
Schedule of Investments (unaudited)
July 31, 1999
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Shares Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Underlying Funds -- 99.1%
66,912 Smith Barney Funds, Inc. - Large Cap Value Fund
$ 1,281,375
63,559 Smith Barney Investment Funds Inc. - Concert
Peachtree Growth Fund
1,150,434
528,523 Smith Barney Investment Funds Inc. - Smith Barney
Hansberger
Global Value Fund 6,701,674
259,402 Smith Barney Investment Funds Inc. - Smith Barney
Hansberger Small
Cap Value Fund 2,697,789
176,891 Smith Barney Investment Trust - Smith Barney Large
Capitalization
Growth Fund 3,803,158
183,548 Smith Barney Small Cap Blend Fund, Inc.
2,641,257
142,813 Smith Barney World Funds, Inc. - Emerging Markets
Portfolio
1,281,034
277,240 Smith Barney World Funds, Inc. - International
Equity Portfolio
6,626,058
- ------------------------------------------------------------------
- --------------
- -------------------------------------------
Total Underlying Funds (Cost -- $23,330,070)
26,182,779
==================================================================
==============
===========================================
<CAPTION>
Face
Amount Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Repurchase Agreement -- 0.9%
$ 253,000 Morgan Stanley Dean Witter & Co., 5.030% due 8/2/99;
Proceeds at
maturity-- $253,106;
(Fully collateralized by U.S. Treasury Notes, 5.250%
to 7.000% due
11/18/99 to 7/15/06;
Market value -- $259,670) (Cost -- $253,000)
253,000
==================================================================
==============
===========================================
Total Investments-- 100% (Cost -- $23,583,070*)
$ 26,435,779
==================================================================
==============
===========================================
</TABLE>
* Aggregate cost for Federal income tax purposes is
substantially the
same.
See Notes to Financial Statements.
35
<PAGE>
THE HIGH GROWTH PORTFOLIO
Schedule of Investments (unaudited)
July 31, 1999
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Shares Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Underlying Funds -- 99.5%
1,427,912 Smith Barney Aggressive Growth Fund Inc.
$ 94,470,662
1,982,513 Smith Barney Equity Funds - Smith Barney Large Cap
Blend Fund
35,427,510
1,811,556 Smith Barney Funds, Inc. - Large Cap Value Fund
34,691,311
6,477,351 Smith Barney Income Funds - Smith Barney High Income
Fund
66,911,043
4,175,061 Smith Barney Investment Funds Inc. - Concert
Peachtree Growth Fund
75,568,606
2,453,780 Smith Barney Investment Funds Inc. - Smith Barney
Contrarian Fund
34,058,478
6,249,566 Smith Barney Investment Funds Inc. - Smith Barney
Hansberger
Global Value Fund 79,244,509
4,025,897 Smith Barney Investment Trust - Smith Barney Large
Capitalization
Growth Fund 86,556,789
2,326,088 Smith Barney Investment Trust - Smith Barney Mid Cap
Blend Fund
39,869,153
10,667,454 Smith Barney Small Cap Blend Fund, Inc.
153,504,669
3,068,717 Smith Barney World Funds, Inc. - International
Equity Portfolio
73,342,346
- ------------------------------------------------------------------
- --------------
- -------------------------------------------
Total Underlying Funds (Cost -- $625,244,436)
773,645,076
==================================================================
==============
===========================================
<CAPTION>
Face
Amount Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Repurchase Agreement -- 0.5%
$ 4,160,000 Morgan Stanley Dean Witter & Co., 5.030% due 8/2/99;
Proceeds at maturity -- $4,161,744; (Fully
collateralized by U.S.
Treasury Notes, 5.250% to 7.000% due 11/18/99 to
7/15/06; Market
value -- $4,243,200)
(Cost -- $4,160,000)
4,160,000
==================================================================
==============
===========================================
Total Investments -- 100% (Cost -- $629,404,436*)
$777,805,076
==================================================================
==============
===========================================
</TABLE>
* Aggregate cost for Federal income tax purposes is
substantially the
same.
See Notes to Financial Statements.
36
<PAGE>
THE GROWTH PORTFOLIO
Schedule of Investments (unaudited)
July 31, 1999
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Shares Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Underlying Funds -- 99.1%
938,109 Smith Barney Aggressive Growth Fund Inc.
$ 62,065,346
5,053,441 Smith Barney Equity Funds - Smith Barney Large Cap
Blend Fund
90,305,000
4,618,070 Smith Barney Funds, Inc. - Large Cap Value Fund
88,436,056
5,272,297 Smith Barney Investment Funds Inc. - Concert
Peachtree Growth Fund
95,428,585
3,155,483 Smith Barney Investment Funds Inc. - Smith Barney
Contrarian Fund
43,798,107
8,850,752 Smith Barney Investment Funds Inc. - Smith Barney
Government
Securities Fund 81,426,927
4,096,294 Smith Barney Investment Funds Inc. - Smith Barney
Hansberger
Global Value Fund 51,941,016
7,593,745 Smith Barney Investment Funds Inc. - Smith Barney
High Income Fund
78,443,401
6,754,735 Smith Barney Investment Funds Inc. - Smith Barney
Investment Grade
Bond Fund 79,503,236
2,626,922 Smith Barney Investment Trust - Smith Barney Large
Capitalization
Growth Fund 56,478,824
2,981,907 Smith Barney Investment Trust - Smith Barney Mid Cap
Blend Fund
51,109,896
3,374,353 Smith Barney Small Cap Blend Fund, Inc.
48,556,946
3,911,695 Smith Barney World Funds, Inc. - International
Equity Portfolio
93,489,514
- ------------------------------------------------------------------
- --------------
- -------------------------------------------
Total Underlying Funds (Cost-- $797,516,366)
920,982,854
==================================================================
==============
===========================================
<CAPTION>
Face
Amount Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Repurchase Agreement -- 0.9%
$ 7,972,000 Morgan Stanley Dean Witter & Co., 5.030% due 8/2/99;
Proceeds at
maturity -- $7,975,342; (Fully collateralized by
U.S. Treasury
Notes, 5.250% to 7.000% due 11/18/99 to 7/15/06;
Market value --
$8,183,103)
(Cost -- $7,972,000)
7,972,000
==================================================================
==============
===========================================
Total Investments -- 100% (Cost -- $805,488,366*)
$928,954,854
==================================================================
==============
===========================================
</TABLE>
* Aggregate cost for Federal income tax purposes is
substantially the
same.
See Notes to Financial Statements.
37
<PAGE>
THE BALANCED PORTFOLIO
Schedule of Investments (unaudited)
July 31, 1999
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Shares Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Underlying Funds -- 99.3%
3,415,812 Smith Barney Appreciation Fund Inc.
$ 55,404,480
1,560,498 Smith Barney Equity Funds - Smith Barney Large Cap
Blend Fund
27,886,107
4,278,803 Smith Barney Fundamental Value Fund Inc.
57,592,700
1,478,354 Smith Barney Funds, Inc. - Large Cap Value Fund
28,310,493
5,983,706 Smith Barney Funds, Inc. - Short-Term High Grade
Bond Fund
24,114,337
3,513,757 Smith Barney Income Funds - Smith Barney Convertible
Fund
53,901,043
10,469,232 Smith Barney Income Funds - Smith Barney Diversified
Strategic
Income Fund 78,100,472
2,631,663 Smith Barney Income Funds - Smith Barney Premium
Total Return Fund
56,449,183
5,595,511 Smith Barney Investment Funds Inc. - Smith Barney
Government
Securities Fund 51,478,708
4,317,941 Smith Barney Managed Governments Fund Inc.
52,247,092
2,345,481 Smith Barney World Funds, Inc. - Global Government
Bond Portfolio
26,175,576
1,219,936 Smith Barney World Funds, Inc. - International
Equity Portfolio
29,156,482
- ------------------------------------------------------------------
- --------------
- -------------------------------------------
Total Underlying Funds (Cost -- $522,736,250)
540,816,673
==================================================================
==============
===========================================
<CAPTION>
Face
Amount Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Repurchase Agreement -- 0.7%
$ 3,996,000 Morgan Stanley Dean Witter & Co., 5.030% due 8/2/99;
Proceeds at
maturity -- $3,997,675;
Fully collateralized by U.S. Treasury Notes, 5.250%
to 7.000% due
11/18/99 to 7/15/06;
(Market value -- $4,101,817) (Cost -- $3,996,000)
3,996,000
==================================================================
==============
===========================================
Total Investments -- 100% (Cost -- $526,732,250*)
$544,812,673
==================================================================
==============
===========================================
</TABLE>
* Aggregate cost for Federal income tax purposes is
substantially the
same.
See Notes to Financial Statements.
38
<PAGE>
THE CONSERVATIVE PORTFOLIO
Schedule of Investments (unaudited)
July 31, 1999
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Shares Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Underlying Funds -- 99.8%
950,953 Smith Barney Appreciation Fund Inc.
$ 15,424,465
624,957 Smith Barney Fundamental Value Fund Inc.
8,411,922
1,656,848 Smith Barney Funds, Inc. - Short-Term High Grade
Bond Fund
6,677,101
965,214 Smith Barney Income Funds - Smith Barney Convertible
Fund
14,806,389
3,939,321 Smith Barney Income Funds - Smith Barney Diversified
Strategic
Income Fund 29,387,338
1,423,555 Smith Barney Income Funds - Smith Barney High Income
Fund
14,705,326
354,608 Smith Barney Income Funds - Smith Barney Premium
Total Return Fund
7,606,362
1,596,517 Smith Barney Investment Funds Inc. - Smith Barney
Government
Securities Fund 14,687,964
676,521 Smith Barney Investment Funds Inc. - Smith Barney
Hansberger
Global Value Fund 8,578,297
1,822,455 Smith Barney Managed Governments Fund Inc.
22,051,709
658,976 Smith Barney World Funds, Inc. - Global Government
Bond Portfolio
7,354,173
- ------------------------------------------------------------------
- --------------
- -------------------------------------------
Total Underlying Funds (Cost -- $151,912,872)
149,691,046
==================================================================
==============
===========================================
<CAPTION>
Face
Amount Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Repurchase Agreement -- 0.2%
$ 325,000 Morgan Stanley Dean Witter & Co., 5.030% due 8/2/99;
Proceeds at
maturity -- $325,136;
(Fully collateralized by U.S. Treasury Notes, 5.250%
to 7.000% due
11/18/99 to 7/15/06;
Market value -- $332,475) (Cost -- $325,000)
325,000
==================================================================
==============
===========================================
Total Investments -- 100% (Cost-- $152,237,872*)
$150,016,046
==================================================================
==============
===========================================
</TABLE>
* Aggregate cost for Federal income tax purposes is
substantially the
same.
See Notes to Financial Statements.
39
<PAGE>
THE INCOME PORTFOLIO
Schedule of Investments (unaudited)
July 31, 1999
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Shares Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Underlying Funds -- 99.7%
217,463 Smith Barney Appreciation Fund Inc.
$ 3,527,255
1,680,226 Smith Barney Funds, Inc. - Short-Term High Grade
Bond Fund
6,771,314
232,037 Smith Barney Income Funds - Smith Barney Convertible
Fund
3,559,453
1,892,387 Smith Barney Income Funds - Smith Barney Diversified
Strategic
Income Fund 14,117,212
1,361,361 Smith Barney Income Funds - Smith Barney High Income
Fund
14,062,860
163,977 Smith Barney Income Funds - Smith Barney Premium
Total Return Fund
3,517,314
1,149,840 Smith Barney Investment Funds Inc. - Smith Barney
Government
Securities Fund 10,578,529
1,171,148 Smith Barney Managed Governments Fund Inc.
14,170,899
- ------------------------------------------------------------------
- --------------
- -------------------------------------------
Total Underlying Funds (Cost -- $73,714,122)
70,304,836
==================================================================
==============
===========================================
<CAPTION>
Face
Amount Description
Value
==================================================================
==============
===========================================
<S> <C>
<C>
Repurchase Agreement -- 0.3%
$238,000 Morgan Stanley Dean Witter & Co., 5.030% due 8/2/99;
Proceeds at
maturity -- $238,100;
(Fully collateralized by U.S. Treasury Notes, 5.250%
to 7.000% due
11/18/99 to 7/15/06;
Market value -- $244,302) (Cost -- $238,000)
238,000
==================================================================
==============
===========================================
Total Investments -- 100% (Cost -- $73,952,122*)
$ 70,542,836
==================================================================
==============
===========================================
</TABLE>
* Aggregate cost for Federal income tax purposes is
substantially the
same.
See Notes to Financial Statements.
40
<PAGE>
Statements of Assets and Liabilities (unaudited)
July 31, 1999
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Global High
Growth
Growth Balanced Conservative Income
Portfolio
Portfolio
Portfolio Portfolio Portfolio Portfolio
==================================================================
==============
====================================================
<S> <C> <C>
<C>
<C> <C> <C>
Assets:
Investments, at cost $23,583,070
$629,404,436
$805,488,366 $526,732,250 $152,237,872 $73,952,122
==================================================================
==============
====================================================
Investments, at value $26,435,779
$777,805,076
$928,954,854 $544,812,673 $150,016,046 $70,542,836
Cash 779
1,827,090
815 669 -- 729
Receivable for Fund shares sold 3,811
80,351
92,225 34,249 93,411 20,709
Receivable from manager 31,528
- --
- -- -- -- --
Dividends and interest receivable 35
581
1,113 73,456 578,826 354,161
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Total Assets 26,471,932
779,713,098
929,049,007 544,921,047 150,688,283 70,918,435
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Liabilities:
Payable to bank --
- --
- -- -- 336,290 --
Dividends payable 43,606
5,000,246
12,254,836 13,102,537 2,129,455 789,132
Distribution fees payable 6,494
152,191
172,085 107,443 29,056 10,810
Accrued expenses --
559,641
572,067 510,877 144,684 27,814
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Total Liabilities 50,100
5,712,078
12,998,988 13,720,857 2,639,485 827,756
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Total Net Assets $26,421,832
$774,001,020
$916,050,019 $531,200,190 $148,048,798 $70,090,679
==================================================================
==============
====================================================
Net Assets:
Par value of capital shares $ 2,172 $
49,588 $
62,946 $ 41,922 $ 12,602 $ 6,399
Capital paid in excess of par value 23,637,398
620,125,749
782,010,480 510,703,884 149,309,147 73,522,390
Undistributed (overdistributed)
net investment income (74,452)
109,327
5,645,578 (784,699) 594,224 35,232
Accumulated net realized gain (loss)
on investments 4,005
5,315,716
4,864,527 3,158,660 354,651 (64,056)
Net unrealized appreciation (depreciation)
of investments 2,852,709
148,400,640
123,466,488 18,080,423 (2,221,826) (3,409,286)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Total Net Assets $26,421,832
$774,001,020
$916,050,019 $531,200,190 $148,048,798 $70,090,679
==================================================================
==============
====================================================
Shares Outstanding:
Class A 1,179,152
24,854,026
27,360,484 17,475,864 6,059,928 3,159,325
Class B 961,860
21,627,766
31,343,788 19,136,322 5,934,060 2,870,983
Class L 30,776
2,618,051
3,775,622 2,801,094 607,718 369,019
Class Z --
488,344
466,312 2,509,065 -- --
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Net Asset Value:
Class A (and redemption price) $ 12.19 $
15.66 $
14.54 $ 12.68 $ 11.76 $ 10.95
Class B * $ 12.13 $
15.55 $
14.56 $ 12.67 $ 11.74 $ 10.96
Class L ** $ 12.13 $
15.56 $
14.56 $ 12.67 $ 11.74 $ 10.96
Class Z (and redemption price) -- $
15.68 $
14.49 $ 12.67 -- --
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 5.26% of
net asset value per share) $ 12.83 $
16.48 $
15.30 $ 13.35 -- --
Class A (net asset value plus 4.71% of
net asset value per share) --
- --
- -- -- $ 12.31 $ 11.47
Class L (net asset value plus 1.01% of
net asset value per share) $ 12.25 $
15.72 $
14.71 $ 12.80 $ 11.86 $ 11.07
==================================================================
==============
====================================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 5.00%
CDSC (4.50%
for the Conservative Portfolio and the Income Portfolio) if
shares are
redeemed within one year from purchase (See Note 2).
** Redemption price is NAV of Class L shares reduced by a 1.00%
CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
41
<PAGE>
Statements of Operations (unaudited) For the Six Months Ended
July 31, 1999
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Global High
Growth Growth
Balanced Conservative Income
Portfolio
Portfolio
Portfolio Portfolio Portfolio Portfolio
==================================================================
==============
==============================================
<S> <C> <C>
<C>
<C> <C> <C>
Investment Income:
Income distributions from
Underlying Funds $ 7,525 $
3,277,428 $
9,511,519 $ 9,185,895 $ 3,502,883 $ 2,255,546
Short-term capital gain distributions
from Underlying Funds 22,791
330,820
683,676 499,494 120,005 32,722
Interest 6,562
82,488
99,139 30,943 20,542 5,574
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Total Investment Income 36,878
3,690,736
10,294,334 9,716,332 3,643,430 2,293,842
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Expenses:
Distribution fees (Note 2) 70,170
2,279,568
3,046,144 1,709,545 369,162 184,651
Other expenses 41,160
1,301,841
1,597,880 954,429 257,909 128,328
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Total Expenses 111,330
3,581,409
4,644,024 2,663,974 627,071 312,979
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Net Investment Income (Loss) (74,452)
109,327
5,650,310 7,052,358 3,016,359 1,980,863
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Realized and Unrealized Gain (Loss)
on Investments (Note 3):
Realized Gain (Loss) From:
Sale of Underlying Funds --
2,540,120
800,604 1,056,196 (16,603) (159,702)
Capital gain distributions from
Underlying Funds 4,159
2,781,689
4,068,761 2,111,451 371,924 97,037
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Net Realized Gain (Loss) 4,159
5,321,809
4,869,365 3,167,647 355,321 (62,665)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments:
Beginning of period 673,196
110,582,801
115,601,383 18,334,047 (273,413) (374,229)
End of period 2,852,709
148,400,640
123,466,488 18,080,423 (2,221,826) (3,409,286)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Change in Net Unrealized
Appreciation (Depreciation) 2,179,513
37,817,839
7,865,105 (253,624) (1,948,413) (3,035,057)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------
Net Gain (Loss) on Investments 2,183,672
43,139,648
12,734,470 2,914,023 (1,593,092) (3,097,722)
==================================================================
==============
==============================================
Increase (Decrease) in Net Assets
From Operations $ 2,109,220 $
43,248,975 $
18,384,780 $ 9,966,381 $ 1,423,267 ($1,116,859)
==================================================================
==============
==============================================
</TABLE>
See Notes to Financial Statements.
42
<PAGE>
Statements of Changes in Net Assets For the Six Months Ended
July 31, 1999
(unaudited)
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Global High Growth
Growth
Balanced Conservative Income
Portfolio Portfolio
Portfolio
Portfolio Portfolio Portfolio
==================================================================
==============
==================================================
<S> <C> <C>
<C>
<C> <C> <C>
Operations:
Net investment income (loss) $ (74,452) $ 109,327
$
5,650,310 $ 7,052,358 $ 3,016,359 $ 1,980,863
Net realized gain (loss) 4,159 5,321,809
4,869,365 3,167,647 355,321 (62,665)
Change in net unrealized
appreciation (depreciation) 2,179,513 37,817,839
7,865,105 (253,624) (1,948,413) (3,035,057)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Increase (Decrease) in Net
Assets From Operations 2,109,220 43,248,975
18,384,780 9,966,381 1,423,267 (1,116,859)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Distributions to Shareholders From:
Net investment income -- --
(773,332) (8,236,032) (2,795,255) (1,912,671)
Net realized gains (43,606)
(5,000,246)
(11,481,504) (13,102,537) (2,129,455) (477,851)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (43,606)
(5,000,246)
(12,254,836) (21,338,569) (4,924,710) (2,390,522)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Fund Share Transactions (Note 5):
Net proceeds from sale of shares 7,290,051 100,491,990
114,343,793 80,438,349 28,814,341 11,629,681
Net asset value of shares issued
for reinvestment of dividends -- --
- -- 7,769,572 2,728,000 1,440,570
Cost of shares reacquired (3,164,040)
(92,746,472)
(108,110,363) (92,577,406) (23,457,406) (14,304,475)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Increase (Decrease) in Net
Assets From Fund Share
Transactions 4,126,011 7,745,518
6,233,430 (4,369,485) 8,084,935 (1,234,224)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Increase (Decrease) in Net Assets 6,191,625 45,994,247
12,363,374 (15,741,673) 4,583,492 (4,741,605)
Net Assets:
Beginning of period 20,230,207 728,006,773
903,686,645 546,941,863 143,465,306 74,832,284
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
End of period* $ 26,421,832 $ 774,001,020
$
916,050,019 $ 531,200,190 $ 148,048,798 $ 70,090,679
==================================================================
==============
==================================================
* Includes undistributed
(overdistributed) net
investment income of: $ (74,452) $ 109,327
$
5,645,578 $ (784,699) $ 594,224 $ 35,232
==================================================================
==============
==================================================
</TABLE>
See Notes to Financial Statements.
43
<PAGE>
Statements of Changes in Net Assets For the Year Ended
January 31, 1999
(continued)
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Global High
Growth
Growth Balanced Conservative Income
Portfolio(1)
Portfolio
Portfolio Portfolio Portfolio Portfolio
==================================================================
==============
==================================================
<S> <C> <C>
<C>
<C> <C> <C>
Operations:
Net investment income $ 37,925 $
1,916,805 $
11,738,141 $ 13,071,007 $ 5,668,123 $ 3,892,661
Net realized gain 59,221
20,723,412
22,093,046 16,335,841 2,660,092 684,340
Increase (decrease) in net
unrealized appreciation 673,196
85,048,371
81,964,941 10,040,283 (1,387,430) (1,487,808)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Increase in Net Assets From Operations 770,342
107,688,588
115,796,128 39,447,131 6,940,785 3,089,193
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Distributions to Shareholders From:
Net investment income (37,925)
(1,916,805)
(11,668,230) (13,888,946) (5,720,587) (3,925,621)
Net realized gains (15,769)
(22,738,630)
(21,474,608) (13,499,883) (2,438,232) (653,034)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (53,694)
(24,655,435)
(33,142,838) (27,388,829) (8,158,819) (4,578,655)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Fund Share Transactions (Note 5):
Net proceeds from sale of shares 21,514,725
250,815,393
279,779,380 221,653,754 63,759,336 32,573,378
Net asset value of shares issued
for reinvestment of dividends 53,691
24,488,226
32,700,434 26,738,856 7,940,449 4,093,470
Cost of shares reacquired (2,054,857)
(150,565,920)
(160,653,723) (104,498,115) (32,857,120) (20,741,399)
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 19,513,559
124,737,699
151,826,091 143,894,495 38,842,665 15,925,449
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
Increase in Net Assets 20,230,207
207,770,852
234,479,381 155,952,797 37,624,631 14,435,987
Net Assets:
Beginning of year --
520,235,921
669,207,264 390,989,066 105,840,675 60,396,297
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------
End of year* $20,230,207
$728,006,773
$903,686,645 $546,941,863 $143,465,306 $74,832,284
==================================================================
==============
==================================================
* Includes undistributed (overdistributed)
net investment income of: --
- --
$768,600 $398,975 $373,120 $(32,960)
==================================================================
==============
==================================================
</TABLE>
(1) For the period March 9, 1998 (commencement of operations) to
July 31,
1999.
See Notes to Financial Statements.
44
<PAGE>
Notes to Financial Statements (unaudited)
- ------------------------------------------------------------------
- --------------
1. Significant Accounting Policies
The Global, High Growth, Growth, Balanced, Conservative and Income
Portfolios
("Portfolios") are separate investment portfolios of the Smith
Barney Concert
Allocation Series Inc. ("Fund"). The Fund, a Maryland corporation,
is registered
under the Investment Company Act of 1940, as amended, as a non-
diversified,
open-end management investment company and consists of these
portfolios and five
other separate investment portfolios: Select High Growth, Select
Growth, Select
Balanced, Select Conservative and Select Income Portfolios. The
Portfolios
invest in other mutual funds ("Underlying Funds") managed by SSBC
Fund
Management Inc. ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc.
("SSBH"). The financial statements and financial highlights for
the other
portfolios are presented in a separate shareholder report.
The significant accounting policies consistently followed by the
Fund are: (a)
security transactions are accounted for on trade date; (b)
investments in the
Underlying Funds are valued at the closing net asset value per
share of each
Underlying Fund on the day of valuation; (c) income distributions
and short-term
capital gain distributions from Underlying Funds are recorded on
the ex-dividend
date as investment income and interest income is recorded on an
accrual basis;
(d) long-term capital gains from Underlying Funds are recorded on
the
ex-dividend date as realized gains; (e) gains or losses on the
sale of
Underlying Funds are calculated by using the specific
identification method; (f)
dividends and distributions to shareholders are recorded on the ex-
dividend
date; (g) the Fund intends to comply with the applicable
provisions of the
Internal Revenue Code of 1986, as amended, pertaining to regulated
investment
companies to make distributions of taxable income sufficient to
relieve it from
substantially all Federal income and excise taxes; (h) the
character of income
and gains to be distributed are determined in accordance with
income tax
regulations which may differ from generally accepted accounting
principles. Net
investment income, net realized gains and net assets were not
affected by these
adjustments; (i) direct expenses are charged to each class of each
portfolio;
management fees are allocated on the basis of the relative net
assets of each
class; and (j) estimates and assumptions are required to be made
regarding
assets, liabilities and changes in net assets resulting from
operations when
financial statements are prepared. Changes in the economic
environment,
financial markets and any other parameters used in determining
these estimates
could cause actual results to differ.
2. Management Agreement and Other Transactions
SSBC is the investment manager for the Fund. Each Portfolio pays
SSBC a monthly
fee calculated at an annual rate of 0.35% of the average daily net
assets. From
this fee all expenses of the Fund are deducted except for Rule 12b-
1 Plan
Distribution fees and extraordinary expenses. If expenses exceed
the 0.35% fee,
the excess amount is paid on behalf of the Fund by SSBC.
CFBDS, Inc. ("CFBDS") acts as the Fund's distributor. Salomon
Smith Barney Inc.
("SSB"), another subsidiary of SSBH, as well as certain other
broker-dealers,
continues to sell Fund shares to the public as a member of the
selling group.
The Global, High Growth, Growth and Balanced Portfolios have a
contingent
deferred sales charge ("CDSC") of 5.00% on Class B shares, which
applies if
redemption occurs within one year from purchase and declines
thereafter by 1.00%
per year until no CDSC is incurred. The Conservative and Income
Portfolios have
a CDSC of 4.50% on Class B shares, which applies if redemption
occurs less than
one year from purchase and declines by 0.50% the first year after
purchase and
thereafter by 1.00% per year until no CDSC is incurred. Class L
shares also have
a 1.00% CDSC which applies if redemption occurs within the first
year of
purchase. In certain cases, Class A shares also have a 1.00% CDSC,
which applies
if redemption occurs within the first year of purchase. This CDSC
only applies
to those purchases of Class A shares, which, when combined with
current holdings
of Class A shares, equal or exceed $500,000 in the aggregate.
These purchases do
not incur an initial sales charge.
For the six months ended July 31, 1999, CFBDS and SSB received
sales charges of
approximately $178,000 and $100,000 on sales of the Portfolios'
Class A and L
shares, respectively. In addition, CDSCs paid to CFBDS and SSB
were
approximately:
Portfolio Class A
Class B Class L
==================================================================
==============
Global --
- -- --
High Growth $2,000
$140,000 $5,000
Growth --
238,000 7,000
Balanced --
141,000 3,000
Conservative --
18,000 1,000
Income --
18,000 --
==================================================================
==============
Pursuant to a Distribution Plan, the Portfolios pay a service fee
with respect
to their Class A, B and L shares calculated at an annual rate of
0.25% of the
average daily net assets of each respective class. In addition,
the Global, High
Growth, Growth and Balanced Portfolios each pays a distribution
fee with respect
to their Class B and L shares calculated at an annual rate of
0.75% of the
average daily net assets of each class. The Conservative and
Income Portfolios
each pays a distribution fee with respect to their Class B and L
shares
calculated at the annual rates of 0.50% and 0.45%, respectively,
of the average
daily net assets of each class.
45
<PAGE>
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------------
- --------------
For the six months ended July 31, 1999, total Distribution Plan
fees were as
follows:
Portfolio Class A Class B
Class L
==================================================================
==============
Global $ 15,810 $ 52,857
$ 1,503
High Growth 467,847 1,620,774
190,947
Growth 495,452 2,280,270
270,422
Balanced 284,986 1,246,674
177,885
Conservative 90,870 253,643
24,649
Income 44,645 125,343
14,663
==================================================================
==============
All officers and one Director of the Fund are employees of SSB.
3. Investments
During the six months ended July 31, 1999, the aggregate cost of
purchases and
proceeds from sales of investments (including maturities, but
excluding
short-term securities) were as follows:
Portfolio Purchases
Sales
==================================================================
==============
Global $ 4,154,473
$ --
High Growth 14,370,923
7,000,000
Growth 17,639,433
2,000,000
Balanced 5,880,613
10,919,000
Conservative 9,419,025
766,000
Income 1,676,942
2,694,649
==================================================================
==============
At July 31, 1999, the aggregate gross unrealized appreciation and
depreciation
of investments for Federal income tax purposes were substantially
as follows:
Net Unrealized
Appreciation
Portfolio Appreciation Depreciation
(Depreciation)
==================================================================
==============
Global $ 2,852,709 $ --
$ 2,852,709
High Growth 154,663,648 (6,263,008)
148,400,640
Growth 140,216,011 (16,749,523)
123,466,488
Balanced 35,665,370 (17,584,947)
18,080,423
Conservative 3,766,117 (5,987,943)
(2,221,826)
Income 238,007 (3,647,293)
(3,409,286)
==================================================================
==============
4. Repurchase Agreements
The Portfolios purchase (and their custodian takes possession of)
U.S.
government securities from banks and securities dealers subject to
agreements to
resell the securities to the sellers at a future date (generally,
the next
business day) at an agreed-upon higher repurchase price. The
Portfolios require
continual maintenance of the market value of the collateral in
amounts at least
equal to the repurchase price.
5. Capital Shares
At July 31, 1999, the Fund had 5.5 billion shares of capital stock
authorized
with a par value of $0.001 per share. The Portfolios have the
ability to issue
multiple classes of shares. Each share of a class represents an
identical
interest in the Portfolios and has the same rights, except that
each class bears
certain expenses specifically related to the distribution of its
shares.
46
<PAGE>
Notes to Financial Statements (unaudited) (continued)
At July 31, 1999, total paid-in capital amounted to the following
for each
class:
<TABLE>
<CAPTION>
Portfolio Class A
Class B
Class L Class Z
==================================================================
==============
=============================
<S> <C> <C>
<C> <C>
Global $ 12,872,501 $
10,420,389 $
346,680 $ --
High Growth 311,322,374
269,490,486
32,706,061 6,656,416
Growth 342,326,175
387,362,434
46,058,135 6,326,682
Balanced 213,029,142
231,951,271
33,616,715 32,148,678
Conservative 71,832,697
70,355,275
7,133,777 --
Income 36,325,600
32,973,826
4,229,363 --
==================================================================
==============
=============================
</TABLE>
Transactions in shares of each class within each Portfolio were as
follows:
<TABLE>
<CAPTION>
Six Months Ended July
31, 1999
Year Ended January 31, 1999*
---------------------
- --------- -
- ---------------------------
Shares
Amount
Shares Amount
==================================================================
==============
=============================
<S> <C> <C>
<C> <C>
GLOBAL PORTFOLIO:
Class A
Shares sold 340,374 $
3,937,885
1,073,327 $ 11,530,351
Shares issued on reinvestment --
- --
4,610 50,532
Shares reacquired (125,799)
(1,456,738)
(113,360) (1,189,529)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 214,575 $
2,481,147
964,577 $ 10,391,354
==================================================================
==============
=============================
Class B
Shares sold 277,458 $
3,189,908
907,165 $ 9,739,828
Shares issued on reinvestment --
- --
281 3,083
Shares reacquired (142,747)
(1,649,132)
(80,297) (863,298)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 134,711 $
1,540,776
827,149 $ 8,879,613
==================================================================
==============
=============================
Class L**
Shares sold 13,648 $
162,257
22,142 $ 244,546
Shares issued on reinvestment --
- --
7 76
Shares reacquired (4,824)
(58,169)
(197) (2,030)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 8,824 $
104,088
21,952 $ 242,592
==================================================================
==============
=============================
HIGH GROWTH PORTFOLIO:
Class A
Shares sold 3,447,229 $
51,998,624
9,638,759 $133,112,615
Shares issued on reinvestment --
- --
924,090 13,150,399
Shares reacquired (3,172,817)
(47,865,792)
(5,966,783) (82,338,491)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 274,412 $
4,132,832
4,596,066 $ 63,924,523
==================================================================
==============
=============================
Class B
Shares sold 2,572,507 $
38,711,962
7,337,722 $100,937,836
Shares issued on reinvestment --
- --
700,013 9,910,412
Shares reacquired (2,428,889)
(36,537,203)
(4,321,062) (58,961,282)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 143,618 $
2,174,759
3,716,673 $ 51,886,966
==================================================================
==============
=============================
Class L**
Shares sold 528,847 $
8,014,528
978,422 $ 13,492,978
Shares issued on reinvestment --
- --
83,746 1,186,252
Shares reacquired (473,905)
(7,104,636)
(647,771) (8,784,316)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 54,942 $
909,892
414,397 $ 5,894,914
==================================================================
==============
=============================
Class Z
Shares sold 117,215 $
1,766,876
237,560 $ 3,271,964
Shares issued on reinvestment --
- --
16,927 241,163
Shares reacquired (80,669)
(1,238,841)
(36,884) (481,831)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 36,546 $
528,035
217,603 $ 3,031,296
==================================================================
==============
=============================
</TABLE>
* For the Global Portfolio, transactions are for the period
from March 9,
1998 (inception date) to July 31, 1999.
** On June 12, 1998, Class C shares were renamed Class L
shares.
47
<PAGE>
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Six Months Ended July
31, 1999
Year Ended January 31, 1999
---------------------
- ---------
- ---------------------------
Shares
Amount
Shares Amount
==================================================================
==============
=============================
<S> <C> <C>
<C> <C>
GROWTH PORTFOLIO:
Class A
Shares sold 3,808,462 $
55,209,450
9,890,705 $135,398,427
Shares issued on reinvestment --
- --
1,153,168 16,051,546
Shares reacquired (3,554,209)
(51,614,277)
(5,482,711) (74,886,382)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 254,253 $
3,595,173
5,561,163 $ 76,563,591
==================================================================
==============
=============================
Class B
Shares sold 3,358,282 $
48,776,366
9,212,957 $125,960,941
Shares issued on reinvestment --
- --
1,053,702 14,682,979
Shares reacquired (3,301,470)
(48,034,392)
(5,399,175) (73,438,124)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 56,812 $
741,974
4,867,484 $ 67,205,796
==================================================================
==============
=============================
Class L*
Shares sold 627,775 $
9,135,520
1,118,532 $ 15,322,127
Shares issued on reinvestment --
- --
122,113 1,702,086
Shares reacquired (534,313)
(7,770,789)
(863,978) (11,810,541)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 93,462 $
1,364,731
376,667 $ 5,213,672
==================================================================
==============
=============================
Class Z
Shares sold 84,562 $
1,222,456
225,050 $ 3,097,885
Shares issued on reinvestment --
- --
18,966 263,823
Shares reacquired (47,733)
(690,904)
(38,475) (518,676)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 36,829 $
531,552
205,540 $ 2,843,032
==================================================================
==============
=============================
BALANCED PORTFOLIO:
Class A
Shares sold 2,905,618 $
37,797,997
7,295,468 $ 93,331,666
Shares issued on reinvestment 298,171
3,834,289
992,232 12,647,946
Shares reacquired (3,308,308)
(43,106,493)
(3,928,077) (50,334,232)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase (Decrease) (104,519) $
(1,474,207)
4,359,623 $ 55,645,380
==================================================================
==============
=============================
Class B
Shares sold 2,377,637 $
30,930,391
6,310,903 $ 80,756,363
Shares issued on reinvestment 247,300
3,181,467
955,452 12,174,485
Shares reacquired (2,625,511)
(34,177,334)
(3,493,405) (44,662,329)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase (Decrease) (574) $
(65,476)
3,772,950 $ 48,268,519
==================================================================
==============
=============================
Class L*
Shares sold 472,251 $
6,149,106
1,018,653 $ 13,032,302
Shares issued on reinvestment 33,478
430,550
126,636 1,613,187
Shares reacquired (394,025)
(5,128,963)
(634,335) (8,131,326)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 111,704 $
1,450,693
510,954 $ 6,514,163
==================================================================
==============
=============================
Class Z
Shares sold 425,993 $
5,560,855
2,689,368 $ 34,533,423
Shares issued on reinvestment 25,235
323,265
23,813 303,238
Shares reacquired (777,909)
(10,164,615)
(108,811) (1,370,228)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase (Decrease) (326,681) $
(4,280,495)
2,604,369 $ 33,466,433
==================================================================
==============
=============================
</TABLE>
* On June 12, 1998, Class C shares were renamed Class L
shares.
48
<PAGE>
Notes to Financial Statements (unaudited) (continued)
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
Six Months Ended July
31, 1999
Year Ended January 31, 1999
---------------------
- ---------
- ---------------------------
Shares
Amount
Shares Amount
==================================================================
==============
=============================
<S> <C> <C>
<C> <C>
CONSERVATIVE PORTFOLIO:
Class A
Shares sold 1,097,671 $
13,206,591
2,757,450 $ 33,247,320
Shares issued on reinvestment 122,129
1,449,662
343,683 4,130,057
Shares reacquired (1,105,722)
(13,294,630)
(1,363,889) (16,448,987)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 114,078 $
1,361,623
1,737,244 $ 20,928,390
==================================================================
==============
=============================
Class B
Shares sold 1,206,856 $
14,462,138
2,192,411 $ 26,465,020
Shares issued on reinvestment 98,000
1,162,260
283,399 3,402,812
Shares reacquired (774,971)
(9,304,747)
(1,068,131) (12,898,059)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 529,885 $
6,319,651
1,407,679 $ 16,969,773
==================================================================
==============
=============================
Class L*
Shares sold 95,667 $
1,145,612
273,480 $ 3,295,754
Shares issued on reinvestment 9,787
116,078
28,107 337,543
Shares reacquired (71,500)
(858,029)
(170,834) (2,071,580)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 33,954 $
403,661
130,753 $ 1,561,717
==================================================================
==============
=============================
Class Z+
Shares sold --
- --
61,958 $ 751,242
Shares issued on reinvestment --
- --
5,835 70,037
Shares reacquired --
- --
(120,224) (1,438,494)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Decrease --
- --
(52,431) $ (617,215)
==================================================================
==============
=============================
INCOME PORTFOLIO:
Class A
Shares sold 578,172 $
6,523,779
1,432,010 $ 16,620,992
Shares issued on reinvestment 68,105
766,418
186,978 2,165,859
Shares reacquired (652,634)
(7,387,494)
(969,412) (11,236,624)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase (Decrease) (6,357) $
(97,297)
649,576 $ 7,550,227
==================================================================
==============
=============================
Class B
Shares sold 378,743 $
4,286,233
1,150,258 $ 13,342,895
Shares issued on reinvestment 53,949
607,630
144,806 1,678,632
Shares reacquired (560,710)
(6,329,763)
(554,946) (6,443,862)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase (Decrease) (128,018) $
(1,435,900)
740,118 $ 8,577,665
==================================================================
==============
=============================
Class L*
Shares sold 72,172 $
819,668
142,970 $ 1,657,080
Shares issued on reinvestment 5,909
66,522
14,963 173,507
Shares reacquired (52,044)
(587,217)
(118,393) (1,382,791)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Increase 26,037 $
298,973
39,540 $ 447,796
==================================================================
==============
=============================
Class Z+
Shares sold --
- --
81,175 $ 952,411
Shares issued on reinvestment --
- --
6,518 75,472
Shares reacquired --
- --
(146,474) (1,678,122)
- ------------------------------------------------------------------
- --------------
- -----------------------------
Net Decrease --
- --
(58,781) $ (650,239)
==================================================================
==============
=============================
</TABLE>
* On June 12, 1998, Class C shares were renamed Class L
shares.
+ On January 4, 1999, Class Z shares were fully redeemed.
49
<PAGE>
Financial Highlights
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class A
Class B Class L
---------------------
- ---- -----
- -------------------- ---------------------------
GLOBAL PORTFOLIO 1999(1)(2)
1999(2)(3)
1999(1)(2) 1999(2)(3) 1999(1)(2) 1999(2)(3)(4)
==================================================================
==============
====================================================
<S> <C> <C>
<C>
<C> <C> <C>
Net Asset Value, Beginning of Period $ 11.16 $
11.40 $
11.15 $ 11.40 $ 11.14 $ 11.40
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)(5) (0.02)
0.07
(0.06) 0.00* (0.06) (0.02)
Net realized and unrealized gain (loss) 1.07
(0.26)
1.06 (0.24) 1.07 (0.23)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Total Income (Loss) From Operations 1.05
(0.19)
1.00 (0.24) 1.01 (0.25)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Less Distributions From:
Net investment income --
(0.04)
- -- -- -- --
Net realized gains (0.02)
(0.01)
(0.02) (0.01) (0.02) (0.01)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Total Distributions (0.02)
(0.05)
(0.02) (0.01) (0.02) (0.01)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Net Asset Value, End of Period $ 12.19 $
11.16 $
12.13 $ 11.15 $ 12.13 $ 11.14
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Total Return++ 9.41%
(1.60)%
8.97% (2.16)% 9.07% (2.25)%
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Net Assets, End of Period (000's) $ 14,379 $
10,766 $
11,670 $ 9,220 $ 373 $ 244
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Ratios to Average Net Assets+:
Expenses 0.60%
0.59%
1.35% 1.32% 1.35% 1.32%
Net investment income (loss) (0.28)
0.80
(1.08) 0.06 (1.05) (0.12)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------------
Portfolio Turnover Rate 0%
0%
0% 0% 0% 0%
==================================================================
==============
====================================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from March 9, 1998 (inception date) to
January 31, 1999.
(4) On June 12, 1998, Class C shares were renamed Class L
shares.
(5) Net investment income (loss) per share includes short-term
capital gain
distributions from Underlying Funds.
* Amount represents less than $0.01.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
50
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class A
Shares
-------------------------
- --------------
- --------------------------------
HIGH GROWTH PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
================================
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $ 14.86 $
12.97
$ 12.41 $ 11.40
- ------------------------------------------------------------------
- --------------
- --------------------------------
Income From Operations:
Net investment income(4) 0.03
0.09
0.11 0.20
Net realized and unrealized gain 0.87
2.36
0.91 1.05
- ------------------------------------------------------------------
- --------------
- --------------------------------
Total Income From Operations 0.90
2.45
1.02 1.25
- ------------------------------------------------------------------
- --------------
- --------------------------------
Less Distributions From:
Net investment income --
(0.08)
(0.13) (0.20)
Net realized gains (0.10)
(0.48)
(0.33) (0.04)
- ------------------------------------------------------------------
- --------------
- --------------------------------
Total Distributions (0.10)
(0.56)
(0.46) (0.24)
- ------------------------------------------------------------------
- --------------
- --------------------------------
Net Asset Value, End of Period $ 15.66 $
14.86
$ 12.97 $ 12.41
- ------------------------------------------------------------------
- --------------
- --------------------------------
Total Return 6.06%++
19.15%
8.25% 11.04%++
- ------------------------------------------------------------------
- --------------
- --------------------------------
Net Assets, End of Period (000's) $ 389,311 $
365,225
$ 259,212 $ 154,069
- ------------------------------------------------------------------
- --------------
- --------------------------------
Ratios to Average Net Assets:
Expenses 0.60%+
0.60%
0.60% 0.60%+
Net investment income 0.39+
0.68
1.00 2.79+
- ------------------------------------------------------------------
- --------------
- --------------------------------
Portfolio Turnover Rate 1%
21%
39% 0%
==================================================================
==============
================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
51
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class B
Shares
-------------------------
- --------------
- --------------------------------
HIGH GROWTH PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
================================
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $ 14.81 $
12.95
$ 12.41 $ 11.40
- ------------------------------------------------------------------
- --------------
- --------------------------------
Income (Loss) From Operations:
Net investment income (loss)(4) (0.02)
(0.01)
0.03 0.08
Net realized and unrealized gain 0.86
2.35
0.89 1.04
- ------------------------------------------------------------------
- --------------
- --------------------------------
Total Income From Operations 0.84
2.34
0.92 1.12
- ------------------------------------------------------------------
- --------------
- --------------------------------
Less Distributions From:
Net investment income --
- --
(0.05) (0.07)
Net realized gains (0.10)
(0.48)
(0.33) (0.04)
- ------------------------------------------------------------------
- --------------
- --------------------------------
Total Distributions (0.10)
(0.48)
(0.38) (0.11)
- ------------------------------------------------------------------
- --------------
- --------------------------------
Net Asset Value, End of Period $ 15.55 $
14.81
$ 12.95 $ 12.41
- ------------------------------------------------------------------
- --------------
- --------------------------------
Total Return 5.68%++
18.30%
7.44% 9.91%++
- ------------------------------------------------------------------
- --------------
- --------------------------------
Net Assets, End of Period (000's) $ 336,303 $
318,101
$ 230,142 $ 141,241
- ------------------------------------------------------------------
- --------------
- --------------------------------
Ratios to Average Net Assets:
Expenses 1.35%+
1.35%
1.35% 1.35%+
Net investment income (loss) (0.36)+
(0.07)
0.25 2.04+
- ------------------------------------------------------------------
- --------------
- --------------------------------
Portfolio Turnover Rate 1%
21%
39% 0%
==================================================================
==============
================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income (loss) per share includes short-term
capital gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
52
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class L
Shares
-------------------------
- --------------
- -----------------------------------
HIGH GROWTH PORTFOLIO 1999(1)(2)
1999(2)(3)
1998 1997(4)
==================================================================
==============
===================================
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $ 14.81 $
12.96
$ 12.42 $ 11.40
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Income (Loss) From Operations:
Net investment income (loss)(5) (0.02)
(0.01)
0.03 0.08
Net realized and unrealized gain 0.87
2.34
0.89 1.05
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Total Income From Operations 0.85
2.33
0.92 1.13
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Less Distributions From:
Net investment income --
- --
(0.05) (0.07)
Net realized gains (0.10)
(0.48)
(0.33) (0.04)
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Total Distributions (0.10)
(0.48)
(0.38) (0.11)
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Net Asset Value, End of Period $ 15.56 $
14.81
$ 12.96 $ 12.42
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Total Return 5.75%++
18.21%
7.44% 10.00%++
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Net Assets, End of Period (000's) $ 40,730 $
37,969
$ 27,845 $ 19,340
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Ratios to Average Net Assets:
Expenses 1.35%+
1.35%
1.35% 1.35%+
Net investment income (loss) (0.36)+
(0.07)
0.25 2.04+
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Portfolio Turnover Rate 1%
21%
39% 0%
==================================================================
==============
===================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L
shares.
(4) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(5) Net investment income (loss) per share includes short-term
capital gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
53
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class Z
Shares
-------------------------
- --------------
- ----------------------------------
HIGH GROWTH PORTFOLIO 1999(1)(2)
1999(2)
1998(2) 1997(3)
==================================================================
==============
==================================
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $ 14.86 $
12.97
$ 12.41 $ 12.24
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Income From Operations:
Net investment income(4) 0.05
0.13
0.17 0.01
Net realized and unrealized gain 0.87
2.36
0.89 0.16
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Income From Operations 0.92
2.49
1.06 0.17
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Less Distributions From:
Net investment income --
(0.12)
(0.17) --
Net realized gains (0.10)
(0.48)
(0.33) --
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Distributions (0.10)
(0.60)
(0.50) --
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Net Asset Value, End of Period $ 15.68 $
14.86
$ 12.97 $ 12.41
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Return 6.20%++
19.45%
8.58% 1.39%++
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Net Assets, End of Period (000's) $ 7,657 $
6,712
$ 3,037 $ 4
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Ratios to Average Net Assets:
Expenses 0.35%+
0.35%
0.35% 0.35%+
Net investment income 0.65+
0.95
1.25 3.33*
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Portfolio Turnover Rate 1%
21%
39% 0%
==================================================================
==============
==================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from January 17, 1997 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
* Not annualized.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
54
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class A
Shares
-------------------------
- --------------
- ----------------------------------
GROWTH PORTFOLIO 1999(1)(2)
1999(2)
1998(2) 1997(3)
==================================================================
==============
==================================
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $ 14.43 $
12.99
$ 12.32 $ 11.40
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Income From Operations:
Net investment income(4) 0.12
0.26
0.31 0.33
Net realized and unrealized gain 0.20
1.82
1.14 0.92
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Income From Operations 0.32
2.08
1.45 1.25
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Less Distributions From:
Net investment income (0.03)
(0.27)
(0.32) (0.31)
Net realized gains (0.18)
(0.37)
(0.46) (0.02)
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Distributions (0.21)
(0.64)
(0.78) (0.33)
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Net Asset Value, End of Period $ 14.54 $
14.43
$ 12.99 $ 12.32
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Return 2.21%++
16.20%
11.82% 11.08%++
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Net Assets, End of Period (000's) $ 397,934 $
391,235
$ 279,842 $ 161,026
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Ratios to Average Net Assets:
Expenses 0.60%+
0.60%
0.60% 0.60%+
Net investment income 1.66+
1.93
2.77 4.79+
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Portfolio Turnover Rate 0%
10%
41% 0%
==================================================================
==============
==================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
55
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class B
Shares
------------------------
- --------------
- ---------------------------------
GROWTH PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
=================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 14.48 $
13.00
$ 12.33 $ 11.40
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Income From Operations:
Net investment income(4) 0.07
0.16
0.22 0.23
Net realized and unrealized gain 0.19
1.82
1.12 0.94
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Total Income From Operations 0.26
1.98
1.34 1.17
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Less Distributions From:
Net investment income --
(0.13)
(0.21) (0.22)
Net realized gains (0.18)
(0.37)
(0.46) (0.02)
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Total Distributions (0.18)
(0.50)
(0.67) (0.24)
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Net Asset Value, End of Period $ 14.56 $
14.48
$ 13.00 $ 12.33
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Total Return 1.81%++
15.40%
10.93% 10.32%++
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Net Assets, End of Period (000's) $ 456,371 $
452,943
$ 343,474 $ 211,434
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Ratios to Average Net Assets:
Expenses 1.35%+
1.35%
1.35% 1.35%+
Net investment income 0.91+
1.18
1.96 4.04+
- ------------------------------------------------------------------
- --------------
- ---------------------------------
Portfolio Turnover Rate 0%
10%
41% 0%
==================================================================
==============
=================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
56
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class L
Shares
-------------------------
- --------------
- -----------------------------------
GROWTH PORTFOLIO 1999(1)(2)
1999(2)(3)
1998 1997(4)
==================================================================
==============
===================================
<S> <C> <C>
<C> <C>
Net Asset Value, Beginning of Period $ 14.48 $
13.00
$ 12.33 $ 11.40
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Income From Operations:
Net investment income(5) 0.07
0.16
0.22 0.23
Net realized and unrealized gain 0.19
1.82
1.12 0.93
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Total Income From Operations 0.26
1.98
1.34 1.17
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Less Distributions From:
Net investment income --
(0.13)
(0.21) (0.22)
Net realized gains (0.18)
(0.37)
(0.46) (0.02)
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Total Distributions (0.18)
(0.50)
(0.67) (0.24)
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Net Asset Value, End of Period $ 14.56 $
14.48
$ 13.00 $ 12.33
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Total Return 1.81%++
15.40%
10.92% 10.32%++
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Net Assets, End of Period (000's) $ 54,986 $
53,319
$ 42,983 $ 31,279
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Ratios to Average Net Assets:
Expenses 1.35%+
1.35%
1.35% 1.35%+
Net investment income 0.92+
1.18
1.96 4.04+
- ------------------------------------------------------------------
- --------------
- -----------------------------------
Portfolio Turnover Rate 0%
10%
41% 0%
==================================================================
==============
===================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L
shares.
(4) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(5) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
57
<PAGE>
Financial Highlights (continued)
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class Z
Shares
---------------------
- --------------
- ----------------------------------
GROWTH PORTFOLIO 1999(1)(2)
1999(2)
1998(2) 1997(3)
==================================================================
==============
==================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 14.41
$ 12.99
$ 12.32 $ 12.18
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Income From Operations:
Net investment income(4) 0.14
0.30
0.73 0.02
Net realized and unrealized gain 0.20
1.81
0.75 0.12
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Income From Operations 0.34
2.11
1.48 0.14
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Less Distributions From:
Net investment income (0.08)
(0.32)
(0.35) --
Net realized gains (0.18)
(0.37)
(0.46) --
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Distributions (0.26)
(0.69)
(0.81) --
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Net Asset Value, End of Period $ 14.49
$ 14.41
$ 12.99 $ 12.32
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Total Return 2.34%++
16.47%
12.08% 1.15%++
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Net Assets, End of Period (000's) $ 6,759
$ 6,190
$ 2,908 $ 6
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Ratios to Average Net Assets:
Expenses 0.35%+
0.35%
0.35% 0.35%+
Net investment income 1.95+
2.18
5.24 5.30*
- ------------------------------------------------------------------
- --------------
- ----------------------------------
Portfolio Turnover Rate 0%
10%
41% 0%
==================================================================
==============
==================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from January 17, 1997 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
* Not annualized.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
58
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class
A Shares
---------------------
- --------------
- ------------------------------------
BALANCED PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
====================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 12.95
$ 12.62
$ 12.14 $ 11.40
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Income From Operations:
Net investment income(4) 0.19
0.42
0.58 0.45
Net realized and unrealized gain 0.07
0.73
0.80 0.74
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Total Income From Operations 0.26
1.15
1.38 1.19
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Less Distributions From:
Net investment income (0.22)
(0.45)
(0.54) (0.45)
Net realized gains (0.31)
(0.37)
(0.36) --
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Total Distributions (0.53)
(0.82)
(0.90) (0.45)
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Net Asset Value, End of Period $ 12.68
$ 12.95
$ 12.62 $ 12.14
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Total Return 2.05%++
9.33%
11.59% 10.64%++
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Net Assets, End of Period (000's) $ 221,486
$ 227,674
$ 166,806 $ 90,938
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Ratios to Average Net Assets:
Expenses 0.60%+
0.60%
0.60% 0.60%+
Net investment income 2.97+
3.24
4.79 4.88+
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Portfolio Turnover Rate 1%
10%
23% 0%
==================================================================
==============
====================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
59
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class
B Shares
---------------------
- --------------
- ------------------------------------
BALANCED PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
====================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 12.95
$ 12.61
$ 12.14 $ 11.40
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Income From Operations:
Net investment income(4) 0.14
0.32
0.48 0.37
Net realized and unrealized gain 0.06
0.74
0.80 0.74
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Total Income From Operations 0.20
1.06
1.28 1.11
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Less Distributions From:
Net investment income (0.17)
(0.35)
(0.54) (0.37)
Net realized gains (0.31)
(0.37)
(0.36) --
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Total Distributions (0.48)
(0.72)
(0.81) (0.37)
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Net Asset Value, End of Period $ 12.67
$ 12.95
$ 12.61 $ 12.14
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Total Return 1.59%++
8.62%
10.67% 9.90%++
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Net Assets, End of Period (000's) $ 242,433
$ 247,733
$ 193,791 $ 111,918
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Ratios to Average Net Assets:
Expenses 1.35%+
1.35%
1.35% 1.35%+
Net investment income 2.21+
2.50
3.96 4.14+
- ------------------------------------------------------------------
- --------------
- ------------------------------------
Portfolio Turnover Rate 1%
10%
23% 0%
==================================================================
==============
====================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
60
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class L Shares
---------------------
- --------------
- ---------------------------------------
BALANCED PORTFOLIO 1999(1)(2)
1999(2)(3)
1998 1997(4)
==================================================================
==============
=======================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 12.94
$ 12.61
$ 12.14 $ 11.40
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Income From Operations:
Net investment income(5) 0.14
0.32
0.46 0.37
Net realized and unrealized gain 0.07
0.73
0.82 0.74
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Income From Operations 0.21
1.05
1.28 1.11
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Less Distributions From:
Net investment income (0.17)
(0.35)
(0.54) (0.37)
Net realized gains (0.31)
(0.37)
(0.36) --
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Distributions (0.48)
(0.72)
(0.81) (0.37)
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Asset Value, End of Period $ 12.67
$ 12.94
$ 12.61 $ 12.14
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Return 1.67%++
8.53%
10.67% 9.90%++
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Assets, End of Period (000's) $ 35,480
$ 34,809
$ 27,473 $ 19,968
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Ratios to Average Net Assets:
Expenses 1.35%+
1.35%
1.35% 1.35%+
Net investment income 2.24+
2.50
3.69 4.14+
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Portfolio Turnover Rate 1%
10%
23% 0%
==================================================================
==============
=======================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L
shares.
(4) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(5) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
61
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class Z Shares
---------------------
- --------------
- --------------------------------------
BALANCED PORTFOLIO 1999(1)(2)
1999(2)
1998(2) 1997(3)
==================================================================
==============
======================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 12.95
$ 12.61
$ 12.13 $ 12.10
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Income From Operations:
Net investment income(4) 0.21
0.45
1.11 0.00
Net realized and unrealized gain 0.06
0.74
0.30 0.03
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Total Income From Operations 0.27
1.19
1.41 0.03
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Less Distributions From:
Net investment income (0.24)
(0.48)
(0.57) --
Net realized gains (0.31)
(0.37)
(0.36) --
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Total Distributions (0.55)
(0.85)
(0.93) --
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Net Asset Value, End of Period $ 12.67
$ 12.95
$ 12.61 $ 12.13
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Total Return 2.10%++
9.70%
11.82% 0.25%++
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Net Assets, End of Period (000's) $ 31,801
$ 36,726
$ 2,919 $ 2
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Ratios to Average Net Assets:
Expenses 0.35%+
0.35%
0.35% 0.35%+
Net investment income 3.16+
3.50
8.31 5.39*
- ------------------------------------------------------------------
- --------------
- --------------------------------------
Portfolio Turnover Rate 1%
10%
23% 0%
==================================================================
==============
======================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from January 17, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds. Amount represents less
than $0.01.
* Not annualized.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
62
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class A Shares
------------------
- --------------
- ---------------------------------------
CONSERVATIVE PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
=======================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 12.04
$ 12.17
$ 11.90 $ 11.46
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.26
0.58
0.73 0.53
Net realized and unrealized gain (loss) (0.13)
0.11
0.63 0.43
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Income From Operations 0.13
0.69
1.36 0.96
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Less Distributions From:
Net investment income (0.24)
(0.58) (0.69) (0.52)
Net realized gains (0.17)
(0.24) (0.40) --
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Distributions (0.41)
(0.82) (1.09) (0.52)
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Asset Value, End of Period $ 11.76
$ 12.04
$ 12.17 $ 11.90
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Return 1.11%++
5.85% 11.70% 8.57%++
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Assets, End of Period (000's) $ 71,255
$ 71,583
$ 51,233 $ 30,478
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Ratios to Average Net Assets:
Expenses 0.60%+
0.60% 0.60% 0.60%+
Net investment income 4.35+
4.80
6.17 5.66+
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Portfolio Turnover Rate 1%
5% 28% 0%
==================================================================
==============
=======================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
63
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class B Shares
------------------
- --------------
- ---------------------------------------
CONSERVATIVE PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
=======================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 12.02
$ 12.16
$ 11.89 $ 11.46
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.23
0.52
0.66 0.48
Net realized and unrealized gain (loss) (0.13)
0.10
0.64 0.42
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Income From Operations 0.10
0.62
1.30 0.90
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Less Distributions From:
Net investment income (0.21)
(0.52) (0.63) (0.47)
Net realized gains (0.17)
(0.24) (0.40) --
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Distributions (0.38)
(0.76) (1.03) (0.47)
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Asset Value, End of Period $ 11.74
$ 12.02
$ 12.16 $ 11.89
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Return 0.85%++
5.22% 11.21% 8.03%++
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Assets, End of Period (000's) $ 69,656
$ 64,983
$ 48,584 $ 28,297
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Ratios to Average Net Assets:
Expenses 1.10%+
1.09% 1.10% 1.10%+
Net investment income 3.88+
4.31
5.67 5.16+
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Portfolio Turnover Rate 1%
5% 28% 0%
==================================================================
==============
=======================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
64
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class L Shares
------------------
- --------------
- ------------------------------------------
CONSERVATIVE PORTFOLIO 1999(1)(2)
1999(2)(3)
1998 1997(4)
==================================================================
==============
==========================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 12.02
$ 12.16
$ 11.89 $ 11.46
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.24
0.53
0.69 0.48
Net realized and unrealized gain (loss) (0.13)
0.10
0.62 0.42
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Total Income From Operations 0.11
0.63
1.31 0.90
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Less Distributions From:
Net investment income (0.22)
(0.53) (0.64) (0.47)
Net realized gains (0.17)
(0.24) (0.40) --
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Total Distributions (0.39)
(0.77) (1.04) (0.47)
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Net Asset Value, End of Period $ 11.74
$ 12.02
$ 12.16 $ 11.89
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Total Return 0.88%++
5.29% 11.25% 8.08%++
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Net Assets, End of Period (000's) $ 7,138
$ 6,899
$ 5,386 $ 4,129
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Ratios to Average Net Assets:
Expenses 1.05%+
1.05% 1.05% 1.05%+
Net investment income 3.92+
4.32
5.72 5.21+
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Portfolio Turnover Rate 1%
5% 28% 0%
==================================================================
==============
==========================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L
shares.
(4) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(5) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
* Not annualized.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
65
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class A Shares
------------------
- --------------
- ---------------------------------------
INCOME PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
=======================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 11.50
$ 11.75
$ 11.53 $ 11.46
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.32
0.69
0.76 0.63
Net realized and unrealized gain (loss) (0.49)
(0.14) 0.52 0.07
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Income (Loss) From Operations (0.17)
0.55
1.28 0.70
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Less Distributions From:
Net investment income (0.31)
(0.69) (0.77) (0.63)
Net realized gains (0.07)
(0.11) (0.29) --
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Distributions (0.38)
(0.80) (1.06) (0.63)
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Asset Value, End of Period $ 10.95
$ 11.50
$ 11.75 $ 11.53
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Return (1.45)%++
4.88% 11.44% 6.39%++
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Assets, End of Period (000's) $ 34,590
$ 36,390
$ 29,574 $ 17,817
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Ratios to Average Net Assets:
Expenses 0.60%+
0.60% 0.60% 0.60%+
Net investment income 5.69+
5.95
6.62 6.32+
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Portfolio Turnover Rate 2%
0% 28% 0%
==================================================================
==============
=======================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
66
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class B Shares
------------------
- --------------
- ---------------------------------------
INCOME PORTFOLIO 1999(1)(2)
1999(2)
1998 1997(3)
==================================================================
==============
=======================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 11.50
$ 11.76
$ 11.53 $ 11.46
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.29
0.63
0.70 0.58
Net realized and unrealized gain (loss) (0.48)
(0.15) 0.52 0.07
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Income (Loss) From Operations (0.19)
0.48
1.22 0.65
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Less Distributions From:
Net investment income (0.28)
(0.63) (0.70) (0.58)
Net realized gains (0.07)
(0.11) (0.29) --
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Distributions (0.35)
(0.74) (0.99) (0.58)
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Asset Value, End of Period $ 10.96
$ 11.50
$ 11.76 $ 11.53
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Total Return (1.62)%++
4.25% 10.93% 5.89%++
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Net Assets, End of Period (000's) $ 31,458
$ 34,497
$ 26,563 $ 17,800
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Ratios to Average Net Assets:
Expenses 1.10%+
1.10% 1.10% 1.10%+
Net investment income 5.19+
5.45
6.12 5.82+
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
Portfolio Turnover Rate 2%
0% 28% 0%
==================================================================
==============
=======================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(4) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
67
<PAGE>
Financial Highlights (continued)
- ------------------------------------------------------------------
- --------------
For a share of each class of capital stock outstanding throughout
each year
ended January 31, except where noted:
<TABLE>
<CAPTION>
Class L Shares
------------------
- --------------
- ------------------------------------------
INCOME PORTFOLIO 1999(1)(2)
1999(2)(3)
1998 1997(4)
==================================================================
==============
==========================================
<S> <C>
<C>
<C> <C>
Net Asset Value, Beginning of Period $ 11.50
$ 11.76
$ 11.53 $ 11.46
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.30
0.64
0.71 0.59
Net realized and unrealized gain (loss) (0.49)
(0.15) 0.52 0.07
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Total Income (Loss) From Operations (0.19)
0.49
1.23 0.66
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Less Distributions From:
Net investment income (0.28)
(0.64) (0.71) (0.59)
Net realized gains (0.07)
(0.11) (0.29) --
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Total Distributions (0.35)
(0.75) (1.00) (0.59)
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Net Asset Value, End of Period $ 10.96
$ 11.50
$ 11.76 $ 11.53
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Total Return (1.59)%++
4.31% 10.98% 5.94%++
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Net Assets, End of Period (000's) $ 4,043
$ 3,945
$ 3,568 $ 2,113
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Ratios to Average Net Assets:
Expenses 1.05%+
1.05% 1.05% 1.05%+
Net investment income 5.28+
5.47
6.17 5.87+
- ------------------------------------------------------------------
- --------------
- ------------------------------------------
Portfolio Turnover Rate 2%
0% 28% 0%
==================================================================
==============
==========================================
</TABLE>
(1) For the six months ended July 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly
average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L
shares.
(4) For the period from February 5, 1996 (inception date) to
January 31, 1997.
(5) Net investment income per share includes short-term capital
gain
distributions from Underlying Funds.
++ Total return is not annualized, as it may not be
representative of the
total return for the year.
+ Annualized.
68
<PAGE>
Directors
Walter E. Auch
Martin Brody
H. John Ellis
Armon E. Kamesar
Stephen E. Kaufman
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
R. Jay Gerken
Vice President and Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Manager
SSBC Fund Management Inc.
Distributors
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Shareholder Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9699
Providence, RI 02940-9699
Smith Barney Concert
Allocation Series Inc.
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
69
<PAGE>
This report is submitted for the general information of the
shareholders of
Smith Barney Concert Allocation Series Inc. It is not authorized
for
distribution to prospective investors unless accompanied or
preceded by a
current Prospectus for the Fund, which contains information
concerning the
Fund's investment policies and expenses as well as other pertinent
information.
SalomonSmithBarney
--------------
- --------------
A member of
citigroup [LOGO]
Salomon Smith Barney is a service mark of Salomon
Smith Barney Inc.
Member NASD, SIPC
(C) 1999 Salomon
Smith Barney Inc.
FD01185 9/99
<PAGE>
SMITH BARNEY CONCERT ALLOCATION SERIES INC.
[GRAPHIC]
- - SELECT HIGH GROWTH PORTFOLIO
- - SELECT GROWTH PORTFOLIO
- - SELECT BALANCED PORTFOLIO
- - SELECT CONSERVATIVE PORTFOLIO
- - SELECT INCOME PORTFOLIO
SEMI-ANNUAL REPORT
JULY 31, 1999
INVESTMENT STRATEGIES FOR YOUR LIFE
[LOGO]
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to
Shareholders....................................................
1
The Concert Allocation Series Portfolios
The Select High Growth
Portfolio...................................... 5
The Select Growth
Portfolio........................................... 8
The Select Balanced
Portfolio......................................... 11
The Select Conservative
Portfolio..................................... 14
The Select Income
Portfolio........................................... 17
Schedules of
Investments..................................................
20
Statements of Assets and
Liabilities...................................... 25
Statements of
Operations..................................................
26
Statements of Changes in Net
Assets....................................... 27
Notes to Financial
Statements............................................. 29
Financial
Highlights......................................................
32
Directors and
Officers....................................................
37
</TABLE>
<PAGE>
Dear Shareholder:
[PHOTO]
Heath B. McLendon
CHAIRMAN
THE CONCERT ALLOCATION SERIES
We are pleased to present the semi-annual report for the Smith
Barney Concert
Allocation Series Inc. ("Concert Allocation Series") Select
Portfolios
("Portfolios") for the period ended July 31, 1999. The Concert
Allocation Select
Portfolios seek to deliver strong returns over the long term while
minimizing
market volatility. The Portfolios covered in this report delivered
competitive
returns during the reporting period. The performance and current
holdings of
each Portfolio are discussed in greater detail on the following
pages.
THE PERFORMANCE OF CONCERT ALLOCATION
SELECT SERIES PORTFOLIOS*
TOTAL RETURNS FOR THE SIX MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
PORTFOLIO TOTAL RETURN
- -------------------- ------------<S> <C>
Select High Growth 6.35% Select Growth
2.25 Select
Balanced 2.19 Select Conservative 1.22
Select Income
(1.28) </TABLE>
* THE PERFORMANCE FIGURES SHOWN ABOVE REPRESENT PAST
PERFORMANCE WHICH IS
NOT
INDICATIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL
VALUE OF AN
INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
THE U.S. MARKETS
The U.S. stock market set record highs during the six months ended
July 31, 1999
and returned 4.50% as measured by the S&P 500 Stock Index, a
capitalization-
weighted index of 500 widely held common stocks. These new market
highs were
supported by strong corporate earnings reports, and renewed
confidence that
worldwide growth was turning upwards. Bond investors were not as
fortunate. For
the stronger economy stirred fears of inflation, as well as the
reality of the
Federal Reserve Board ("Fed") boosting interest rates by 25 basis
points both in
late June and late August. For the six months ended July 31, 1999,
the Lehman
Brothers Government/Corporate Bond Index, a combination of
publicly issued
intermediate- and long-term U.S government bonds and corporate
bonds, returned a
negative of 3.24%.
1 <PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SALUTING THE
LONG-TERM INVESTOR
GROWTH OF $10,000
INVESTED IN THE
STANDARD & POOR'S 500 COMPOSITE STOCK
INDEX,
SALOMON SMITH BARNEY WORLD GOVERNMENT
BOND INDEX,
LEHMAN
GOVERNMENT/CORPORATE BOND INDEX AND MORGAN STANLEY
CAPITAL
INTERNATIONAL EAFE
INDEX
JULY 1989 -- JULY 1999
(UNAUDITED)
SALOMON SMITH BARNEY WORLD
LEHMAN GOVERNMENT BOND
GOVERNMENT/CORPORATE
S&P 500 INDEX INDEX
MSCI EAFE INDEX BOND INDEX
<S> <C> <C>
<C>
<C>
7/89 $10,000 $10,000
$10,000 $10,000
1/90 $9,667 $10,008
$10,049 $10,105
1/91 $10,476 $10,943
$8,276 $11,219
1/92 $12,849 $12,164
$8,330 $12,692
1/93 $14,206 $13,372
$7,502 $14,161
1/94 $16,031 $14,808
$10,817 $15,620
1/95 $16,115 $14,442
$10,364 $15,134
1/96 $22,338 $16,978
$12,072 $17,816
1/97 $28,220 $18,438
$12,340 $18,242
1/98 $35,812 $20,662
$13,629 $20,280
1/99 $47,451 $23,919
$15,616 $22,049
7/99 $49,587 $22,960
$16,767 $21,334
</TABLE>
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX ("S&P 500") IS A
CAPITALIZATION-WEIGHTED INDEX OF 500 WIDELY HELD COMMON STOCKS.
THE SALOMON
SMITH BARNEY WORLD GOVERNMENT BOND INDEX IS A MARKET-
CAPITALIZATION-WEIGHTED
BENCHMARK THAT TRACKS THE PERFORMANCE OF THE GOVERNMENT BOND
MARKETS OF 14
COUNTRIES. THE LEHMAN GOVERNMENT/CORPORATE BOND INDEX IS A
COMBINATION OF
PUBLICLY ISSUED INTERMEDIATE- AND LONG-TERM U.S. GOVERNMENT BONDS
AND CORPORATE
BONDS. THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX ("MSCI
EAFE")
CONSISTS OF THE EQUITY TOTAL RETURNS FOR EUROPE, AUSTRALIA AND THE
FAR EAST.
THESE INDICES ARE UNMANAGED AND ARE NOT SUBJECT TO THE SAME
MANAGEMENT AND
TRADING EXPENSES AS A MUTUAL FUND. AN INVESTOR CANNOT INVEST
DIRECTLY IN AN
INDEX.
Climbing stock prices have been, in some sense, a continuation of
the strong
stock markets of the last several years. But in other ways, the
period under
review has been different. Over the past several years, large-
sized company
stocks have outperformed small ones, and growth stocks have
outperformed value
stocks. But in the last six months, small stocks and value stocks
have improved
their relative price performance. And we think it likely that this
change should
persist for a significant time period, as relative performance
often rotates
between asset classes.
The long anticipated slowdown in U.S. economic activity again
failed to happen
during the reporting period. Global stock markets continued to
rise, led by
better than expected profit growth and continued merger and
acquisition
activity. During the first seven months of 1999, U.S. economic
growth continued
at a robust pace. Furthermore, the labor market continued to be
extremely tight,
as the unemployment rate fell to a 29-year low of 4.2% in March.
2
<PAGE>
Defying the expectations of many economists, inflation -- as
measured by the
Consumer Price Index ("CPI") -- was virtually absent. Productivity
gains and
sagging global demand were credited with keeping inflation under
control.
However, signs of inflation began to emerge in early spring. This,
coupled with
signs that many world economies were in the early stages of growth
and recovery,
deepened fears that inflationary pressures were reaching a
breaking point.
To counter these inflationary pressures, the Fed raised short-term
interest
rates by 0.25% in late June and late August, and subsequently
adopted a neutral
stance on monetary policy. Meanwhile, during the months of May and
June, the CPI
remained constant, generating considerable optimism that inflation
had
retreated.
INTERNATIONAL STOCK MARKETS
Major political and economic crosscurrents influenced the
international equity
markets during the first half of the year. Despite rising interest
rate
anxieties, global equity markets delivered positive returns. While
investors
fretted about rising U.S. and Japanese bond yields, economic data
showed that
many Asian countries had begun their recoveries from the steep
recessions of the
past two years. Performance of the European markets, for dollar-
based investors
has lagged in 1999, primarily due to weakness of the new Euro
currency versus
the U.S. dollar.
During the reporting period, Asia continued to experience a flow
of funds from
global investors attracted by falling interest rates, signs of
economic growth
in Asia and the prospects for meaningful structural change in
Japan.
INTERNATIONAL BOND MARKETS
The last several months of 1998 saw particularly strong
performance from the
majority of the world's major bond markets. Bond yields moved
lower, in line
with the U.S. Treasury market, as investors fled from the
uncertainties in the
lesser-developed countries. In Europe, the shift to lower yields
was
additionally supported by the advent of a single currency, the
Euro. This drove
the yields on the peripheral markets, such as Sweden and Italy,
down to levels
that more closely matched those on the core markets of Germany and
France.
However, the trend of lower interest rates reversed in the first
six months of
1999. The main concerns stemmed from the United States, where
economic activity
had been more robust than many investors had earlier anticipated.
This in turn
led many investors to question when the Fed would reverse the
lower interest
rate policy it had authorized in the fall of 1998. At that time,
the Fed's top
priority was to ensure that the financial crisis enveloping many
of the world's
emerging economies did not escalate into a major global problem.
The Fed's
actions have largely contributed to ongoing economic recovery,
providing
liquidity to overseas markets. In reaction to the Fed's interest
rate increase
on June 30, 1999, the international bond market declined. We
anticipate that the
performance of fixed-income markets worldwide will continue to
mirror the
actions of the Fed.
3 <PAGE>
LOOKING FORWARD
Rising equity markets, the unwillingness of consumer spending to
slow down and a
growing global economy has caused Fed monetary policy to remain
vigilant. With
the world economic crisis abating, we cannot rule out the
possibility of another
Fed rate increase before year-end. However, in our view, the most
likely
scenario is that the Fed's monetary policy will remain neutral, at
least through
the third quarter of 1999.
Thank you for your participation and the confidence you have
placed in us.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
CHAIRMAN
AUGUST 31, 1999
4 <PAGE>
THE SELECT HIGH GROWTH PORTFOLIO
TARGET ASSET ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BOND FUNDS STOCK FUNDS
<S> <C>
10% 90%
</TABLE>
THE SELECT HIGH GROWTH PORTFOLIO SEEKS CAPITAL APPRECIATION BY
INVESTING A HIGH
PERCENTAGE OF ITS ASSETS IN AGGRESSIVE EQUITY FUNDS.
.................................................................
THE SELECT HIGH GROWTH PORTFOLIO
The Select High Growth Portfolio seeks capital appreciation. Among
the
Portfolios of the Concert Allocation Series, the Select High
Growth Portfolio
invests a large portion of its assets in aggressive equity mutual
funds that
focus on smaller, more speculative companies as well as mid-sized
(or larger)
companies with the potential for rapid growth. Moreover, a
significant portion
of the Portfolio is invested in international or emerging markets
funds in order
to achieve a greater level of diversification.
INDEX COMPARISON*
<TABLE>
<S> <C>
S&P 500 4.50 %
RUSSELL 2000 4.89 %
MSCI EAFE 7.37 %
SALOMON SMITH BARNEY
HIGH YIELD MARKET 0.49 %
</TABLE>
.................................................................
*THE CHART ABOVE REPRESENTS TOTAL RETURNS FOR THE SIX MONTHS ENDED
JULY 31,
1999.
PORTFOLIO UPDATE
The Select High Growth Portfolio ("Portfolio") generated a total
return of 6.35%
for the six months ended July 31, 1999. The chart that appears on
page 6
compares the Portfolio's performance to broad-based indices that
track four of
the asset classes represented in the Portfolio.
During the six months ended July 31, 1999, the U.S. economy
continued to show
signs of benign inflation and productivity-driven growth. Domestic
demand growth
outstripped even optimistic estimates of the economy's long-term
capacity, and a
combination of rising productivity, a flood of goods from abroad
and more
intensive use of labor kept inflation from overheating.
During the period, the Portfolio benefited from its exposure to
value stocks. In
particular, global value stocks performed extremely well and
posted healthy
returns. Also, the Portfolio's mid-cap stock holdings were key
contributors to
performance. As we noted in our main letter, the market's return
to "normalcy"
during the past six months (after the long domination of large-cap
growth
stocks) further reinforces the importance and benefits of
maintaining broad
diversification over the long-term. ------------------------------
- --------------
- ----------------------
THE TARGET ASSET ALLOCATION SET FORTH ABOVE REPRESENTS AN
APPROXIMATE MIX OF
INVESTMENTS FOR THE SELECT HIGH GROWTH PORTFOLIO. THE ALLOCATION
AND INVESTMENT
MIX OF THE PORTFOLIO MAY VARY DEPENDING UPON MARKET CONDITIONS,
CASH FLOWS IN
AND OUT OF THE PORTFOLIO AND OTHER FACTORS. IN ADDITION, THE
ALLOCATION AND
INVESTMENT RANGES OF THE PORTFOLIO MAY BE CHANGED FROM TIME TO
TIME UPON THE
APPROVAL OF THE CONCERT ALLOCATION SERIES' BOARD OF DIRECTORS.
5 <PAGE>
GROWTH OF $10,000 INVESTED IN THE SELECT HIGH GROWTH PORTFOLIO VS.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX, RUSSELL 2000
INDEX,
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX AND SALOMON SMITH
BARNEY HIGH
YIELD MARKET INDEX
..................................................................
.............
FEBRUARY 5, 1997 -- JULY 31, 1999 (UNAUDITED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SELECT HIGH STANDARD & POOR'S 500 RUSSELL
MSCI
SALOMON SMITH BARNEY HIGH YIELD
GROWTH PORTFOLIO COMPOSITE STOCK INDEX 2000 INDEX EAFE
INDEX
MARKET INDEX
<S> <C> <C> <C> <C>
<C>
2/5/97 $10,000 $10,000 $10,000
$10,000
$10,000
7/97 $11,250 $12,264 $11,307 $11,711
$10,757
1/98 $11,060 $12,689 $11,607 $11,028
$11,487
7/98 $11,998 $14,618 $11,569 $12,349
$11,906
1/99 $13,138 $16,814 $11,851 $12,636
$11,812
7/99 $13,972 $17,571 $12,431 $13,566
$11,870
</TABLE>
THE CHART ABOVE REPRESENTS A HYPOTHETICAL ILLUSTRATION OF $10,000
INVESTED ON
FEBRUARY 5, 1997 (COMMENCEMENT OF OPERATIONS), ASSUMING
REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, IF ANY, AT NET ASSET VALUE THROUGH
JULY 31, 1999.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX IS AN UNMANAGED
INDEX COMPOSED
OF 500 WIDELY HELD COMMON STOCKS LISTED ON THE NEW YORK STOCK
EXCHANGE, AMERICAN
STOCK EXCHANGE AND THE OVER-THE-COUNTER MARKET. THE RUSSELL 2000
INDEX IS A
CAPITALIZATION WEIGHTED TOTAL RETURN INDEX WHICH IS COMPRISED OF
2,000 OF SOME
OF THE SMALLER-CAPITALIZED U.S.-DOMICILED COMPANIES WHOSE COMMON
STOCK IS TRADED
IN THE UNITED STATES ON THE NEW YORK STOCK EXCHANGE, AMERICAN
STOCK EXCHANGE AND
NASDAQ. THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX ("MSCI
EAFE")
CONSISTS OF THE EQUITY TOTAL RETURNS FOR EUROPE, AUSTRALIA AND THE
FAR EAST. THE
SALOMON SMITH BARNEY HIGH YIELD MARKET INDEX COVERS A SIGNIFICANT
PORTION OF THE
BELOW-INVESTMENT-GRADE U.S. CORPORATE BOND MARKET. THESE INDICES
ARE UNMANAGED
AND ARE NOT SUBJECT TO THE SAME MANAGEMENT AND TRADING EXPENSES AS
A MUTUAL
FUND. AN INVESTOR CANNOT INVEST DIRECTLY IN AN INDEX.
ALL FIGURES REPRESENT PAST PERFORMANCE AND ARE NOT A GUARANTEE OF
FUTURE
RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUE WILL FLUCTUATE,
AND REDEMPTION
VALUES MAY BE MORE OR LESS THAN THE ORIGINAL COST. NO ADJUSTMENT
HAS BEEN MADE
FOR SHAREHOLDER TAX LIABILITY ON DIVIDENDS OR CAPITAL GAINS.
6 <PAGE>
HISTORICAL PERFORMANCE -- SELECT HIGH GROWTH PORTFOLIO+
..................................................................
.............
<TABLE>
<CAPTION>
NET ASSET VALUE
- ------------------------------------- INCOME CAPITAL GAIN
PERIOD ENDED BEGINNING OF PERIOD END OF PERIOD
DIVIDENDS
DISTRIBUTIONS TOTAL RETURNS
<S> <C> <C> <C> <C>
<C>
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------7/31/99
$13.02
$13.61 $0.07 $0.17 6.35%++
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------1/31/99
11.06
13.02 0.07 0.04 18.79
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------2/5/97* -- 1/31/98
10.00
11.06 0.00 0.00 10.60++
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------
Total $0.14 $0.21
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------</TABLE>
AVERAGE ANNUAL TOTAL RETURNS -- SELECT HIGH GROWTH PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C>
<C>
<C> <C> <C>
Six Months Ended 7/31/99++
6.35%
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------Year Ended 7/31/99
16.46
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------2/5/97* through
7/31/99
14.42
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------</TABLE>
CUMULATIVE TOTAL RETURN -- SELECT HIGH GROWTH PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C>
<C>
<C> <C> <C>
2/5/97* through 7/31/99
39.72%
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------</TABLE>
+ IT IS THE SELECT HIGH GROWTH PORTFOLIO'S POLICY TO DISTRIBUTE
DIVIDENDS
AND
CAPITAL GAINS, IF ANY, ANNUALLY.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE
OF THE TOTAL
RETURN FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS.
7
<PAGE>
THE SELECT GROWTH PORTFOLIO
TARGET ASSET ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BOND FUNDS STOCK FUNDS
<S> <C>
30% 70%
</TABLE>
THE SELECT GROWTH PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL BY
INVESTING
PRIMARILY IN FUNDS CONTAINING THE ISSUES OF MORE ESTABLISHED
COMPANIES.
.................................................................
THE SELECT GROWTH PORTFOLIO
The Select Growth Portfolio seeks long-term growth of capital.
Among the
Portfolios of the Concert Allocation Series, the Select Growth
Portfolio invests
the highest percentage of its assets in large-capitalization stock
mutual funds,
to provide growth. The Portfolio's equity allocation also includes
funds that
invest in small- and mid-cap stocks and international securities.
In addition, a
significant portion of the Select Growth Portfolio is also
allocated to bonds,
to help reduce volatility.
INDEX COMPARISON*
<TABLE>
<S> <C>
S&P 500 4.50%
RUSSELL 2000 4.89%
MSCI EAFE 7.37%
LEHMAN GOVERNMENT/CORPORATE BOND (3.24)%
</TABLE>
.................................................................
*THE CHART ABOVE REPRESENTS TOTAL RETURNS FOR THE SIX MONTHS ENDED
JULY 31,
1999.
PORTFOLIO UPDATE
The Select Growth Portfolio ("Portfolio") generated a total return
of 2.25% for
the six months ended July 31, 1999. The chart that appears on page
9 compares
the Portfolio's performance to broad-based indices that track four
of the asset
classes represented in the Portfolio.
During the six months ended July 31, 1999, the U.S. economy
continued to show
signs of benign inflation and productivity-driven growth. Domestic
demand growth
outstripped even optimistic estimates of the economy's long-term
capacity, and a
combination of rising productivity, a flood of goods from abroad
and more
intensive use of labor kept inflation from overheating.
Underlying funds in the Portfolio that emphasized value stocks and
a blend of
growth and value small-cap stocks generated competitive returns
for the six
months ended July 31, 1999. International value stocks performed
well as many
investors began to see opportunities from cyclical businesses that
stood to
benefit from a growing global economy. The bond funds in the
Portfolio, with
their emphasis on credit quality in their respective asset
classes, also posted
competitive returns versus their indices. ------------------------
- --------------
- ----------------------------
THE TARGET ASSET ALLOCATION SET FORTH ABOVE REPRESENTS AN
APPROXIMATE MIX OF
INVESTMENTS FOR THE SELECT GROWTH PORTFOLIO. THE ALLOCATION AND
INVESTMENT MIX
OF THE PORTFOLIO MAY VARY DEPENDING UPON MARKET CONDITIONS, CASH
FLOWS IN AND
OUT OF THE PORTFOLIO AND OTHER FACTORS. IN ADDITION, THE
ALLOCATION AND
INVESTMENT RANGES OF THE PORTFOLIO MAY BE CHANGED FROM TIME TO
TIME UPON THE
APPROVAL OF THE CONCERT ALLOCATION SERIES' BOARD OF DIRECTORS.
8 <PAGE>
GROWTH OF $10,000 INVESTED IN THE SELECT GROWTH PORTFOLIO VS.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX, RUSSELL 2000
INDEX,
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX AND LEHMAN
GOVERNMENT/CORPORATE
BOND INDEX
..................................................................
.............
FEBRUARY 5, 1997 -- JULY 31, 1999 (UNAUDITED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SELECT GROWTH STANDARD & POOR'S 500
LEHMAN
GOVERNMENT/
PORTFOLIO COMPOSITE STOCK INDEX RUSSELL 2000
INDEX MSCI
EAFE INDEX CORPORATE BOND INDEX
<S> <C> <C> <C> <C>
<C>
2/5/97 $10,000 $10,000
$10,000
$10,000 $10,000
7/97 $11,170 $12,254
$11,307
$11,711 $10,575
1/98 $11,280 $12,689
$11,807
$11,028 $11,117
7/98 $12,111 $14,618
$11,569
$12,349 $11,428
1/99 $13,120 $16,814
$11,851
$12,635 $12,086
7/99 $13,414 $17,571
$12,431
$13,566 $11,694
</TABLE>
THE CHART ABOVE REPRESENTS A HYPOTHETICAL ILLUSTRATION OF $10,000
INVESTED ON
FEBRUARY 5, 1997 (COMMENCEMENT OF OPERATIONS), ASSUMING
REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, IF ANY, AT NET ASSET VALUE THROUGH
JULY 31, 1999.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX IS AN UNMANAGED
INDEX COMPOSED
OF 500 WIDELY HELD COMMON STOCKS LISTED ON THE NEW YORK STOCK
EXCHANGE, AMERICAN
STOCK EXCHANGE AND THE OVER-THE-COUNTER MARKET. THE RUSSELL 2000
INDEX IS A
CAPITALIZATION-WEIGHTED TOTAL RETURN INDEX WHICH IS COMPRISED OF
2,000 OF SOME
OF THE SMALLER-CAPITALIZED U.S.-DOMICILED COMPANIES WHOSE COMMON
STOCK IS TRADED
IN THE UNITED STATES ON THE NEW YORK STOCK EXCHANGE, AMERICAN
STOCK EXCHANGE AND
NASDAQ. THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX ("MSCI
EAFE") IS A
COMPOSITE INDEX THAT CONSISTS OF EQUITY TOTAL RETURNS FOR EUROPE,
AUSTRALIA AND
THE FAR EAST. THE LEHMAN GOVERNMENT/CORPORATE BOND INDEX IS A
COMBINATION OF
PUBLICLY ISSUED INTERMEDIATE- AND LONG-TERM U.S. GOVERNMENT BONDS
AND CORPORATE
BONDS. THESE INDICES ARE UNMANAGED AND ARE NOT SUBJECT TO THE SAME
MANAGEMENT
AND TRADING EXPENSES AS A MUTUAL FUND. AN INVESTOR CANNOT INVEST
DIRECTLY IN AN
INDEX.
ALL FIGURES REPRESENT PAST PERFORMANCE AND ARE NOT A GUARANTEE OF
FUTURE
RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUE WILL FLUCTUATE,
AND REDEMPTION
VALUES MAY BE MORE OR LESS THAN THE ORIGINAL COST. NO ADJUSTMENT
HAS BEEN MADE
FOR SHAREHOLDER TAX LIABILITY ON DIVIDENDS OR CAPITAL GAINS.
9 <PAGE>
HISTORICAL PERFORMANCE -- SELECT GROWTH PORTFOLIO+
..................................................................
.............
<TABLE>
<CAPTION>
NET ASSET VALUE
- ----------------------------------- INCOME CAPITAL GAIN
PERIOD ENDED BEGINNING OF PERIOD END OF PERIOD DIVIDENDS
DISTRIBUTIONS TOTAL RETURNS
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------7/31/99
$12.87
$12.86 $0.13 $0.17 2.25%++
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------1/31/99
11.28
12.87 0.11 0.12 16.31
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------2/5/97* --
1/31/98
10.00 11.28 0.00 0.00 12.80++
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------Total
$0.24 $0.29
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------</TABLE>
AVERAGE ANNUAL TOTAL RETURNS -- SELECT GROWTH PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C> <C> <C> <C> <C>
Six Months Ended 7/31/99++ 2.25%
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------Year Ended
7/31/99
10.77
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------2/5/97* through
7/31/99
12.56
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------</TABLE>
CUMULATIVE TOTAL RETURN -- SELECT GROWTH PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C> <C> <C> <C> <C>
2/5/97* through 7/31/99 34.14%
- ------------------------------------------------------------------
- --------------
- --------------------------------------------------</TABLE>
+ IT IS THE SELECT GROWTH PORTFOLIO'S POLICY TO DISTRIBUTE
DIVIDENDS AND
CAPITAL GAINS, IF ANY, ANNUALLY.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE
OF THE TOTAL
RETURN FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS.
10 <PAGE>
THE SELECT BALANCED PORTFOLIO
TARGET ASSET ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BOND FUNDS STOCK FUNDS
<S> <C>
50% 50%
</TABLE>
THE SELECT BALANCED PORTFOLIO SEEKS A BALANCE OF CAPITAL GROWTH
AND INCOME BY
PLACING EQUAL EMPHASIS ON FUNDS INVESTING IN STOCKS AND BONDS.
.................................................................
THE SELECT BALANCED PORTFOLIO
The Select Balanced Portfolio seeks long-term growth of capital
and income,
placing equal emphasis on current income and capital appreciation.
The Select
Balanced Portfolio, as its name states, divides its assets roughly
between
equity and fixed-income mutual funds. The equity funds are
primarily large-
capitalization, dividend-paying stock funds. The fixed-income
portion of the
Portfolio is mainly invested in funds that invest in U.S.
government and agency
securities, as well as mortgage-backed securities.
INDEX COMPARISON*
<TABLE>
<S> <C>
S&P 500 4.50%
LEHMAN GOVERNMENT/CORPORATE BOND (3.24)%
SALOMON SMITH BARNEY
ONE-YEAR TREASURY BILL 2.31% SALOMON SMITH BARNEY
WORLD GOVERNMENT BOND (4.01)%
</TABLE>
.................................................................
*THE CHART ABOVE REPRESENTS TOTAL RETURNS FOR THE SIX MONTHS ENDED
JULY 31,
1999.
PORTFOLIO UPDATE
The Select Balanced Portfolio ("Portfolio") generated a total
return of 2.19%
for the six months ended July 31, 1999. The chart that appears on
page 12
compares the Portfolio's performance to broad-based indices that
track four of
the asset classes represented in the Portfolio.
During the six months ended July 31, 1999, the U.S. economy
continued to show
signs of benign inflation and productivity-driven growth. Domestic
demand growth
outstripped even optimistic estimates of the economy's long-term
capacity, and a
combination of rising productivity, a flood of goods from abroad
and more
intensive use of labor kept inflation from overheating.
The stock funds in the Portfolio that focused primarily on large-
sized companies
posted solid gains during the period. However, many investors
demonstrated a
preference for value stocks versus growth stocks during the
period. (Value
investing attempts to identify stocks that are selling at
relatively low prices
compared to their earnings or book value with the belief that the
market will
eventually recognize their value, hence causing the price to
increase. Growth
stocks are generally considered to be company shares that have
exhibited above-
average earnings growth and are expected to continue to grow
faster than other
similar-sized companies.)
Although the stock market performed well during the last six
months, bond
markets worldwide did not perform as well. Bond investors,
concerned that a
strong economy would lead to an interest rate hike by the Federal
Reserve Board
("Fed"), retreated from the fixed income market. Their concerns
were well
founded as the Fed raised interest rates 25 basis points twice
this summer. The
bond funds in the Select Balanced Portfolio tended to emphasize
strong credit
quality and their returns consisted mostly of coupon interest with
very little
price appreciation or depreciation. ------------------------------
- --------------
- ----------------------
THE TARGET ASSET ALLOCATION SET FORTH ABOVE REPRESENTS AN
APPROXIMATE MIX OF
INVESTMENTS FOR THE SELECT BALANCED PORTFOLIO. THE ALLOCATION AND
INVESTMENT MIX
OF THE PORTFOLIO MAY VARY DEPENDING UPON MARKET CONDITIONS, CASH
FLOWS IN AND
OUT OF THE PORTFOLIO AND OTHER FACTORS. IN ADDITION, THE
ALLOCATION AND
INVESTMENT RANGES OF THE PORTFOLIO MAY BE CHANGED FROM TIME TO
TIME UPON THE
APPROVAL OF THE CONCERT ALLOCATION SERIES' BOARD OF DIRECTORS.
11 <PAGE>
GROWTH OF $10,000 INVESTED IN THE SELECT BALANCED PORTFOLIO VS.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX, LEHMAN
GOVERNMENT/CORPORATE
BOND INDEX,
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX AND SALOMON SMITH
BARNEY WORLD
GOVERNMENT BOND INDEX
..................................................................
.............
FEBRUARY 5, 1997 -- JULY 31, 1999 (UNAUDITED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SELECT BALANCED STANDARD & POOR'S 500 LEHMAN
GOVERNMENT/CORPORATE
MSCI PORTFOLIO COMPOSITE STOCK INDEX BOND INDEX
EAFE INDEX
<S> <C> <C> <C>
<C>
2/5/97 $10,000 $10,000
$10,000 $10,000
7/97 $11,050 $12,254
$10,575
$11,711
1/98 $11,280 $12,689
$11,117
$11,028
7/98 $11,846 $14,618
$11,428
$12,349
1/99 $12,381 $16,814
$12,086
$12,635
7/99 $12,651 $17,571
$11,694
$13,566
<CAPTION>
SALOMON SMITH BARNEY
WORLD GOVERNMENT BOND INDEX
<S> <C>
2/5/97 $10,000
7/97 $10,512
1/98 $11,111
7/98 $11,589
1/99 $12,863
7/99 $12,347
</TABLE>
THE CHART ABOVE REPRESENTS A HYPOTHETICAL ILLUSTRATION OF $10,000
INVESTED ON
FEBRUARY 5, 1997 (COMMENCEMENT OF OPERATIONS), ASSUMING
REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, IF ANY, AT NET ASSET VALUE THROUGH
JULY 31, 1999.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX IS AN UNMANAGED
INDEX COMPOSED
OF 500 WIDELY HELD COMMON STOCKS LISTED ON THE NEW YORK STOCK
EXCHANGE, AMERICAN
STOCK EXCHANGE AND THE OVER-THE-COUNTER MARKET. THE LEHMAN
GOVERNMENT/CORPORATE
BOND INDEX IS A COMBINATION OF PUBLICLY ISSUED INTERMEDIATE- AND
LONG-TERM U.S.
GOVERNMENT BONDS AND CORPORATE BONDS. THE MORGAN STANLEY CAPITAL
INTERNATIONAL
EAFE INDEX ("MSCI EAFE") IS A COMPOSITE INDEX THAT CONSISTS OF
EQUITY TOTAL
RETURNS FOR EUROPE, AUSTRALIA AND THE FAR EAST. THE SALOMON SMITH
BARNEY WORLD
GOVERNMENT BOND INDEX IS A MARKET-CAPITALIZATION-WEIGHTED
BENCHMARK THAT TRACKS
THE PERFORMANCE OF THE GOVERNMENT BOND MARKETS OF 14 COUNTRIES.
THESE INDICES
ARE UNMANAGED AND ARE NOT SUBJECT TO THE SAME MANAGEMENT AND
TRADING EXPENSES AS
A MUTUAL FUND. AN INVESTOR CANNOT INVEST DIRECTLY IN AN INDEX.
ALL FIGURES REPRESENT PAST PERFORMANCE AND ARE NOT A GUARANTEE OF
FUTURE
RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUE WILL FLUCTUATE,
AND REDEMPTION
VALUES MAY BE MORE OR LESS THAN THE ORIGINAL COST. NO ADJUSTMENT
HAS BEEN MADE
FOR SHAREHOLDER TAX LIABILITY ON DIVIDENDS OR CAPITAL GAINS.
12 <PAGE>
HISTORICAL PERFORMANCE -- SELECT BALANCED PORTFOLIO+
..................................................................
.............
<TABLE>
<CAPTION>
NET ASSET VALUE
- ------------------------------------- INCOME CAPITAL GAIN
PERIOD ENDED BEGINNING OF PERIOD END OF PERIOD DIVIDENDS
DISTRIBUTIONS TOTAL RETURNS
<S> <C> <C> <C> <C>
<C>
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------7/31/99
$12.04
$11.84 $0.22 $0.24 2.19%++
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------1/31/99
11.28
12.04 0.16 0.16 9.76
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------2/5/97* -- 1/31/98
10.00
11.28 0.00 0.00 12.80++
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------Total
$0.38 $0.40
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------</TABLE>
AVERAGE ANNUAL TOTAL RETURNS -- SELECT BALANCED PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C> <C> <C> <C>
<C>
Six Months Ended 7/31/99++ 2.19%
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------Year Ended 7/31/99
6.80
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------2/5/97* through
7/31/99
9.94
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------</TABLE>
CUMULATIVE TOTAL RETURN -- SELECT BALANCED PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C> <C> <C> <C>
<C>
2/5/97* through 7/31/99 26.51%
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------</TABLE>
+ IT IS THE SELECT BALANCED PORTFOLIO'S POLICY TO DISTRIBUTE
DIVIDENDS AND
CAPITAL GAINS, IF ANY, ANNUALLY.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE
OF THE TOTAL
RETURN FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS.
13
<PAGE>
THE SELECT CONSERVATIVE PORTFOLIO
TARGET ASSET ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BOND FUNDS STOCK FUNDS
<S> <C>
70% 30%
</TABLE>
THE SELECT CONSERVATIVE PORTFOLIO PRIMARILY SEEKS INCOME AND,
SECONDARILY, LONG-
TERM GROWTH OF CAPITAL BY INVESTING THE MAJORITY OF ITS ASSETS IN
FUNDS THAT
INVEST IN BONDS.
.................................................................
THE SELECT CONSERVATIVE PORTFOLIO
The Select Conservative Portfolio primarily seeks income and,
secondarily, long-
term capital growth. Among the Portfolios of the Concert
Allocation Series, the
Select Conservative Portfolio consists primarily of taxable fixed-
income funds,
with a portion invested in stock funds that invest primarily in
large-
capitalization U.S. stocks.
INDEX COMPARISON*
<TABLE>
<S> <C>
S&P 500 4.50%
LEHMAN GOVERNMENT/CORPORATE BOND (3.24)%
SALOMON SMITH BARNEY
HIGH YIELD MARKET 0.49%
SALOMON SMITH BARNEY
ONE-YEAR TREASURY BILL 2.31%
</TABLE>
.................................................................
*THE CHART ABOVE REPRESENTS TOTAL RETURNS FOR THE SIX MONTHS ENDED
JULY 31,
1999.
PORTFOLIO UPDATE
The Select Conservative Portfolio ("Portfolio") generated a total
return of
1.22% for the six months ended July 31, 1999. The chart that
appears on page 15
compares the Portfolio's performance to broad-based indices that
track four of
the asset classes represented in the Portfolio.
In keeping with its investment mandate, the Portfolio is made up
largely of bond
funds with the remainder invested in stock funds. The Portfolio's
bond holdings
tend to be very high-credit quality and involve U.S. government
debt, as well as
the bonds of other developed nations. During the reporting period,
the returns
of these bond funds consisted mostly of coupon interest with very
little price
appreciation or depreciation. Also, the Portfolio's exposure to
primarily high-
quality foreign national debt also contributed to its returns
during the six
months ended July 31, 1999.
The portion of the Portfolio devoted to stocks was invested
primarily in large
company value stocks that benefited from investor expectations
that they
represented good values versus growth stocks in a growing global
economy. (Value
investing attempts to identify stocks that are selling at
relatively low prices
compared to their earnings or book value with the belief that the
market will
eventually recognize their value, hence causing their share price
to increase.
Growth stocks are generally considered to be company shares that
have exhibited
above-average earnings growth and are expected to continue to grow
faster than
other similar-sized companies.) ----------------------------------
- --------------
- ------------------
THE TARGET ASSET ALLOCATION SET FORTH ABOVE REPRESENTS AN
APPROXIMATE MIX OF
INVESTMENTS FOR THE SELECT CONSERVATIVE PORTFOLIO. THE ALLOCATION
AND INVESTMENT
MIX OF THE PORTFOLIO MAY VARY DEPENDING UPON MARKET CONDITIONS,
CASH FLOWS IN
AND OUT OF THE PORTFOLIO AND OTHER FACTORS. IN ADDITION, THE
ALLOCATION AND
INVESTMENT RANGES OF THE PORTFOLIO MAY BE CHANGED FROM TIME TO
TIME UPON THE
APPROVAL OF THE CONCERT ALLOCATION SERIES' BOARD OF DIRECTORS.
14 <PAGE>
GROWTH OF $10,000 INVESTED IN THE SELECT CONSERVATIVE PORTFOLIO
VS.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX, LEHMAN
GOVERNMENT/CORPORATE
BOND INDEX, SALOMON SMITH BARNEY HIGH YIELD MARKET INDEX AND
SALOMON SMITH
BARNEY ONE-YEAR TREASURY BILL INDEX
..................................................................
.............
FEBRUARY 5, 1997 -- JULY 31, 1999 (UNAUDITED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SELECT STANDARD & POOR'S 500 LEHMAN
GOVERNMENT/
SALOMON SMITH BARNEY HIGH
CONSERVATIVE PORTFOLIO COMPOSITE STOCK INDEX CORPORATE
BOND INDEX
YIELD MARKET INDEX
<S> <C> <C> <C>
<C>
2/5/97 $10,000 $10,000
$10,000 $10,000
7/97 $10,930 $12,254 $10,575
$10,757
1/98 $11,300 $12,689 $11,117
$11,487
7/98 $11,646 $14,618 $11,428
$11,906
1/99 $11,984 $16,814 $12,088
$11,812
7/99 $12,129 $17,571 $11,694
$11,870
<CAPTION>
SALOMON SMITH BARNEY ONE-YEAR
TREASURY BILL INDEX
<S> <C>
2/5/97 $10,000
7/97 $10,322
1/98 $10,627
7/98 $10,910
1/99 $11,222
7/99 $11,481
</TABLE>
THE CHART ABOVE REPRESENTS A HYPOTHETICAL ILLUSTRATION OF $10,000
INVESTED ON
FEBRUARY 5, 1997 (COMMENCEMENT OF OPERATIONS), ASSUMING
REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, IF ANY, AT NET ASSET VALUE THROUGH
JULY 31, 1999.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX IS AN UNMANAGED
INDEX COMPOSED
OF 500 WIDELY HELD COMMON STOCKS LISTED ON THE NEW YORK STOCK
EXCHANGE, AMERICAN
STOCK EXCHANGE AND THE OVER-THE-COUNTER MARKET. THE LEHMAN
GOVERNMENT/CORPORATE
BOND INDEX IS A COMBINATION OF PUBLICLY ISSUED INTERMEDIATE- AND
LONG-TERM U.S.
GOVERNMENT BONDS AND CORPORATE BONDS. THE SALOMON SMITH BARNEY
HIGH YIELD MARKET
INDEX COVERS A SIGNIFICANT PORTION OF THE BELOW INVESTMENT-GRADE
U.S. CORPORATE
BOND MARKET. THE SALOMON SMITH BARNEY ONE-YEAR TREASURY BILL INDEX
IS COMPOSED
OF ONE 1-YEAR UNITED STATES TREASURY BILL WHOSE RETURN IS TRACKED
UNTIL ITS
MATURITY. THESE INDICES ARE UNMANAGED AND ARE NOT SUBJECT TO THE
SAME MANAGEMENT
AND TRADING EXPENSES AS A MUTUAL FUND. AN INVESTOR CANNOT INVEST
DIRECTLY IN AN
INDEX.
ALL FIGURES REPRESENT PAST PERFORMANCE AND ARE NOT A GUARANTEE OF
FUTURE
RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUE WILL FLUCTUATE,
AND REDEMPTION
VALUES MAY BE MORE OR LESS THAN THE ORIGINAL COST. NO ADJUSTMENT
HAS BEEN MADE
FOR SHAREHOLDER TAX LIABILITY ON DIVIDENDS OR CAPITAL GAINS.
15 <PAGE>
HISTORICAL PERFORMANCE -- SELECT CONSERVATIVE PORTFOLIO+
..................................................................
.............
<TABLE>
<CAPTION>
NET ASSET VALUE
- ------------------------------------- INCOME CAPITAL GAIN
PERIOD ENDED BEGINNING OF PERIOD END OF
PERIOD
DIVIDENDS DISTRIBUTIONS TOTAL RETURNS
<S> <C> <C> <C>
<C> <C>
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------7/31/99
$11.71 $11.46 $0.27
$0.13
1.22%++
- ------------------------------------------------------------------
- --------------
- ------------------------------------------------
1/31/99 11.30
11.71
0.17 0.10 6.05 ---------------------------
- --------------
- ------------------------------------------------------------------
- --------------
- ------2/5/97* -- 1/31/98 10.00
11.30
0.00 0.00 13.00++ -------------------------
- --------------
- ------------------------------------------------------------------
- --------------
- --------Total $0.44 $0.23
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------</TABLE>
AVERAGE ANNUAL TOTAL RETURNS -- SELECT CONSERVATIVE PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C>
<C>
<C> <C> <C>
Six Months Ended 7/31/99++
1.22%
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------Year Ended 7/31/99
4.15
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------2/5/97* through
7/31/99
8.09
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------</TABLE>
CUMULATIVE TOTAL RETURN -- SELECT CONSERVATIVE PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C>
<C>
<C> <C> <C>
2/5/97* through 7/31/99
21.29%
- ------------------------------------------------------------------
- --------------
- -----------------------------------------------</TABLE>
+ IT IS THE SELECT CONSERVATIVE PORTFOLIO'S POLICY TO
DISTRIBUTE DIVIDENDS
AND
CAPITAL GAINS, IF ANY, ANNUALLY.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE
OF THE TOTAL
RETURN FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS.
16
<PAGE>
THE SELECT INCOME PORTFOLIO
TARGET ASSET ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BOND FUNDS STOCK FUNDS
<S> <C>
10% 90%
</TABLE>
THE SELECT INCOME PORTFOLIO SEEKS HIGH CURRENT INCOME BY INVESTING
PRIMARILY IN
BOND FUNDS.
.................................................................
THE SELECT INCOME PORTFOLIO
The Select Income Portfolio seeks high current income. Among the
Portfolios of
the Concert Allocation Series, the Select Income Portfolio
allocates most of its
assets in taxable fixed-income funds designed to generate a high
level of income
consistent with relative stability of principal. A small portion
of the
Portfolio is invested in equity funds that invest in large-
capitalization U.S.
stocks.
INDEX COMPARISON*
<TABLE>
<S> <C>
S&P 500 4.50%
Lehman Government/
Corporate Bond
(3.24)%
Salomon Smith Barney
High Yield Market 0.49%
Salomon Smith Barney
One-Year Treasury Bill 2.31%
</TABLE>
.................................................................
*THE CHART ABOVE REPRESENTS TOTAL RETURNS FOR THE SIX MONTHS ENDED
JULY 31,
1999.
PORTFOLIO UPDATE
The Select Income Portfolio ("Portfolio") generated a total return
of a negative
1.28% for the six months ended July 31, 1999. The chart that
appears on page 18
compares the Portfolio's performance to broad-based indices that
track four of
the asset classes represented in the Portfolio.
The majority of assets in the Portfolio are invested in bond funds
that invest
in the debt obligations of the U. S. government and other
developed nations. The
six-month period ended July 31, 1999 saw the bond market perform
poorly. Strong
corporate earnings, coupled with the continuing recovery in the
global markets,
concerned bond investors who believed that inflationary pressures
were growing.
To forestall further inflationary pressures, the Federal Reserve
Board raised
interest rates by 25 basis points twice this summer. -------------
- --------------
- ---------------------------------------
THE TARGET ASSET ALLOCATION SET FORTH ABOVE REPRESENTS AN
APPROXIMATE MIX OF
INVESTMENTS FOR THE SELECT INCOME PORTFOLIO. THE ALLOCATION AND
INVESTMENT MIX
OF THE PORTFOLIO MAY VARY DEPENDING UPON MARKET CONDITIONS, CASH
FLOWS IN AND
OUT OF THE PORTFOLIO AND OTHER FACTORS. IN ADDITION, THE
ALLOCATION AND
INVESTMENT RANGES OF THE PORTFOLIO MAY BE CHANGED FROM TIME TO
TIME UPON THE
APPROVAL OF THE CONCERT ALLOCATION SERIES' BOARD OF DIRECTORS.
17 <PAGE>
GROWTH OF $10,000 INVESTED IN THE SELECT INCOME PORTFOLIO VS.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX, LEHMAN
GOVERNMENT/CORPORATE
BOND INDEX,
SALOMON SMITH BARNEY HIGH YIELD MARKET INDEX AND SALOMON SMITH
BARNEY ONE-YEAR
TREASURY BILL INDEX
..................................................................
.............
FEBRUARY 5, 1997 -- JULY 31, 1999 (UNAUDITED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SELECT STANDARD & POOR'S 500 LEHMAN
GOVERNMENT/CORPORATE
SALOMON SMITH BARNEY INCOME PORTFOLIO COMPOSITE STOCK INDEX
BOND
INDEX HIGH YIELD MARKET INDEX
<S> <C> <C> <C>
<C>
2/5/97 $10,000 $10,000
$10,000 $10,000
7/97 $10,850 $12,254
$10,575
$10,757
1/98 $11,290 $12,689
$11,117
$11,487
7/98 $11,620 $14,618
$11,428
$11,906
1/99 $11,875 $16,814
$12,086
$11,812
7/99 $11,722 $17,571
$11,694
$11,870
<CAPTION>
SALOMON SMITH BARNEY ONE-YEAR
TREASURY BILL INDEX
<S> <C>
2/5/97 $10,000
7/97 $10,322
1/98 $10,627
7/98 $10,910
1/99 $11,222
7/99 $11,481
</TABLE>
THE CHART ABOVE REPRESENTS A HYPOTHETICAL ILLUSTRATION OF $10,000
INVESTED ON
FEBRUARY 5, 1997 (COMMENCEMENT OF OPERATIONS), ASSUMING
REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, IF ANY, AT NET ASSET VALUE THROUGH
JULY 31, 1999.
THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX IS AN UNMANAGED
INDEX COMPOSED
OF 500 WIDELY HELD COMMON STOCKS LISTED ON THE NEW YORK STOCK
EXCHANGE, AMERICAN
STOCK EXCHANGE AND THE OVER-THE-COUNTER MARKET. THE LEHMAN
GOVERNMENT/CORPORATE
BOND INDEX IS A COMBINATION OF PUBLICLY ISSUED INTERMEDIATE- AND
LONG-TERM U.S.
GOVERNMENT BONDS AND CORPORATE BONDS. THE SALOMON SMITH BARNEY
HIGH YIELD MARKET
INDEX COVERS A SIGNIFICANT PORTION OF THE BELOW-INVESTMENT-GRADE
U.S. CORPORATE
BOND MARKET. THE SALOMON SMITH BARNEY ONE-YEAR TREASURY BILL INDEX
IS COMPOSED
OF ONE 1-YEAR UNITED STATES TREASURY BILL WHOSE RETURN IS TRACKED
UNTIL ITS
MATURITY. THESE INDICES ARE UNMANAGED AND ARE NOT SUBJECT TO THE
SAME MANAGEMENT
AND TRADING EXPENSES AS A MUTUAL FUND. AN INVESTOR CANNOT INVEST
DIRECTLY IN AN
INDEX.
ALL FIGURES REPRESENT PAST PERFORMANCE AND ARE NOT A GUARANTEE OF
FUTURE
RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUE WILL FLUCTUATE,
AND REDEMPTION
VALUES MAY BE MORE OR LESS THAN THE ORIGINAL COST. NO ADJUSTMENT
HAS BEEN MADE
FOR SHAREHOLDER TAX LIABILITY ON DIVIDENDS OR CAPITAL GAINS.
18 <PAGE>
HISTORICAL PERFORMANCE -- SELECT INCOME PORTFOLIO+
..................................................................
.............
<TABLE>
<CAPTION>
NET ASSET VALUE
- ------------------------------------- INCOME CAPITAL GAIN
PERIOD ENDED BEGINNING OF PERIOD END OF PERIOD DIVIDENDS
DISTRIBUTIONS TOTAL RETURNS
<S> <C> <C> <C> <C>
<C>
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------7/31/99
$11.66
$11.12 $0.33 $0.06 (1.28)%++
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------1/31/99
11.29
11.66 0.15 0.06 5.18
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------2/5/97* -- 1/31/98
10.00
11.29 0.00 0.00 12.90++
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------Total
$0.48 $0.12
- ------------------------------------------------------------------
- --------------
- ----------------------------------------------</TABLE>
AVERAGE ANNUAL TOTAL RETURNS -- SELECT INCOME PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C> <C> <C> <C> <C>
Six Months Ended 7/31/99++
(1.28)%
- ------------------------------------------------------------------
- --------------
- ----------------------------------------
Year Ended 7/31/99
0.88
- ------------------------------------------------------------------
- --------------
- ---------------------------------------2/5/97* through 7/31/99
6.61
- ------------------------------------------------------------------
- --------------
- ---------------------------------------</TABLE>
CUMULATIVE TOTAL RETURN -- SELECT INCOME PORTFOLIO
..................................................................
.............
<TABLE>
<S> <C> <C> <C> <C> <C>
2/5/97* through 7/31/99
17.22%
- ------------------------------------------------------------------
- --------------
- ---------------------------------------</TABLE>
+ IT IS THE SELECT INCOME PORTFOLIO'S POLICY TO DISTRIBUTE
DIVIDENDS AND
CAPITAL GAINS, IF ANY, ANNUALLY.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE REPRESENTATIVE
OF THE TOTAL
RETURN FOR THE YEAR.
* COMMENCEMENT OF OPERATIONS.
19
<PAGE>
THE SELECT HIGH GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JULY 31, 1999
..................................................................
.............
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
-----------------------------------------------------------------
- -----------
UNDERLYING FUNDS -- 99.4%
163,960 Smith Barney Aggressive Growth Fund
$ 10,847,614
282,289 Smith Barney Equity Funds - Smith Barney
Large
Cap Blend Fund 5,044,514
266,808 Smith Barney Funds, Inc. - Large Cap
Value Fund
5,109,392
962,868 Smith Barney Income Funds - Smith Barney
High
Income Fund 9,946,436
569,878 Smith Barney Investment Funds, Inc. -
Concert
Peachtree Growth Fund
10,314,807
365,283 Smith Barney Investment Funds, Inc. -
Smith
Barney Contrarian Fund 5,070,137
835,287 Smith Barney Investment Funds, Inc. -
Smith
Barney Hansberger Global Value Fund
10,591,449
478,067 Smith Barney Investment Trust - Smith
Barney
Large Capitalization Growth Fund
10,278,453
305,485 Smith Barney Investment Trust - Smith
Barney Mid
Cap Blend Fund 5,236,024
1,463,830 Smith Barney Small Cap Blend Fund, Inc.
21,064,523
440,083 Smith Barney World Funds, Inc. -
International
Equity Portfolio
10,518,006
-----------------------------------------------------------------
- -----------
TOTAL UNDERLYING FUNDS (Cost -- $91,028,360)
104,021,355
-----------------------------------------------------------------
- -----------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
-----------------------------------------------------------------
- -----------
REPURCHASE AGREEMENT -- 0.6%
$632,000 Morgan Stanley Dean Witter & Co., 5.030% due
2/8/99; Proceeds at maturity -- $632,265;
(Fully collateralized by U.S. Treasury Notes, 5.250% to 7.000% due
11/18/99 to
7/15/06;
Market value -- $648,639) (Cost -- $632,000) 632,000
- ------------------------------------------------------------------
- ----------
TOTAL INVESTMENTS -- 100% (Cost --
$91,660,360*)
$104,653,355
- ------------------------------------------------------------------
- ----------
</TABLE>
* AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS SUBSTANTIALLY
THE SAME.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
THE SELECT GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) JULY 31, 1999
..................................................................
.............
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
- ------------------------------------------------------------------
- ----------
UNDERLYING FUNDS -- 98.7%
146,253 Smith Barney Aggressive Growth Fund
$ 9,676,138
1,004,474 Smith Barney Equity Funds - Smith Barney Large
Cap Blend Fund 17,949,961
949,948 Smith Barney Funds, Inc. - Large Cap
Value Fund
18,191,510
1,716,479 Smith Barney Income Funds - Smith Barney High
Income Fund 17,731,233
1,015,169 Smith Barney Investment Funds, Inc. - Concert
Peachtree Growth Fund 18,374,561
650,243 Smith Barney Investment Funds, Inc. -
Smith
Barney Contrarian Fund 9,025,380
2,017,361 Smith Barney Investment Funds, Inc. - Smith
Barney Government Securities Fund
18,559,724
743,073 Smith Barney Investment Funds, Inc. -
Smith
Barney Hansberger Global Value Fund
9,422,173
1,568,535 Smith Barney Investment Funds, Inc. - Smith
Barney Investment Grade Bond Fund
18,461,663
424,926 Smith Barney Investment Trust - Smith
Barney
Large Capitalization Growth Fund
9,135,920
543,632 Smith Barney Investment Trust - Smith
Barney Mid
Cap Blend Fund 9,317,862
651,088 Smith Barney Small Cap Blend Fund, Inc.
9,369,169
783,529 Smith Barney World Funds, Inc. -
International
Equity Portfolio 18,726,357
- ------------------------------------------------------------------
- ----------
TOTAL UNDERLYING FUNDS (Cost -- $172,368,758)
183,941,651
- ------------------------------------------------------------------
- ----------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- ------------------------------------------------------------------
- ----------
REPURCHASE AGREEMENT -- 1.3%
$2,397,000 Morgan Stanley Dean Witter & Co., 5.030% due
2/8/99; Proceeds at maturity -- $2,398,005;
(Fully collateralized by U.S. Treasury Notes, 5.250% to 7.000% due
11/18/99 to
7/15/06;
Market value -- $2,460,474) (Cost -- $2,397,000) 2,397,000
- ------------------------------------------------------------------
- ----------
TOTAL INVESTMENTS -- 100% (Cost --
$174,765,758*)
$186,338,651
- ------------------------------------------------------------------
- ----------
</TABLE>
* AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS SUBSTANTIALLY
THE SAME.
SEE NOTES TO FINANCIAL STATEMENTS.
21 <PAGE>
THE SELECT BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) JULY 31, 1999
..................................................................
.............
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
- ------------------------------------------------------------------
- ----------
UNDERLYING FUNDS -- 98.8%
1,040,541 Smith Barney Appreciation Fund Inc.
$
16,877,583
459,483 Smith Barney Equity Funds - Smith Barney
Large
Cap Blend Fund 8,210,962
1,301,660 Smith Barney Fundamental Value Fund Inc.
17,520,352
434,186 Smith Barney Funds, Inc. - Large Cap
Value Fund
8,314,674
1,926,482 Smith Barney Funds, Inc. - Short-Term High Grade
Bond Fund 7,763,725
1,115,522 Smith Barney Income Funds - Smith Barney
Convertible Fund 17,112,114
3,432,472 Smith Barney Income Funds - Smith Barney
Diversified Strategic Income Fund
25,606,246
789,478 Smith Barney Income Funds - Smith Barney
Premium
Total Return Fund 16,934,311
1,847,076 Smith Barney Investment Funds, Inc. - Smith
Barney Government Securities Fund
16,993,102
1,409,262 Smith Barney Managed Governments Fund Inc.
17,052,075
769,398 Smith Barney World Funds, Inc. - Global
Government Bond Portfolio
8,586,483
357,781 Smith Barney World Funds, Inc. -
International
Equity Portfolio 8,550,984
- ------------------------------------------------------------------
- ----------
TOTAL UNDERLYING FUNDS (Cost -- $167,742,518)
169,522,611
- ------------------------------------------------------------------
- ----------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- ------------------------------------------------------------------
- ----------
REPURCHASE AGREEMENT -- 1.2%
$1,973,000 Morgan Stanley Dean Witter & Co., 5.030% due
8/2/99; Proceeds at maturity -- $1,973,827;
(Fully collateralized by U.S Treasury Notes, 5.250% to 7.000% due
11/18/99 to
7/15/06;
Market value -- $2,025,246) (Cost -- $1,973,000) 1,973,000
- ------------------------------------------------------------------
- ----------
TOTAL INVESTMENTS -- 100% (Cost --
$169,715,518*)
$171,495,611
- ------------------------------------------------------------------
- ----------
</TABLE>
* AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS SUBSTANTIALLY
THE SAME.
SEE NOTES TO FINANCIAL STATEMENTS.
22 <PAGE>
THE SELECT CONSERVATIVE PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) JULY 31, 1999
..................................................................
.............
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
- ------------------------------------------------------------------
- ---------
UNDERLYING FUNDS -- 98.6%
314,170 Smith Barney Appreciation Fund Inc.
$ 5,095,838
192,310 Smith Barney Fundamental Value Fund Inc.
2,588,498
580,030 Smith Barney Funds, Inc. - Short-Term
High Grade
Bond Fund 2,337,524
336,166 Smith Barney Income Funds - Smith Barney
Convertible Fund 5,156,799
1,377,327 Smith Barney Income Funds - Smith Barney
Diversified Strategic Income Fund
10,274,864
497,592 Smith Barney Income Funds - Smith Barney
High
Income Fund 5,140,126
119,034 Smith Barney Income Funds - Smith Barney
Premium
Total Return Fund 2,553,298
555,268 Smith Barney Investment Funds, Inc. -
Smith
Barney Government Securities Fund
5,108,469
211,212 Smith Barney Investment Funds, Inc. -
Smith
Barney Hansberger Global Value Fund
2,678,180
636,210 Smith Barney Managed Governments Fund
Inc.
7,698,149
231,560 Smith Barney World Funds, Inc. - Global
Government Bond Portfolio
2,584,211
- ------------------------------------------------------------------
- ---------
TOTAL UNDERLYING FUNDS (Cost --
$52,135,297)
51,215,956
- ------------------------------------------------------------------
- ---------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT DESCRIPTION
VALUE
<C> <S> <C>
- ------------------------------------------------------------------
- ---------
REPURCHASE AGREEMENT -- 1.4%
$702,000 Morgan Stanley Dean Witter & Co., 5.030% due
8/2/99; Proceeds at maturity -- $702,294;
(Fully collateralized by U.S Treasury Notes, 5.250% to 7.000% due
11/18/99 to
7/15/06;
Market value -- $716,937) (Cost -- $702,000) 702,000
- ------------------------------------------------------------------
- ---------
TOTAL INVESTMENTS -- 100% (Cost --
$52,837,297*)
$51,917,956
- ------------------------------------------------------------------
- ---------
</TABLE>
* AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS SUBSTANTIALLY
THE SAME.
SEE NOTES TO FINANCIAL STATEMENTS.
23 <PAGE>
THE SELECT INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) JULY 31, 1999
..................................................................
.............
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
- ------------------------------------------------------------------
- -------
UNDERLYING FUNDS -- 100.0%
73,274 Smith Barney Appreciation Fund Inc.
$
1,188,515
572,864 Smith Barney Funds, Inc. - Short-Term High Grade
Bond Fund 2,308,641
78,193 Smith Barney Income Funds - Smith Barney
Convertible Fund 1,199,495
644,269 Smith Barney Income Funds - Smith Barney
Diversified Strategic Income Fund
4,806,254
465,903 Smith Barney Income Funds - Smith Barney High
Income Fund 4,812,782
55,246 Smith Barney Income Funds - Smith Barney
Premium
Total Return Fund 1,185,048
389,976 Smith Barney Investment Funds, Inc. - Smith
Barney Government Securities Fund
3,587,785
396,808 Smith Barney Managed Governments Fund Inc.
4,801,380
-----------------------------------------------------------------
- --------
TOTAL INVESTMENTS -- 100% (Cost --
$24,974,733*)
$23,889,900
-----------------------------------------------------------------
- --------
</TABLE>
* AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS
SUBSTANTIALLY THE SAME.
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JULY 31, 1999
..................................................................
.............
<TABLE>
<CAPTION>
SELECT SELECT SELECT SELECT
SELECT
HIGH GROWTH GROWTH BALANCED CONSERVATIVE
INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PORTFOLIO
<S> <C> <C> <C>
<C>
<C>
- ------------------------------------------------------------------
- --------------
- ------------------------------ASSETS:
Investments, at cost $ 91,660,360 $174,765,758
$169,715,518 $
52,837,297 $ 24,974,733
- ------------------------------------------------------------------
- --------------
- ------------------------------Investments, at value
$104,653,355 $186,338,651
$171,495,611 $ 51,917,956 $ 23,889,900
Cash 350 73
517
604 87,932
Receivable from manager --
- -- --
- -- 19,368
Dividends and interest receivable 253,003
335 23,655 78,246 7,182
- ------------------------------------------------------------------
- --------------
- ------------------------------TOTAL ASSETS 104,906,708
186,339,059 171,519,783 51,996,806 24,004,382
- ------------------------------------------------------------------
- --------------
- ------------------------------LIABILITIES:
Capital gains payable 1,277,697
2,379,456
3,405,478 549,496 132,281
Dividend payable 513,651
1,845,350
3,039,612 1,173,166 681,851
Accrued expenses 91,308
167,022 167,816
42,035 --
- ------------------------------------------------------------------
- --------------
- ------------------------------TOTAL LIABILITIES
1,882,656
4,391,828 6,612,906 1,764,697 814,132
- ------------------------------------------------------------------
- --------------
- ------------------------------TOTAL NET ASSETS
$103,024,052 $181,947,231
$164,906,877 $ 50,232,109 $ 23,190,250
- ------------------------------------------------------------------
- --------------
- ------------------------------NET ASSETS:
Par value of capital shares $ 7,571 $ 14,152
$ 13,931
$ 4,384 $ 2,085
Capital paid in excess of par value 89,346,020
167,905,123
159,959,591 49,940,704 23,642,554
Undistributed net investment income
416,331
1,730,574 2,553,836 1,087,820 671,581
Accumulated net realized gain (loss)
from security transactions 261,135
724,489 599,426 118,542 (41,137)
Net unrealized appreciation
(depreciation)
of investments 12,992,995 11,572,893
1,780,093 (919,341) (1,084,833)
- ------------------------------------------------------------------
- --------------
- ------------------------------TOTAL NET ASSETS
$103,024,052 $181,947,231
$164,906,877 $ 50,232,109 $ 23,190,250
- ------------------------------------------------------------------
- --------------
- ------------------------------SHARES OUTSTANDING
7,571,139 14,152,159 13,931,415 4,384,348
2,085,455
- ------------------------------------------------------------------
- --------------
- ------------------------------NET ASSET VALUE
$13.61
$12.86 $11.84 $11.46 $11.12
- ------------------------------------------------------------------
- --------------
- ------------------------------</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS
ENDED JULY
31, 1999
..................................................................
.............
<TABLE>
<CAPTION>
SELECT
SELECT SELECT SELECT SELECT
HIGH GROWTH
GROWTH BALANCED CONSERVATIVE INCOME
PORTFOLIO
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C>
<C> <C> <C>
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------INVESTMENT INCOME:
Income distributions from Underlying Funds $
455,014 $
1,833,045 $ 2,638,720 $1,115,729 $ 695,220
Short-term capital gains from Underlying Funds
92,126
122,381 144,820 38,520 10,485
Interest 26,277
52,740 40,034 14,406 5,188
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------TOTAL INVESTMENT
INCOME
573,417 2,008,166 2,823,574
1,168,655 710,893
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------EXPENSES:
Other expenses 156,582
276,617 269,342 80,400 39,199
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------TOTAL EXPENSES
156,582 276,617 269,342
80,400
39,199
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------NET INVESTMENT INCOME
416,835 1,731,549 2,554,232
1,088,255 671,694
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------REALIZED AND
UNREALIZED GAIN (LOSS)
ON
INVESTMENTS (NOTE 3):
Realized Gain From Capital Gain
Distributions From Underlying Funds
326,873 781,954 615,295 119,281
31,197
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------NET REALIZED GAIN
326,873 781,954 615,295
119,281 31,197
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------Change in Net
Unrealized
Appreciation (Depreciation)
of Investments:
Beginning of period
7,984,603 10,341,892 1,771,658 (185,729) (84,778)
End of period
12,992,995 11,572,893 1,780,093 (919,341)
(1,084,833)
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------INCREASE IN NET
UNREALIZED
APPRECIATION (DEPRECIATION) 5,008,392 1,231,001
8,435
(733,612) (1,000,055)
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------NET GAIN (LOSS) ON
INVESTMENTS
5,335,265 2,012,955 623,730
(614,331)
(968,858)
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 5,752,100 $
3,744,504
$ 3,177,962 $ 473,924 $ (297,164)
- ------------------------------------------------------------------
- --------------
- ---------------------------------------------</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) FOR THE SIX
MONTHS ENDED JULY
31, 1999
..................................................................
.............
<TABLE>
<CAPTION>
SELECT SELECT
SELECT SELECT SELECT
HIGH GROWTH GROWTH
BALANCED CONSERVATIVE INCOME
PORTFOLIO PORTFOLIO
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C>
<C> <C> <C>
- ------------------------------------------------------------------
- --------------
- --------------------------------------OPERATIONS:
Net investment income $ 416,835 $ 1,731,549 $
2,554,232 $
1,088,255 $ 671,694
Net realized gain 326,873
781,954
615,295 119,281 31,197
Increase in net unrealized
appreciation (depreciation) 5,008,392
1,231,001 8,435 (733,612) (1,000,055)
- ------------------------------------------------------------------
- --------------
- --------------------------------------INCREASE (DECREASE) IN NET
ASSETS
FROM OPERATIONS 5,752,100
3,744,504
3,177,962 473,924 (297,164)
- ------------------------------------------------------------------
- --------------
- --------------------------------------DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (513,651)
(1,845,350)
(3,039,612) (1,173,166) (681,851)
Net realized gains (1,277,697)
(2,379,456) (3,405,478) (549,496)
(132,281)
- ------------------------------------------------------------------
- --------------
- --------------------------------------DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (1,791,348)
(4,224,806) (6,445,090) (1,722,662) (814,132)
- ------------------------------------------------------------------
- --------------
- --------------------------------------FUND SHARE TRANSACTIONS
(NOTE 5):
Net proceeds from sale of shares 26,459,471
56,866,431 41,397,879 15,974,795 6,539,916
Cost of shares reacquired (3,176,306)
(4,367,873)
(7,019,392) (3,309,203) (2,835,426)
- ------------------------------------------------------------------
- --------------
- --------------------------------------INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 23,283,165
52,498,558
34,378,487 12,665,592 3,704,490
- ------------------------------------------------------------------
- --------------
- --------------------------------------INCREASE IN NET ASSETS
27,243,917 52,018,256 31,111,359
11,416,854 2,593,194
NET ASSETS:
Beginning of period 75,780,135
129,928,975
133,795,518 38,815,255 20,597,056
- ------------------------------------------------------------------
- --------------
- --------------------------------------END OF PERIOD* $
103,024,052 $
181,947,231 $ 164,906,877 $ 50,232,109 $ 23,190,250
- ------------------------------------------------------------------
- --------------
- ---------------------------------------
*Includes undistributed net
investment income of: $416,331
$1,730,574
$2,553,836 $1,087,820 $671,581
- ------------------------------------------------------------------
- --------------
- --------------------------------------</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEAR
ENDED JANUARY 31,
1999
..................................................................
.............
<TABLE>
<CAPTION>
SELECT SELECT
SELECT SELECT SELECT
HIGH GROWTH GROWTH
BALANCED
CONSERVATIVE INCOME
PORTFOLIO PORTFOLIO
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C>
<C>
<C> <C>
- ------------------------------------------------------------------
- --------------
- ----------------------------------------OPERATIONS:
Net investment income $ 513,295 $
1,844,604 $
3,039,216 $ 1,172,731 $ 681,738
Net realized gains 1,306,932
2,407,077 3,404,973 549,268 59,947
Increase in net unrealized
appreciation (depreciation)
7,876,219
10,166,260 2,042,065 (159,130)
(116,288)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------INCREASE IN NET ASSETS
FROM
OPERATIONS 9,696,446
14,417,941
8,486,254 1,562,869 625,397
- ------------------------------------------------------------------
- --------------
- ----------------------------------------DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (259,791)
(689,890)
(1,058,984) (290,574) (124,156)
Net realized gains (157,661)
(786,615) (1,074,913) (169,756) (48,840)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------DECREASE IN NET ASSETS
FROM
DISTRIBUTIONS TO SHAREHOLDERS (417,452)
(1,476,505) (2,133,897) (460,330)
(172,996)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------FUND SHARE TRANSACTIONS
(NOTE 5):
Net proceeds from sale of shares 40,984,630
71,729,729 82,964,105 28,219,439
19,481,318
Net asset value of shares issued for
reinvestment of dividends
417,452
1,476,505 2,133,897 460,330
172,996
Cost of shares reacquired (1,971,681)
(2,200,244) (2,725,679) (1,664,789)
(3,949,914)
- ------------------------------------------------------------------
- --------------
- ----------------------------------------INCREASE IN NET ASSETS
FROM
FUND SHARE TRANSACTIONS 39,430,401
71,005,990 82,372,323 27,014,980
15,704,400
- ------------------------------------------------------------------
- --------------
- ----------------------------------------INCREASE IN NET ASSETS
48,709,395 83,947,426 88,724,680
28,117,519
16,156,801
NET ASSETS:
Beginning of year 27,070,740
45,981,549
45,070,838 10,697,736 4,440,255
- ------------------------------------------------------------------
- --------------
- ----------------------------------------END OF YEAR* $
75,780,135 $ 129,928,975 $ 133,795,518 $ 38,815,255 $
20,597,056
- ------------------------------------------------------------------
- --------------
- -----------------------------------------
*Includes undistributed net
investment income of: $513,147
$1,844,375
$3,039,216 $1,172,731 $681,738 ------------------------
- --------------
- ------------------------------------------------------------------
- --------------
- --</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
..................................................................
.............
1. SIGNIFICANT ACCOUNTING POLICIES
The Select High Growth, Select Growth, Select Balanced, Select
Conservative and
Select Income Portfolios ("Portfolios") are separate investment
portfolios of
the Smith Barney Concert Allocation Series Inc. ("Fund"). The
Fund, a Maryland
corporation, is registered under the Investment Company Act of
1940, as amended,
as an open-end management investment company and consists of these
portfolios
and six other separate investment portfolios: High Growth, Growth,
Balanced,
Conservative, Income and Global Portfolios. The Portfolios invest
in other
mutual funds ("Underlying Funds") managed by SSBC Fund Management
Inc. ("SSBC"),
or another affiliate of Salomon Smith Barney Inc. Shares of the
Portfolios are
offered to separate accounts sponsored by certain life insurance
companies and
qualified pension and retirement plans. The financial statements
and financial
highlights for the other portfolios are presented in a separate
shareholder
report.
The significant accounting policies consistently followed by the
Fund are: (a)
security transactions are accounted for on trade date; (b)
investments in the
Underlying Funds are valued at the closing net asset value per
share of each
Underlying Fund on the day of valuation; (c) dividend income and
short-term
capital gains from Underlying Funds are recorded on the ex-
dividend date as
investment income and interest income is recorded on the accrual
basis; (d)
long-term capital gains from Underlying Funds are recorded on the
ex-dividend
date as realized gains; (e) gains or losses on the sale of
Underlying Funds are
calculated by using the specific identification method; (f)
dividends and
distributions to shareholders are recorded on the ex-dividend
date; (g) the Fund
intends to comply with the applicable provisions of the Internal
Revenue Code of
1986, as amended, pertaining to regulated investment companies and
to make
distributions of taxable income sufficient to relieve it from
substantially all
Federal income and excise taxes; (h) the character of income and
gains to be
distributed are determined in accordance with income tax
regulations which may
differ from generally accepted accounting principles. At January
31, 1999
reclassifications were made to the Select Income Fund's capital
accounts to
reflect permanent book/tax differences and income and gains
available for
distributions under income tax regulations. Accordingly, a portion
of
accumulated net investment income and accumulated net realized
gains amounting
to $30 and $6, respectively, has been reclassified to paid-in
capital. Net
investment income, net realized gains and net assets were not
affected by this
adjustment; and (i) estimates and assumptions are required to be
made regarding
assets, liabilities and changes in net assets resulting from
operations when
financial statements are prepared. Changes in the economic
environment,
financial markets and any other parameters used in determining
these estimates
could cause actual results to differ.
2. MANAGEMENT AGREEMENT
Travelers Investment Adviser, Inc. ("TIA"), a subsidiary of
Salomon Smith Barney
Holdings Inc., acts as the investment manager for the Fund. Each
Portfolio pays
TIA a monthly fee calculated at an annual rate of 0.35% on the
average daily net
assets. From this fee all expenses of the Fund are deducted,
except for
extraordinary expenses. If expenses exceed the 0.35% fee, this
amount is paid on
behalf of the Fund by TIA.
All officers and one director of the Fund are employees of Salomon
Smith Barney
Inc.
3. INVESTMENTS
During the six months ended July 31, 1999, the aggregate cost of
purchases and
proceeds from sales of investments (including maturities, but
excluding short-
term securities) were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
<S> <C> <C>
- ------------------------------------------------------------------
Select High
Growth $23,502,177 $ --
Select Growth 54,101,150 --
Select Balanced 36,526,919 --
Select Conservative 13,457,505 --
Select Income 4,520,200 --
- ------------------------------------------------------------------
</TABLE>
29 <PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
..................................................................
.............
At July 31, 1999, the aggregate gross unrealized appreciation and
depreciation
of investments for Federal income tax purposes were substantially
as follows:
<TABLE>
<CAPTION>
NET UNREALIZED APPRECIATION
PORTFOLIO APPRECIATION DEPRECIATION (DEPRECIATION)
<S> <C> <C> <C>
- ------------------------------------------------------------------
- --------------
- -------Select High Growth $13,822,400 $ (829,405)
$12,992,995
Select Growth 15,747,943 (4,175,050)
11,572,893
Select Balanced 6,741,244 (4,961,151)
1,780,093
Select Conservative 1,197,378 (2,116,719)
(919,341)
Select Income 103,491 (1,188,324)
(1,084,833)
- ------------------------------------------------------------------
- --------------
- -------</TABLE>
4. REPURCHASE AGREEMENTS
The Portfolios purchase (and their custodian takes possession of )
U.S.
government securities from banks and security dealers subject to
agreements to
resell the securities to sellers at a future date (generally, the
next business
day) at an agreed-upon higher repurchase price. The Portfolios
require continual
maintenance of the market value of the collateral in amounts at
least equal to
the repurchase price.
5. CAPITAL SHARES
At July 31, 1999, the Fund had 5.5 billion shares of capital stock
authorized
with a par value of $0.001 per share. Transactions in shares for
each portfolio
were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JULY 31, 1999 JANUARY 31, 1999 <S> <C>
<C>
- ------------------------------------------------------------------
- -----------
SELECT HIGH GROWTH PORTFOLIO
Shares sold 1,989,776 3,511,232
Shares issued on reinvestment --
35,109
Shares reacquired (238,947) (173,302)
- ------------------------------------------------------------------
- ------------
NET INCREASE 1,750,829 3,373,039
- ------------------------------------------------------------------
- -----------
SELECT GROWTH PORTFOLIO
Shares sold 4,392,261 6,086,424
Shares issued on reinvestment -- 124,285
Shares reacquired (336,743) (191,489)
- ------------------------------------------------------------------
- -----------NET
INCREASE 4,055,518 6,019,220
- ------------------------------------------------------------------
- -----------
SELECT BALANCED PORTFOLIO
Shares sold 3,397,237 7,161,383
Shares issued on reinvestment -- 185,234
Shares reacquired (574,655) (234,832)
- ------------------------------------------------------------------
- -----------NET
INCREASE 2,822,582 7,111,785
- ------------------------------------------------------------------
- -----------
</TABLE>
30 <PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
..................................................................
.............
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JULY 31, 1999 JANUARY 31, 1999 <S>
<C> <C>
- ------------------------------------------------------------------
- -----------
SELECT CONSERVATIVE PORTFOLIO
Shares sold 1,352,154 2,472,258
Shares issued on reinvestment -- 40,441
Shares reacquired (281,612) (145,515)
- ------------------------------------------------------------------
- -----------NET
INCREASE 1,070,542 2,367,184
- ------------------------------------------------------------------
- -----------
SELECT INCOME PORTFOLIO
Shares sold 562,442 1,703,327
Shares issued on reinvestment -- 15,162
Shares reacquired (244,031) (344,589)
- ------------------------------------------------------------------
- -----------NET
INCREASE 318,411 1,373,900
- ------------------------------------------------------------------
- -----------
</TABLE>
31 <PAGE>
FINANCIAL HIGHLIGHTS
..................................................................
.............
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
ENDED JANUARY 31,
EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
SELECT HIGH GROWTH PORTFOLIO 1999(1)(2) 1999(2)
1998(2)(3)
<S> <C> <C>
<C>
- ------------------------------------------------------------------
- ----------NET
ASSET VALUE, BEGINNING OF
PERIOD $13.02 $11.06
$10.00
- ------------------------------------------------------------------
- ----------
INCOME FROM OPERATIONS:
Net investment income(4) 0.06
0.13 0.26
Net realized and unrealized
gain 0.77
1.94
0.80
- ------------------------------------------------------------------
- -----------
Total Income From Operations 0.83 2.07 1.06
- ------------------------------------------------------------------
- ----------LESS
DISTRIBUTION FROM:
Net investment income (0.07) (0.07)
- --
Net realized gains (0.17) (0.04)
- --
- ------------------------------------------------------------------
- ----------
Total Distributions (0.24) (0.11)
- --
- ------------------------------------------------------------------
- ----------NET
ASSET VALUE, END OF PERIOD $13.61 $13.02
$11.06 ---------
- ------------------------------------------------------------------
- -TOTAL RETURN
6.35%++ 18.79% 10.60%++
- ------------------------------------------------------------------
- ----------NET
ASSETS, END OF PERIOD
(000'S) $103,024 $ 75,780
$27,071 -----
- ------------------------------------------------------------------
- -----RATIOS TO
AVERAGE NET ASSETS:
Expenses 0.35%+ 0.35% 0.35%+
Net investment income 0.93+ 1.08 2.41+
- ------------------------------------------------------------------
- ----------
PORTFOLIO TURNOVER RATE 0% 19% 43%
- ------------------------------------------------------------------
- ----------
</TABLE>
(1) FOR THE SIX MONTHS ENDED JULY 31, 1999 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES
METHOD.
(3) FOR THE PERIOD FROM FEBRUARY 5, 1997 (COMMENCEMENT OF
OPERATIONS) TO
JANUARY 31, 1998.
(4) NET INVESTMENT INCOME PER SHARE INCLUDES SHORT-TERM CAPITAL
GAIN
DISTRIBUTIONS FROM UNDERLYING FUNDS.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE
REPRESENTATIVE OF THE
TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
32 <PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
..................................................................
.............
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
ENDED JANUARY 31,
EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
SELECT GROWTH PORTFOLIO 1999(1)(2) 1999(2)
1998(2)(3)
<S> <C> <C> <C>
- ------------------------------------------------------------------
- ----------NET
ASSET VALUE, BEGINNING OF
PERIOD $12.87 $11.28
$10.00 -----
- ------------------------------------------------------------------
- -----INCOME
FROM OPERATIONS:
Net investment income(4) 0.14 0.27 0.44
Net realized and unrealized
gain 0.15 1.55 0.84
- ------------------------------------------------------------------
- ----------
Total Income From Operations 0.29 1.82 1.28
- ------------------------------------------------------------------
- ----------LESS
DISTRIBUTION FROM:
Net investment income (0.13) (0.11)
- --
Net realized gains (0.17) (0.12)
- --
- ------------------------------------------------------------------
- ----------
Total Distributions (0.30) (0.23)
- --
- ------------------------------------------------------------------
- ----------NET
ASSET VALUE, END OF PERIOD $12.86 $12.87
$11.28 ---------
- ------------------------------------------------------------------
- -TOTAL RETURN
2.25%++ 16.31% 12.80%++
- ------------------------------------------------------------------
- ----------NET
ASSETS, END OF PERIOD
(000'S) $181,947 $129,929
$45,982 -----
- ------------------------------------------------------------------
- -----RATIOS TO
AVERAGE NET ASSETS:
Expenses 0.35%+ 0.35% 0.35%+
Net investment income 2.19+ 2.29 4.11+
- ------------------------------------------------------------------
- ----------
PORTFOLIO TURNOVER RATE 0% 10% 43%
- ------------------------------------------------------------------
- ----------
</TABLE>
(1) FOR THE SIX MONTHS ENDED JULY 31, 1999 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES
METHOD.
(3) FOR THE PERIOD FROM FEBRUARY 5, 1997 (COMMENCEMENT OF
OPERATIONS) TO
JANUARY 31, 1998.
(4) NET INVESTMENT INCOME PER SHARE INCLUDES SHORT-TERM CAPITAL
GAIN
DISTRIBUTIONS FROM UNDERLYING FUNDS.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE
REPRESENTATIVE OF THE
TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
33 <PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
..................................................................
.............
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
ENDED JANUARY 31,
EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
SELECT BALANCED PORTFOLIO 1999(1)(2) 1999(2)
1998(2)(3)
<S> <C> <C>
<C>
- ------------------------------------------------------------------
- -------------
NET ASSET VALUE, BEGINNING OF
PERIOD $12.04 $11.28
$10.00 --
- ------------------------------------------------------------------
- -----------
INCOME FROM OPERATIONS:
Net investment income(4) 0.20 0.42 0.64
Net realized and unrealized
gain 0.06 0.66 0.64
- ------------------------------------------------------------------
- -------------
Total Income From Operations 0.26 1.08 1.28
- ------------------------------------------------------------------
- -------------
LESS DISTRIBUTION FROM:
Net investment income (0.22) (0.16)
- --
Net realized gains (0.24) (0.16)
- --
- ------------------------------------------------------------------
- -------------
Total Distributions (0.46) (0.32)
- --
- ------------------------------------------------------------------
- -------------
NET ASSET VALUE, END OF PERIOD $11.84 $12.04
$11.28 --
- ------------------------------------------------------------------
- -----------
TOTAL RETURN 2.19%++ 9.76% 12.80%++
- ------------------------------------------------------------------
- -------------
NET ASSETS, END OF PERIOD
(000'S) $164,907 $133,796
$45,071 --
- ------------------------------------------------------------------
- -----------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.35%+ 0.35% 0.35%+
Net investment income 3.33+ 3.64 5.89+
- ------------------------------------------------------------------
- -------------
PORTFOLIO TURNOVER RATE 0% 7% 19%
- ------------------------------------------------------------------
- -------------
</TABLE>
(1) FOR THE SIX MONTHS ENDED JULY 31, 1999 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES
METHOD.
(3) FOR THE PERIOD FROM FEBRUARY 5, 1997 (COMMENCEMENT OF
OPERATIONS) TO
JANUARY 31, 1998.
(4) NET INVESTMENT INCOME PER SHARE INCLUDES SHORT-TERM CAPITAL
GAIN
DISTRIBUTIONS FROM UNDERLYING FUNDS.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE
REPRESENTATIVE OF THE
TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
34 <PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
..................................................................
.............
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
ENDED JANUARY 31,
EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
SELECT CONSERVATIVE PORTFOLIO 1999(1)(2) 1999(2)
1998(2)(3)
<S> <C> <C> <C>
- ------------------------------------------------------------------
- ----------NET
ASSET VALUE, BEGINNING OF
PERIOD $11.71 $11.30
$10.00 -----
- ------------------------------------------------------------------
- -----INCOME
FROM OPERATIONS:
Net investment income(4) 0.28 0.60 0.78
Net realized and unrealized
gain (loss) (0.13) 0.08 0.52
- ------------------------------------------------------------------
- ----------
Total Income From Operations 0.15 0.68 1.30
- ------------------------------------------------------------------
- ----------LESS
DISTRIBUTION FROM:
Net investment income (0.27) (0.17)
- --
Net realized gains (0.13) (0.10)
- --
- ------------------------------------------------------------------
- ----------
Total Distributions (0.40) (0.27) --
- ------------------------------------------------------------------
- ----------NET
ASSET VALUE, END OF PERIOD $11.46 $11.71
$11.30 ---------
- ------------------------------------------------------------------
- -TOTAL RETURN
1.22%++ 6.05% 13.00%++
- ------------------------------------------------------------------
- ----------NET
ASSETS, END OF PERIOD
(000'S) $50,232 $38,815
$10,698 -----
- ------------------------------------------------------------------
- -----RATIOS TO
AVERAGE NET ASSETS:
Expenses 0.35%+ 0.35% 0.35%+
Net investment income 4.75+ 5.27 7.24+
- ------------------------------------------------------------------
- ----------
PORTFOLIO TURNOVER RATE 0% 3% 35%
- ------------------------------------------------------------------
- ----------
</TABLE>
(1) FOR THE SIX MONTHS ENDED JULY 31, 1999 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES
METHOD.
(3) FOR THE PERIOD FROM FEBRUARY 5, 1997 (COMMENCEMENT OF
OPERATIONS) TO
JANUARY 31, 1998.
(4) NET INVESTMENT INCOME PER SHARE INCLUDES SHORT-TERM CAPITAL
GAIN
DISTRIBUTIONS FROM UNDERLYING FUNDS.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE
REPRESENTATIVE OF THE
TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
35 <PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
..................................................................
.............
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
ENDED JANUARY 31,
EXCEPT WHERE NOTED:
<TABLE>
<CAPTION>
SELECT INCOME PORTFOLIO 1999(1)(2) 1999(2)
1998(2)(3)
<S> <C> <C> <C>
- ------------------------------------------------------------------
- ----------NET
ASSET VALUE, BEGINNING OF
PERIOD $11.66 $11.29
$10.00 ------
- ------------------------------------------------------------------
- ----INCOME
(LOSS) FROM OPERATIONS:
Net investment income(4) 0.35 0.74 0.80
Net realized and unrealized
gain (loss) (0.50)
(0.16)
0.49
- ------------------------------------------------------------------
- ----------
Total Income (Loss) From
Operations (0.15) 0.58 1.29
- ------------------------------------------------------------------
- ----------LESS
DISTRIBUTION FROM:
Net investment income (0.33) (0.15)
- --
Net realized gains (0.06) (0.06)
- --
- ------------------------------------------------------------------
- ----------
Total Distributions (0.39) (0.21) --
- ------------------------------------------------------------------
- ----------NET
ASSET VALUE, END OF PERIOD $11.12 $11.66
$11.29 ----------
- ------------------------------------------------------------------
TOTAL RETURN
(1.28)%++ 5.18% 12.90%++
- ------------------------------------------------------------------
- ----------NET
ASSETS, END OF PERIOD
(000'S) $23,190 $20,597
$4,440 ------
- ------------------------------------------------------------------
- ----RATIOS TO
AVERAGE NET ASSETS:
Expenses 0.35%+ 0.35% 0.35%+
Net investment income 6.02+ 6.45 7.36+
- ------------------------------------------------------------------
- ----------
PORTFOLIO TURNOVER RATE 0% 14% 11%
- ------------------------------------------------------------------
- ----------
</TABLE>
(1) FOR THE SIX MONTHS ENDED JULY 31, 1999 (UNAUDITED).
(2) PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY
AVERAGE SHARES
METHOD.
(3) FOR THE PERIOD FROM FEBRUARY 5, 1997 (COMMENCEMENT OF
OPERATIONS) TO
JANUARY 31, 1998.
(4) NET INVESTMENT INCOME PER SHARE INCLUDES SHORT-TERM CAPITAL
GAIN
DISTRIBUTIONS FROM UNDERLYING FUNDS.
++ TOTAL RETURN IS NOT ANNUALIZED, AS IT MAY NOT BE
REPRESENTATIVE OF
THE
TOTAL RETURN FOR THE YEAR.
+ ANNUALIZED.
36 <PAGE>
DIRECTORS
Walter E. Auch
Martin Brody
Armon E. Kamesar Stephen E. Kaufman H. John Ellis
Heath B. McLendon, CHAIRMAN
OFFICERS
Heath B. McLendon
CHIEF EXECUTIVE OFFICER
Lewis E. Daidone
SENIOR VICE PRESIDENT AND TREASURER
R. Jay Gerken
VICE PRESIDENT AND INVESTMENT OFFICER
Paul A. Brook CONTROLLER
Christina T. Sydor SECRETARY
INVESTMENT MANAGER
Travelers Investment Adviser, Inc.
CUSTODIAN
PNC Bank, N.A.
SMITH BARNEY CONCERT
ALLOCATION SERIES INC. 388 Greenwich Street
New York, New York 10013
37
<PAGE>
<TABLE>
<S> <C>
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION
OF THE OWNERS OF THE SMITH BARNEY CONCERT ALLOCATION
[LOGO]
SERIES INC.: SELECT HIGH GROWTH, SELECT GROWTH, SELECT
BALANCED, SELECT CONSERVATIVE AND SELECT INCOME Member NASD,
SIPC
PORTFOLIOS. IT IS NOT AUTHORIZED FOR DISTRIBUTION TO -C-
1999 Salomon
Smith Barney Inc. PROSPECTIVE INVESTORS UNLESS ACCOMPANIED OR
PRECEDED BY
FD01325 9/99
A CURRENT PROSPECTUS FOR THE FUND, WHICH CONTAINS
INFORMATION CONCERNING THE FUND'S INVESTMENT POLICIES, FEES AND
EXPENSES, AS
WELL AS OTHER PERTINENT INFORMATION.
</TABLE>
